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Absence Management

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Absence Management

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  1. Absence Management FERMA Conference Standard Insurance Company

  2. Steve McGonagle National Practice Leader Absence Management Todays Session

  3. Today’s Agenda Absence and Disability Services FMLA Subpart F What is the Cost? Outsource or Insource? State Leave Changes

  4. The Affordable Care Act (ACA) gets all the attention but Absence Management and Disability are significant drivers of employer’s overall benefit costs. Why Does Disability and Absence Really Matter?Current Reality Facing Employers Compliance is becoming more challenging and employers are at a great potential risk. LTD sometimes seems to mean “Last Thing Discussed”, even though it is one of the more catastrophic risks facing employees. Most disability programs assist the employee/claimant, but offer little support to the employer. Increasing EEOC/DOL Oversight, more focus on the process The ADA Amendments Act of 2008 (ADAAA) is becoming part of the absence discussion and employers face new complexities due to the potential overlap of ADAAA and Family Leave Medical Act (FMLA).

  5. Absence management solutions An effective Absence Management program provides employers with the tools they need to: • Integrate absence reporting across all benefits • Assess and benchmark the full costs of disability, absence-related benefits, and lost productivity • Improve productivity • Streamline processes • Reduce absenteeism

  6. School data for 40 of the country’s largest metropolitans • On average, public school teachers were in the classroom 94 percent of the school year, missing nearly 11 days out of a 186-day school year (the average school year length). Teachers used slightly less than all of the short-term leave offered by the district, an average of 13 days in the 40 districts. • 16 percent of all teachers were classified as chronically absent teachers because they missed 18 days or more in the school year, accounting for almost a third of all absences. • In spite of previous research to the contrary, this study did not find a relationship between teacher absence and the poverty levels of the children in the school building. • Districts with formal policies in place to discourage teacher absenteeism did not appear to have better attendance rates than those without such policies, suggesting that the most common policies are not particularly effective. Data collected by National Council on Teacher Quality (NCTQ)

  7. School Districts types of lost productivity Leave taken by leave category Sick and personal leave account for 71 percent of the leave taken by teachers.

  8. Definitions

  9. Definitions • Absence…any form of time away from work: • Planned – vacation and holidays • Incidental – unplanned, less than 3 days • Extended disability – 3 days or longer • Leaves of absence • Family Medical Leave (FML) – job-protected time away from work for employee’s own (or family’s) serious health condition • Short-term disability – income replacement for time away from work for employee’s own health condition

  10. Other Definitions • Coordinated FML – Runs at same time as income replacement program such as STD, sick leave, salary continuation, etc. and enables “linkage” between the two • Stand-Alone FML – Runs without income replacement program but offers federal job protection for the duration of the leave. • Continuous FML – Leave taken in a block, more than 3 consecutive days for the same qualifying condition • Intermittent FML – Hours, minutes, or days of leave taken sporadically for the same qualifying condition

  11. Why Is Management of Intermittent Leave Important? • For Employers • Lost productivity • Complexity • Compliance • Department of Labor • Audits • Fines • Wrongful termination lawsuits • ADAAA • FMLA Interference Lawsuits

  12. THE BASICS OF FMLA ADMINISTRATION

  13. FMLA summary • Premise of FMLA: allow employees leave for a variety of medical or military related issues. FMLA designed to establish parameters for employers & employees as a basis for taking and granting leave. • Generally speaking, employees can request leave for the following reasons: • Due to the employee’s own serious health condition • To care for a parent, child or spouse with a serious health condition • To bond with a newborn or adopted child • Military deployment or care of wounded service person

  14. FMLA: Employer and Employee Eligibility • Covered Employers • Employ 50 or more employees for 20 or more calendar workweeks during the preceding calendar year. • Eligible Employees • Employed for at least 12 months by a covered employer • Worked for at least 1,250 hours during the previous 12-month period before leave • Employed at a worksite with 50 or more employees within 75 miles

  15. Subpart F – Special Rules Applicable To Employees of Schools

  16. Definitions • Certain special rules apply to employees of local educational agencies, including public school boards and elementary and secondary schools under their jurisdiction, and private elementary and secondary schools. The special rules do not apply to other kinds of educational institutions, such as colleges and universities, trade schools, and preschools. • The special rules affect the taking of intermittent leave or leave on a reduced leave schedule, or leave near the end of an academic term (semester), by instructional employees. • Instructional employees are those whose principal function is to teach and instruct students in a class, a small group, or an individual setting. This term includes not only teachers, but also athletic coaches, driving instructors, and special education assistants such as signers for the hearing impaired. It does not include, and the special rules do not apply to, teacher assistants or aides who do not have as their principal job actual teaching or instructing, nor does it include auxiliary personnel such as counselors, psychologists, or curriculum specialists. It also does not include cafeteria workers, maintenance workers, or bus drivers. Company Confidential

