“So what exactly would you say you do here?”

Anyone who has seen Office Space is probably familiar with this quote. I think the quote applies to big corporate Human Resources (HR) departments that outsource Family Medical Leave Act (FMLA) eligibility determinations to private disability insurers.

One purpose Congress had in passing the Family Medical Leave Act in 1993 was that there was “inadequate job security for employees who have serious health conditions that prevent them from working for temporary periods.”

The way some big employers determine FMLA eligibility flies in the face of this purpose. If you wanted to design a system to fire workers with health conditions, I’m not sure the craftiest HR and legal minds representing management could come up with a better way to do so than outsourced leave administration.

Why outsourcing leave decisions to private disability insurers is a bad idea

FMLA is unpaid leave. Many employers use short-term disability as paid leave. But if you need to be off-work to get short-term disability then the decision about eligibility for FMLA and disability are one in the same. But if a short-term disability insurer is the decision maker, they have a reason to deny claims because paying claims costs money. So in essence, an employees right to unpaid leave is premised on an insurance companies decision about paying disability benefits.

That this is a terrible idea should be apparent to everyone to knows how insurance companies work.

And seeing exactly how this process harms workers is infuriating.

FMLA leave determinations should be simple

If you work at a big employer, you’ve been there for a year or more and have worked more than 1250 hours in that year and you can’t work because of a health condition or the health condition of a loved one, you’re eligible for Family Medical Leave Act. It’s basically that simple.

FMLA issues often arise when a worker gets hurt on the job. So if a worker brings in a doctors note with work restrictions that an employer can’t accommodate, you would think it would be as simple as HR looking at payroll records to see if an employee is eligible for FMLA.

Plaintiff’s lawyers like me make these determinations all the time in a few minutes when prospective clients call in about claims. I fail to understand how HR managers at large worksites for major companies can’t make the same decisions with the resources they have available.

But that’s not how things work with many major employers.

How outsourced leave works

So instead of the process I described in two paragraphs above. Outsourced leave decisions require the employer and an outside entity to communicate about an employee’s leave eligibility. It also requires an employee, who typically doesn’t have a lot of experience with paperwork, to send documents to their employer and to the leave administrator. Often times these documents are sent by medical offices. Sounds complicated, lots of room for error. Employers have lots of reasons to claim they didn’t get documents or blame employees for not properly communicating.

But it can get even more complicated when some company nurse is hassling an employee or their doctors about a return to work before they are ready.

It gets even more complicated when someone in HR or a company nurse engages in Dwight Schrute/Toby Flinderson-style amateur sleuthing to uncover alleged employee fraud or abuse of FMLA.

Ongoing complications due to remote work by insurers during the pandemic don’t help out either.

All of these complications need to viewed in the context of the disability insurer/leave decider being fundamentally adverse to the workers asking for disability insurance and leave.

Sure, an experienced lawyer would know how to navigate this web. But when it comes to leave applications, blue collar workers are often thrown into this hostile maze without assistance or even knowing where to turn for help.

Why outsourced leave?

Outsourced leave is usually administered in conjunction with short and long-term disability insurance. Employers like these policies, in part, because they are good ways to shift the cost of work injuries away from workers compensation. I think this particularly true for injured workers who may have aggravated an old injury, had an overuse injury or didn’t report injuries immediately. These workers are often mislead by HR and employee health types that workers compensation coverage isn’t available in those situations.

Of course, pushing employees who are hurt on the job to apply for short or long-term disability is just pouring glue on the already sticky situation described above. An application for short-term disability can muddy a claim for workers compensation and vice-versa. A private disability carrier may claim a right to repayment for workers compensation benefits. A private disability company may also have policies that in effect require their beneficiaries to apply for Social Security Disability Insurance. This can complicate a workers compensation claim as well.