It may be easier than you think to eliminate a major reason employees sue.

How? Well, roughly 75% of employee lawsuits happen because of accidental disconnects between an employer’s internal policies and procedures, and what’s written in the plan documents.

Here are two areas where some the costliest errors lurk, and three steps your fim can take to catch and correct the mistakes before you’re ever sued.

1. Policy/coverage discrepancies

Many firms’ written benefits policies and plan documents are like siblings who start to drift apart as they grow up.

In the benefits realm, however, the plan sponsor has the “parental” power – and legal responsibility – to make sure written policies and plan documents remain close as they grow and change.

As a routine practice, firms should make sure changes in their benefits policies are also written into the formal plan documents, according to benefits attorney William Wright.

If push comes to shove in court, any inconsistency with plan documents can prove fatal for the company. Example: Senior management passes a new rule that employees must work 30 hours a week to be eligible for the health plan.

Benefits and HR then write the new coverage policy into employees’ benefits  handbooks and hold meetings with employees to explain the change.

Now suppose an employee drops to part-time status. Are you legally protected if the employee challenges the loss of benefits?

Not necessarily. For the policy in  the handbook to stand up in court, the plan documents must also say there’s a 30-hour-a-week eligibility requirement.

Same thing goes for disputes over run-out coverage.  Suppose it’s your firm’s policy to carry over coverage for a terminated employee during the COBRA election period, but the requirement was never written into the plan document.

A few weeks later, the employee has a major health claim. The TPA denies it, saying coverage had expired. Reason: The plan document says “active employees” are covered, but doesn’t specify that the insurer pay claims until the end of the month.

The likely result: The ex-employee sues, saying the company is liable for the mistake.

2. Coordination of benefits

Watch out for cases where an employee’s claim may be covered under two or more policies (e.g., your firm’s plan and one from a spouse’s employer).

Make sure there’s a clear-cut coordination-of-benefits policy in all of your plan documents. Usually, if a plan contains no instructions for coordination of benefits, it’s expected to pay first. Two key areas to check:

1. Make sure there’s a statement that says only the amount actually paid by each plan will be charged against the maximum benefit, and
2. Be certain that the order of benefits determination spells out which plan pays first for a covered child if the employee is divorced from his or her spouse.

Likewise, if your firm offers domestic partner coverage, make sure there’s a coordination-of-benefits statement for dependent and non-dependent partners.

Three best practices

On an ongoing basis, you can cut your lawsuit risk by 75% if you:

• gather all materials related to specific plans into a binder, including renewal letters from vendors and materials distributed to employees
• perform a yearly self-audit, checking to see if plan-document wording matches your current policies, and
• pay special attention to keeping benefits descriptions up to date.

Reminder: If you don’t have a formal plan document, your contract with the vendor legally serves as the “control document” for the plan. By law, all employees must have access to the plan document and be notified in writing of any alterations, including minor ones.

What’s your biggest challenge when it comes to the Family and Medical Leave Act (FMLA) administration?

For many benefits/HR pros, it’s administering intermittent leave and making the right call about eligibility. Here’s how to proactively handle three common scenarios that can wind up in court:

1. Can’t pinpoint leave need or frequency

Even when an employee’s health condition is considered “serious” under FMLA, it’s sometimes tough to pin down the need for – and frequency of – intermittent absence. Migraine headaches are one such condition that give employers fits with FMLA. Chronic pain (without a diagnosis of a specific cause) is another.

In one recent case (Sconfienza v. Verizon, Inc.)  a woman suffering from migraine headaches asked her employer for intermittent FMLA leave. Her doctor informed the employer she’d need to take off several days a month, on an as-necessary basis.

Each time she had an episode, she asked for leave, sometimes for part of a day, often more than one day. When several of her requests were delayed or denied, the woman sued for FMLA discrimination.

The company countered by saying the delays were caused by the vague info the employee provided about her treatments.

To clear up the matter, the company had another physician contact the employee’s doctor. The employee’s doctor refused to cooperate, citing privacy issues. So the company denied the leave.

A U.S. District Court judge ruled the company was within its rights to delay or deny leave in this case. But the company still lost the case because it never asked the employee for permission for her physician to be contacted by another doctor.

Under FMLA, the judge said, the request for more info should’ve been brought to the employee’s attention. Then, if the employee failed to get the needed clarification from her doctor, the company was free to deny intermittent leave.

2. Breaks in service time

If an ex-employee later comes back to work at your firm, does his or her previous service time count toward FMLA eligibility? The answer is yes. A worker needn’t be continuously employed to meet FMLA’s 12-month, 1,250 worked-hours eligibility rule.

In fact, a court recently ruled in favor of a woman rehired some two decades after her previous service (O’Connor v. Busch’s Inc). She was in an accident a short time after her return and was denied FMLA leave based on lack of service time.  The court said that her previous stint at the company counted for FMLA purposes.

The feds have been promising for years to revise FMLA to close this legal loophole. The DOL has said it will unveil the final plan this summer, but as of yet, nothing has been forthcoming. It’s believed that when the changes finally come, service time prior to a continuous five-year break will no longer count for FMLA eligibility purposes.

For now, though, all previous service time counts.

3. Their pain becomes yours

How about cases in which an employee chronically claims to be in “too much pain” to work? Chronic pain is considered a serious health condition. But unless there’s a known cause (e.g., a torn knee ligament), it’s often tough to document the need for FMLA.

Even worse, legit absences for pain (not the folks who conveniently get a backache every Friday) are tough to predict and designate as FMLA.

One key to lessening this problem may already be under your nose.

Many employers’ health plan networks include pain management specialists. Educating employees about the network specialists can save a lot of hassle down the road. Ideally, an employee suffering from chronic pain goes to a specialist early in the FMLA certification process – preferably as his or her first stop after the primary care doctor.

How it works: The doctor uses X-ray guidance to locate the source or sources of the employee’s pain, and determines a treatment schedule. This makes FMLA documentation easier, and helps you better predict how often the employee will miss work.