I have been approached by a manager regarding an employee who possibly has scabies. This person has been treated twice by a physician and has produced medical authorization to return to work, but continues to present active conditions of the possible disease.
I have taken the consideration of ADA. The employee is not yet eligible for FMLA. I have not experienced such an issue in the workplace, but want to protect the other workers in the department. Does anyone have suggestions how to go about addressing this issue?

Unless you are a doctor then your actions would be opinion not based in facts or medical expertise so who are you protecting other than feeding your own FEARS!

Bottom line is whatever issues you raise better have verifiable solid FACTS behind them, or drop this.

One suggestion is to do a lot of reading (and to do so carefully, in case you run across dubious information).

Scabies is a mite that burrows under the skin. It IS contagious, but not as of 24 hours after treatment. Treatment is a prescription lotion applied from neck to ankles (for some reason the mites never go onto the head or feet), and requires a helper to apply in the back. The patient must be totally naked. SYMPTOMS MAY PERSIST FOR WEEKS AFTER CURE.

CONTAGION must be very thorough contact, such as carrying a child or sleeping in the same bed, but also by shared laundry and upholstered chairs. It shouldn't be contagious in an office unless chairs are shared. I'm adding this ONLY for general knowledge. She has been treated.

I see nothing in this situation that remotely comes under ADA.
And.... how would FMLA apply to her?

If you are in Human Resources, it is part of your job to know about ADA, FMLA, but also HIPAA. I'm puzzled that you didn't mention HIPAA, which is what DOES apply here. In the case of a contagion, of course there is a conflict - the patient deserves privacy and the other employees deserve to know if they are at risk. Privacy wouldn't apply if there hadn't been a release by a doctor. Continued itching is the lingering side effect of the mite, gone 24 hours after the lotion is applied.

treated twice by a physician and has produced medical authorization to return to work

That is ALL you need to know. You tell the manager who approached you that the employee has received medical authorization to return to work. If other employee do contract the ailment, then you sue the doctor. But the doctor knows this, which means he is unlikely to release the employee back to work if he is contagious.

I would hope someone verified that the return to work authorization was completely legitimate.