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Family and Medical Leave Act

July 7, 1993

Dr. Paul K. Browning Superintendent Greene County Public Schools 301 Kingold Boulevard Snow Hill, North Carolina 28580

Re: Advisory opinion; Family and Medical Leave Act; Pub. L. 103-3 (1993)

Dear Dr. Browning:

You recently wrote to Mr. Speas to ask whether the Family and Medical Leave Act of 1993, Pub.

L. No. 103-3 (FMLA), obligates local education agencies (LEA’s) to pay for employee health benefits during the time that the employee might be on unpaid family or medical leave authorized under the FMLA. It is our opinion that the FMLA does require LEA’s to pay for health benefits for eligible employees while they are on leave authorized by the Act.

The Act is intended to promote a healthier balance between work and family responsibilities. Under the FMLA, eligible employees of covered employers, including LEA’s, are entitled to up to 12 weeks of unpaid leave per year in the event of the birth or adoption of a child or a serious illness of the employee or an immediate family member of the employee. At the end of the leave, the employer must reinstate the employee to the same or an equivalent job.

During the period of leave, covered employers are required to maintain pre-existing health coverage. Section 104(c)(1) (29 U.S.C. §2614(c)(1) specifically provides:

[T]he employer shall maintain coverage under any "group health plan" (as defined in section 5000(b)(1) of the Internal Revenue Code of 1986) for the duration of such leave at the level and under the conditions coverage would have been provided if the employee had continued in employment continuously for the duration of such leave.

The Senate Report regarding this section of the FMLA states:

During the period of leave, the employer shall make contributions to the plan at the same rate and in the same amount as if the employee were continuously employed. Unless the contrary is clearly demonstrated by the employer, it shall be assumed that the employee would have continued working on the same schedule, at the same wage or salary, and otherwise under the same terms and conditions as he or she normally worked before going on leave. S. Rep. No. 103

3.

Therefore, in general, covered employers must pay for eligible employees’ "group health plan" while the employees are on leave authorized under the FMLA.

The obligation of LEA’s to pay for their employees’ health insurance, however, is not clear. Section 104 of the Act incorporates the definition of "group health plan" from section 5000(b)(1) of the Internal Revenue Code of 1986 into the FMLA. Section 5000(b)(1) of the Internal Revenue Code defines "group health plan" to mean:

[A]ny plan of, or contributed to by, an employer (including a self-insured plan to provide health
care (directly or indirectly)) to the employers’ employees, former employees, or the families of
such employees or former employees.

That definition would include the LEA’s health plans. However, section 5000(d) of the Internal
Revenue Code of 1986 specifically states, "For purposes of this section, the term ’employer’ does
not include a Federal or other governmental entity." Thus, while the subsection which excludes
Federal and other government entities is separate from the section (5000(b)(1)) which is referred
to in the FMLA, it is clear that, when read in its entirety, section 5000 of the Internal Revenue
Code excludes LEA’s health plans from the definition of "group health plans." Therefore, one
might argue that the FMLA also excludes those plans from the benefits which LEA’s are
obligated to maintain for employee on leave under the FMLA.

In our opinion, this argument is unlikely to prevail. Legislative intent is the primary principle of
statutory construction. Based on previous sections of the Act and the stated purpose of the Act, it
does not appear that Congress intended to exempt state agencies from the obligation to maintain
the group health plan benefits of their eligible employees who take leave authorized under the
FMLA. Moreover, the U.S. Department of Labor regulations for the Act indicate that LEA’s are
responsible for maintaining health care premiums during the leave period. The relevant
regulation states:

FMLA includes public agencies within its definition of covered employers. There is no indication
in either the Act or its legislative history supporting a view that public agencies are not required
to maintain employees’ health benefits during periods of FMLA leave, and they must do so. 58
Fed. Reg. 31803 (1993) (to be codified at 29 C.F.R. § 825.209).

Therefore, it is our opinion that Congress intended LEA’s to maintain and pay for eligible
employees’ group health benefits during leave periods authorized under the FMLA. Like other
covered employers, LEA’s may recover any contributions to the group health plan if the
employee fails to return to work after the expiration of authorized leave unless the failure to
return is due to the onset of a serious health condition or other circumstances beyond the
employee’s control. § 104(c)(2).

Andrew A. Vanore, Jr.
Chief Deputy Attorney General