The Voluntary Craze

Voluntary benefits are growing in popularity. In fact, new research from LIMRA, an association of life insurance and financial services companies, reported that up to 363,000 U.S. businesses with 10 or more employees are considering introducing a new voluntary benefit within the next two years. This could affect as many as 45 million Americans.

Voluntary benefits can include traditional benefits, such as health, life, dental and vision coverage. Employers can also offer more unusual benefits on a voluntary basis, such as pet insurance and legal plans.

The Holiday Season

The holidays might be a little longer this year for some workers. A survey by the Society for Human Resource Management showed 48 percent of employers plan to close their offices on the day before Christmas this year. Christmas is on a Tuesday. The day after Christmas will be a holiday at 16 percent of companies. Twenty-seven percent of employers plan to close on New Year’s Eve, which also falls on a Monday this year.

Since productivity generally drops over the holidays, some employers might find it sensible to close for the extra days.

FMLA Working...Mostly

Congress passed the Family and Medical Leave Act (FMLA) in 1993 to help employees retain job rights while coping with the serious illness of themselves or a family member. After analyzing input from more than 15,000 employees and employers, the U.S. Department of Labor (DOL) reported in June that the law was largely working as intended.

According to the DOL report, some 76.1 million employees were eligible for leave under the law as of 2005, and somewhere between 6 percent and 17.1 percent of those employees had taken leave. Chances are, if the FMLA applies to your company, one of your employees will want to take leave, if they haven’t already.

According to the DOL report, problems and conflicts over FMLA implementation arise most frequently in two areas: the definition of “serious health condition” and in situations of intermittent leave.

What is "a serious health condition"?

The FMLA defines this as incapacity or treatment that involves inpatient care in a medical facility, as well as subsequent treatment related to inpatient care. It also includes any period of incapacity due to pregnancy, a chronic serious health condition or a health condition lasting more than three days that requires treatment by a health care provider. The FMLA also applies to employee absences to receive multiple treatments to address conditions that are not currently incapacitating but would be if left untreated.

To qualify for FMLA medical leave, an employee must provide enough information to substantiate the need for leave. He or she must obtain certification from a physician that leave is necessary, but does not have to supply a specific diagnosis.

Employees do not have to take leave all at once – they can take time in increments as small as the lowest increment used by the company payroll system. And employees who qualify for FMLA leave do not have to provide advance notice if the leave is not foreseeable – for example, a migraine sufferer could leave work every time he gets a headache. And the law allows him up to two days after taking time off to declare it FMLA leave.

As many as 3 million workers take advantage of this provision, according to the DOL. While intermittent leave helps some employees, it can cause major problems for employers. The National Association of Manufacturers, one of the country’s largest employer organizations, told the Department of Labor that, “As currently interpreted by DOL, the FMLA has become the single largest source of uncontrolled absences [among members] and, thus, the single largest source of all the costs those absences create: missed deadlines, late shipments, lost business, temporary help, and over-worked staff.”

The Society for Human Resource Management (SHRM) reported that 40 percent of human resource professionals surveyed said confusion over implementation of the FMLA has led to the granting of illegitimate leave. Respondents specifically cited tracking and administering intermittent FMLA leave as a problem. In the comment portion of the survey, many HR professionals also noted that the timing of intermittent FMLA leave requests (e.g. around weekends, holidays, pleasant weather) raised suspicions of abuse.

Despite the problems the report highlighted, don’t expect the DOL to make changes soon. Observers expect the DOL to tackle the redefinition of “serious health condition” and revising the medical certification form before fixing the problems with intermittent leave. “It does not by any means present any easy resolution,” Victoria Lipnic, assistant secretary of labor for the Employment Standards Administration, told Workforce Management.

The FMLA:

• Applies to any employer with 50 or more workers in a 75-mile radius each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.
• Applies to employees who have worked for their employer for at least 12 months and have worked for at least 1,250 hours over the previous 12 months.
• Requires employers to allow eligible workers to take up to 12 administrative workweeks of unpaid leave per year.
• Allows eligible employees to take leave for 1) the birth of a son or daughter and care of the newborn; 2) the placement of a son or daughter with them for adoption or foster care; 3) the care of their spouse, son, daughter or parent with a serious health condition, or 4) their own serious health condition that makes them unable to perform the duties of their position.
• Requires employers to return an employee coming back from FMLA leave to the same or equivalent position.
• Entitles the employee to maintain health benefits coverage while on leave. If on leave without pay, the employee is responsible for paying employee share of premiums.

Following these procedures can help ease FMLA administrative burdens:

• Create a written policy and process for FMLA administration.
• Compare company leave policy with FMLA to ensure consistency. Consult a lawyer if needed.
• Provide written notification of FMLA leave and start and end dates to all parties within two days, including reason for leave and impact on other benefits.
• Develop a leave-tracking mechanism for relevant personnel.
• Explain impact of FMLA to employees and advise two weeks prior to end of leave.
• Require recertification of intermittent leave at specified times.
• Utilize medical consultant services as needed to clarify an employee's medical condition.

For more information on FMLA, please call us.