Month: July 2013

By Mike Humphrey
Sr. Employee Benefits Advisor
The Wilson Agency, a UBA Partner Firm

I’ve been in human resources for a long time.  One of the most frustrating parts of the job is managing Family Medical Leave Act (FMLA) compliance. This piece of legislation has been in place since 1993 and allows employees to be away from their job and still have it waiting for them when they return.  It does have limitations on it, such as what events qualify and how long it can be used (12 weeks in a 12-month period or up to 26 weeks in a single 12-month period for military caregiver leave), and it’s a great assistance to employees who are going through an often traumatic period in their lives. 

The biggest frustration about it comes from unplanned intermittent leave for chronic serious health conditions.  Taking FMLA leave intermittently or on a reduced schedule doesn’t affect the total amount of leave available to an employee. Only the time actually taken is charged against the employee’s available leave, and generally an employer must account for the FMLA leave using an increment no greater than the shortest period of time that it uses to account for use of other forms of leave, provided that it is not greater than one hour. The result is an employee can stretch out their intermittent leave for a very long time.

The Department of Labor also recognized unplanned intermittent leave as a considerable issue for employers regulated by FMLA.  As a result, the Department issued a Request for Information asking the public to assist the Department by furnishing information about their experiences. The response was significant—more than 15,000 comments were received. Although the Department noted the overwhelming majority of the comments were centered on the employer’s frustration about difficulties in maintaining necessary staffing levels and controlling attendance problems as a result of unscheduled intermittent leave, nothing was done to address this issue. So, employers are still left with managing this frustrating and time consuming provision of FMLA.

In my experience I find the best solution is to hire a professional organization to handle FMLA.  These vendors can come in the form of your payroll, time & attendance, or disability insurance providers.  Three primary reasons justify this added expense.

1. Neutrality: a third party manager takes the politics out and removes inequities that may exist between staff levels.

2. Systematic: a professional organization can find efficiencies in this laborious and technical compliance task.

3. Focus: the HR department can then focus on value added education to make sure employees & managers are fully trained on how this works, ultimately saving the company time and money.

UBA recently hosted a webinar on FMLA – Meeting the Challenge of Compliance and Cost. For a copy of the presentation, click here. If you are interested in a full audio/visual presentation on the recorded webinar, click here to request a copy from your nearest UBA Partner Firm.

On July 3^rd, immediately following the announcement of the employer mandate delay, we published preliminary analysis by Chief Compliance Officer, Linda Rowings on how employers would be affected. Within 24 hours, the New York Times, Employee Benefit News, ThomsonReuters and SHRM all contacted UBA for interviews and comment. In the days that followed the big news, other top industry publications sought UBA and its Partners for reactions, including: Workplace Weekly News and Compliance Week,

In response to this tremendous demand, we have updated our information as the impact of the delay has been analyzed further following the July 9, 2013 IRS Notice 2013-45, which confirms that the employer shared responsibility penalties and reporting requirements will not apply until 2015. The updated summary, “Four Things You Should Know About the Employer Mandate Delay” contains expanded information on:

• What the Delay Affects;
• What’s Still Required;
• What’s Next; and
• How Reporting Delays Impact Compliance

The latest July 9 Notice states that the delay in the employer shared responsibility will not affect the employee’s ability to receive a premium tax credit/subsidy. However, it is currently unclear how the exchange will know if an employee who is applying for a premium tax credit/subsidy is eligible for employer-provided affordable, minimum value coverage.  The Notice also says that the delay in the employer shared responsibility requirements will not affect the requirement that an individual obtain minimum essential coverage or pay a penalty. While the employee’s obligation to obtain minimum essential coverage remains, in late June the IRS released Notice 2013-42, which provides that if an individual has access to employer-provided coverage and the employer’s plan operates on a non-calendar year, the individual will not be subject to the penalty until the start of the employer’s plan year. Unfortunately, the Notice provides few additional details about how this extension will work.  For instance, it is unclear whether the play or pay requirements will apply to all plans as of Jan. 1, 2015, or if non-calendar year plans that meet certain requirements will be able to delay compliance until the start of their 2015 plan year.

While questions like these remain unanswered and most employers will enjoy the respite from measurement and stability periods, they may want to take this opportunity to think through actions they had planned to make with respect to their plans to manage the play or pay requirements.  Also, many parts of PPACA are unaffected by this delay, and employers will need to meet a number of requirements in 2014 despite this delay.  UBA partners are available to help employers assess the effects of PPACA on their business and make the best choices along the complex Pay or Play continuum.

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and
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