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DOL Proposes to Adopt State of Celebration Rule to Determine FMLA Rights of Employees in Same-Sex Marriages

Presently, the federal government uses different rules for different purposes when determining whether a same sex marriage will be recognized. The IRS and the majority of other government agencies use the state of celebration rule for purposes of determining whether a same sex marriages will be recognized.   Under this rule, a same sex marriage is recognized so long as it was recognized in the state in which is was performed.  However, the DOL uses the state of residence rule for Family Medical Leave Act (FMLA) purposes. Under this rule, a same sex marriage is recognized only if it is recognized in the state in which the couple resides.  The resulting inconsistency is confusing and complicates administration of employee benefits.

Secretary of Labor Thomas E. Perez announced on Friday that the Department of Labor (DOL) is proposing a rule to revise the definition of spouse under the FMLA to include all eligible employees in same-sex and common-law marriages.  “Under the proposed revisions, the FMLA will be applied to all families equally, enabling individuals in same-sex marriages to fully exercise their rights and fulfill their responsibilities to their families,” states Perez. The proposal is in keeping with the Supreme Court’s June 26, 2013 ruling to strike down Section 3 of the Defense of Marriage Act in the Windsor decision.

The main highlights of the DOL’s proposal are as follows:

  • Moving from the current state of residence rule to place of celebration rule; and
  • Revising the

Another Same-Sex Marriage Ban Falls: FMLA Implications

On June 6th, a Wisconsin federal district court held that state laws prohibiting same-sex marriage are unconstitutional in the matter of Wolf v. Walker.  This decision is the latest in a series of rulings in favor of same-sex marriage since the Supreme Court overturned section three of the Defense of Marriage Act in United States v. Windsor, nearly one year ago.  Since Windsor, judges in eight states (AR, ID, MI, OK, TX, UT, VA, and WI) have overturned same-sex marriage bans, and judges in four other states (IN, KY, OH, and TN) have issued more limited rulings in favor of same-sex marriage. On June 13th, the district court judge issued an injunction against enforcement of the ban, but stayed the order pending the outcome of the defendant’s appeal to the Seventh Circuit Court of Appeals.

For the employee benefits community, this decision will have an impact on the eligibility of Wisconsin employees to take job-protected leave to care for their seriously ill spouse under the Family Medical Leave Act (FMLA).  Current FMLA guidance from the Department of Labor applies a “place of residence” rule that does not require employers to permit employee leave to care for a same-sex spouse if the employee resides in a state that does not recognize same-sex marriage.  If upheld on appeal, the decision would mean that an employee who resides in Wisconsin and was legally married in another state would be eligible for FMLA leave to care for her same-sex spouse.

FMLA – Auditing the Administrator

FMLA – Auditing the Administrator

June 11, 2014

Authored by: Christy Phanthavong and Lisa Van Fleet

A few weeks ago, we discussed audits from the perspective of the Employer as the audit target.  Today our discussion is from the perspective of the Employer as auditor rather than audit target.

For many companies, the sheer size and complication of the task of Family and Medical Leave Act (“FMLA”) administration has led to a decision to outsource the work to a third-party administrator.  Whew, you can rest easy now that someone else is in charge of the hassle of FMLA forms, notices, tracking, etc., right?

Wrong.

As the employer, it will be you that is on the hook for FMLA violations, even when such violations occur as a result of a third-party administrator failing to properly perform FMLA administration.  You may have an indemnity clause, but such clauses may have limits and, in any event, won’t prevent the costs of fighting a claim in the first place.

Given this potential liability, have you taken steps to ensure that your third-party administrator is handling FMLA matters correctly?  Have you audited the administrator’s process?  Asked tough questions about how complicated situations are handled?  Inquired into the administrator’s training process for the representatives assigned to your account?  Ensured that the administrator is knowledgeable concerning your policies and preferences with respect to leave issues?

You have a right to expect your third-party administrator to be an FMLA expert and

Designating Leave To Care For A Same-Sex Spouse As FMLA Leave Can Create Unintended Consequences

159289576Generally, benefits and employment attorneys emphasize the need for consistency in how employees are treated, whether such treatment relates to benefits, policies, or work rules.

