Employer's notice to employees and health insurance responsibilities
Employers may want to advise employees of their status. There are two schools of thought with regard to layoff/furlough of employees during the ‘shelter in place’ period. One is to layoff employees completely until the ‘shelter in place’ is lifted. The second seemingly more reasonable approach is to ‘furlough’ workers, which indicates a temporary situation.
Neither one will inhibit your employee from applying for unemployment as of the last day of work. You may also have other options depending on your state – such as Shared Work and other programs, which were discussed in a prior post.
Employers have a responsibility to inform employees if their health insurance coverage will expire and when, and to inform them about COBRA rights. See the link far below for more information.
In any case, it is recommended that employers consult with an HR advisor to discuss specifics.
Here’s the layoff/furlough letter I located online with the 2 options:
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Dear [Employee name],
Due to the economic impact of COVID-19 (coronavirus), [Company name] is implementing measures to ensure the financial stability of the company. The current pandemic situation has impacted our business significantly, and as a result, we find that we must make some difficult personnel decisions.
Option 1-Example language for a layoff:
Effective [date], [Company name] is implementing a temporary layoff of certain positions. This notice is to inform you that your position is included in this layoff, effective beginning [date]. We expect the layoff to last until at least [date]; however, we will reassess the circumstances regularly and may lessen or extend this timeframe. We will recall laid-off employees as business needs warrant based first on job function and then by seniority.
Option 2-Example language for a furlough:
Effective [date], [Company name] is implementing a temporary furlough of certain nonessential positions. This notice is to inform you that your position is included in this furlough and as such, you are being placed on a temporary, unpaid leave of absence effective, beginning [date].
This furlough is expected to last through [date]. It is important to note that your employment continues to be at-will and nothing in this notice or other furlough communications is intended as an express or implied contract.
You may be eligible for unemployment benefits under these circumstances. Contact your local unemployment office for information on eligibility and applying for unemployment benefits. Present this letter to your local unemployment office as evidence of your employment status.
[I provided the different State links in prior posts]
[Company name] will communicate with you regularly during this period. If your personal phone number, email or mailing address has changed recently, please provide your current contact information to human resources immediately. Please feel free to contact human resources at [contact information] with any questions.
If you find alternate employment during this period and do not intend to return to work at [Company name], please notify human resources immediately of your voluntary resignation.
Here’s the link re health insurance:
Are employers subject to federal COBRA required to provide employees with COBRA elections in the event of a temporary layoff or furlough? Yes, if the temporary layoff or furlough results in both a reduction in hours and a loss of healthcare coverage, which is a COBRA qualifying event. If the group health plan permits laid-off or furloughed employees to continue participation in the group health plan for a period of time (as discussed below), there should be no COBRA qualifying event because the loss of coverage has not yet occurred. If, after a period of time during the leave or furlough, active coverage is no longer extended to the laid-off or furloughed worker, the COBRA qualifying event should occur at that future point in time if the loss of coverage still results from the reduction in hours.