When employees need to attend to their (or their family’s) medical needs, they may need to take time off from work. There are specific steps they and their employer need to follow to determine whether they will receive compensation when they aren’t working.
The Family and Medical Leave Act of 1993 (FMLA) provides unpaid, job-protected leave to eligible employees. The FMLA is a federal law that requires employers to provide up to 12 weeks of unpaid, job-protected leave per year for particular family and medical reasons.
Although the details may seem complicated, the process is fairly straightforward when both employer and employee adhere to the following steps.
Determine Employer Obligation and Employee Eligibility
An employer has certain obligations towards their employees. They need to provide a safe and healthy work environment, pay them a wage that is at least equal to the minimum wage, provide them with meal breaks and rest periods, provide them with leave entitlements and notify them of changes to their employment terms.
Under the terms of FMLA, if they employ 50 or more employees who work within a 75-mile radius of the worksite, they are also required to offer paid leave.
With a qualifying reason, employees are eligible for these entitlements if they are employed on a full or part-time basis and have worked for the employer for at least 12 months.
Determine Whether there Is a Qualifying Reason
The next step is to determine whether the employee has a qualifying reason for requesting leave. A qualifying reason for FMLA includes when the employee is unable to work because of any of the following reasons:
- Serious health condition
- Employees must care for a family member with a significant health condition.
- Qualifying exigency arising out of the military service of the employee or family member
- Qualifying exigency arising from an employee’s spouse, child, or parent is on covered active duty (or has been notified of an impending call or order to covered active duty) in the Armed Forces.
If an employer denies FMLA benefits to an eligible employee, they must provide written notice. It must include the name and address of each person or organization denying leave and the specific reasons why the leave was denied.
Notify the Employee of Eligibility for FMLA
The Family and Medical Leave Act requires employers to notify employees of their eligibility for FMLA. Employers must let employees know if they are eligible to take leave under the FMLA within five business days of receiving a request for leave, or an employee’s first day of work, whichever is later.
Employees must also be notified if they are not eligible for FMLA within five business days of the employer’s determination.
Request Medical Certification for Paid Leave
As per the company’s policy, employees must provide a medical certification for any paid leave. The company will not process any requests for paid leave without a valid medical certificate.
When possible, medical certifications should be submitted to the HR department at least ten days before the date of leave.
Notify the Employee of FMLA Approval or Rejection
If the medical certificate is complete, they will approve or reject the request based on the provided facts. If it is incomplete or unclear, additional information may be required before they make a determination. The employee should have at least seven days to submit the requested information.
The employee will be notified of the status within five business days of submitting a completed medical certificate. If the request is approved, they will be able to take a paid leave of absence, which will be counted against the FMLA benefits to which they are entitled.
Responsible Employee Leave Procedures
Implementing and adhering to Responsible Employee Leave Procedures is a way to ensure that the company is not negatively affected by an employee’s absence. Responsible leave procedures might include giving the employee information on what they need to do before they leave, including who needs to know about their leave, where to find important documents and how best to communicate with people while they’re on leave.
They may also be required to periodically call in to provide updates on their status so the company can continue to plan for their absence without additional strain to the business or other employees.
Employee Reinstatement After FMLA Leave
Since the employee should have been periodically calling in to report their status, the company should be prepared for their imminent return. Plus, the employee on leave may have been kept up-to-date on any changes made to their job while they were gone.
If the employee requested leave for their own medical condition, they would have submitted a medical certificate. In this case, before the employee is allowed to return to work, a medical release from the doctor may be required.
In some circumstances, there may be mitigating circumstances that require additional documentation. Generally, by following these steps, an employee will be able handle their or their family’s medical issue without running the risk of further financial hardship or losing their job.
As manufacturing continues to change, companies face the challenge of evolving or being unable to keep up with their more adaptive competitors. To successfully solve these challenges, HR managers need to adapt to changes not only in technology, but in workforce demographics, as well as. Here are five top tips for solving some of manufacturing’s HR challenges:
Retrain Your Workforce to Retain Your Workforce
Retraining is the key to ensuring that your workforce is equipped with the most current skills required for successful completion of their responsibilities. Keeping your employees happy and engaged is also an element in maintaining employee morale. This can be done by providing them with opportunities to learn new techniques.
