For companies with 50 or more employees, the family and medical leave act (FMLA) can become a costly administrative burden. The act requires employers to provide job protection when workers take time off to care for a newborn child, an ill relative, or themselves, and it is fraught with legal pitfalls that vary by state. The costs to employers include absenteeism, as well as overtime and temp pay to cover for the employee on leave. According to the Society for Human Resources Management, more than half of companies believe they approved an FMLA leave that was unfounded.
More than 80 percent of FMLA absences overlap with disability and workers' comp claims -- and therein lies a sales opportunity.
Benefits for your clients
Often, small businesses do not have the expertise or resources to manage FMLA effectively. By outsourcing FMLA administration and integrating it with disability/workers' comp, the agent can provide a solution. Because disability/workers' comp claims are almost always concurrent with FMLA absences, integrating processes will streamline paperwork and approvals while reducing duplication in gathering medical and other information. Integrating FMLA administration into the claims process also protects the employer against litigation by identifying and tracking FMLA-eligible events. For instance, an employee may enter a disability claim for a heart ailment. If the employer does not recognize this as a concurrent FMLA event, and the employee is later terminated for excessive absences, the employee may be able to sue based on FMLA protections.
Providing small-business clients with FMLA expertise can also help them reduce employee abuse while staying compliant. FMLA providers stay up-to-date with new case law and state laws. Many can help the small employer create clear company policies that communicate to employees what is and is not an FMLA absence, and what procedures must be followed in order to be approved. An expert will utilize the tools provided by the act (such as notification, eligibility verification, medical certification, and second opinions) to ensure all FMLA claims are legitimate and accurately reported. This is important since complete and consistent tracking of FMLA claims is central to avoiding legal trouble.
How to choose an FMLA vendor
When evaluating FMLA vendors for integration with disability/workers' comp programs, agents should consider the following:
o Extensive experience in processing and tracking FMLA claims.
o In-house legal expertise to help small businesses avoid legal landmines.
o Adequate staff for handling employee claims and questions.
o Ability to coordinate with disability/workers' comp vendors and share information.
o Knowledge of exceptions in running FMLA and disability/workers' comp leave concurrently.
Agents can differentiate themselves with their small-business clients and add to their consultative value by packaging FMLA management with disability/workers' comp products.
Terrie Sorensen is director of ComPsych's FMLASource program, working with insurance carriers and Fortune 500 companies to provide solutions to the challenges of FMLA. ComPsych provides services to more than 25 million individuals and 6,000 organizations throughout the U.S. and 92 countries. For more information, contact Ms. Sorensen at 312-705-6318 or tsorensen@compsych.com or visit www.compsych.com.
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