What a Leave of Absence Reveals About Your HR and Benefits Program

HR and businesses are struggling. That's not new. According to the International Foundation of Employee Benefit Plans, employers project a median 10% increase in health care costs for 2027, the second consecutive year of a 10% projection.

But to an executive team for a small business, that pressure can feel heavier every year: new compliance regulations, higher healthcare renewals, demand for richer and more affordable benefits, tighter talent pools, and questionable employee loyalty. When the stakes are high, patching up the one cracked thing in front of you, a single policy tweak, a vendor swap, a small plan change, can contain cost without "rocking the boat." Do that for five or six renewal cycles in a row, and even the most skilled HR team can lose sight of why the program was built that way in the first place. The benefits program and the HR processes supporting it quietly drift out of sync, one small, well-intentioned decision at a time. There's one moment that often exposes that drift faster than anything else: a leave of absence.

Leave of absence is a pressure test of an organization's HR, benefits, and culture. It's where everything you've built finally gets used in real time, and where the smallest gaps mean the difference between an employee who feels supported and one who starts quietly looking elsewhere. It's where compliance, technology, benefits, HR leadership, and culture all collide at once: Is payroll connected to the carrier and accurately deducting premiums? Does short- or long-term disability provide enough income replacement? When did we last review that policy? Are managers trained to actually have a leave conversation? Did open enrollment communication clearly explain how to use these benefits? Will this employee come back? Will their team hear about how it went?

These aren’t small-stakes questions. Mental health-related leave of absences rose 300% from 2017 to 2023, according to ComPsych data reported by SHRM. Leave isn't an edge case anymore. It's a recurring, growing operational event, and many programs weren't built with that volume in mind. Employee needs have changed faster than most leave processes, which is how a program built for the occasional maternity leave ends up managing mental health, caregiving and serious illness at the same time. And every informal workaround that got a program through the last leave becomes a risk the next time one comes up.

With a double-digit increase projected for 2027, the question shifts from "How do we cut costs?" to "How do we build a roadmap?"

This isn't theoretical and brings to mind a scenario where I stepped into a client relationship involving an employee navigating treatment for an illness. The employer had taken the employee off payroll, but had informally agreed to keep them on the company's health plan to avoid cutting off care. That meant an employee facing a health crisis was also at risk of losing access to disability protection, while the employer was carrying on an informal arrangement.

By the time I was brought in, COBRA was the path forward, which helps keep healthcare coverage in place, but without a disability and leave strategy from the start, both the employee and the employer remain in an exposed position. This is what happens when a program drifts out of sync one informal decision at a time. Everyone involved was focused on finding the best solution for that employee. But without a disability strategy, a documented leave process, and a broker partner watching the compliance side, good intentions led to real financial consequences, and open questions neither side should have had to face.

A well-design program helps prevent situations like this. At OneDigital, we look beyond the bottom line. We build leave and disability strategies so our clients’ businesses and employees stay protected through difficult moments. That's the difference between a reactive benefits program and one that's proactively designed.

When a leave situation doesn't go smoothly, that breakdown can be an opportunity. It shows you exactly where to re-engineer your HR and benefits program with intention. It starts with having a strong broker or benefits consultant in the mix. A good partner identifies points of failure and vulnerability from a coverage and technology standpoint. They bring payroll providers and carrier reps together to fix Electronic Data Interchange (EDI) file issues, update leave policies so income protection matches what employees actually expect, and help HR decide how leave should be administered, through the carrier, a third party, or the state. They also bring compliance visibility into leave law changes before they take effect.

Those are real wins on their own. But the bigger opportunity comes next: when coverage, process, and technology are in sync, you can approach renewal with a clear plan. With a double-digit increase projected for 2027, the question shifts from "How do we cut costs?" to "How do we build a roadmap?" As premiums rise and deductibles climb, your broker should be helping you redesign your benefits to deliver what employees want most: affordable care.

This is where a well-run ancillary strategy starts to inform your medical strategy. Our own research backs this up directly. In OneDigital's 2024-2025 Employee Value-Perception Study of more than 4,700 U.S. employees, 43.2% said they fear an accident could destroy their financial future, a number that climbs to 53% among single parents. That fear doesn't go away because an employer offers a rich medical plan. It gets solved by real income protection: disability coverage, accident, hospital indemnity, and critical illness insurance that employees actually understand and trust.  

The Takeaway for HR Leaders

Stop auditing your benefits program plan by plan. Start by asking how your program performs during a single leave of absence. That one scenario can tell you more about your real strategic gaps than any renewal spreadsheet will.

This is exactly the audit our consultants run with clients before every renewal: pressure-test the leave experience first, then rebuild the ancillary and medical strategy around what it reveals.

If you want a second opinion on where your program stands, let’s talk through it together to see where your organization’s opportunities lie to put a clear plan in place before your next renewal cycle.