  17. Intermittent Leave • Leave taken for a period that ends with the school year and begins the next semester is leave taken consecutively rather than intermittently. The period during the summer vacation when the employee would not have been required to report for duty is not counted against the employee's FMLA leave entitlement. • If an eligible instructional employee needs intermittent leave or leave on a reduced leave schedule to care for a family member with a serious health condition, to care for a covered service member, or for the employee's own serious health condition, which is foreseeable based on planned medical treatment, and the employee would be on leave for more than 20 percent of the total number of working days over the period the leave would extend, the employer may require the employee to choose either to: (i) Take leave for a period or periods of a particular duration, not greater than the duration of the planned treatment; or (ii) Transfer temporarily to an available alternative position for which the employee is qualified, which has equivalent pay and benefits and which better accommodates recurring periods of leave than does the employee's regular position Company Confidential

  18. Intermittent Leave • These rules apply only to a leave involving more than 20 percent of the working days during the period over which the leave extends. For example, if an instructional employee who normally works five days each week needs to take two days of FMLA leave per week over a period of several weeks, the special rules would apply. Employees taking leave which constitutes 20 percent or less of the working days during the leave period would not be subject to transfer to an alternative position. • Periods of a particular duration means a block, or blocks, of time beginning no earlier than the first day for which leave is needed and ending no later than the last day on which leave is needed, and may include one uninterrupted period of leave. (b) If an instructional employee does not give required notice of foreseeable FMLA leave (see §825.302) to be taken intermittently or on a reduced leave schedule, the employer may require the employee to take leave of a particular duration, or to transfer temporarily to an alternative position. Alternatively, the employer may require the employee to delay the taking of leave until the notice provision is met. Company Confidential

  19. Limitations on Leave Near the End of Term • There are also different rules for instructional employees who begin leave more than five weeks before the end of a term, less than five weeks before the end of a term, and less than three weeks before the end of a term. Regular rules apply except in circumstances when: • An instructional employee begins leave more than five weeks before the end of a term. The employer may require the employee to continue taking leave until the end of the term • The employee begins leave during the five-week period before the end of a term because of the birth of a son or daughter; the placement of a son or daughter for adoption or foster care; to care for a spouse, son, daughter, or parent with a serious health condition; or to care for a covered service member. The employer may require the employee to continue taking leave until the end of the term • The employee begins leave during the three-week period before the end of a term because of the birth of a son or daughter; the placement of a son or daughter for adoption or foster care; to care for a spouse, son, daughter, or parent with a serious health condition; or to care for a covered service member. The employer may require the employee to continue taking leave until the end of the term if the leave will last more than five working days. Company Confidential

  20. Limitations on Leave Near the End of Term • For purposes of these provisions, academic term means the school semester, which typically ends near the end of the calendar year and the end of spring each school year. In no case may a school have more than two academic terms or semesters each year for purposes of FMLA. Company Confidential

  21. Restoration of Position The determination of how an employee is to be restored to an equivalent position upon return from FMLA leave will be made on the basis of “established school board policies and practices, private school policies and practices, and collective bargaining agreements.” The “established policies” and collective bargaining agreements used as a basis for restoration must be in writing, must be made known to the employee prior to the taking of FMLA leave, and must clearly explain the employee's restoration rights upon return from leave. Any established policy which is used as the basis for restoration of an employee to an equivalent position must provide substantially the same protections as provided in the Act for reinstated employees. See§825.215. In other words, the policy or collective bargaining agreement must provide for restoration to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment. For example, an employee may not be restored to a position requiring additional licensure or certification. Company Confidential

  22. Outsourcing or In-house?

  23. Types of FML / LOA administrators • Payroll and other TPAs • Expertise began elsewhere (e.g., payroll, WC, EAP, etc.) • TPAs • Not able to underwrite insured STD & LTD • Group life and disability carriers • Able to underwrite insured STD & LTD • Able to do everything third party administrators (TPAs) can do • Usually have more extensive clinical and vocational resources

  24. Characteristics of potential outsourcers • Unhappy with how they manage FML internally • Believe that there is little or nothing they can do about absence • Believe that FML being abused • Believe that Intermittent leave is being abused • Believe that productivity is being affected by absence • Not sure what other companies are doing • Not aware of benchmarking available • Use FML certification to approve income replacement, e.g., STD, salary continuation

  25. Absence management solutions An effective Absence Management program provides employers with the tools they need to: • Integrate absence reporting across all benefits • Assess and benchmark the full costs of disability, absence-related benefits, and lost productivity • Improve productivity • Streamline processes • Reduce absenteeism

  26. Internal management • Centralize • 1 person • 1 department • Include STD/salary continuation/sick leave/PTO • Obtain legal resources • In house counsel • External employment law firm • Obtain medical resources • On-site clinic • Contracted medical advice firm • Ensure extensive and ongoing training for leave staff

  27. 35 States with leave laws In addition to complying with the federal FMLA, many states have enacted their own laws which may embellish one or more aspects of the federal law. The list of states which have drafted such legislation include but are not limited to: • California • Connecticut • District of Columbia • Hawaii • Maine • Massachusetts • Minnesota • New Jersey • Oregon • Rhode Island • Vermont • Washington • Wisconsin

