Paid Family and Medical Leave Challenges

The FINEOS team enjoyed our trip to Los Angeles for the DMEC FMLA/ADA Employer Compliance Conference for opportunities to learn and connect with the best and the brightest in the industry.  We spent four days in our element, swimming in the deep waters of FMLA, ADA, paid sick leave, paid family and medical leave, and more. Touching base on the latest industry developments and meeting face-to-face with our clients, colleagues, and friends was just what the doctor ordered after two years of largely remote connections.

Two of the hot topics that we heard discussed again and again concerned the complexity of paid family and medical leave and concurrency issues. Paid family and medical leave programs have exploded while we have been away from live conferences during our COVID-19 hiatus, and it was fascinating to hear employers and TPAs discuss the challenges they’ve experienced along the way. The pace at which the laws have been passed and implemented (and are continuing to do so), in addition to balancing the regular pace of unpaid leave compliance has left the industry very busy.

Employers managing this complexity have always been challenged with employees in a multi-state work environment, but remote work has amplified this issue. With an increasing share of the workforce working from home, many employees have taken the opportunity to relocate — without necessarily informing their employer. Or in some cases, they’ve informed their manager, but that message hasn’t reached the leave administrator who needs that information to accurately assess the employee’s leave entitlement. While this used to be relevant primarily for questions around job protection, increasingly an employee’s location can have significant impacts on their pay during leave. Ensuring accurate and timely communication on workplace location is a crucial touchpoint for employers and employees.

In addition, we heard multiple times that as more layers of leave and pay programs are added, the industry continues to struggle with how to manage concurrency issues. For a single, uncomplicated pregnancy, an employee could be eligible for federal FMLA, state FMLA, state PFML, state Paid Sick & Safe leave, state Parental leave, company STD program, and company Parental leave. In addition to understanding which leaves may be applicable, understanding how different pay entitlements can – or must not – offset one another adds another layer of complexity. The trend of “unlimited” PTO policies has dropped another ingredient into the concurrency mix. Employers with unlimited PTO often do not require a reason or even a category of reason when an absence is requested. Employers mentioned the challenge of learning after the fact that employees are using unlimited PTO for absences that may qualify for state or federal leaves. Without this knowledge, employers are not alerted to potential coverage, and cannot provide important information and compliance notices to employees. Further, employees may actually be leaving money on the table when they are paying into state PFML programs, but not taking advantage of those benefits. In some cases, employees are using PTO because the process is simpler than applying for PFML benefits, while in other cases it may simply be a case of a lack of information. Still others may opt to characterize their leave as PTO only, because some PFML laws prohibit or limit top-up of benefits. Savvy employers are analyzing these issues to determine whether, and how, to tweak their policies to ensure their employees are taking advantage of any benefits available outside of employer payroll while also providing generous employee perks to stay competitive in the marketplace.

We look forward to the next opportunity to meet with the absence and disability industry in person! As much as we continue to enjoy webinars and other online opportunities, the benefits of meeting face-to-face cannot be underestimated.

Using modern insurance technology solutions like the FINEOS Platform can help insurance carriers remain agile and competitive when leave legislation is revised. Learn more about how a modern, integrated disability and absence management (IDAM) solution can help your organization adapt to sudden changes and remain in compliance.


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