The handbook should say explicitly that all statements of coverage are subject to the terms, conditions, restrictions and other eligibility requirements set forth in the plan document, which is the final word in terms of eligibility and coverage. In the absence of such language, an employee may be able to proceed on a claim for benefits relying exclusively on the handbook. The employer should reserve its right to modify, amend or terminate any benefit plan at any time and for any reason. Many employers have a general policy of continuing to provide employees with certain insured benefits during an extended leave of absence. Often, this is done without reviewing the relevant plan document.
Many plans provide that an employee remains eligible for coverage only while actively employed.
Consequently, coverage may cease while the employee is on an extended leave of absence. In these circumstances, if the employer continues coverage despite the language of the plan document, the employer may be self-insuring the employee. Under the Family and Medical Leave Act, group health insurance must be continued under certain circumstances. Many employers will need to renegotiate their insurance contracts to ensure that they are in accord with the new law. For an employee to be considered salaried, FLSA regulations provide that no deductions for absences of less than a full day may be made from the employee's pay.