updated July 22, 2013
Employers can use leave-taking under the Family and Medical Leave Act (FMLA) as an “early warning system” to predict and prevent disability absence, according to a study by the Integrated Benefits Institute (IBI), a benefits research and consulting firm.
Lost productivity costs to businesses due to employees on extended leave include lost revenue, work disruptions, reliance on overtime and the use of substitute workers. These costs are compounded when an employee’s health issue results in a claim on the company’s short-term disability (STD) policy and increase significantly in the event of a long-term disability (LTD) claim, according to IBI's study report, which analyzed data from 161 companies and 520,000 employees.
The report, Early Warnings: Using FMLA to Understand and Manage Disability Absence, suggests that employers have an opportunity to minimize disability costs by developing strategies to connect at-risk employees with existing benefits.
“In many ways FMLA gets a bad rap because of the spotlight on questionable claims, and employers usually focus on trying to prevent misuse of leaves,” said IBI President Thomas Parry. “The data tell a different story of how employees are using it and how there’s an opportunity for employers to prevent disability absence. Employers should consider using FMLA as an early warning system to detect impending health issues among their employees and their families.”
While IBI's findings demonstrate the advantage of early engagement with employees requesting FMLA leaves, "few employers do this—even though the majority undertake comprehensive efforts to engage their workforces as a whole in their own health,” Parry added.
Among the study highlights:
- Almost one-quarter—24 percent—of eligible employees took leaves under the FMLA over the five-year period studied and 14 percent filed STD claims.
- Employees who used the FMLA due to personal health conditions were twice as likely as other workers to use STD the following year.
- Employees who took FMLA leave for a family member’s health condition were about 50 percent more likely to have an STD claim the following year than other employees.
- FMLA requests were predictive of a future STD claim even when leave was denied, suggesting that employees who are ineligible for FMLA leave may still benefit from interventions.
- Employees without access to STD benefits use more FMLA days.
- STD durations are longer when preceded by FMLA claims. And the likelihood of a later long-term-disability claim increases, as well.
- Intermittent FMLA leave is as likely on Monday and Friday as on any other weekday and is equally likely to be a full-day absence.
Using FMLA to Manage Disability Costs
To better manage costs, employers should connect employees requesting FMLA leave with resources such as employee assistance programs; discuss stay-at-work alternatives; improve training for supervisors about early warning signs and potential interventions; and better educate workers on the types of absences the FMLA does (and does not) cover, and their rights and responsibilities, according to a panel of experts convened by IBI, as noted in the study report.
The panel recommended the following strategies to better manage costs associated with FMLA leaves:
Explore work continuity options. Discussions with employees about job accommodation and stay-at-work options should commence at the earliest opportunity. Job accommodation and stay-at-work programs involve making changes to the duties of affected employees to enable them to continue working at a reduced level.
- Connect employees with resources. When employers become aware of employees’ challenging personal situations through FMLA requests, they have the opportunity to direct workers to resources that can help minimize the risks of subsequent claims. Employers should take steps to connect employees requesting FMLA leaves with resources such as employee assistance programs, ergonomic interventions and disease management programs.
Expand training for supervisors. Employers and their benefits partners should expand FMLA training for supervisors on early warning signs and potential interventions. They should also conduct periodic “roundtables” with supervisors and human resources staff to review ongoing cases and provide appropriate coaching and support for supervisors.
Stay in touch with workers. Supervisors should remain in contact with employees during FMLA and STD leaves to keep them engaged and connected to work.
Better educate employees about FMLA. Training for employees about their FMLA rights and responsibilities should be improved and consistent. Employees generally receive information about FMLA from their human resource departments, but typically only at the time of requests. This increases the workload of personnel who must verify requests with no chance of approval. Workers should also be educated on the types of leaves FMLA does and does not cover.
Synchronize HR duties related to leaves. Employers should coordinate FMLA-related activities of human resources, benefits and occupational health departments so cases can more actively be monitored and managed.
"Employers can track and analyze FMLA leave-taking data in order to promote healthier workforces and prevent disability absence," Gregory Poulakos told SHRM Online. Poulakos, senior vice president of financial protection products at UnitedHealthcare, recommended that employers:
- Take advantage of FMLA as a way to improve employees’ health at early stages to prevent future disability absences.
- Connect workers who request FMLA leave with resources such as employee assistance programs, ergonomic interventions and disease management programs, regardless of an employee’s eligibility for FMLA leave.
- Coordinate activities across benefits programs silos, which continue to be barriers to effective FMLA management.
Based on UnitedHealthcare data, employers can reduce the duration of disability claims by more than 13 percent through proactive outreach, said Poulakos, who helps oversee UnitedHealthcare’s Bridge2Health program. "For instance, employees who are living with a cardiovascular condition receive additional support and information on filing an FMLA, disability or critical-illness claim," he noted. "The timing and depth of that support is not possible if the employer does not use an integrated approach to employee benefits."
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Related SHRM Video:
Understanding the Full Costs of Health. Data-based behavioral health interventions can reduce absenteeism and increase productivity, says Tom Parry, president of the Integrated Benefits Institute.
Best Practices Help to Manage Disability-Related Absence, SHRM Online Benefits Discipline, April 2012
Integrated Disability Management in a Challenging Economy, SHRM Online Benefits, March 2011
SHRM Online Benefits pageSHRM Online Health Care Reform Resource Page