Some companies offer courses and workshops as part of their benefits package. This helps the company, but it also helps the employee. It provides an opportunity for them to gain new skills at work that can help them advance within the company.
Recruit New Talent to Expand Your Workforce
Recruiting new talent can be a difficult task. Although companies previously depended on want ads and word-of-mouth to find new workers, now, they must be a bit more creative to find qualified employees.
Job placement platforms online can connect job searchers with recruiting companies. Another option is to promote hiring positions at high schools and colleges. Marketing your job openings in those two arenas will expand your applicant pool exponentially.
Train Supervisors to Respond to Worker Needs
Supervisors are often in charge of training their employees on their jobs. This is especially true for new hires. However, an increasing number of companies are realizing that this responsibility is not just the job of the supervisors.
Instead, employees should be trained by the company as a whole to ensure that they are getting the most out of their time at work.
Companies can train supervisors to respond better to workers’ needs by giving them an overview of what it’s like for employees on a day-to-day basis and how they can help them with these challenges.
It is important for supervisors to develop a strong relationship with workers. Company leadership and mentorship programs can assist with this.
Adjust to Evolving Laws for Workers Compensation and Leave
Staying current with evolving laws is a difficult process for any company. The greater number of on-the-job accidents requiring adequate leave and compensation for workers cause manufacturing companies to feel the challenges even more.
With the Americans With Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA), the federal government works to make it easier for employers to offer paid leave and workers’ compensation benefits. Companies need to balance the individual needs of the injured employee with those of the companies’ overall objectives. This affects several dynamics.
Skilled HR teams strive to achieve that balance to better benefit everyone involved.
Outsource Work to Help Your Company Adapt
Although many tasks and responsibilities can be handled in-house, outsourcing work is a way for companies to adapt to changing markets and also cut costs. It is a strategy that many companies are employing to stay competitive in the global market.
Outsourcing work allows companies to assign some tasks to experts with the necessary skill sets while the onsite employees focus on the company’s core competencies. Not only can outsourcing be beneficial for companies by helping them save time, money, and resources, it also can be seen as a form of risk management because it helps companies adapt quickly to changes in the industry.
Health savings account (HSA) contribution limits will significantly increase in 2023 and will likely continue to rise in the near future. On April 29, the IRS announced that it would drastically increase contribution limits. The announcement was made in response to the recent surge in inflation, and provides employers sponsoring high-deductible health plans (HDHPs) sufficient preparation time before the approaching open enrollment season.
With the annual inflation-adjusted limit, the maximum contribution limit for a family HSA is now $7,750, up from $7300. This is an increase of 5.5 percent from 2022’s limit, where the increase for the previous year was a mere 1.4 percent. Self-only coverage HSA contributions will increase from $3,650 to $3,850 in 2023.
The IRS verified the projected 2023 HSA contribution limits and the maximum out-of-pocket expenses and minimum deductibles for the paired HDHPs in the Revenue Procedure 2022-24.
2023 Increase Is a “Significant Jump” Over Previous Years
As more employers weigh the benefits of making income-based contributions, the number interested in matching the HSA contributions of their employees has grown. Although this practice is similar to the those used to match 401(k) retirement plans, it is particularly beneficial to lower-paid employees who might require additional help with health care expenses under high-deductible plans.
HSA Bank’s Chief revenue officer, Kevin Robertson, claims the 2023 higher limits are “a significant jump” from previous annual increases. As employer contributions generally spur employees to assign a higher value to their health care benefit packages, he believes news of the increase can be used for a few purposes.
- Employers can use the open enrollment season to encourage employee contributions.
- Employers may be persuaded to contribute to HSAs where they had not previously.
- Employees may raise their rate of contribution or begin contributing to their personal or family accounts.
