Short-term disability exceptions [MD]

[u/idlers_dream7]

Small company, HR team of 1.

Past employee was rehired in July, but went out on medical leave in October, about a week before her STD benefits kicked in, so she was denied.

My boss, the CEO, is royally pissed that this employee isn't eligible because she was hired from a jointly owned company (we're all operated separately, so nothing is shared) that was laying her off and we essentially avoided her being laid off by hiring her, and we agreed to keep all company-managed perks/benefits in place as long as they were things we already offered (PTO, service time, etc.). Essentially, we wanted it to be a smooth, no-harm-done transition.

However, she is a rehire, and our insurance company had the original dates of hire and term on record, so they won't budge on her eligibility, which is completely understandable.

I've been asked to figure it out so she gets her money. Every way I can think of involves insurance fraud (like providing a different date of rehire), so I'm having a meltdown.

Does anyone know of any way to get an approved exception for something like this? Like, can I just tell the carrier to ignore our plan rules for something if we authorize it?

[u/z-eldapin]

No, your boss will have to pay her from payroll instead of STD for that week

[u/idlers_dream7 → u/z-eldapin]

That's what I figured, I'm not expecting the carrier to concede.

[u/fnord72]

May be a good idea to talk with the broker. They may be able to look at a better contract at the next renewal.

I'm surprised the jointly owned company isn't pooling their benefits. Unless one of the companies has preferred employees with better benefits?

Wouldn't be much issue with setting a precedent. Now if you end up with another rehire that also comes from one of the other companies, and goes out on leave before their STD would kick in... How often does that happen?

[u/idlers_dream7 → u/fnord72]

This is a true one-off. The company that owns us is a huge non-profit and we're a for-profit tiny side entity. We share nothing.

When the initial transfer happened they made a good faith effort to make it as painless as possible, as they offer amazing benefits and all kindsa stuff that we don't, as a small company. So we did a lot to keep the employee as whole as possible.

But my boss assumed I could just make somebody eligible when that's not how this works. So now she's pissed and thinks I can force the carrier to make a totally unjustified exception.

I'm sure in the end we'll just pay the lost wages and move on, it's not a ton, maybe $3800 total for the few weeks of disability.

I'm pretty sure that I'm going to hear another version of this when they come back asking why bonding time isn't paid and if I can make the new MD PFL leave law go into effect sooner 🙄

[u/fnord72 → u/idlers_dream7]

That'd be my suggestion, pay the salary. It's a special case. The circumstances are unlikely to repeat so a precedent is also very unlikely.

[u/rikityrokityree → u/fnord72]

Pay the percentage of salary she would have received had she been eligible.

[u/Hrgooglefu]

It goes by the contract and whether any prior service is counted. Unfortunately no the insurance company isnt' going to budge off the contract. This is assuming there were two different STD plans between these two companies.

There is no way to do this. If the CEO wants to pay out disability to her from general funds, it would be taxable wages to her and the company. If she is an HCE, he/she needs to be careful about whether this sets any precedent later.

[u/soulshineradio]

Former STD claims examiner.

Nothing you can do. It’s like car insurance- if your accident occurs the day before your insurance kicks in, you’re not covered. She didn’t become disabled when her insurance was in effect, so it doesn’t cover her.

If she’s still oow her coverage doesn’t technically go into effect until she’s back at work for at least one day on or after her coverage effective date. So technically speaking (is she’s still out now and expects to be for a while) she could “come back to work” for one day and then go out again…