Navigating Benefit Continuation Under FMLA and Minnesota PFML
Introduction
Employee leave has become a central part of workplace culture, policy, and compliance. With the upcoming implementation of Minnesota’s Paid Family & Medical Leave (PFML) program in 2026, employers across the state are re-evaluating how they manage benefit continuation for employees who take extended leave.
At the federal level, the Family and Medical Leave Act (FMLA) has long established the foundation for protecting employee rights during unpaid leave – including continued access to health insurance benefits.
However, as programs like Minnesota’s PFML expand access to paid leave, the compliance obligations for employers remain – and often grow more complex. Understanding how these laws interact is essential to maintaining compliance, preventing disputes, and protecting employees’ access to critical benefits.
1. Federal FMLA: The Foundation for Benefit Continuation
The Family and Medical Leave Act of 1993 (29 U.S.C. § 2601 et seq.) guarantees eligible employees up to 12 weeks of unpaid, job-protected leave for qualifying family or medical reasons.
Under FMLA, employers are required to maintain group health insurance coverage on the same terms as if the employee were actively working. This includes continuing the employer’s share of premium payments and offering employees the opportunity to pay their share directly. Coverage may not be terminated unless the employer provides adequate written notice and a 30-day grace period.
According to the U.S. Department of Labor (DOL):
“An employee’s coverage under a group health plan must be maintained on the same conditions as coverage would have been provided if the employee had been continuously employed during the FMLA leave period.” – 29 C.F.R. § 825.209(a)
The DOL also encourages employers to allow coverage to continue and recover any missed employee premiums once the employee returns to work: “Employers may recover the employee’s share of premiums after the employee returns to work.” – 29 C.F.R. § 825.212(c)
2. Minnesota Paid Family & Medical Leave: Expanding Protection
Minnesota’s Paid Family & Medical Leave (PFML) program will take effect in January 2026. Funded through shared payroll contributions, the program provides up to 12 weeks of paid family leave and 12 weeks of paid medical leave, with a combined annual maximum of 20 weeks.
PFML covers a broad range of circumstances – from caring for a newborn or an ill family member to recovering from a serious health condition.
While PFML provides wage replacement through a state-administered insurance program, it does not replace employers’ responsibilities for maintaining benefits. The statute mirrors FMLA requirements by ensuring that employers:
- Continue medical, dental, vision, life, and disability insurance during leave,
- Maintain the employer’s premium contribution, and
- Coordinate employee premium payments throughout the leave period.
As the law states:
“An employer must maintain any health insurance coverage the employee had prior to leave under the same conditions as if the employee had continued employment.” – Minn. Stat. § 268B.09, Subd. 5 (2023)
3. The Compliance Challenge: Premium Collection During Leave
When employees take unpaid or partially paid leave, payroll deductions for benefit premiums often stop – but their premium obligations continue.
Under both FMLA and Minnesota PFML, the only plan employers are federally required to maintain during leave is the group medical plan. Other benefits, such as dental, vision, life, or disability coverage, are not automatically subject to continuation unless the employer voluntarily extends them.
If an employer wishes to include these additional benefits during leave, the group must coordinate directly with the carrier to confirm approval and establish appropriate procedures for continuation.
When it comes to medical coverage, if an employee fails to pay their portion of premiums, employers may terminate coverage – but only after providing accurate written notice and allowing the required grace period. Even in this case, when the employee returns from leave, the employer is required to reinstate medical coverage immediately, with the deductible resuming at the same level it was on the employee’s last day of active coverage. Any medical expenses incurred during the lapse would not apply toward that deductible.
Because these steps involve strict documentation, notification, and reinstatement rules, premium collection during leave can quickly become an administrative challenge. Employers must carefully track payments and delinquencies, issue timely reminders, and ensure compliance with both federal and state continuation standards.
Failing to manage this process correctly can expose employers to risks under ERISA, FMLA, or PFML, as well as employee grievances related to benefit termination. Given these complexities, many organizations find that manual tracking becomes unsustainable – particularly when managing multiple leave cases and benefit types.