Even with small amounts, employer contributions add up and promote a more collaborative approach to the employee accounts and the perceived value of those accounts.
Inflation Results in Contribution Limit Adjustments
Generally, October heralds announcements regarding various tax-advantaged accounts’ contribution limits for the following year. Those concerning HSAs, however, are announced in late April or May.
Although the adjusted contribution amount is regulated by statute, the limits are adjusted annually for inflation using the Consumer Price Index for All Urban Consumers. They use data compiled from the 12 months ending on March 31 and round to the nearest $50 to arrive at the precise amount.
The Employers Council on Flexible Compensation (ECFC) represents the sponsors of various account-based benefits plans. Legislative and technical director of ECFC, William Sweetnam, explains that limit increases for HDHP and HSA are:
“released much earlier than other employee benefit limits so that insurance companies that offer high-deductible health plans—which participants must be enrolled in to make HSA contributions—can get their insurance products approved by state insurance regulators.”
Differing Limits for ACA
Based on the Affordable Care Act (ACA), there is more than one set of health plan out-of-pocket expenses annually determined by federal agencies. This can cause considerable confusion for the administrators of the plans.
Under an ACA-compliant plan, annual cost-sharing limits for basic health benefits are established by the Department of Health and Human Services (HHS). These out-of-pocket limits are higher than the maximum limits set by the IRS. For a plan to qualify as an HSA-compatible HDHP, however, they can not exceed the out-of-pocket maximum limit of the IRS.
Regardless of whether a person is enrolled in a family or self-only plan, the ACA’s cost-sharing limits apply to every person in a non-grandfathered health plan.
Maximum Limit for Excepted-Benefit HRAs
Additionally, Revenue Procedure 2022-24 raises the employer contribution maximum amount to an excepted-benefit health reimbursement arrangement (HRA) for year 2023. Excepted-benefit HRAs are restricted to paying only for dental and vision or comparable benefits that the employer’s primary plan doesn’t pay and are also not covered by the ACA. The HRA for 2023 is raised $150 higher from the 2022 amount of $1,800 to $1,950.
The Announcement Allows Employers to Plan Ahead
Sweetnam claims that, since employers often discuss health care choices and limits during the open enrollment season, the limits for 2023 are “good to know.” To plan ahead, employers should consider updating payroll to mitigate the coming year’s cost-of-living adjustments and incorporate the announced HSA limits.
Amongst all the things that 2020 brought to the foreground of our attention, the importance of having a benefits plan that puts employees first is more important than ever. In a recent study, research showed that COVID-19 has had a major impact on how important the majority of employees view their benefits plan. In fact, more than 77% of employees claim that their benefits plan is an important part of their overall compensation, with approximately 73% claiming that benefits play a major role in their decision to stay with their current employer. And with 75% of employees claiming that being provided benefits from their employer is more important than ever, the effects that COVID-19 has had on the way employees view benefits are clear.
Employee benefits are now viewed in ways unlike ever before. For example, benefits that in the past have seemed more like rewards than necessities (i.e. remote work) are now seen as essential by employees. While healthcare benefits are clearly a top priority, the list doesn’t stop there – including those benefits that don’t always get the most attention.
In today’s article we’ll explore several tax-advantaged benefits programs that must be on the radar for modern employers in 2021 and beyond.
Did you know that more than 28 million Americans had a health savings account last year? Health savings accounts or HSAs are accounts that are designed to help employees with higher deductible health plans better save for their medical expenses, and the number of employees that have HSAs has been steadily growing for years. In fact, 95% of employers now provide HSAs to their employees. Because they give employees the opportunity to set aside pre-tax dollars to better manage healthcare costs that are unexpected, HSAs have become increasingly more popular.
Additionally, flexible spending accounts or FSAs have also become more popular in the last decade, with a reported 32 million Americans currently having an FSA. FSAs, like HSAs, give employees the opportunity to set aside pre-tax dollars for unexpected healthcare costs. The difference being that FSAs allow employees to access the entire amount that they decide to set aside from the first day of their plan year.
