Family Medical Leave Act

(FMLA) How Do You Manage It

Disability Management Solutions

Introduction

The CareWorks Family of Companies

More than 900 Ohio-based associates delivering customer-focused cost control services 180,000

business customers with a 98 percent annual customer retention rate.

Family Medical Leave Act (FMLA) Enacted in 1993 Congress “it will be a simple program to

administer” Provide job protection for time off work due to

your own illness or to care for a family member The act confers certain rights to employees

Job protection- Unpaid leave Health insurance premiums paid-Employer

pays their portion Guaranteed reinstatement Protection from retaliation claims

History of FMLA

Military Family Leave-Signed into law 1/28/2008 Qualifying Reason for Leave

Eligible employees are entitled up to 12 weeks of leave because of an exigency arising out of the fact that spouse, son, daughter, or parent of the employee is on active duty or has been notified of an impending call to active duty status in support of contingency operation

Up to 26 weeks of leave in a single 12 month period to care for a service member. An eligible employee who is the spouse, son, daughter, parent, or next of kin of a covered service member who is recovering from a serious illness or injury sustained in the line of duty

Changes in 2008 and 2009

Eligibility

Employer must have 50 or more employees within 75 miles

Employed for at least 12 months by a covered employer

Worked at least 1250 hours of service during the 12 month period immediately before the leave started.

EligibilityThe Family Medical Leave Act of 1993, known asFMLA, is a federal law allowing eligible employees ofa covered employer to take job-protected leave, forup to a total of 12 work weeks in any 12 months for:

Birth of a child. Adoption & foster care. Care of a spouse, child, or parent with a serious health

condition. Your own serious health condition. Care of a spouse, child, parent or next of kin with a serious

injury or illness incurred or exacerbated within 5 years of active duty in the Armed Forces (up to 26 weeks).

Qualifying exigency arising out of the fact that a spouse, child or parent is on active duty in the Armed Forces or is deployed to a foreign country

FMLA as a Benefit?

FMLA Statute and regulations make clear that FMLA is not intended to be an additional 12 week leave entitlement stacked on top of an employer’s existing leave policies.

Neither the employee or the employer can “waive” or “trade off” their rights under FMLA.

Who is responsible?

The employer is responsible for designating time off work as FMLA and informing all employees of their rights under FMLA. General notices-Posters Employee handbook Notice of rights and responsibilities given when leave is

requested Designation notice- When leave is designated as FMLA

The employee is responsible for providing medical certification by a health care provider, supporting the need for leave due to a serious health condition

FMLA Non-Compliance Costs According to the Society for Human Resource

Management, the average cost to defend a FMLA lawsuit is $78,000, regardless of the outcome.

Employees who successfully sued for wrongful termination based on FMLA Absence received on average between $87,500 - $450,000 in damages. (Source: EEOC)

According to the U.S. Department of Labor, managers and supervisors can be sued directly and held personally liable for paying damages (Shultz v. Advocate Health & Hospitals Corp.).

FMLA: The Cost of Absences

$760,000 every year in payroll costs due to unscheduled absences.***

Overall direct costs of FMLA nationally was $21 billion.* Lost productivity due to FMLA cost employers $4.8 billion in

profit. Employers paid $10.3 billion to replace workers who took

FMLA and paid $5.9 billion in healthcare coverage for employees on FMLA.

Costs of unscheduled absence plans (sick leave, Short and Long Term Disability, salary continuation, workers’ compensation) can add up to 4.4% of payroll.**

The most common method of covering unplanned absences is OVERTIME WORK.**

Workflow disruption was also cited as a concern by employers.*

FMLA: The Cost of Absences

*Statistics by Employment Policy Foundation Analysis on 04/19/05.**Fourth Annual Marsh/Mercer Survey of Employers’ Time-off and Disability Management Programs.

***Commerce Clearing House (CCH) Unscheduled Absence Survey.

BreakBreak

Address three primarychallenges employers face.

Administrative Issues Compliance Issues Employee Issues

How do you manage it?

Decrease costs associatedwith absences.

Coordination of policies – avoid “stacking.”

Better tracking of who is off work.

Accurately capturing lost work days.

Decentralized information.

Definitive Roles – who handles what?

Staffing concerns – leave taken with little or no notice.

Return to work coordination.

HR personnel with multiple responsibilities.

Administrative Challenges

Consistent claims handling.

Meeting timeframes for notice, designation and denial.

Reduced exposure to litigation.

Appropriate coordination of benefits.

Appropriate application of benefits.

Reduce privacy concerns.

Compliance Challenges

Low morale – co-workers having to pick up additional work to cover for those who are absent.

Reduced productivity.

Misuse of benefits – FML.

Increase in absences.

Dislike of having to share sensitive information with supervisors.

Employee Challenges

Integrated Disability Management

Seamless Coordination

Family Medical Leave Act State Specific Leave Laws Workers’ Compensation Short Term Disability Long Term Disability Medical Leave Personal Leave PTO/Sick Leave Employee Assistance Programs Wellness Programs Group Health and Disease Management

Role of the Agent/Broker/Consultant

Employers need assistance in evaluating their occupational and non-occupational absences

Identify best practices Provide guidance for program management

Outsourcing In-house program Hybrid of outsourcing and in-house

management Tracking and reporting

Best Practices

Four key programcomponents

Centralized intake

Clinical Management/Claim Administration

(Leave Coordinator)

Return to work programs

Data/reporting

Best Practices Program Model

Centralized Intake Single Point of Intake

24/7 availability

Toll Free Reporting

Efficient for employees

Efficient for Human Resources

Best Practices Program Model

Clinical Management/Claim AdministrationNurse Case Manager and Leave Coordinator

Leave Coordinator Knowledge of multiple benefits Understand policy language Work closely with Nurse Case Manager

Nurse Case Management Occupational & Non-Occupational Use of Nationally accepted Disability

Guidelines Early Identification of Long Term Disability and

Benefit Coordination Work Closely with Claim Administrator

Housed in same physical location.

Best Practices Program Model

Return to Work Fitness for Duty

Coordination of Return to Work

Job Analyses – Essential job functions

Transitional Work (occupational & non-occupational)

Written Policy

Onsite and Off-Site

Best Practices Program Model

Reporting/Data

Types of Reporting: Raw Data & Trending Number, Type and Location of Claims Approval/Denial Rates Benefit hours utilized, left and recovered What does my overall program look like? Who is taking off and why?

Return on Investment Impact What are my savings? Hard $$ savings: Lost work days = $$ Soft Savings – administrative time, employee

morale etc. Where have we improved? Where can we still improve?

Thank You

Disability Management Solutions

Holly Moyer, M.Ed., CRCSenior Disability Management Consultant

holly.moyer@careworks.com

(440) 937-9507 office(440) 413-0729 mobile

&

Ron LuckiDirector of Business Development

ron.lucki@careworks.com

(614) 760-3510 office(614) 989-8681 mobile