Employees' Benefits FAQs

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 can't be fired simply because you went on disability.

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

  • Up until March 2010, the general rule was that an employer could change or even eliminate a health plan so long as it followed the rules and guidelines set out by the Employee Retirement Income Security Act (ERISA).

    However, under the new federal Health Care Reform Law passed in 2010, employers with at least 50 employees will be required to provide and keep health care coverage for its employees by 2014. They'll have to pay a penalty to the federal government if they don't do so.

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

  • A: It's the company's option whether or not to offer a retirement 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 or run, and the penalties for failing to follow the act.

    There are two basic types of retirement plans:

    • Defined benefit plans provide a specific monthly benefit at retirement. The plan may promise an exact dollar amount at retirement or may calculate the benefit through a formula based on salary and service
    • Defined contribution plans do not promise a specific amount at retirement. The employee, employer or both contribute to the employee's individual account. The contributions are invested for the employee

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's right?

  • Generally speaking, pension benefits, both vested and nonvested, must be shared as part of the property division in a divorce. For state government workers, state retirement system rules determine how pension dollars accrued during a marriage may be divided.

    In dividing this asset a court may award the entire pension to the employee-spouse and order him to buy-out the other spouse's interest or share in the benefits. Alternatively, a court may divide the plan between the parties assigning each spouse a percentage to be paid out when the pension benefits are distributed, usually at retirement.

    Any employee with a retirement plan who's also in a divorce should talk to an attorney about how retirement and pension benefits might be split.

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 or duties of the job just to make it possible for you to do that job.

    Your employer is required to have an "interactive dialogue" or discussion 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" with neither you nor the doctor dictating what the accommodation will be.

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

  • Not necessarily. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage for up to 18 months. COBRA applies to companies with 20 or more employees.

    You will have to pay for your own health coverage but you'll get the same discounted or "group rate" your former employer pays.

    Also, keep in mind the new the federal Health Care Reform Law enacted in March 2010. Under this law, if you don't find a new job with employer-paid health care coverage, you'll have to buy your own insurance or else pay a penalty to the federal government.

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

  • A: No, an employer isn't required to give employees time off for vacation or holidays. If an employer agrees to give these benefits and then doesn't do so, workers may sue the business in small claims court or through an attorney.

    And, an employer can't give time off for vacations and holidays to a particular group of employees. Rather, the benefit must be applied equally to everyone. The employer may, however, give different groups more or less time. For instance, part-time employees may get less vacation than full-time employees.

    Generally, employers offer time off as a way to recruit and maintain a skilled workforce or to follow a union contract.

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

  • A: The laws in your state specify if unused vacation must be paid. Many states require employers to include any unused vacation pay you would've been entitled to in your last paycheck. Other states don't, however.

    When an employer provides paid vacation, it can establish the rules for when you actually get that benefit. The rules may be stated in a policy or handbook. If not, courts may consider pay documentation and the employer's past practice to see whether the employer must pay unused vacation when you quit.

Q: Is my employer required to provide health insurance?

  • Up until March 2010, private employers weren't required to provide health. That all changed when the Health Care Reform Law was enacted. Generally, by 2014, employers must provide health care coverage to their employees. Private employers aren't required to offer or pay for life insurance, though.

    Also, union contracts sometimes include provisions for insurance as part of the agreement with the company.

    Most federal government employees must be given health insurance. Likewise, many states have laws requiring health benefits be given to state government employees. Hawaii requires all employees who work over 20 hours per week be given benefits.

    In any event, many employers offer heath and other insurance, such as life insurance, as a way of attracting and keeping a workforce.

Q: Does an employer have to give employees paid sick leave?

  • An employer isn't required to provide you with paid sick leave. However, many employers voluntarily offer it to attract and retain employees.

    If your employer is subject to the Family Medical Leave Act (FMLA), you may receive unpaid sick leave. FMLA provides for up to 12 weeks of unpaid leave to eligible employees for certain medical situations for either the employee or a member of the employee's immediate family.

Q: My employer applied my sick time away from work to FMLA, even though 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 you're given the proper notice and you, the company, and the situation qualify.

    Your employer decides if it's FMLA time, not you. But if you feel the FMLA has been incorrectly applied, you should talk to your state Department of Labor or to an experienced attorney .

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

  • A: It 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 can't withhold insurance from some members of the class while offering it to others.

    Also, 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 insurance plan.

    Some of these rules may change, though, with the federal Health Care Reform Law enacted in March 2010. This law requires employers with 50 or more employees to provide them with health care coverage by 2014. The law doesn't apply, specifically, to part-time workers, but under the law, they'll have to buy their own insurance. And if they don't, they'll have to pay a penalty to the federal government.

Q: The returns on my 401(k) have been really bad. Can I designate how the funds are invested, rather than letting my employer choose?

  • A: Maybe, it depends on your plan setup. Some 401(k) plans allow participants to designate how the funds are invested. Other plans are directed by the employer. You should talk to your human resources or employee benefits office for the details of the plan.

Q: What is a 401(k) plan?

  • 401(k) is a type of retirement savings plan. It allows employees to contribute part of their wages to an account with either pre-tax or after-tax dollars. If your contributions to the plan are pre-tax, you don't pay any tax until your contributions are withdrawn or paid to you when you retire. If your contributions are after-tax, you don't pay any tax when you withdraw your contributions after reaching retirement age.

    If you're not sure about whether pre- or after-tax contributions are best for you, talk to your tax attorney or other financial advisor.

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

  • "Vesting" is the term used to define when the funds in your pension plan become yours to take, either upon termination or retirement from the company. The Employee Retirement Income Security Act (ERISA) requires an employee be at least 25 percent vested in benefits from employer contributions after 5 years of service. ERISA also requires an employee be 100% vested after 15 years of service.

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

  • A: As an employee, you're covered by the Family Medical Leave Act (FMLA) if you've:

    • Been employed by a covered employer and worked at a worksite having 50 or more employees, or worked at a site that's within 75 miles of other worksites that, when taken together have, a total of 50 or more employees. A "covered employer" is one having 50 or more employees in 20 or more workweeks per year in the current or prior calendar year, and 
    • Worked at least 12 months (which don't have to be consecutive) for the employer, and 
    • Worked at least 1,250 hours during the 12 months immediately before your FMLA leave is scheduled to start

    Public employee - those who work for the federal or a state or local government - are covered by the FMLA no matter how many employees work for the employer.

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