  28. 2018 Statutory Disability and Leave Products DC *As of June 2018

  29. 2018 Paid Family Leave Statutory Landscape DC *As of June 2018

  30. 2018 Paid Sick Leave Statutory LandscapeText boxes list locations where municipal paid sick leave laws are in effect. Minneapolis Duluth St. Paul Chicago Cook County Seattle SeaTac Tacoma Spokane New York City Jersey City Newark Passaic East Orange Paterson Irvington Montclair Trenton Broomfield Elizabeth New Brunswick Plainfield Morristown DC Long Beach Malibu Pasadena West Hollywood El Cerrito Mountain View Palo Alto Richmond Sacramento San Jose Santa Clara Sunnyvale San Francisco Oakland Emeryville Los Angeles San Diego Santa Monica Berkeley Montgomery County Austin San Antonio *As of June 2018

  31. Municipalities are getting into the game Cities are starting to get into the act by passing paid leave laws. Laws PassedLaws Proposed (By State) Seattle Washington Portland, OR Oregon San Francisco California Jersey City Minnesota New York City Iowa Washington D.C. Illinois Connecticut (Statewide) Michigan Vermont Massachusetts Rhode Island North Carolina Florida Source: USA Today, 1/11/2014

  32. Industry Benchmarking Comparisons How does the Educational Services Industry compare to Business Services/Legal Services?

  33. Number of districts by attendance incentive Approximately 16 percent of teachers were responsible for over a third of all absences. *SOURCE – National Council on Teacher Quality www.nctq.org

  34. Creative strategies to increase teacher attendance • Payment for unused sick leave at retirement • Paying teachers for unused sick leave at retirement is the most common way school districts encourage good attendance. • Orleans Parish, Louisiana teachers are paid the daily pay rate for their unused sick leave for up to 25 days. • Teachers in Hartford are paid one day’s pay for each day in excess of 45 sick days, up to 30 days, which may yield a payment of approximately $14,500 Payment for unused sick leave at the end of the school year Nine districts in our sample provide teachers the option of receiving some payment for unused sick leave at the end of the year. Baltimore City, Denver, District of Columbia, Jacksonville, Los Angeles, Milwaukee, Phoenix, Providence and Seattle. *SOURCE – National Council on Teacher Quality www.nctq.org

  35. Creative strategies to increase teacher attendance Rewarding excellent attendance with additional leave or compensation Giving teachers additional leave days or payment to reward excellent attendance is an incentive in nine districts: Cincinnati, Indianapolis, Kansas City, Salt Lake City, Los Angeles, Milwaukee, Pittsburgh, Phoenix and Oklahoma City. • Ironically, Cincinnati rewards teachers who have high attendance with more leave. Teachers receive one extra sick day for having 96 percent attendance or better. • Indianapolis teachers who have at least 97 percent attendance can carry over up to 4 personal days. • In 2012-2013, Pittsburgh held a drawing each semester to give one teacher with excellent attendance a $500 bonus. • In Los Angeles, the district pays teachers with unused sick leave up to $1,500 through available funds in its substitute teacher budget. Restricting leave on specific dates Districts discourage teachers from using leave by restricting the days when leave can be used: before or after holidays and vacations, during the first and last week of the school year, during state testing and/or on professional development days. • 27 of the 40 districts in our sample have some type of policy to restrict or subject leave to refusal on particular days or times of the year. *SOURCE – National Council on Teacher Quality www.nctq.org

  36. Creative strategies to increase teacher attendance • Requiring medical certification for sick leave • Twenty-eight districts require teachers to provide medical certification after absences. This requirement is activated at different times in different districts • from three days in Atlanta and Kansas City to 20 consecutive days of absence in Salt Lake City. • Including teacher attendance as a measure in teacher evaluations • In 2012-2013, 10 districts – Austin, Buffalo, Hartford, Houston, Indianapolis, Louisville, Newark, St. Louis, Tampa and the District of Columbia – explicitly included teacher attendance as a measure within the district’s teacher evaluation framework. • In those 10 districts, this requirement is incorporated most often as part of a broader evaluation measure describing the professionalism competency of the teacher. *SOURCE – National Council on Teacher Quality www.nctq.org

  37. Creative strategies to increase teacher attendance In Austin, the University of Texas gives ticket vouchers for university events to teachers who meet teacher attendance goals or improve their students’ attendance (vouchers not applicable to UT football games). In Louisville, attendance data is considered in employee promotions. In Providence, once teachers are absent 135 days or more, they do not qualify for sick leave the following year, until they have worked at least 135 days. *SOURCE – National Council on Teacher Quality www.nctq.org

  38. Conclusion • Big focus is on health care and connections to absence • Absence & lost productivity caused by time away are almost as expensive as health care • Expand your employee benefits discussion to address absence and health related lost productivity • Address overall employee engagement and satisfaction • Reducing the incidence and duration of absences through effective Absence Management will help the bottom line • Look for alternative plan designs

  39. Conclusion Wow, this is complicated!

  40. Questions?

  41. 41