Introduction and summary
When a serious health need occurs or a new child arrives, continuing health insurance coverage becomes more important than ever. But for too many Americans, taking time away from work to address these needs can jeopardize that coverage, whether by putting employer-sponsored coverage at risk or simply by cutting off income needed to pay premiums. Losing health insurance at these critical junctures has dangerously detrimental health consequences. Guaranteeing paid leave can help Americans keep their health insurance as they take the time they need—a powerful combination for better health.
Continued health insurance coverage is especially important when the need for leave comes
The majority (51 percent) of people who use leave under the federal Family and Medical Leave Act (FMLA) do so for their own serious, nonpregnancy-related health needs.1 Similarly, most people who take leave under most state paid leave programs do so for their own serious health care needs, otherwise known as medical leave.2 To qualify for medical leave, workers must have a “serious health condition,” a legal term meaning a health need involving either inpatient care in a health facility or ongoing treatment by a health provider.3 Therefore, by definition, medical leaves occur when workers are getting substantial health treatment. Common serious health conditions include kidney disease,4 diabetes,5 pregnancy,6 and serious accidents or injuries7—circumstances that necessitate regular, often costly, care8 and make continued health insurance particularly critical.
Consider the person who takes leave to treat cancer,9 whether that means hospitalization,10 intermittent leave for chemotherapy,11 or simply time to rest when the disease or its treatment has caused “incapacity.”12 Continuation of health insurance means better, more effective treatment. Uninsured cancer patients are less likely to get recommended treatments, including radiation, chemotherapy, and surgery, than those with private insurance.13 Across many different types of cancer, uninsured patients have higher mortality rates than those with private insurance.14 Even a temporary disruption in coverage among cancer survivors can mean a greater risk of inability to afford care.15 By helping cancer patients keep their health insurance, paid leave can powerfully support health at crucial moments.
Others need leave to care for loved ones with serious health conditions.16 For example, workers may need leave to care for a seriously ill spouse,17 one of the most common family members for whom leave is taken.18 Many Americans rely on their spouse’s employer-provided health insurance for their own coverage,19 making it especially critical that the leave-taking employee not lose the coverage upon which their seriously ill spouse is relying.
Similarly, many workers take leave to care for their child with a serious health condition.20 About half of all minor children in the United States have employer-provided coverage,21 typically through a parent’s employer.22 Many adults younger than age 26 also rely on a parent’s coverage.23 Thus, in many cases, the child for whom the worker is providing care will be on the leave-taking parent’s health insurance—and therefore the child’s access to care is at risk if the parent loses that coverage. For example, when her 8-year-old daughter was diagnosed with cancer, single mother Elizabeth Austin could not take leave from her job because she would have been unable to afford the health insurance that paid for her daughter’s care.24 As Austin shared in a HuffPost op-ed, “Forfeiting my income and our insurance at a time when we’d never needed them more was not an option. … My daughter’s access to treatment — the thing tethering her to her life — was completely dependent on me.”25
Forfeiting my income and our insurance at a time when we’d never needed them more was not an option. … My daughter’s access to treatment — the thing tethering her to her life — was completely dependent on me.
Elizabeth Austin. In HuffPost, "My 8-Year-Old Was Suffering From Cancer. To Keep Her Alive, I Made An Unthinkable Choice.” (2024).
For the same reasons, continued health insurance coverage is significant when a new child arrives. The American Academy of Pediatrics recommends a series of well-baby visits to the pediatrician during an infant’s first year, starting very frequently for newborns and spacing out as babies age.26 Babies who are born prematurely,27 who need to be in a neonatal intensive care unit,28 or who have complex health needs29 have even more pronounced needs for health care. Along with other important policy investments in health insurance coverage for children,30 paid leave can help ensure that parents taking time away from work to bond does not compromise their children’s access to health insurance and, therefore, to care.
Continued health insurance coverage through paid leave means better health
Maintaining health insurance coverage through paid leave is an investment in health because being uninsured has profound negative consequences for health outcomes. The uninsured are nearly three times as likely as those with private insurance to report not having seen a doctor or health professional in the past 12 months.31 Those without insurance are less likely to receive preventive care and are more likely to be hospitalized.32 Most dramatically, the uninsured have higher mortality rates than the insured.33
Both paid leave and health insurance are crucial for timely access to needed care. Lack of paid leave means workers postpone or skip needed health care.34 Uninsured adults are three times as likely as those with insurance to report delaying or forgoing needed care because of cost (61 percent vs. 21 percent).35 Putting off or going without needed care can profoundly negatively affect health,36 making paid leave and continued health insurance coverage mutually reinforcing supports for timely care and, therefore, better health.
Leave laws can and should specifically protect employer-sponsored coverage
For covered workers, the FMLA requires employers to continue providing health insurance during covered leave on the same terms as while the employee is working.37 This means that employers must continue paying the employer share of premiums during leave.38 This crucial protection prevents employees from suddenly being responsible for dramatically higher premium costs just to keep their coverage during leave.39 This protection is significant because employers pay most of the cost of coverage—on average, about 84 percent of the premium for single coverage and 75 percent of the premium for more expensive family coverage.40
Without the legal right to continuation of coverage, leave-taking employees would need to pay both the employee and employer shares of premiums to continue coverage. Because employers generally pay for the majority share of premiums, on average, taking on the full premium cost rather than just the employee share means an employee could face a 306 percent increase in premium costs for family coverage and a 554 percent increase in premium costs for single coverage.41
Continuation of coverage provisions reduces employee premium costs by hundreds or even thousands of dollars—substantial savings that can make the difference between affording and losing coverage.
