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FMLA Outsourcing: Pros, Cons, and How Automation Helps

Properly navigating employee leave has increased in importance, especially over the last years. The Family and Medical Leave Act (FMLA) uses federal law to protect the well-being of qualifying employees. FMLA ensures that employees aren’t out of a job if they need time off to care for a sick family member or because of personal health conditions. 

Employees want leave policies clearly outlined and accessible, which can pose a challenge for employers facing regularly changing regulations. Mismanaged leave programs can have a hugely negative impact which is why organizations commonly rely on FMLA outsourcing from outside vendors. 

While it's common to outsource many types of leave like short-term disability (STD) leave, Americans with Disabilities Act (ADA) leave, group health, workers' compensation, and parental leave, today we'll focus on FMLA administration specifically. This article will cover the common considerations, benefits, and outsourcing risks of leave administration and how automation can help bridge the gap.

Should I Consider FMLA Outsourcing?

Federal FMLA outsourcing has increased yearly at a rate of 5%, according to the Disability Management Employer Coalition's 2020 Employer Leave Management Survey.

FMLA affects both the HR team and employees alike. 

HR is always looking for ways to simplify processes, whether it's generating forms and letters or acquiring documents. This manual process takes time to coordinate and organize and leaves lots of room for potential errors, which can mean delays. 

FMLA outsourcing may seem like it saves time, but, in the end, it adds more cooks to the kitchen who often have lots of questions about how things work internally. Those questions will, more often than not, be fielded by HR.

It's essential to consider the employee experience too. While employees also value efficient processes and want to provide the necessary information required to achieve that, they also don't want to feel like they're under investigation for a benefit that is their legal right. A solution that allows seamless communication built around privacy and clarity is essential to a positive experience.

Here’s a list of benefits and risks to outsourcing or co-sourcing absence management to give you a fuller picture of working with third-party administrators.

Benefits of Outsourcing FMLA

  • Offloading some tasks can mean a reduced administrative burden on human resources.
  • A neutral party acts as an added buffer between employees and management regarding sensitive information about their leave requests.
  • FMLA outsourcing can mean an added layer of privacy for employees and their medical information when taking sick leave.
  • Having a specialized provider can ensure that all processes are compliant and up-to-date with the most recent guidelines.

Risks of Outsourcing FMLA

  • Providers do not have total access to your human resources information system (HRIS). This can mean knowledge gaps when determining eligibility.
  • Outsourced administrators will depend on the internal team for validation and employee communication. If that falls short, they will often offload work back onto the employee benefits team or HR department, which is counterproductive.
  • Many aspects of leave management aren't handled by providers, like intermittent leave, ADA requests, or return to work restrictions, which will require further internal support.
  • If an employee sues the organization based on the external provider's decision, the employer may still be held accountable for those actions.
  • Companies have less control if complaints or litigation should arise from an employee claim since there are more parties involved.
  • Important information can get missed when bounced between internal and external stakeholders.
  • Outsourcing can mean that key business patterns or issues go undetected since external providers don't monitor them closely.
  • Time will need to be invested in onboarding the third-party administrator to your company.

How Automation Tools Support FMLA Leave Administration

FMLA outsourcing: team of professionals smiling for a photo

If outsourcing doesn't feel like a suitable or even a practical option for your business after reviewing the above list, then automation might be a better fit. 

The ideal automation tools will help you to:

  • Make it easier for your internal teams to process, document, and support claims securely and efficiently.
  • Support your employees swiftly during their time of need.
  • Enhance team communication with collaborative tools that lead to better outcomes.

Automation tools do this by giving you complete control over your staffing processes while also saving time by reducing manual processes. 

Use Pulpstream to Get on Track Fast

Pulpstream provides a win-win scenario — it doesn't require much training since it's a no-code platform, and yet, it saves hours with its smart and efficient features.

Logic-Driven Workflows

The team may seemingly have a handle on things, but why not help make it easier?

Pulpstream provides automatic reminders to ensure that employees get relevant updates about their leave without anyone on your team having to invest extra time and energy into tracking it manually. The employee experience is far superior when they know when their leave starts and what's expected before returning to work.

If there are pieces of information or documents missing, Pulpstream catches it, which means an end to delays or, worse, wrongfully denied claims.

Consolidated Data That’s Accessible to the Proper Parties

Outsourcing may temporarily move the metaphorical papers off your desk, but they can boomerang back unexpectedly when there's an issue, which can be extra disruptive to the workday. 

Pulpstream makes it easy to integrate data to ensure the right team members have access and can collaborate remotely. The reporting features help the team to make data-driven decisions using a few keystrokes.

Seamless Communication and Intelligent Notifications

Improved efficiency helps both your HR team and your employees. Pulpstream enables SMS communication to easily connect and update employees who may be away from their computers. This feature takes what's otherwise a manual hoop-jumping process into the 21st century. 

In moments where immediacy is required, this modern feature is incredibly supportive.

Processing members can capture all communications and store them in the employee record, which helps to centralize critical information.

Highly Accessible and Still Secure

There's no need to play telephone between employer, employee, and third-party providers. Pulpstream simplifies the process with cloud-based systems that are secure and accessible from any connected devices. 

If your team is remote or the service is down, process initiation and completion can happen while in offline mode. Automatic syncing ensures the data is there when systems go back online.

Improved Business Intelligence With Integrated Case Management

If you're outsourcing or co-sourcing FMLA, organizing the data sources that come from your providers, employees, and external parties can get hairy. 

Pulpstream provides a safe space to centralize, access, and collaborate with a 360-degree view of every case. Reporting is more manageable, too, since you can track enterprise-wide trends in the platform rather than accumulating data from multiple sources.

Automation Provides Productive Peace of Mind

Pulpstream website

Get proactive about your leave of absence administrative processes, and it will pay you back with a happy and productive team. Manual processes are prone to errors, and FMLA outsourcing is an added cost that places a high-stakes process out of your control. 

Use Pulpstream to digitize, and you will promote efficient communication and put the power in the hands of process owners quickly without training managers for hours on end. Request a Pulpstream demo or take a look at our leave of absence guide to experience an intuitive platform that enhances your workflows and optimizes your organizational processes.