We were recently reminded that Article XV, Section 2 of the October 31, 1985 National Agreement significantly changed insurance coverage eligibility requirements for furloughed employees. Prior to the implementation of that Section, a furloughed employee who received vacation pay would be eligible for continuation of health and welfare benefits, just as if the employee had worked that month. However, this is no longer the case. That Section 2 reads as follows:

"Vacation pay received by a furloughed employee shall not qualify such employee for any benefits under the Plan and will not generate premium payments on his behalf."

I have been under the incorrect impression that this provision applied only to furloughed employees who had already lost their benefits eligibility, and that vacation pay could not serve to reinstate such coverage. We recently learned that this exception also applies to the continuation of coverage, so that vacation pay is basically irrelevant in the determination of eligibility for furloughed employees. It is important for furloughed employees to consider opting for continuation of coverage under COBRA laws before their coverage ends, and vacation pay should be ignored in calculating the continuation of coverage for such furloughed employees.