Employees: Benefits FAQ

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  • Is my employer required to provide health insurance?

  • If I lose or quit my job, will I lose my health coverage too?

  • Can an employer change the health plan at any time?

  • Other employees have health insurance, but I don't.  Is that discrimination?

  • Does my company have to offer a retirement program?

  • What is a 401K program?

  • Can I designate how the funds for my 401K are invested?

  • When does the money in my pension plan become "mine?"

  • I am in the middle of a divorce. My soon-to-be ex says he doesn't have to share his pension money. I think he does. Who is right?

  • Is my employer required to offer paid vacations or time off for holidays?

  • Is my employer required to pay out my unused vacation when I quit?

  • Can I be fired while I'm on disability?

  • Who is covered under the Family Medical Leave Act?

  • My employer applied the time I was off sick to the Family Medical Leave Act, but I didn't ask him to. What should I do?

  • I have a disability. Isn't my employer supposed to do whatever the doctor says?

  • Is my employer required to hold my job, even though I've been out six months on sick leave?

    Q: Is my employer required to provide health insurance?

    A: Heath insurance and other insurance such as life insurance are generally offered by the employer as a means of attracting and keeping a workforce. Only the state of Hawaii requires employers in the private sector to cover employees who work over 20 hours per week. All other states don't mandate this coverage.

    Union contracts may include provisions for insurance as part of the agreement with the company.

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    Q: If I leave or lose my job, will I lose my health coverage too?

    A: The Consolidated Omnibus Budget Reconciliation Act ("COBRA") provides an employee who loses his or her job for any reason outside of gross-misconduct the ability to maintain coverage for up to 18 months at his or her own expense. COBRA applies to companies with 20 or more employees.

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    Q: Can my employer change the health plan anytime he wants? The new plan doesn't cover nearly as much as the old plan.

    A: Generally, an employer may change or even eliminate the health plan, but must follow the rules and guidelines set out by the Employee Income Security Act ("ERISA").

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    Q: Other employees have health insurance, but I don't. Is that discrimination?

    A: That depends. It's not illegal to provide insurance only to some classes of employees. For example, it's okay to provide insurance to full-time employees but not to part-time employees. Once the eligible classes are established, though, your employer cannot withhold insurance from some members of the class while offering it to others.

    Your employer can require that you follow the rules of the plan, which may require you to fulfill a waiting period or wait for an open enrollment period before you may join the plan.

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    Q: Does my company have to offer a retirement program?

    A: Companies establish retirement programs, commonly known as "pension plans," to help employees with retirement needs. It's the company's option whether or not to offer a plan. If one is offered, the employer must follow the rules set out in the Employee Retirement Income Security Act ("ERISA"). ERISA covers the information that must be included in the plan, how the plan will be administered and the penalties for failing to follow the act or other certain minimum standards.

    There are two basic forms of retirement programs:

    • Defined benefit plans provide retirement benefits where the employer promises to pay retirees a pension in a specific amount, with the monthly benefit set by a formula of years of service times final average salary times a percentage figure
    • Defined contribution plans provide that the employer will contribute an amount into the plan on behalf of an employee with the employee typically required to also contribute, and with each employee having her own individual account

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    Q: What is a 401K program?

    A: A 401K program is a type of defined contribution plan where a portion of your salary is contributed into the pension plan.

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    Q: The returns on my 401k have been really bad. Can I designate how the funds for my 401K are invested, rather than letting my employer continue in their poor choices?

    A: Possibly. It will depend on the plan setup. Some plans allow participants to designate how the funds are invested. Other plans are directed by the employer.

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    Q: When does the money in my pension plan become "mine?"

    A: "Vesting" is the term used to define when the funds in your plan become yours to take, either upon termination or retirement from the company. The Employee Retirement Income Security Act ("ERISA") requires 100% vesting of employer-contributed funds, and sets out the various time frames under which this will be done.

    "Shelf-vesting" generally occurs after five years of employment. A percentage of vesting can be spread out over a number of years with complete vesting generally completed in 7 years. Funds you contributed to a 401K are generally vested immediately.

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    Q: I am in the middle of a divorce. My soon-to-be ex says he doesn't have to share his pension money. I think he does. Who is right?

    A: Generally speaking, you must share pension benefits as part of the property division in a divorce. State law dictates how pension dollars accrued during a marriage may be divided.

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    Q: Is my employer required to offer paid vacations or time off for holidays?

    A: No. Providing paid time off for vacations or holidays in private employment is a benefit that an employer has the option of offering. If offered to a particular class of employee, they must be applied equally to all in that class. Generally, offering built-in time off is a way to recruit and maintain a skilled workforce or union contract, rather than law.

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    Q: Is my employer required to pay out my unused vacation when I quit?

    A: State law will determine if unused vacation must be paid. Some states require it and some states do not. If your employer isn't required to pay unused vacation but has established a policy to do so, the policy must be applied equally to all departing employees. To find out the regulations for your state, call your state's Department of Labor.

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    Q: Can I be fired while I'm on disability?

    A: In some circumstances, depending on how long you've been off work and how much longer it will be before you can return to work, your employer may be able to terminate you. But you cannot be fired because you went on disability.

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    Q: Who is covered by the Family Medical Leave Act?

    A: In order to be "eligible" for Family Medical Leave Act ("FMLA") leave, an employee must:
    • Be employed by a covered employer and work at a worksite within 75 miles of which that employer employs at least 50 employees
    • Have worked at least 12 months (which do not have to be consecutive) for the employer
    • Have worked at least 1,250 hours during the 12 months immediately preceding the date of commencement of FMLA leave.

    Public employers are covered by the FMLA regardless of whether they meet the 50-employee threshold.

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    Q: My employer applied the time I was off sick to FMLA, but I didn't ask him to. What should I do?

    A: If you've accrued paid leave such as vacation and personal leave, you may be able to use this instead of FMLA, or it may be required by the employer. An employee may also substitute accrued paid sick or family leave for FMLA leave, but only if the reasons for the leave are covered by the plan. Your employer has the right to determine whether to apply FMLA time, as long as he provides you with the proper notice and you, the company and the situation qualify.

    If you feel that FMLA has been incorrectly applied, you should talk to the Department of Labor. But the employer decides if it is FMLA time, not you.

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    Q: I have a disability. Isn't my employer supposed to do whatever the doctor says?

    A: Within reason. If you have a disability that qualifies you for Americans With Disabilities Act ("ADA") protection, your employer isn't required to override a valid and already-in-place seniority system, create a new job for you, lower standards for the position or eliminate essential functions of the position.

    Your employer is required to enter into an interactive dialogue with you to find a reasonable accommodation that won't place an undue hardship on the company, but will allow you to perform the essential functions of the position. The key word is "interactive": neither you nor the doctor gets to dictate what that accommodation will be.

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    Q: I've been on sick leave for six months, and my employer says if I can't come back to work I'm going to lose my job. But my doctor says I can't go back yet. Is my employer breaking the law?

    A: No. Under the Family Medical Leave Act ("FMLA"), your employer must return you to the same job or one that is substantially equivalent as long as you return within 12 weeks. If you're going to be out slightly longer than 12 weeks, the employer MAY have to hold your job slightly longer, pursuant to ADA protections. But your employer isn't required to hold your job indefinitely.

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