Employers often have questions about the key features and differences between short term disability (STD) and the Family and Medical Leave Act (FMLA). By understanding how each program works and where they overlap, employers can make informed decisions about employee benefits management and create benefits strategies that meet legal requirements. This helps align corporate culture and employee needs, fostering a consistent and supportive work environment.
Short Term Disability overview
Short term disability (STD) insurance is designed to replace a portion of an employee's income if they are temporarily unable to work due to a non-work-related injury or illness. Typically, this benefit is provided by employers as part of a comprehensive employee benefits package, although some people may choose to purchase individual policies. This financial safety net is critical in maintaining an employee's financial stability during unforeseen medical challenges, alleviating stress and allowing them to focus on recovery.
- Coverage duration: STD generally covers a percentage of the employee's salary for a period ranging from a few weeks up to six months or more. This duration is flexible, allowing employers to tailor the coverage based on industry standards and workforce needs. The flexibility in duration also helps by accommodating a variety of medical conditions, ensuring that employees have sufficient time to recuperate without financial distress.
- Eligibility for STD: Typically, employees must provide medical certification that supports they are unable to perform their job due to a covered illness or injury. The certification process is crucial as it ensures that the benefits are directed towards legitimate medical needs. Employers often collaborate with healthcare providers to streamline this process, ensuring timely verification and benefits disbursement.
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- Compensation: STD typically covers a specific percentage of an employee’s salary, depending on the policy. This range allows companies to choose a compensation level that aligns with their budget while still providing meaningful support to employees.
- Purpose: The primary aim of STD is to provide financial support during periods of temporary illness or injury. By mitigating the financial impact of medical leave, short-term disability helps maintain employee health and well-being, even during challenging health episodes. It also reflects a company’s commitment to employee welfare.
Short-term disability is a topic that HR teams and benefits professionals should be familiar with. Understanding its function ensures employees receive appropriate support during health-related absences.
By performing ongoing reviews of their short-term benefits, HR teams can maintain compliance with legal standards and align their offerings with workforce needs. This expertise allows HR to build trust, promote employee wellbeing, and effectively manage leave cases — ultimately supporting organizational productivity and employee satisfaction.
Family and Medical Leave Act
The Family and Medical Leave Act (FMLA) is a federal law enacted in 1993. It requires eligible employers to provide unpaid, job-protected leave to eligible employees for specified reasons. FMLA is applicable to public agencies, public and private elementary and secondary schools, and companies with 50 or more employees within a 75-mile radius.
- FMLA leave reasons and duration:Eligible employees are entitled to take up to 12 weeks of leave in a 12-month period for:
- their own serious health condition
- caring for a spouse, child, or parent with a serious health condition
- bonding with a child after birth, adoption or foster-care placement
- certain military family reasons related to a spouse, child, or parent’s military deployment
In addition, eligible employees are eligible for 26 weeks of leave in a 12-month period to care for a covered family member who is a servicemember or veteran with a service-related serious illness or injury.
FMLA eligibility: Specific requirements are in place for employees before they’re eligible for FMLA. Employees must have worked for a covered employer for at least 12 months and have worked at least 1,250 hours during the 12 months immediately preceding the requested leave of absence; they must also work in a location where the employer has a minimum of 50 employees within 75 miles. To manage these eligibility requirements, employers should take detailed records to avoid error or disputes.
To administer FMLA compliantly, employers must follow strict notification requirements. For example, within five days of an employee’s leave request, an employer should provide the employee with written notification explaining whether the employee is eligible for FMLA, as well as the employee’s FMLA rights and responsibilities. Other written notifications occur at specific points, including when the employer approves or denies FMLA leave and when the employee has used all of their available FMLA time.
In addition to federal FMLA, many states have their own “FMLA-like” leave laws that require employers to provide family and medical leave to employees. Coordinating FMLA and state family and medical leave with employer-provided benefits such as short-term disability can prove challenging for employees and employers alike. Solutions such as Alight’s LeavePro software help maintain accurate records and streamline operations.
Differences between short-term disability and FMLA
While both short term disability and FMLA are intended to support employees during absences, they differ in significant ways:
- Paid vs. unpaid leave: STD provides a portion of an employee’s salary during leave, while FMLA is unpaid. Some employers choose to offer additional financial support during FMLA leave to mitigate the unpaid aspect. In addition, several states have their own paid family and medical leave laws that provide income replacement to employees.
- Duration: STD benefits can last longer than FMLA leave, which is capped at 12 weeks for most leave reasons. Understanding the leave timelines helps manage workforce productivity and ensure that business operations continue smoothly.
- Reasons for leave: STD focuses on the employee’s health, whereas FMLA covers broader reasons to take a leave of absence. These distinctions give employers an opportunity to create customized benefits tailored to their people.
Despite these differences, FMLA and STD often overlap. For instance, an employee can use FMLA leave at the same time as STD benefits if they meet the eligibility criteria for both, allowing for job protection while receiving partial income support. This overlap can be strategically used by employers with a well-organized absence management program.
How Alight can help navigate your leaves of absence
Navigating short-term disability and FMLA can be challenging, especially when trying to determine which option best fits your organization’s needs. That’s where Alight comes in.
With years of expertise in leave management, benefits administration and employee wellbeing, Alight can help you make informed, strategic decisions personalized to your workforce. Whether you're looking to enhance compliance, improve employee experience, or simply understand the nuances between STD and FMLA, Alight provides the guidance and tools to help you choose the right path forward.
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