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Tips on Continuing Medical Coverage When an Employee is Too Ill or Injured to Work
A common question among Hawaii employers is how to handle medical coverage for employees who are unable to work for a longer period due to illness or injury. Hawaii’s Prepaid Health Care law requires employers to continue to provide medical coverage to such workers on the same terms that coverage was provided prior to the illness. Employers are obligated to provide this coverage for three months after the month in which the employee became unable to work, or, if longer than three months, during the period for which the employee continues to receive regular wages.
What happens, though, when an employee stops working for the company sometime during the three-month period listed above? Would an employer’s obligation to continue medical coverage continue if an employee’s position is eliminated while she is out, for example, or if the organization closes operations entirely? According to the Hawaii Department of Labor and Industrial Relations (DLIR), the answer to both questions is “yes.” The agency takes the position that the employer’s obligation to provide continuation coverage arises when the employee is employed by an organization with active business operations. As such, its obligation would continue until the three-month deadline is reached, even where the individual for whom coverage is provided is no longer employed with the organization.