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author's profile photo Former Member
Former Member

Payroll US: Health Benefits are not deducted on FMLA absence


An employee is on FMLA absence and gets no payment. But for ongoing calculation/deduction for health insurances (pre tax deductions) a bi weekly income has to be paid. Employees bi weekly payments for the health benefits is about $ 162.

The system requires at least a gross payment about $ 430 before any health benefit is deducted. Then also taxes are calculated. I expect that a gross payment of $ 162 should be enough to calculate the health benefit. Is there a legal minimum income before any benefit insurances are calculated? Any idea?

Thanks, Rita.

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  • author's profile photo Former Member
    Former Member
    Posted on Feb 09, 2012 at 03:54 PM

    Are you not using Arears? Health Benefits are not able to be deducted if no gross earnings are available. You can use arrears to keep track of what an employee will owe for their helath insurance upon their return. There are ways to set up payments when an employee returns,make payments to the employer while they are out on leave by brining in cash or a personal check, or can be deducted before they leave in order to keep the arrears buckett cleared.

    However, if your situation is that the Employer is wanting to cover the cost of the employee benefits while someone is out on leave then work with your FI team to see how they would want to accomodate this process. This would work if you are not using arrears at all. If arrears are being used and the Employer wants to pay the coverage for them then you need to set up a payment that would allow for benefits to be paid.

    I am not sure whic situation you are really in and if you could provide more about:

    Are you using Arrears

    Which rule for Arrears did you select (Take all or nothing, Take all, Take what you can and forgive the rest.....)

    Do you want to use Payrment options

    Do you want the ER to just cover it?

    Just as a side note, you may need to check the health plan. If it is a Cafateria Plan and it is allowing for the health insurance to be pre tax, the rule to allow those pre tax dollars on the W-2 are ONLY applicable if it is actually coming out of earnings earned by the employee most of the time. Just an FYI 😊

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