Are there any benefits of FMLA beyond preserving your job?

Question

I'm not positive this is the right forum for this, but it regards personal finance and company benefits, so it seems to fit, if not, please recommend another SO site that's more appropriate.

I'm about to have knee replacement surgery and I'll be out for 4-6 weeks or so. My company offers short term disability (STD) for up to 25 weeks as a company provided benefit. To initiate an STD claim, you have to file it with the insurance company (Liberty Mutual) and they require seven working / five business days notice. So the STD benefits would kick in a week after the surgery. To span the difference, the company will pick up three of the required days, and I have to pick up the other two with vacation / sick days (they're combined).

So far so good.

My company also offers up to 12 weeks of Family and Medical Leave Act (FMLA) time, which is like a sabbatical or something. If I opt for the FMLA leave time, I have to first burn all my vacation / sick time (roughly 2 weeks worth currently). The only benefit I see to this is guaranteeing that I have a job after I come back from surgery, something I'm not worried about in the slightest.

So, here's my question:

Am I missing something? Are there benefits to FMLA that I'm missing (beyond the guaranteed job)?

Edit several months after the surgery & returning to work

The surgery was very successful, I've got a new knee and much less pain to deal with. The issue with FMLA turned out to be a non-issue. Other than the two days of vacation time required by my company during the initial week (and they picked up the other three days), I expended none of my other vacation days while I was out for roughly a month. I think the misunderstanding came from my conversation with our less-than-helpful HR person, and how it's worded in the paperwork. Since I couldn't get a straight answer out of her, I went and talked to several others at the company who had gone through similar FMLA / STD claims like for surgery or having a child. None of them reported being required to use their vacation time with the exception of one, because she was out for an extended period of time with a preemy baby.

So, the upshot is, no compulsory use of my vacation time as I feared (I would have done the surgery anyway had it been required, the benefit of the surgery was worth the time had I had to use it).

PS: As an aside, there was no impact to my tax return either, since the company continued to pay me and were reimbursed by Liberty Mutual, I didn't have to deal with supplementary income via the insurance, which was a unexpected benefit.

Answer 1

How will your employer treat your pay and benefits status while you're on leave?

Disability income coverage and leave policies work in tandem to solve very different problems. Disability income coverage covers your income, leave policies guarantee your status as an employee.

Typically, STD coverage requires an actual loss of income and will offset it's stated benefit for any income you're receiving. In general you can't begin a STD claim after the 7 day waiting period and also draw income from vacation or sick time. Also, typically STD will cover some percentage of your covered pay (sometimes including commission/bonus income) up to some weekly maximum.

FLMA requires employers to allow certain amounts of time for certain types of leave. FMLA is not necessarily an income replacement tool like STD coverage. Contrary to your post it's my understanding that if sick and vacation time accrue in to a single PTO bucket your employer is prohibited from requiring employees to exhaust accrued time prior to beginning FMLA leave.

In general, you're not missing anything because the point of FMLA is to guarantee your job and status as an employee from a benefits perspective.

Benefits language from the Department of Labor Website

A covered employer is required to maintain group health insurance coverage, including family coverage, for an employee on FMLA leave on the same terms as if the employee continued to work.

Answer 2

In your situation, it sounds like the only added benefit would be insurance continuance.

For employees who can't access short-term disability it is a critical protection against losing their job. I just want to emphasize that given that you are in a pretty decent employment situation.