Question:

Does FMLA cover time away from work to care for your children if your spouse’s parent is in the hospital and the spouse is not able to say home with the children?

Response:

The Family Medical Leave Act was established to help lighten the burden of employees who either have their own serious medical condition or an immediate family member’s medical condition, as well a providing protection to parents who give birth or adopt children, allowing for a bonding time.
But unfortunately there isn’t any protection through FMLA for employees who need to care for their children while a parent is ill.  The law specifically states that it “in law” parents are not included, so you couldn’t request FMLA to care for your parent in law while tending your children at the same time.
That doesn’t mean that your rights are limited, the Family Medical Leave Act is a federal act, many states have issued other laws that are more employee friendly, California for example, has many leave plans that benefit employees for various reasons.  I am not an attorney, and not fully familiar with Wisconsin’s leave programs, check with your Human Resource Manager to see if there are any programs available you can take advantage of that will protect your employment status and give you the time you need to care for your children.  If not, you might ask about a non medical leave of absence, or see if it is possible to tele-comute (work from home) for a short period while your family member is recovering.
Thank you for your question, I hope I have provided assistance.