My thought is even though he's not paying and he may not return from his w/c leave I can't tell him he can cancel his insurance, because then I have to allow anyone else the same option. Need your thoughts.

I may be reading between the lines, but I'm assuming that the WC leave is an unpaid leave. Going on or coming off an unpaid leave is considered an event to allow a corresponding change.

If that won't work, consider that manual payment of premium while on leave, i.e., it is not being deducted from his pay on a pre-tax basis is after tax method of funding. I don't know what your plan descriptions say, but ours allow dropping coverage paid for on an after tax basis at any time since the premiums are not going through the 125 plan.

just a couple thoughts.

My thought - an employee is required to make his premium payments while on leave. If he does not make the payments, then the employer can cancel his coverage back to the date of full payment. So it isn't that the ee is cancelling his coverage, but that you are cancelling his coverage for lack of payment because you are not required to provide coverage that he isn't paying for.

This would not apply to other current employees, because their premiums are paid through the payroll (I will assume). Unless paying after-tax, they cannot make any changes to their payroll deductions for the year without a qualifying status change, therefore their premiums will continue to be paid.

Thanks for the help. I was so busy thinking on the day to day, which is pre-tax payroll deduted, that i wasn't thinking about its after tax. Someone else told me that because he'd been out on w/c for over 90 days he could be termed.

I think that you need to retain labor counsel. Many states (e.g., California) place limits upon what actions you can take with respect to persons on workers' compensation leave.