Skip to main content

Content is loading...



Posted April 30, 2020

Billing for LOA, furloughed employees


Administering the employee benefits for your active population can be a big lift if you’re doing it on your own. And providing benefits to those who are on a leave of absence or are furloughed presents additional challenges since these employees aren’t receiving their regularly issued paychecks to deduct their premiums from. 

Direct Bill has taken on even greater importance during the COVID-19 pandemic, with some employees choosing to take a leave of absence due to family obligations or to reduce their risk of contracting the coronavirus, while others have been furloughed for the time being. Here are three ways you and your employees benefit when you outsource your Direct Bill to a proven administrator. 

Please note: There is no universal answer on whether COBRA should be offered to furloughed employees instead of Direct Bill. We cannot advise which is appropriate for an employer’s plan or situation. 

Employees easily keep up with premiums

In addition to their employer-sponsored health insurance, your employees may have a variety of other benefits, such as medical, dental and vision, that they pay premiums toward. However, when they’re no longer receiving a paycheck, they may be left with having to pay those premiums in one lump sum or through catch-up contributions upon returning to work. And the size of that lump sum could be significant, depending on how long the employee has been on leave or furloughed. 

When you choose a third party to administer your Direct Bill, they can collect these premiums from employees while they’re out and remit them back to you. And an administrator can provide these employees with an online account and/or mobile app for them to easily submit payments. 

Robust reporting and record-keeping

Collecting premiums from your employees on leave of absence or who are furloughed is only part of your responsibility. There’s also the paperwork that comes with billing these employees on your own, tracking such things as:

  • Which benefits each employee has.
  • Who has paid and who hasn’t. 
  • What is the best way to contact the employees to collect payment.

A third-party administrator should be able to provide you with an online account that puts all of this information and tracking just a click away. 

Knowledgeable and experienced service

Generally, employees who are on a leave of absence or are furloughed do not have direct access to you in the same way that your active employee population does. And the types of questions they may have about their benefits and billing might be quite different. By outsourcing your Direct Bill, you and your employees gain access to that administrator’s customer service team. 

The WEX Health COBRA and Direct Bill program is an innovative central system of record for your COBRA and Direct Bill needs. Click here to learn more. 

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own counsel.


WEX Health

WEX Health