When our organization was smaller (35 employees) and we were not under FMLA we still had a Leave of Absence policy which was generally in conjunction with our Short-Term Disability policy.  It helped because it gave guidelines on such issues as giving notice of the leave, acceptable documentation, whether the leave would be paid or unpaid and what would happen when the employee returns from leave.  I think a policy helps  you stay consistent in administering the employee's absence from work. 

hi Sarah! I think I'd try to make this a real positive for your company. I'd try to communicate it something like this: "Even though we're not required by law to do xxx, our company doesn't want to get by with just the minimum, we want to go beyond. That's why we're providing this policy, etc." That would allow you to reduce/eliminate FMLA confusion, but make a very positive statement about what a great employer you are. 

I agree with Sheryl that having a policy helps with consistency and shows that you're a caring employer (allowing leaves although not required to do so by law). My company is also under 50 and not subject to FMLA. We have a leave of absence policy that states how leaves are approved, whether paid or unpaid, status of insurance benefits, coordination with our disability benefits, and guidelines for return to the work. It touches on the concerns one would have relative to FMLA, but never mentions FMLA.