Employee Leave: Clarifying STD, FMLA, and ADA

Federal laws, such as the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA), govern an employer's obligation in providing disability or disability-related leave. In addition to federal requirements many states, and even many localities and municipalities, have enacted their own employee leave laws. Due to the various leave requirements, employers may have a hard time understanding how different leaves coordinate with each other and how wage replacement benefits fit into the equation.

The purpose of this article is to clarify some of the differences between the federal FMLA, the ADA, and short-term disability (STD). Employers must keep in mind that state and/or local leave laws may also need to be considered.

Short-Term Disability vs. FMLA

Short Term Disability (STD) is not a form of job-protected leave with rights to continued health coverage and job reinstatement. STD is a type of disability insurance coverage that provides income protection for employees when they are unable to work due to an injury or illness. Usually, STD coverage begins within one to 15 days of the event causing the disability (i.e., a waiting period) and typically last for about 10 to 26 weeks, although this varies by policy. When this STD coverage ends, long-term disability (LTD) coverage typically takes effect if the original illness or injury still continues beyond the length of the STD policy. FMLA, on the other hand, is a federal law that provides eligible employees with unpaid leave, job reinstatement rights, and continued health insurance benefits for up to 12 weeks when an employee experiences certain family or medical events. On a federal level, employers are not required to provide STD benefits to their employees; however, six localities have laws that require disability coverage, including CA, HI, NJ, NY, PR, and RI. For more information on these statutory disability laws, please see this article from our Compliance Confidence blog.

Eligibility

Eligibility for STD benefits is described in the certificate of coverage provided by the carrier, or in the plan document, if the STD plan is self-insured or a salary continuation plan. Eligibility for FMLA leave is determined on the federal level, and is described in the Employer’s Guide to FMLA. Employers must take care to check whether or not they are subject to the law, and then check whether or not the employee in question is subject to the law. In general, an employer is subject to FMLA if it employed 50 or more employees for 20 or more weeks during the current or previous calendar year. When making this determination, an employer or group of employers must count all of its employees at different entities under common ownership. An employee is subject to FMLA if they have:

• Worked for the employer for a minimum of 12 months before the leave starts
• Has worked at least 1,250 hours for that employer during the preceding 12 months before the leave starts
• Works at a location where the employer has 50 or more employees in a 75-mile radius

Depending on the situation, an individual may be eligible for STD, or FMLA, or both, or neither. When an employee is eligible for benefits under both an STD plan and for leave under FMLA, STD and FMLA will run concurrently. In this situation, neither the employer nor employee can require the employee use of available paid time off. This is because leave under a disability plan, such as STD, is not unpaid leave. An employee who is eligible for STD benefits while taking leave under FMLA leave does not receive any extra leave benefits.

The ADA

The ADA requires employers to refrain from discriminating against qualified individuals because of a disability and to provide a reasonable accommodation to individuals with a disability. Providing leave is considered a reasonable accommodation under the ADA. Need for leave under the ADA may arise when a disabled employee exhausts job-protected leave (such as under the FMLA), or when he or she is ineligible for such leave. The amount of time that will be considered reasonable will depend on the specific facts and circumstances of the situation. Leave as a reasonable accommodation includes the right to return to the employee's original position. However, if an employer determines that holding open the job will cause an undue hardship, then it must consider whether there are alternatives that permit the employee to complete the leave and return to work.

The ADA does not come with any requirements to continue group health benefits. However, if the employer has a company leave of absence (LOA) policy that provide coverage during a leave or working part-time, then the employer needs to comply with the LOA policy. Therefore, continuation of these benefits is determined based on plan terms.

It may be helpful for employers to think of STD benefits as wages an employee may be eligible for when on leave, but that do not provide for the employee’s leave. The ADA comes in when FMLA is exhausted or unavailable to a disabled employee.

Managing Leaves for your employees can be challenging. Is it time to look at an outsourced solution? If you are looking to learn more about when the right time to outsource might be, visit our article on when the time might be right.