Offering public employees sick time is a practice that has been around for many years. Most employees have come to expect and some even demand a sick day program that replaces a large part of their daily compensation. Most Public Sector employers have responded to this need by offering robust sick time programs that allow employees to earn a number of days per calendar year and then carry over those sick days that are not used. In some cases employees have amassed large numbers of sick day “banks” that can be used for a long term disability caused by either an off the job accident or an illness. Other employees rely on these sick day “banks” as another way to save for retirement. Most sick time programs include clauses that allow an employee to “cash out” a percentage of the sick time earned during their tenure. These clauses vary from town to town as it pertains to the amount of sick time that can be carried over from year to year or the maximum dollar amount an employee may receive at retirement.  Some employees are rewarded with large payouts upon retirement.  

In an economy where Health Insurance Programs, prescription drug programs and pension programs continue to add pressure to both the local and state tax basis, the question should be asked whether sick time programs should also be managed more effectively in order to relieve tax payers of a liability that is often very difficult to manage. Besides the obvious financial burden caused by the potential for a large sick time payout, many unlimited sick day programs also force the public sector employer into the role of disability case manager.  

The role of disability case manager is to manage an employee’s ongoing disability as well as work with their doctor to determine when it may be reasonable for an employee to return to work. They must have a working understanding of the employee’s daily work duties and hopefully be able to determine if a modified work schedule or change in occupational duties may be appropriate in helping the employee return to work.  

The routine pregnancies, broken bones and minor-surgeries are easier to manage then the more complicated disabilities that may be caused by mental and nervous conditions, soft tissue disorders or disabilities with multiple diagnoses. It may be difficult to determine, even when working with an employee’s doctor, when to continue or stop an employee’s sick time payment. The decision for the public sector human resource manager is made even more difficult if a personal relationship exists prior to the employee asking to use their sick days. This puts the public sector human resource manager in the middle of the claim decision.  

Another way to manage the financial burden of offering sick time programs as well as managing the actual claim process is to solicit the services of a specialty insurance carrier that can customize a sick time program to meet the town’s needs as well as manage the claims process.  These formal disability plans charge a premium to the employer and pay a percentage of the employee’s salary versus the full salary. Disability plans can also be customized so the employee can obtain 100% income replacement. These arrangements often have the employer funding some of the benefit and the insurance company funding the remaining balance. 

A formal disability program offered through an insurance carrier can also enable the human resource manager to be involved in the claims process but removed from the decision of whether or not to continue claim payment. Thus the disability carrier can objectively determine if the employee meets the definition of disability. 

Sick time programs can be managed in a number of different ways. However miss-management of these programs or abuse of benefits by employees can cost taxpayers thousands of extra dollars in taxes. Insurance companies may offer solutions that provide the benefit an employee requires in their time of need without putting the town or the taxpayer in a difficult position.