Coordinating Leave Benefits. September 20, 2017

Transcription

1 Coordinating Leave Benefits September 20, 2017

2 Agenda Introduction FMLA COBRA ADA Financial Benefits Coordinating Benefits Examples Takeaways 2

3 Introduction

4 FMLA Covered Employers Private sector employer: 50 or more employees in 20 or more workweeks in current or preceding calendar year. (Do not need to be consecutive weeks) Including joint employers or successor interest to a covered employer Public agency (state, local, federal government agency) Regardless of the number of employees Public or private elementary or secondary school Regardless of the number of employees

5 FMLA Covered Employees Works for covered employer Has worked for employer for at least 12 months Has at least 1250 hours of service for the employer during the 12 months preceding the leave Works at a location where the employer has at least 50 employees within 75 miles

6 FMLA Covered Reasons Eligible Employee Entitlement: 12 workweeks of unpaid leave in a 12 month period for: 26 workweeks of unpaid leave in a 12 month period for: Care for a service member with a serious illness or injury when the employee is the spouse, son, daughter, parent or next of kin of the service member

7 COBRA The Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to employers with 20 or more employees. Most states in our region have laws covering employers with less than 20 employees. Michigan is an exception No state COBRA equivalent Illinois is modified scales benefit on age and relationship COBRA requires employers to give employees the option of continuing health benefits for a limited period if they lose coverage because of a qualifying event.

8 COBRA/FMLA FMLA is not considered a qualifying event. FMLA requires employers to maintain medical coverage during FMLA leave. Accordingly, COBRA eligibility is extended with the medical coverage. The employee on FMLA can become eligible for COBRA if: The employee fails to pay the medical premium in a timely manner*, Employee exhausts FMLA leave Employers should have a written FMLA policy that specifies what will happen in the event employee fails to pay premium.

9 COBRA/ACA Affordable Care Act (ACA) if an employee is full time and benefits eligible at the end of a measurement period, in most circumstances the employee must remain benefit eligible for the remainder of the stability period. Status as full time is locked in for entire stability period. Often times this means that an employee who qualifies as full time must remain benefit eligible for the entire plan year because most employers use a 12 month stability period. ACA does not directly impact COBRA obligations for employers, but can cause havoc. Prior to the ACA, most employers would remove an employee from the plan if the employee s hours were below the plan s eligibility threshold and, if applicable, offer COBRA. Now, employers must be cautious not to remove an employee from the plan mid-year if the employee qualified for coverage under the look back measurement period.

10 COBRA/ACA Under the ACA an offer of COBRA coverage does constitutes an offer of coverage. COBRA probably does not meet affordability requirements, which would expose the employer to potential penalties. Subsection (b) penalties: penalty for failing to offer affordable coverage Triggered if employee enrolls on public exchange and receives subsidy. 2017: $ per month/per employee Employee standpoint Electing COBRA limits opportunity to go to the exchange until the next open enrollment period. Playing nice - Employer contributing to the COBRA premium could prevent the employee from being eligible for an exchange subsidy.

11 COBRA/FMLA/ACA ACA COBRA FMLA

12 COBRA/FMLA/ACA Employer should consider: Is the employee s leave protected by FMLA? How long has the insurance or reinsurance carrier agreed to continue benefits? Does the employer have an internal policy or precedent addressing the length of time during which benefits may be continued? Is the employee in a stability period?

13 ADA The American with Disabilities Act (ADA) prohibits discrimination against individuals with disabilities Employers focus was determining if there was a protected disability. Is this condition a disability? In 2008, the ADA was amended to expand the definition of disability. Changed the employer focus to providing a reasonable accommodation.

14 ADA Reasonable accommodations include: Providing or modifying equipment or devices, Job restructuring, Part-time or modified work schedules, Reassignment to a vacant position, Adjusting or modifying examinations, training materials, or policies, Providing readers and interpreters, and Making the workplace readily accessible to and usable by people with disabilities. Extension of leave

15 Employer Benefits and ADA ADA requires employers to provide all employees - with a disability or without a disability - the same health insurance benefits.

16 ADA/FMLA Cautions Avoid 100% healed policies. Avoid no-fault leave policies. Managers and supervisors. Limit requests for medical information. Pregnancy might be covered under both FMLA and ADA. Treat obvious and nonobvious disabilities the same. Light duty. Use work-leave as the last accommodation option, not the first. Indefinite leave.

