There are times when an employee needs to get away from it all. And it’s not for a beach or a mountain vacation. Rather, it’s for a medical or family situation that requires an extended break from work.
Luckily, the Family and Medical Leave Act (FMLA) helps American workers do just that. Since it was signed into law in 1993, workers have used the FMLA more than 315 million times. In fact, some 15 million employees use it each year.1
That means that employees who are experiencing some of their biggest medical challenges or personal struggles can rest a little easier during their time away.
Here’s a quick primer on FMLA so that you can be sure your finances work for you even when you’re not working.
How FMLA works
With FMLA, an employee may get up to 12 weeks of unpaid leave due to family and medical reasons. More than 75 percent of leaves are 8 weeks or less in duration.1
Reasons include the birth and care of an employee’s newborn child, the placement of an adopted or foster care child with the employee, the care of an immediate family member with a serious medical condition, or the need for an employee to take medical leave to care for their own serious health issue.2
A serious health issue can include a physical or a mental illness, both of which may qualify for FMLA leave.
Military-related circumstances also might require a leave of absence. Employees who qualify for military caregiver leave can take up to 26 weeks of leave to care for a seriously ill or injured family member who serves in the Regular Armed Forces and the National Guard or Reserves.3
Employees who are away from work for a certified FMLA covered reason need not worry about having a job when they return. In fact, they may have guaranteed job protection and health benefits.2 The law says the same job (or an equivalent one) must be available to them at the end of their FMLA leave.3
However, you must have put the time in at your job to be eligible for leave. Employees must have worked at least 1,250 hours during the past 12 months for a covered employer (not all employers are required to provide FMLA).2
How short-term disability insurance works
While FMLA gives you a breather from work while recovering, you still need money coming in to pay for your expenses. That’s where short-term disability insurance coverage comes into play.
Make sure you have it.
It’s usually more cost-effective to purchase it through your employer rather than on your own. Find out if it’s offered through your employer.4
Plan ahead (if you can). With paternity leave, for example, you often have up to nine months to consider how you’ll fill the gap if your short-term disability doesn’t cover 100% of your leave.5
Understand your company’s benefits — get to know your HR department
While the majority of workers (55 percent) say they understand their financial benefits, other benefits are more apt to be overlooked. These include child-care and elder-care assistance, financial planning, fertility and adoption help, mental-health services, and fitness and wellness resources.
More than 30 percent of employees are confused about their benefit packages. This can result in them leaving money on the table — thus, lessening their wealth, their physical and emotional health, and their job satisfaction.6
Make sure you don’t miss out. A human resources or benefits portal can inform you about what’s available to you. Also, be sure to read the emails your HR department sends you and attend informational events that can be especially helpful. And don’t be shy about asking your colleagues and coworkers what benefits they’ve chosen.6 After all, iron sharpens iron.
Keep an emergency savings account
Although short-term disability insurance will help with expenses, it amounts to only 60 percent of what you typically earn. To help fill in the gaps, have a well-stocked emergency savings account. Let’s say you plan to take a 12-week leave of absence. That means you want to put away at least 12 weeks’ worth of 40 percent of your salary. If you make $100,000 a year, you’ll want $10,000 earmarked in your emergency savings account.
Also, don’t take on extra expenditures. Knowing that a leave of absence might leave you with less money for expenses, avoid any unnecessary purchases.
Look into supplemental health insurance
You might have great health insurance through your employer. However, many people aren’t prepared for the out-of-pocket medical costs and living expenses that come with an accident, the diagnosis of critical illness or hospital visit. Supplemental health insurance can may help. Learn more here.
When you return from a vacation, you want to feel rested and relaxed. And when you return from a leave of absence, your hope should be the same. Having a good understanding about your benefits will put you in a better position to make that happen.