With continued employer contributions, employees are responsible for only their share of premiums while on leave, just as when they are working.42 On average, the employer premium share is $632 per month for single coverage and $1,606 per month for family coverage.43 In other words, continuation of coverage provisions reduces employee premium costs by hundreds or even thousands of dollars—substantial savings that can make the difference between affording and losing coverage.
Moreover, the same provision also prevents employers from providing less generous health benefits while the employee is on leave than when the employee is working.44 For example, employers cannot switch to coverage that no longer covers counseling or substance use treatments.45 Similarly, employers cannot rescind coverage of the employee’s family members during leave. This is especially important for scenarios where an employee takes leave to care for a loved one, such as a spouse or young child, who relies on their health insurance.46
However, far too many Americans currently do not have this essential protection: The FMLA does not cover those whose employers have fewer than 50 employees,47 nor employees who have been with their current employer for less than a year or who work less than an average of 24 hours per week.48 As a result, nearly half of all employees in the United States, including a disproportionate number of low-income workers,49 are not covered by the FMLA.50 This disparity has profound consequences: Employees who are not eligible for the FMLA are nearly four times as likely as FMLA-eligible employees to report losing part or all of their health insurance while on leave.51
To fill in the gap, many state paid leave laws guarantee continuation of coverage during leave.52 These laws typically have much more inclusive eligibility rules than the FMLA, powerfully expanding who has access to coverage continuation protections.53 Other states have expanded access to continued health insurance coverage through state laws guaranteeing unpaid leave.54 As more states look to enact or improve their own paid leave laws, alongside continued federal advocacy, policymakers should prioritize inclusion of this crucial protection.55
Paid leave helps people keep their income and health insurance regardless of source of coverage
In addition to ensuring continuation of employer-provided coverage, guaranteeing paid leave means that workers keep the income they need to afford their health insurance. Today, for too many Americans, taking the leave they need for a serious health or family need means losing income—often income they cannot afford to go without. In a 2018 U.S. Department of Labor survey, among those who took leave in the past 12 months for a serious health or family need, roughly one-quarter (24.3 percent) saw their pay reduced, while one-third (33.6 percent) received no pay at all during leave.56 Low-wage workers, who need to keep their income the most, are nearly twice as likely (60.7 percent) as the population as a whole to receive no pay while on leave.57 Moreover, each year, more than 11 million people do not take needed leave.58 Most of them do not take leave because they cannot afford to take it unpaid.59
When leave must be unpaid, taking needed time can jeopardize workers’ health insurance by cutting off the income needed to pay premiums. Among employees who took leave for at least a month, many—including a disproportionate number of low-income workers60—lost all or part of their health insurance. Cost is likely a major contributor to this loss of coverage, particularly given that inability to afford coverage is the most commonly cited reason for being uninsured among all adults younger than age 64.61
5x
People in states without paid leave programs are nearly five times as likely as those in states with paid leave programs to report losing some or all of their health insurance while on leave.
Paid leave can help. People in states without paid leave programs are nearly five times as likely as those in states with paid leave programs to report losing some or all of their health insurance while on leave.62 States with paid leave offer critically needed income that can be used to cover premiums during leave.
Ensuring workers have continued income during leave helps them afford—and keep—their coverage, regardless of the source of their coverage. Most Americans younger than age 65 have employer-sponsored health insurance,63 either through their own employment or as a dependent.64 The vast majority of employer-sponsored coverage is through plans where employees must cover at least some of the premium, especially where employees get family coverage rather than single coverage.65 With employee premiums rising to levels that many people struggle to afford at full pay,66 keeping up with those premiums when income is suddenly cut off is difficult if not impossible for many families.67 Paid leave can help with covering employee premiums during leave, whether the leave-taking worker’s coverage comes through their own employer or as a dependent on a family member’s coverage.
Similarly, paid leave means continued income to cover premiums for the more than 20 million Americans who receive health insurance through the Affordable Care Act marketplace.68 This is especially important for self-employed people, who have virtually no access to paid leave outside of public programs69 and are particularly likely to have marketplace coverage.70 As past Center for American Progress research has highlighted, without a public paid leave program, not working means that self-employed people do not get paid.71 This cuts off income they need to pay their bills—including health insurance premiums.
Conclusion
At the moments when it matters most—a serious diagnosis, a new baby—paid leave means keeping the income that not only keeps the lights on but also keeps health insurance premiums paid. Continuing coverage at these crucial junctures means giving Americans their best shot at the care they need and, with it, better health. Policymakers at the state and federal levels must act to guarantee paid leave for all workers, protecting not only workers’ paychecks but also the health coverage they rely on when they need it the most.
Acknowledgments
The author would like to thank Nicole Rapfogel, Andrea Ducas, and Kate Kelly for their contributions to this report.