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Leave of Absence & Return From Leave

If you are planning a leave of absence to care for a newborn or newly adopted child, or to take a sabbatical or fulfill a military obligation, you’ll want to understand the resources available to you when you’re away from work.

Here are some steps you can take:

Coordinate with your employer

  • Check with your employer to learn application procedures and benefit policies, and let your employer know when you will be leaving and when you expect to return. If you serve a church, coordinate with the congregation to see that the good work will continue.
  • If you work for an employer subject to the Family and Medical Leave Act (generally FMLA applies to employers with more than 50 employees) you may be eligible for up to 12 weeks of unpaid leave within 12 months. Check with your employer to see what advance notice is required for your leave.
  • If your employer provides a health care flexible spending account or a dependent care flexible spending account, you will need to review with your employer the benefit provision in the plan to determine the benefit options available to you.
  • Contact your employer to provide:
    • your address, if it will change during your leave; and
    • your tax withholding, if you need to change it.

Health Insurance

  • If your leave is for anticipated medical reasons, such as childbirth or elective surgery, be sure to follow your medical plan’s procedures if your plan requires you to obtain advance authorization of a hospital stay or surgery.
  • Depending on the type of leave you are taking, you may be eligible to keep your benefits or to enroll for continued coverage. Be sure you know the options available to you.

Retirement Plans

  • Check your options for keeping your retirement savings going and be sure to make arrangements to pay any insurance premiums so your policies don’t lapse.
  • Loan repayments can generally be suspended during a leave of absence of up to one year if the member’s pay is insufficient to make repayments, provided that the loan is repaid by the end of the term of the loan.

Personal Affairs, Taxes and Estate Planning

  • Speak to your lawyer if you need to create or change your will or other legal documents.
  • The Tools section can help you model the effect your leave could have on your future savings needs and how much you want to set aside for a health care flexible spending account or a dependent care flexible spending account.

Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008

Among other things, the HEART Act provides:

  • Modifies the Uniformed Services Employment and Re-employment Act to allow the day prior to the date of death to be treated as the date the employee returned to work for purposes of triggering payment of benefits under a qualified plan;
  • Permit an employer to make certain contributions to a qualified pension plan on behalf of an employee who is killed or become disabled in combat
  • Permit active duty reservists to make penalty-free withdrawals form retirement plans
  • Permit members of the reserves called to active duty to withdraw amounts held in a Flexible Spending Account (FSA) without penalty

For more information visit the Internal Revenue Service website at www.irs.gov.