4. Best Practice: Continue Coverage, Track Delinquencies, Arrange Repayment
Both FMLA and Minnesota PFML encourage a consistent approach to benefit continuation. The best practice is to:
- Maintain coverage throughout the employee’s leave period.
- Track payments and delinquencies accurately and consistently.
- Avoid terminating coverage unless absolutely necessary and supported by proper notice.
- Arrange repayment of missed premiums once the employee returns to work.
This approach aligns with federal and state expectations, balancing compliance with fairness and employee well-being.
As the DOL summarizes:
“Employers may recover premiums from employees upon return from FMLA leave, rather than terminating coverage mid-leave.” – FMLA Employer Guide, U.S. Department of Labor, 2020 Edition
5. MEDSURETY’s Role: Simplifying Compliance and Continuation
As a trusted benefits administrator, MEDSURETY offers a specialized Premium Collection Service designed to help employers maintain compliance and reduce administrative burden during employee leave.
Our program manages the full process of benefit premium collection, including:
- Monthly invoicing for employee premium shares,
- Secure electronic collection and remittance of payments to the employer,
- Automated reminders for missed payments, and
- Comprehensive delinquency tracking to support repayment agreements.
By outsourcing premium management to MEDSURETY, employers gain a documented, audit-ready process that meets federal and state requirements – minimizing risk while ensuring uninterrupted employee coverage. This not only protects employers from compliance violations but also provides employees peace of mind, knowing their benefits remain secure during significant life events.
6. Preparing for 2026: Next Steps for Employers
With Minnesota PFML approaching, employers should take proactive steps to prepare:
- Review and update benefit continuation policies to ensure compliance with both FMLA and PFML.
- Establish clear procedures for premium billing, tracking, and repayment.
- Train HR and payroll teams on leave coordination and communication.
- Partner with experienced administrators like MEDSURETY to streamline compliance and manage premium collection effectively.
Taking these steps now ensures a seamless transition when the PFML program launches – protecting both your organization and your workforce.
7. Employer Coverage Comparison: FMLA vs. Minnesota PFML
Understanding which employers are covered under federal and state leave laws is critical for compliance and planning. While FMLA applies only to larger employers, PFML covers all employers operating in Minnesota.
| Requirement | Federal FMLA | Minnesota PFML |
| Employer Size Threshold | 50+ employees within 75 miles | All employers (no size limit) |
| Coverage Type | Unpaid leave | Paid leave (state insurance program) |
| Employer Premium Responsibility | None (no payroll tax) | Shared payroll tax with employees |
| Employee Eligibility | 12 months, 1,250 hours, 50+ employees nearby | ~$3,500 in MN wages during based period |
| Benefit Continuation Required? | Yes, for group health insurance | Yes, for all health and insurance benefits |
| Job Protection | Yes | Yes |
| Effective Date | 1993 (in effect) | January 1, 2026 |
In short, FMLA applies to employers with 50 or more employees and provides unpaid, job-protected leave. Minnesota PFML, by contrast, applies to all employers and provides paid, state-administered leave benefits – while maintaining employer responsibilities for continued benefit coverage.
Conclusion
The introduction of Minnesota’s Paid Family & Medical Leave program marks a new era of employee protection and employer responsibility. While the program enhances financial stability for employees, it also adds new administrative and compliance complexities for employers.
By understanding and aligning benefit continuation practices under both FMLA and PFML, employers can safeguard benefits continuity, maintain compliance, and build employee trust.
With MEDSURETY’s Premium Collection Service, employers gain a proven partner to manage these obligations efficiently and confidently — ensuring compliance, protecting benefits, and simplifying leave management.
Contact MEDSURETY
To learn more about how MEDSURETY can help your organization prepare for Minnesota PFML and manage benefit continuation during employee leave:
| Phone | 952-303-5700 |
| grace@medsurety.com | |
| Website | www.medsurety.com |
Our experience team can help you develop a compliant, seamless strategy for premium collection, repayment coordination, and benefit continuation under both federal and state leave laws.
Stay compliant. Stay covered. Partner with MEDSURETY.
