.webp?width=1200&height=800&name=short-term-disability-and-FMLA%20(1).webp)
When a medical or family emergency strikes, your employees shouldn’t have to worry about a paycheck or whether their job is safe. As an employer, you are in a unique experience to help ensure that your team members are taken care of in major life moments like the birth or adoption of a child, the onset of a serious health condition or a major injury to a family member.
If you’re reading this article, you clearly care about your employees' well-being. But that’s just the first step to lending a helping hand—the rest involves understanding the FMLA, short-term disability leave and the logistics surrounding when and how these concepts can apply for your employees’ benefit.
In this article, I’ll cover all the major items employers should understand about FMLA and short-term disability leave, including how much time off is available under each concept, whether leave must be paid or can be unpaid, and generally how to know which concept applies to a scenario.
Short-term disability is a type of insurance that may be offered by an employer, or that can be sought out by an individual on their own. It is designed to cover wage replacement for events that temporarily disable an employee such that they cannot reasonably work. Wage replacements typically range from 40 to 70% of the employee’s normal paycheck, but can be higher (with higher premiums).
If you decide to offer short-term disability insurance as part of a suite of benefits, you may cover all of the cost, or you may give employees the option to participate and withhold a portion of their paycheck to pay for some of the cost.
A decision regarding which type of short-term disability insurance your company should offer may depend on the size of your workforce, its demographics, your state, and many more factors. A healthcare PEO can help you decide which benefit avenue is right for your business.
With this type of insurance, the employer will pay the full premium
Short-term disability insurance is designed to cover the wages of an employee who is temporarily unable to work. Qualifying events that could trigger short-term disability coverage will vary from plan to plan, but generally, the following events will be covered:
Keep in mind that only events (i.e., illnesses and injuries) that do not occur as a result of the employee’s work environment will be covered under short-term disability. If an injury or illness results from the employee’s work environment, benefits for that employee will be covered by workers’ compensation insurance.
Short-term disability insurance typically involves a waiting period, also known as an “elimination period.” This is a period of time before benefits will be made available to the employee. During this time, the employee may need to use PTO or sick leave to cover pay in their absence. Waiting or elimination periods typically range from seven to thirty days.
RELATED: How to Help Employees Return to Work After Extended Leave >>
Short-term disability coverage may extend to cover an employee for up to a year depending on the selected plan. Most policies, however, will have maximum coverage periods ranging from three to six months.
RELATED: Unraveling the FMLA in Uncommon Situations >>
The Family and Medical Leave Act (or “FMLA”) is a federal law that applies to companies in all fifty states, but only to those companies that have 50 or more employees. Under the FMLA, employees who have worked for a company for at least 12 months, and for at least 1,250 hours over those past 12 months can generally qualify for the protections afforded by the Act.
For those qualifying employees of covered employers (as described above), the Act guarantees up to twelve weeks of unpaid, job-protected leave per year. This means that an employer must allow an employee to take up to 12 weeks of leave for certain reasons (which we will cover below), and that the employee’s job, or a substantially similar one, must be available to them when they come back. The Act also requires that covered employers continue to provide group health benefits to their employees while they are on FLMA leave.
Employee leave is only covered by FMLA leave for specific reasons, including:
RELATED: What Employers Need to Know About FMLA Intermittent Leave >>
Some situations (like a serious injury or complications with a pregnancy) may implicate concepts of both short-term disability and FMLA leave. By now, you're familiar with the basic difference between the two: while short-term disability is a benefit that can be offered in advance of an event and that can cover an employee’s missed wages, FMLA leave, on the other hand, is statutory unpaid leave required by the federal government.
It’s possible that short-term disability insurance coverage and FMLA leave can run concurrently. While an employee is out on job-protected leave as required by the FMLA, the short-term disability insurance policy they may have in place can step in to cover a portion of their paychecks.
Of course, short-term disability coverage may extend past the employee’s FMLA leave. As an employer, you have the discretion to continue to secure an employee’s job for them upon a return, even after 12 weeks (in keeping with applicable state and local laws).
RELATED: Can We Talk? Avoiding Legal Land Mines with Employees on FMLA Leave >>
Could your business use a hand in selecting the right mix of benefits for your employees, including short-term disability insurance? Do you have over fifty employees and need an expert in FMLA administration?
Axcet HR Solutions can help. We are a certified professional employer organization able to handle the full range of human resources tasks for busy small to mid-sized businesses. Interested in learning more about partnering with Axcet? Schedule a consultation with our experts today.
.png){kind=logo}
Let us know what you think...