Another increasingly popular tax-advantaged benefit is health reimbursement arrangements or HRAs, with approximately 14 million Americans having an HRA. HRAs are self-insured arrangements that help to minimize premiums and allow employees to have more control of their healthcare expenses. They are also completely funded by the employers and reimbursements are not taxable.
Pros of Tax-Advantaged Benefits
1. HSAs Remain After a Lost Job
As we endured the worst of the COVID-19 pandemic, HSAs certainly helped many American employees. While many people were laid off due to closures and downsizing, many Americans lost their jobs. However, because they did not lose their HSAs, they were able to use their existing funds on qualified medical expenses.
2. Feminine Care Products are Included
The CARES Act allowed for HSAs and FSAs to include feminine care products for the first time ever. This allowed women to spend tax-free dollars on all feminine products (i.e. tampons, pads, liners, cups).
3. FSAs Continue to Update
Last year was full of all kinds of unforeseen changes and with it, FSAs continued to update. For example, employees with FSAs were able to open or close accounts and change their contributions last year, without the stipulation of having a life-changing event. Additionally, for the purposes of maintaining their FSAs, furloughed employees were able to be considered full-time employees.
4. Over-the-Counter Meds
Another major pro of HSAs and FSAs is the eligible expenses with over-the-counter medicines. Thanks to the CARES Act, individuals no longer have to have a prescription for over-the-counter meds in order to use FSA or HSA money.
5. New HRAs
HRAs helped employers maintain their benefits throughout the worst of COVID-19. In 2020, the US Government gave employers an opportunity to offer employees a new type of HRA called an ICHRA or individual coverage health reimbursement arrangement.
Cons of Tax-Advantaged Benefits
1. Ensuring PPE is Considered a Qualified Medical Expense
While medical professionals have recommended the use of PPE and sanitizers in order to slow the spread of COVID-19, it remains unclear if they fall under qualified medical expenses under current provisions of the tax law.
2. Dependent Care Needs to Be Improved
Dependent care FSAs allow individuals to set aside pre-tax dollars to balance work-related dependent care costs (i.e. preschool, before and after school programs, etc.). Unfortunately, their effectiveness is diminished due to the fact that limits have not been updated in over 20 years. Because they have never adjusted for inflation, their amounts do not meet the dependent care needs in most areas of the country. Throughout the COVID-19 pandemic, several parents had to leave their jobs or significantly reduce their hours due to a lack of childcare, though, many essential workers didn’t have that option and were left scrambling for childcare.
3. COBRA is lacking
With unemployment still rampant across the country, several Americans are left wondering how they will manage to pay for their medical expenses this year. Most of those who were furloughed or lost their job in 2020 were placed in the Consolidated Omnibus Budget Reconciliation Act or COBRA. Not only is COBRA expensive, but it is also confusing for both employees and their employers. COBRA is simply not working for several Americans and is a high-priority health care concern in an economy ravished by COVID-19.
The events of the past year have altered many aspects of daily life, with none more jarring than the switch from in-person to remote work. As organizations of every size and industry have pivoted to accommodate this “new normal”, they and their workforce have come to intimately understand the benefits and drawbacks of a remote working environment. Whether your organization chooses to adopt this practice in perpetuity, or offer remote work as an option to your employees after it’s safe to return to the office, your organization should consider altering its benefits package to meet the health-related changes presented by a remote work setting.
With a new environment come new challenges, and your employee benefits should both reflect and seek to address those new challenges in order to retain your current talent, entice new talent, and save on healthcare costs at both the individual and organizational level.
In this post, we’ll cover:
- New difficulties to employee health presented by a remote work setting
- Benefit adjustments that address these difficulties
- How to meaningfully implement these changes
New Environment, New Challenges
While there are many advantages to working from home, there are also several critical obstacles that can negatively impact employees. The most immediate threat is, namely, stress. Workers are currently inundated with uncertainty, from concerns about their own health and the health of loved ones to unexpected financial strain. Employees may also be feeling alienated from their coworkers, friends, and family, causing a decrease in both happiness and productivity in multiple areas of their lives. According to recent research emanating from the CDC, Americans reporting feelings of anxiety, depression, and loneliness in 2020 have tripled in comparison to the previous year.
