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SHRM's knowledge advisors answer common HR questions.
Why might an employer opt to use a private health care exchange?
A private health care exchange is a marketplace of multiple insurers that offers health coverage and related services. Your company can purchase health insurance from the exchange, and employees can choose a plan and insurer from among the carriers offered.
Exchanges take a defined contribution approach to employee benefits. Instead of both employee and employer contributing to premium costs, your organization would provide employees with a fixed sum with which they can purchase the benefits they desire in the exchange.
There are a number of advantages for employers that use private health care exchanges. Private exchanges may:
However, there are still some unanswered questions. For example, if health care costs increase, will your organization be able to keep its proportion of the costs constant without incurring a penalty? Or will it be required to increase its share?
In offering a private exchange, you also run the risk of overwhelming prospective participants by myriad choices. Job candidates and employees alike may be turned off by the unfamiliar and sometimes confusing nature of a defined contribution plan. Some studies show that when employees are given more choices, they are actually less inclined to participate, or they will make decisions that leave them dissatisfied. Also, giving up your administrative involvement could result in quality control issues.
—Regan Gross, SHRM-SCP
What hours of work count toward FMLA eligibility?
To be eligible to take leave under the federal Family and Medical Leave Act (FMLA), an employee must have worked 1,250 hours during the 12 months prior to the start of the leave, must work at a location with 50 or more employees either at the same site or within 75 miles, and must have worked for the employer for 12 months. The 12 months of employment don’t have to be consecutive.
In general, only hours that were physically worked—and not breaks, vacation or travel time—will count toward the 1,250 hours for FMLA eligibility. The only exceptions are for those who were on military leave during the 12 months preceding the leave and airline flight crew.
Weeks of vacation or sick leave, while not included in the 1,250 hours, will be counted toward the 12 months of employment requirement for nonexempt employees.
Use the U.S. Department of Labor’s Fact Sheet #22 to determine which hours should be counted, such as travel time or on-call time. In general, if you are required by law to pay the worker for the hours, they are included in the 1,250 hours needed for eligibility.
For exempt workers, the same rules apply. However, many employers don’t track the actual time worked by exempt employees, who may work much more than 40 hours a week. If an employee indicates that he or she has worked the 1,250 hours and you don’t keep records to prove otherwise, you must allow that worker eligibility for the leave. If this becomes a problem, consider monitoring the hours of all your exempt employees.
For employees who were serving in the military prior to the requested FMLA leave, you must credit them with the amount of hours they would have worked had they not been on military leave. Use the employee’s pre-service work records.
An airline flight crew member is eligible for FMLA leave if he or she has worked or been paid for at least 60 percent of his or her monthly guarantee and a minimum of 504 hours, not including personal commute time or time spent on vacation, medical or sick leave.
—Angela Stone, SHRM-SCP
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