Does anyone know if an employer is allowed to terminate medical benefits while an employee is on leave?

Were you on FMLA (Family Medical Leave) or short-term disability? If you were then it should've been outlined to you prior to your leave, the rights and responsibilities of both you and your employer. Typically if you're on either of the leaves indicated above your employer cannot terminate your benefits unless you don't continue to pay your portion of the premium. Most insurance companies have a clause as relates to leave and employee benefits that states that after 90 days of continuous leave an employee must be moved to COBRA coverage in order to maitain your benefits. Bottom line, while on either of these leaves you must maintain your benefits as if you were actively employed. Your employer also has the option of paying the total premium costs and then deducting them from your payroll check upon your return to work or cancelling your benefit if you're not paying. However, your employer must reinstate your benefits upon your return to work; they are responsible to restoring you to whatever you had prior to the leave taking place whether it's benefits or pay rate. If you just asked for time off and were out for a few weeks and they allowed this but it wasn't FMLA or disability then you should have spoken with them prior to taking the time to work out how this was to be handled, in this instance if there was no agreement then they could cancel your benefits.

In most cases the employer should not be able to take away your benefits when you're on leave, but you should double check with the company policy to ensure that they haven't put a clause about this in there regarding leaves. I know that in most cases the company policy for the company that you work for will have something regarding leaves. If nothing is mentioned in there, then talk with the human resources or the benefits coordinator at your company.

I don't think there are allowed to, provided there are more than 15 people working for your employer. This information should be posted at your work place in an area that is easily accessible by all employees, such as the break room.

Check the plan documents. They have all the details on the ins and outs of the plan. They almost always have a statement that says "terms of the plan can be changed at any time without notice". In that case, they can change the plan. You gotta love lawyers!

Depends on the circumstances.