California Governor Jerry Brown recently signed Senate Bill 299 into law extending health insurance coverage benefits for employees out on pregnancy disability leave, effective January 1, 2012. As covered in “Pregnancy Disability Leave,” California employers with five or more persons on payroll (whether full- or part-time) must provide any female employee up to four months of unpaid leave for her pregnancy, delivery and newborn care. (California employers with 50 or more on payroll must also provide any qualified female employee with up to 12 additional weeks of medically required maternity leave under the California Family Rights Act (CFRA) or the federal Family and Medical Leave Act (FMLA).)

Currently, employers may opt to make group health insurance coverage available to their workers. The new law requires that if a California employer provides such benefits, it must continue to make them available to a pregnant or new mom out on pregnancy disability leave. The employer must continue that coverage on the same terms and conditions applied to active employees. For example, if the employer normally pays an employee’s premium in full when she’s actively on the job, that company must now continue to pay full premium while she’s out on the four month pregnancy leave.

A business may recover from the employee the premiums it paid to maintain such coverage during the leave if the worker fails to return at the end of the four month maximum period and if that failure was not due to exercise of additional leave rights under FMLA/CFRA or not due to a circumstance beyond the employee’s control. .

Employers should review the new law and contact a California labor law attorney if they have any questions on the new requirements.