But sometimes, “consistency” may not be the best answer.

Take, for example, the question of whether to designate leave taken by an employee to care for a same-sex spouse as leave under the Family and Medical Leave Act (“FMLA”).

Currently, some states recognize same-sex marriage, while others do not.  Under the FMLA regulations, the “place of residence” rule determines whether a same-sex spouse meets the definition of “spouse” under the FMLA.  Thus, an employee is entitled to take FMLA leave to care for the employee’s same-sex spouse only when the state in which the employee resides recognizes same-sex marriage.

Despite the current FMLA definition, some employers, desiring to treat employees consistently – most times either out of a concern for fairness or for purposes of easing administration – choose to define “spouse” in their employment policies to include same-sex spouses.  Such employers then permit employees to take what they call “FMLA leave” to care for a same-sex spouse, even if the individual is not recognized as a “spouse” under applicable state law.

The potential problem with this approach is that only leave that fits within the circumstances that qualify for FMLA leave is permitted to be designated by an employer as FMLA leave and counted

Forget Spring – Government Audits Are In The Air!

Forget Spring – Government Audits Are In The Air!

May 1, 2014

Authored by: Christy Phanthavong and Lisa Van Fleet

Employers are all too familiar with the more common investigation efforts by government agencies, such as an EEOC investigation blossoming from a single employee Title VII or ADEA charge into an onsite investigation of purported pattern and practice violations, or HHS turning a self-reported breach into a broad review of HIPAA compliance.  But the government is increasingly expanding and using its investigation tools in less common areas.  Audits are in the air – are you ready?

Consider whether your policies, practices and files are in order on the following subjects:

  • Health Plan Audits under the Health Benefits Security Project (“HBSP”):  This audit initiative is part of the Employee Benefits Security Administration (“EBSA”) National Enforcement Projects.  It includes a broad range of healthcare investigations as well as enforcement of the Affordable Care Act (“ACA”). More specifically, EBSA will review plans for documentary and operational  compliance with the protections of Part 7 of ERISA which includes the Women’s Health and Cancer Rights Act, the Newborns’ and Mothers’ Health Protection Act, the Mental Health Parity and Mental Health Parity Addiction Equity Act, the Genetic Information and Nondiscrimination Act and Michelle’s Law – as well as the Health Insurance Portability and Accountability Act’s portability and nondiscrimination requirements.  EBSA’s  ACA compliance review encompasses market reforms, patient protections, extension of dependent coverage, internal claims and appeals, external reviews and grandfathered plans.  In addition, the HBSP continues EBSA’s long standing commitment to identify and eliminate abusive multiple employer welfare

FMLA Requirements Still Apply When STD Is Involved

FMLA Requirements Still Apply When STD Is Involved

March 5, 2014

Authored by: Christy Phanthavong

When an employee’s request for a medical leave may qualify for both unpaid leave under the Family and Medical Leave Act (“FMLA”) and compensation under an employer’s Short Term Disability (“STD”) plan or policy, it can be tempting to allow the STD process to drive the administration of the leave.  After all, a reduction in paperwork is always welcome, and the employer is permitted to rely on information received through the STD process when determining whether the employee is entitled to FMLA leave.

However, there are a number of FMLA notice requirements and other considerations that should be keep in mind when processing a claim for medical leave:

  • FMLA eligibility should be determined before moving on to the FMLA and/or STD entitlement determination.  Within five business days of receiving notice that an employee’s leave may be for an FMLA-qualifying reason, the employer must provide the employee with notice of the employee’s eligibility to take FMLA leave.  Thus, it is important to ensure that the eligibility analysis for FMLA purposes is conducted, and the employee is informed of his/her eligibility status, prior to moving into the determination of whether the employee’s health condition entitles the employee to leave (under the FMLA and/or STD policy).
  • FMLA eligibility can be attained during an STD leave.  Depending on the circumstances, an employee who is not eligible for FMLA leave when an STD or other medical leave begins may become eligible for the FMLA’s protections during the leave

Check it Out and Check it Off: 2014 Group Health Plan Checklist

Check it Out and Check it Off: 2014 Group Health Plan Checklist

October 14, 2013

Authored by: benefitsbclp

This is cross-posted from our recent client alert.

