Both private companies, as well as federal and state government entities, may provide financial assistance during FMLA. The amount of help and your eligibility can vary.
The Family Medical Leave Act requires qualifying employers to hold your job open for twelve weeks but does not require them to continue paying you. You must look to outside sources for help staying current on your regular bills.
Private programs can fill certain monetary gaps but require you to participate either by repaying owed amounts or by funding premiums in advance. Government entitlement programs are the most appealing, but only a small fraction of people qualify.
Private Financial Assistance during FMLA
Private companies may be able to provide financial assistance during a family medical leave. These private companies seek to make a profit. They make their money in two different ways while simultaneously helping families when someone is not able to work.
You may be able to find monetary help from private companies while on leave either by settling your debt, borrowing money or by purchasing insurance in advance of your need.
Debt Settlement Programs
Under debt problems? Families frequently face financial hardship during an unpaid family medical leave. The combination of lost income and additional medical bills is very difficult to manage without falling hopelessly behind on many bills. The settlement company will negotiate with creditors on your behalf.
These are the most important qualifying criteria for a debt settlement program.
- Owe more than $10,000 in unsecured debt (credit cards, personal loans, and unpaid medical bills)
- You are behind on your payments by three months or longer
- You are experiencing financial hardship (lost income and/or unexpected, large medical bills)
Family Leave Loans
Apply for a family leave loan to obtain the financial help you need to pay your ongoing bills while on FMLA. This option will help the greatest number of workers as you do not need to purchase anything before the need arises, and you can take advantage in most states.
You will have to repay the money with interest. However, having the extra funds on hand can keep you from falling behind on payments. One late payment could remain on your consumer report for seven years.
Short-term disability insurance may provide financial help while on FMLA. A private policy may cover the person who is physically unable to work and may replace up to 70% of income. You must meet the elimination period before claim payments begin.
However, a private policy has three limitations you need to know.
- The coverage must begin in time. The policy must start before the person becomes sick, hurt, or pregnant. The carrier will exclude pre-existing conditions for at least twelve months.
- The policy covers the employee only. If the covered employee takes time away from work to care for a sick family member, the policy will not make claims payments.
- Most policies cover off-the-job incidents. If you injured yourself while working on-the-job, you will not be able to take advantage.
Government Financial Assistance during FMLA
Federal and state government programs may provide financial assistance during the Family Medical Leave Act in very limited ways and circumstances. The law does not require paid leave. However, other government programs may help you replace a portion of your lost income.
Eligibility rules for other government programs also vary, often based upon the state where you work. Scan through the list to determine if you qualify.
Collecting unemployment compensation for financial help while on FMLA is not possible. The regulation protects your job during the time you are not working for up to twelve weeks. You remain employed without pay.
The equation may change if your employer terminates your job. This may happen if the law does not apply in your situation, or if you remain away from the job for more than twelve weeks. In this scenario, you are now officially unemployed. However, unemployment programs traditionally do not apply when a worker separates voluntarily – as would be the case here.
The American Recovery and Reinvestment Act (ARRA) provides incentives to the states to “modernize” their unemployment compensation systems. The ARRA incentives encourage states to allow workers to collect unemployment compensation if they voluntary leave their job because of a “compelling family reason.”
As of 2016, twenty-two states accepted these incentives. In general, they define a compelling family reason to include caring for a seriously sick family member. Six expand that definition to include an employee’s own disability.
State temporary disability programs provide financial help while on FMLA to workers taking time away from the job due to their own medical condition. These state government programs replace a portion of income for most private workers, after satisfying a brief elimination period.
However, most people will not qualify.
- Only five states have a program: California, Hawaii, New Jersey, New York, and Rhode Island.
- They do not cover caring for a sick family member. The programs pay benefits only for the disabled worker.
- Forty-five states do not offer programs covering temporary medical conditions.
Paid Family Leave
The state paid family leave programs provide financial help while on FMLA for workers taking time away from the job to care for a sick family member. This works as a perfect complement to the state disability program. You receive a portion of your income for up to six weeks.
Paid sick leave laws exist in several other states, and in major cities such as New York City.
Workers compensation provides financial help while on FMLA in the form of income support, medical care, and other benefits. Only workers injured or disabled on-the-job qualify.
Coverage rules vary by state. In most cases, private workers are eligible, while government workers are not.