17 ADA/FMLA When both laws could apply: Generally, public sector employers and private business employers with more than 50 workers are covered under both the ADA and FMLA. Employees in these workplaces can have rights under both laws if they meet the definition of disability (ADA) and serious health condition (FMLA). Workers who have used up FMLA leave can still have rights under the ADA if they meet the ADA definition of a person with a disability. Additional leave (beyond FMLA leave) could be a reasonable accommodation that may need to be provided under the ADA.

18 ADA/FMLA The process for both laws should start when the employer has a knowledge of need. FMLA Notice of Eligibility and Rights & Responsibility ADA Interactive Process Employee does not need to directly ask. Entitlement periods can be concurrent. Extension of leave should be last resort, not first option. Job Accommodation Network - askjan.org

19 ADA/FMLA/COBRA/ACA ACA COBRA FMLA

20 ADA/FMLA/COBRA/ACA Employers (fully insured or self insured) should align: Leave Documentation Interaction of Leave Policies Job Descriptions Supervision COBRA Administration Look Back Measurement Period Insurance Policies Plan Documents Summary Plan Descriptions Medical Plan Eligibility

21 Financial Benefits Vacation Pay Sick Pay Paid Time Off (PTO) Short Term Disability (STD) Long Term Disability (LTD)

22 Coordinating Benefits Example #1 January 1, Employee is injured on the job. Doctor has prohibited the employee from working until follow-up appointment on February 15 th. January 2, 2017: Filed claim with workers compensation insurance carrier. - Send employee FMLA Notice of Eligibility and Rights & Responsibility and Physician Certification. Allocate three vacation days for January 2, 3, and 4. February 15, 2017 Employee is released to work but with numerous restrictions and limited to 20 hours a week. Follow up appt. March 31. Return the employee to light duty position. Employee continues to receive partial work comp benefits Continue to apply FMLA for non-work hours

23 Coordinating Benefits Example #1 March 31, 2017 Employee had a few restrictions lifted, but also was given a permanent restriction. Still can only work 20 hours a week. Follow-up April 30 th. Return the employee to light duty position. Employee continues to receive partial work comp benefits Continue to apply FMLA for non-work hours Start ADA interactive process for permanent restriction April 30, 2017 Employee only has permanent restriction and can now work 30 hours per week. Follow-up May 30, FMLA has expired. ADA accommodation May 30, 2017, Employee at maximum medical improvement, release to full duty with permanent restriction. ADA

24 Coordinating Benefits Example #2 February 10, 2015 Date of hire of a variable hour employee. Following the initial 12 month measurement period the employee averages 34 hours per week and is considered a full time employee for the initial stability period March 1, 2016 until February 28, April 5, 2016 Employee has back injury at home. Employee notifies employer that they are restricted from working until next medical appointment on April Send employee FMLA Notice of Eligibility, Rights & Responsibility Notice and Physician Certification. - FMLA is approved/applied and employee takes PTO for the financial benefit. Employee contributions are deducted. April 20, 2016 Employee is released to work. Follow up appt. set for May 19. April 25, 2016 Employee calls in sick due to back pain.

25 Coordinating Benefits Example #2 April 26, 2016 Employee notifies employer that they are restricted from working until next medical appointment on May 19. May 9, 2016 Employee has used all available PTO. Only covered by unpaid FMLA. May 20, 2016 Employee notifies employer they are having surgery on May 25 and out for 8 weeks after surgery. June 15, 2016 Employee fails to make employee contribution on medical benefit for 30 days. But employee is in initial stability period. Employee submits documentation that recovery will take an additional 2 weeks due to physical therapy. Anticipated return to work is August 1 st. Start ADA interactive process for permanent restriction

26 Coordinating Benefits Example #2 July 1, 2016 FMLA has expired. Extend leave under ADA until next medical appointment on July 29. Eligible for LTD benefits July 29, 2016 Employee released with permanent physical restrictions on sitting. ADA August 1, 2016 Employee returns to work. Accommodation - ADA Arrangements to repay employee contributions.

27 Coordinating Benefits Example What about health insurance coverage? Is the employee s leave protected by FMLA for continuation of benefits? How long has the insurance or reinsurance carrier agreed to continue benefits under the contractual terms of the plan documents? Does the employer have an internal policy or precedent addressing the length of time during which benefits may be continued? Is the employee in a stability period? - When is the next open enrollment? - Does the employee qualify for coverage in the following plan year?* Has the employee maintained the agreed arrangements for premium payments?

28 Takeaways Learn applicability of: Regulations Policies Benefits Apply consistently Documentation Reasonable accommodation Fair vs Equal Respecting limits Employers Employees

29 Thank you!