While some of these feelings may eventually be alleviated by the widespread adoption of a vaccine for the virus that causes Covid-19, remote work environments still present many obstacles that can lead to increased emotional and mental strain. A lack of social interaction with coworkers and misunderstandings stemming from inadequate or poor communication are just some of the hindrances that can increase feelings of anxiety, estrangement, and hurt job performance.
There are numerous studies outlining the direct, negative impact that emotional and mental stress can have on one’s physical health, including heart disease, high blood pressure, and abnormal cholesterol levels. Better mental health advocacy and the increasing amount of evidence that directly links mental and physical health are leading many organizations to offer additional or better benefits that seek to address mental and emotional health in order to drive down healthcare costs now and in the future.
Adjusting Benefits to Meet New Needs
Remote work environments, while convenient, can be mentally and emotionally isolating. These feelings of isolation can often progress into chronic health conditions that can be expensive to both the employee and the employer provided health plan. Mental and physical health are inextricably linked, and the effects of the pandemic have only accelerated the acceptance of this fact and the adoption of programs to address it. As more and more organizations are making the partial or full switch to an entirely remote workforce, employers are simultaneously beefing up their benefits that address the mind-body connection.
One of the simplest, most cost-effective ways to redesign your benefits to include mental and emotional health resources is to adopt a single solution that combines mental wellbeing and chronic condition management through preventative wellness. According to recent research, employee wellness programs provide a 6:1 return on investment in healthcare cost savings.
Chronic diseases often emerge through poor preventative care, costing employers millions of dollars every year. By refocusing your benefits to be employee-centric and encouraging your employees to adopt healthier mental and physical lifestyle habits, employers can achieve monumental cost savings now and in the future. Some examples of wellness programs are those that incentivize employees to keep track their own health data through general physical assessments and friendly competitions. Stimulate your employees to discover and improve their body mass index by offering them a financial reward or paid time off if they complete an annual physical each year. Additionally, creating some friendly competition between employees to engage in healthy habits in exchange for a prize is another great way to engender adoption of good lifestyle choices. By incentivizing employees to participate in preventative care, they may discover they are at risk for certain chronic conditions early enough to redirect the path they’re on.
Support the Transition to Yield Best Results
Open and honest communication is always important in the workplace, but it is especially critical in a remote environment. Most employees are currently working remotely, and there is an increasing likelihood that many companies will decide to go fully remote for the foreseeable future.
One of the most important things that your HR team and organizational leaders can do during the adoption of new benefits programs in any setting is to maintain transparency and open lines of communication between themselves and their employees. Providing employees with the freedom and safety to discuss the obstacles they may be struggling against can help employers to understand the needs of their employees and the resources they may need to be connected to, such as mental health counseling or a one-on-one meeting with your company’s benefits specialist. In addition, open and authentic lines of communication between employees and leaders helps to engender a deeper level of trust. Getting on your employees’ level and being receptive to their needs will increase the likelihood that employees will take advantage of new wellness programs that your organization will offer.
Remote working environments present unique challenges, but these challenges also offer new opportunities to encourage employee self-care that can save everyone time, effort, and money. Employees that understand and use the resources available to them are more likely to be productive, long-term members of your team-and will act as great ambassadors to new prospective talent. By offering employee-centric benefits that address both the mind and the body, employers can ensure the wellbeing of their employees. Remember:
- Employers should acknowledge the new challenges to employees presented by remote work environments and adjust their benefits packages accordingly to meet these challenges.
- Employer benefits packages should include wellness programs that offer incentivized programs and resources for those struggling with mental and emotional health issues, as these issues often manifest as chronic physical conditions. Studies have shown that preventative care programs save employers millions of dollars healthcare costs.
- Facilitate and encourage the regular use of the wellness program and other new employee resources through open and honest communication between leaders and employees.