With 2014 just around the corner, numerous mandates under the Patient Protection and Affordable Care Act, as amended (“PPACA”) are about to become effective.  Below is a checklist of upcoming PPACA mandates that employers must implement in 2014, as well as a list of existing enrollment and annual notice requirements that group health plan sponsors should consider during open enrollment.

Additionally, with the recent decision of the U.S. Supreme Court in U.S. v. Windsor overturning part of the Defense of Marriage Act (“DOMA”), group health plan sponsors should take into account the impact of this decision on their plans.  As such, a brief summary of relevant DOMA considerations are provided below.

For a refresher on the PPACA mandates which became effective this year, please see our 2013 group health plan checklist here.

I. Requirements That Apply to All Group Health Plans (Whether Grandfathered or Not)

Beginning with the dates specified below, a group health plan subject to PPACA must comply with the following requirements, regardless of its status as a “grandfathered health plan”:

  • Annual limits will no longer be permitted on essential health benefits.

Currently, annual limits on “essential health benefits” cannot exceed $2 million.  Effective for plan years beginning on or after January 1, 2014, group health plans may not establish annual dollar limits on such benefits for any participant or beneficiary.  However, this prohibition does not prevent a group health plan from excluding all

FMLA Rights for (Some) Same-Sex Spouses

On August 9, 2013, the Department of Labor (DOL) took its first action in response to the Supreme Court decision in United States v. Windsor, which struck down those provisions of the Defense of Marriage Act (DOMA) prohibiting the treatment of same-sex couples who were legally married under applicable state law as spouses for purposes of federal law.  In an e-mail to DOL staff, Secretary of Labor Thomas Perez announced that several guidance documents had been updated to remove references to DOMA and provide that employees residing in states in which same sex marriage is legal would be entitled to leave under the Family and Medical Leave Act (FMLA) to care for a same-sex spouse with a serious health condition.  Specifically, a DOL Fact Sheet which describes the qualifying reasons for FMLA leave was revised to provide that a spouse is “a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including…same-sex marriage.”

While significant as an explicit statement of policy, the DOL’s action in effect simply confirms the general approach previously taken in the regulations under FMLA, which have always provided that an employee’s spouse is determined under the law of the state of residence.  Without the overlay of DOMA, that regulation leaves the determination of who is a spouse for purposes of FMLA with the state where the employee resides.  Accordingly, whether this is a signal of how same-sex marriages will be recognized for purposes of

COBRA and STD/FMLA – The Appeal

COBRA and STD/FMLA – The Appeal

August 9, 2012

Authored by: benefitsbclp

As we near the first anniversary of benefitsbclp.com, it is a good time to reflect on the past, such as one of our first posts on the importance of clear eligibility terms in a self-funded health plan.  This is a particularly timely reflection because the case discussed on that post was just upheld by the Sixth Circuit Court of Appeals in an unpublished opinion.

For those unfamiliar, in the case, an employee who was participating in a self-funded medical plan went out on FMLA leave.  When that leave expired, she did not return to work and the employer put her on short-term disability, but continued to allow her to be eligible for the medical plan.  After her short-term disability period expired, the employer offered her COBRA, which she elected.

However, the terms of the medical plan provided that eligible employees were those regularly scheduled to work a minimum of 40 hours per week with an express exception only for FMLA leaves.  When the stop-loss carrier inquired about her eligibility, the employer said it had a “corporate practice” of continuing to allow employees on short-term disability to be covered under the plan.  The stop loss carrier, however, had only committed to provide its coverage for claims that were covered under the terms of the self-funded medical plan.  In arriving at its decision, the court narrowly construed the medical plan’s eligibility provisions.  (A few additional details are noted in the prior post.)

As we noted in our prior

New York Marriage Equality and Benefits – Part 2

New York Marriage Equality and Benefits – Part 2

September 8, 2011

Authored by: benefitsbclp

Last week we looked at the implications of New York’s Marriage Equality Act (“Act”) upon the tax treatment of employer-provided health care benefits for same-sex married couples in New York. Today we’ll consider how the Act affects the administration of family and medical leave, HIPAA special enrollment rights and health care continuation coverage under COBRA and New York’s “mini-COBRA” law.

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