Hi ,
Most of the organisations ( private companies ) try to pay full months salary, if a employee is sick for 2 weeks to 3 months ( this is best practice, as long as he has medical evidence ) , it doesn't matter if they are claiming medical insurance this is however a added benefit/ reward for all the employees in the organisation. The insurance cost is paid by the company to the insurance provider on yearly basis or renewed for all the employees PS ( Not all employees claim insurance for that particular year ).
I have seen the best practice in larger organisations for example companies like Wipro/Philips /NXP , and also small firms ( they treat employees on contract/trainees/ consultants in a fair manner ).
This helps other employees to be motivated and reduce turnover within the organisation.
On humanitarian grounds its best to be paid, and be supportive and treat this case as a special case.
Thanks
Muriel Miracle
Associate Member ( CIPD , UK)