HR’s Role in Managing Benefits: Understanding Short-Term Disability and FMLA Leave

For many organizations, the Human Resources (HR) department is tasked with managing employee benefits. This includes designing a compliant benefits package, collaborating with brokers to select insurance plans, and guiding employees through open enrollment. They must also navigate complex benefits-related questions, including those about the various types of leave and disability benefits available to employees. While many benefits support the employee's medical needs during disability, employee disability benefits and leave programs serve to protect the employee's job and potentially provide partial income protection, when eligible.

Understanding Short-Term Disability and FMLA Leave

Short-term disability insurance offers financial support to employees who are temporarily unable to work due to medical conditions. At the federal level, short-term disability insurance is not mandatory, but some states, like New York and California, require it. Regardless of location, offering this insurance can be a valuable benefit for employees who experience unexpected medical events. 

If an employer provides short-term disability insurance, the benefits administrator has several key duties. These include: 

• Working with brokers to select suitable plans
• Understanding the coverage specifics
• Communicating plan and coverage details to employees
• Ensuring the company stays compliant with relevant regulations

The Family and Medical Leave Act (FMLA) is a federal law that grants eligible employees up to 12 weeks of unpaid leave per year for specific family and medical reasons. This includes personal or family illness, childbirth, adoption, or foster care placement. FMLA is mandatory for public agencies and private employers with 50 or more employees. Failure to comply with FMLA regulations can result in significant legal and financial repercussions for the employer.

When an organization is obligated to provide FMLA leave, HR must fulfill several key duties, including:

• Inform Employees: Clearly communicate employees’ rights under FMLA.
• Handle Requests: Manage and respond to employee requests for FMLA leave.
• Verify Eligibility: Assess and confirm employees’ eligibility for FMLA leave.
• Maintain Records: Keep accurate and up-to-date records of FMLA leave.
• Administer Benefits: Ensure the continuation of other benefits, such as healthcare, during approved leaves of absence.

Auditing Your Employee Leave Process

As a plan-sponsor, auditing employee leave policies is a critical step in ensuring programs are compliant with legal regulations, equitable, and enhance overall workplace productivity. By conducting regular audits, HR teams can help identify and rectify any discrepancies or outdated practices. This proactive approach not only helps reduce the threat of potential legal exposure, but also ensures that leave policies are consistent and fairly crafted, leading to a happier, healthier, and more engaged workforce. Not sure where to start? Click here for a helpful checklist on how to properly audit your employee leave program.

Successful employee leave experiences start with having the right expertise and resources. To learn more about Paycor and their Complete HR Benefits Toolkit, and to get more tools and resources your organization needs to tailor your benefits package to your unique workforce, reach out to your AssuredPartners team.