FMLA and Health Insurance Risks and Things to Consider Brice Christensen Client Advisor, Employee Benefits Abbey Vanderwerf Vice President, Employee Benefits 04/24/2019

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Agenda Importance FMLA Basics Identifying Your 12 Month Period FMLA and the ACA Where to Begin

Why is this important to me?

Employee and Employer Protections 12 weeks of protected leave Including health insurance Employer Limit liability Termination of employment Termination of health insurance

What’s the worst that can happen? 1. Employer has no policy/process for administering FMLA 2. Employee is out for extended period of time for serious medical condition 3. Health plan denies claims after COBRA should have been exhausted 4. Employee is terminated from health plan 5. Employee sues for not being offered COBRA coverage 6. Employer self-funds cost of claims for 18 month COBRA period

FMLA Basics

FMLA Basics Requires Covered Employers to provide Eligible Employees up to 12 weeks of unpaid, job-protected leave per year Leave must be for reasons required by law (Covered Reasons) Employers and employees have specific rights and remedies under the FMLA The FMLA provides specific rules for group health benefits coverage Employers must generally restore employees to their position or equivalent position upon return from FMLA leave

Covered Reasons Birth of a child and to take care of newborn, including prenatal care and bonding time Placement of a child for adoption or foster care To care for an immediate family member with a serious health condition Employee’s own serious health condition Qualifying exigent circumstances (a covered service member has been notified of an impending call to active duty) To care for a covered service member's serious injury or illness (a/k/a “military caregiver leave”)

Serious Health Condition Illness, injury, impairment, or physical or mental condition; Requires inpatient care or continuing treatment by a health care provider; and Involves more than three days of incapacity. Burden is on the employer to determine if condition is FMLA qualified.

Intermittent Leave Employers have to allow intermittent or reduced schedule leave under certain circumstances Medical need for such leave Qualifying exigencies (military leave) Not required for birth or adoptions, but employer may agree to it Example: Leave for newborn well-care appointments are not FMLA-protected but could be allowed by employer.

Concurrent Leaves Recommend leave policy to require using paid leave while on FMLA leave. Accrued leaves (Sick, Vaction, etc.) Disability/Workers Compensation If a leave is eligible for FMLA, it is always advisable to treat it as FMLA leave.

Identifying Your FMLA Leave Year

FMLA Leave Year Calendar Year Any Fixed 12 Months The Department of Labor allows employers choice for an FMLA Leave Year. Calendar Year Any Fixed 12 Months The 12 month period measured forward A “rolling” 12 month period measured backward

FMLA Leave Year Calendar Year Any Fixed 12 Month Period Allows for leave stacking January 1 to December 31 Any Fixed 12 Month Period Employer determines (fiscal year or employee date of hire) Rolling Forward Does not allow for leave stacking 12-month period set at the first day of leave rolling forward Rolling Backward 12-month period rolling backward from leave date

FMLA Leave Year Different Leave Year, Different Results Employee requests leave in two years Calendar Year – Both leave requests are granted First leave: 9.1.2018 – 11.1.2018 (8 weeks) Second leave: 3.1.2019 – 6.1.2019 (12 weeks) The leave year must uniformly and consistently applied to all employees, unless the employer is multi-state and an applicable state law requires a specific method be used for a leave year. An employer must describe the leave year in their FMLA policies. An employer can change how they are calculating leave years with 60 days notice but can’t use the change to be less generous to employees.

FMLA Leave Year Different Leave Year, Different Results Employee requests leave in two years Rolling Forward – Only 4 weeks of 2nd leave qualifies as FMLA First leave: 9.1.2018 – 11.1.2018 (8 weeks) Second leave: 3.1.2019 – 6.1.2019 (12 weeks) September 2018 September 2019 First Leave Request 8 Weeks Second Leave Request 12 Weeks 9/1 11/1 3/1 6/1 9/1 3/1 First leave – 8 weeks used - Approved Second Leave – Look at 9/1/2018 – 9/1/2019 (8 weeks used) – Approved for only 4 more weeks (remaining time in leave year)

FMLA Leave Year Different Leave Year, Different Results Employee requests leave in two years Rolling Backward – Only 4 weeks of 2nd leave qualifies as FMLA First leave: 9.1.2018 – 11.1.2018 (8 weeks) Second leave: 3.1.2019 – 6.1.2019 (12 weeks) First Leave – 9/1/2017 – 9/1/2018 – no leave time used - Approved Second Leave – 3/1/2018 – 3/1/2019 (8 weeks already used) – Approved for only 4 more weeks (remaining time in leave year)

FMLA and the ACA

FMLA and the ACA When should we term from health insurance? ACA protected stability period Does employee “measure” as full time? Monthly or Look-Back?

FMLA and the ACA Determining FTE Status Monthly Measurement Method When concurrent with paid leave, an employee earns hours of service for FTE determinations Unpaid FMLA leave does not count as hour of service for FTE determination Look-back Measurement Method If an employee is on FMLA leave during a stability period for which he was full-time, coverage continues Determine FTE at next Admin Period

ACA Periods Select length of stability period Clearly define measurement method Look-Back, Monthly Select length of measurement period Between 3 and 12 months Select length of stability period Between 6 and 12 months Select length of administrative period Between 1 and 3 months

FMLA and the ACA

Where To Begin

Policy Basics Define Covered Reason Identify FMLA Leave Year Run paid leaves concurrently with FMLA Obligation to maintain health benefits stops after FMLA Concurrent leaves: Enforce use of sick or vacation leave alongside allotted FMLA leave

Other things to consider Medical certification process Allows employer to know if condition qualifies Designation notice How to let employee know if leave qualifies Notice of changes 60 day notice for change to Leave Year