INTEGRATING PAID FAMILY & MEDICAL LEAVE INTO YOUR EXISTING - - PowerPoint PPT Presentation

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PRESENTED BY PATTY BORST AND DAVID SETZKORN

INTEGRATING PAID FAMILY & MEDICAL LEAVE INTO YOUR EXISTING BENEFITS

October 10, 2019

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AGENDA

• 1. Overview
• 2. Federal Landscape
• 3. State Landscape
• 4. Impact to STD, LTD, & Company Paid Leave
• 5. Appendix

The following slides are provided for informational purposes only and do not constitute legal advice. They should not be relied upon or treated as legal advice. This information is intended, but not promised or guaranteed to be current, complete, or up-to-date, as statutes and regulations are subject to change. You should not act or rely on any information contained in this document without first seeking the advice of an attorney.

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WHY ARE WE HERE TODAY?

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OVERVIEW

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2019 LEGISLATIVE MAP

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PAID FAMILY & MEDICAL LEAVE DEFINED

• Paid Family and Medical Leave Insurance is an insurance program funded by

Employees and Employers through a payroll tax that implements paid leave both for

• ne’s own condition and to care for others that is typically job protected.
• PFML is similar to FMLA (Family and Medical Leave Act), except that PFML ensures

you get some pay while taking leave. PFML will also apply in certain instances that FMLA does not cover.

Paid F Family L Leave Provides paid leave for an individual to bond with a child, care for a family member with a serious health condition, military exigency, or military caregiver Paid M Med edical Lea eave Provides paid leave for an individual’s OWN serious health condition or pregnancy complications and recovery

OVERVIEW

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NOT TO BE CONFUSED WITH….

• Employer-Mandated Paid Leave: Employers in some states/counties/municipalities

are required to provide a minimum amount of paid sick leave or paid leave for other incidental reasons

• State Accrued Paid Leave: State laws that require employers to allow the application
• f their company sick pay plans to be used for other reasons outside of an employee’s
• wn illness and often provide job projection
• Company Paid Leave Programs: Employer-Specific Paid Leave policies not in

connection with a mandated program

OVERVIEW

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PARENTAL LEAVE TRENDS PAVE THE WAY

From 2014 to 2018, the number of employers offering paid leaves to new parents increased significantly.

OVERVIEW

2016 2016 Paid Maternity Leave – 26% Paid Paternity Leave – 21% Paid Adoption Leave – 20% Paid Parental Leave – 17% 2018 2018 Paid Maternity Leave – 35% Paid Paternity Leave – 29% Paid Adoption Leave – 28% Paid Parental Leave – 27%

1.SHRM, 2018 Employee Benefits: The Evolution of Benefits (2018), 44-45

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FEDERAL VS STATE LANDSCAPE

• Proposed Federal law attempts to compete with state and local laws
• States and municipalities fill the gap, making consensus on federal

requirements difficult to reach OVERVIEW

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FEDERAL LANDSCAPE

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PROPOSED LEGISLATION (2018)

FEDERAL LANDSCAPE

THE E ECO CONOMIC S C SECURITY TY FO FOR NEW P W PARENTS TS ACT ( (RUBIO-FL FL)

• Allows parents to tap into their Social Security Benefits before retirement
• Parents could take a least two months of paid parental leave at up to 70% of their weekly wage

WORKFLEX I IN TH THE 2 21ST T CENTURY ACT ( T (WALTE TERS-CA, R RODGER ER-WA, & & STEF EFANIK-NY)

• Would amend ERISA to provide benefits
• Paid leave is extended to all full-time and part-time employees
• Employees accrue leave over the course of a plan year
• Employers would fund the bill and the bill would be scaled based on the

size of the employer

• Part-time employees would receive proportional benefits
• Minimum eligibility requirements in order to qualify
• The bill would pre-empt all state and local paid leave laws and regulations

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PROPOSED LEGISLATION (2018 – 2019)

FEDERAL LANDSCAPE

FAMIL ILY A Y ACT ( (GI GILLIB IBRAND-NY & & DE DELA LAURO-CT)

• Establishes new office under the Social Security Administration (SSA) to administer and pay benefits
• Provides 12 weeks of paid leave for FMLA qualifying reasons at 66% of their monthly wages up to a

capped amount (TBD); does not provide job or benefit protection as required by FMLA

• Covers all employers regardless of size
• Employees must contribute to Social Security in order to qualify
• Funded by a 2 tenths of 1% employer and employee contribution
• Estimates are about $1.50 per week for a typical worker (figure would adjust based on income)
• Would run concurrent with, rather than in lieu of, state and local benefits
• Based on models of CA, NJ, and RI

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PROPOSED LEGISLATION (2018 – 2019)

FEDERAL LANDSCAPE

CRAD ADLE AC ACT ( (ERNS NST-IA & A & L LEE-UT)

• Allows parents to tap into their Social Security Benefits before retirement
• Would require parents to postpone activating their Social Security Benefits if the choose to use for

Paid Parental leave by up to 6 months

• Parents could take up to three months of paid parental leave at up to 70% of their weekly wage
• Payments would begin 2 weeks after parents applied for a baby’s Social Security Number
• Almost identical to the Economic Security for New Parents Act last in 2018

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STATE LANDSCAPE

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STATE LANDSCAPE – PAID FAMILY LEAVE

Existing ng P Programs

• California
• New Jersey
• New York
• Rhode Island

Com

• ming S

Soon

• on
• Washington
• Oregon
• Massachusetts
• Connecticut
• Washington, DC

Li Likely t to b be Next

• Colorado
• Maine
• Hawaii
• Vermont
• New Hampshire
• Pennsylvania
• Minnesota
• Illinois

STATE LANDSCAPE

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STATE PAID FAMILY MEDICAL LEAVE TRENDS

• Employee vs. Employer Funding (or both)
• Paid Leave Benefit vs. Employer Tax Credit
• Public vs. Private Plans
• Impact to Current Unpaid Leave Laws
• Eligibility Rules and coverage for non-traditional employees (contractors, former

employees)

• Benefit Amounts
• Covered Leave Reasons, Relationships, and Leave Schedules
• Taxation of Benefits

STATE LANDSCAPE

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WASHINGTON PAID FAMILY & MEDICAL LEAVE (WAPFML)

STATE LANDSCAPE

• Effec

ective D e Date: Employee/Employer Contributions begin 7/1/19. Benefits begin 1/1/20. Contribution is 0.4% of gross pay. Employees pay 45% of Medical Leave and 100% of Family Leave. 2/3 of total Premium is for Medical and 1/3 is for Family

• Emplo

ployee E Eligib ibilit ility: Employees must work a minimum 820 hours for any employer (benefit is portable and employees may meet eligibility for WAPFML prior to FMLA)

• Lea

eave R Rea easons: Employee illness or pregnancy, parental leave, military exigency, care of ill child (any age), parent, parent-in-law, Spouse/domestic partner, sibling, grandparent, grandchild

• Income R

e Repla eplacemen ent: 90% of one-half of state AWW + 50% of the difference between the employee’s AWW and ½

• f the state AWW. Can coordinate with employer paid leave programs
• Priva

vate te Plan: Employers can create a voluntary plan that meets or exceeds the state plan for either the medical leave, family leave, or for both

• Prote

tection: Job protection extends once FMLA requirements have been met and can extend beyond the FMLA period

*In any benefit year ¹ There is no Elimination Period for Bonding or Placement of a child.

Waiting Period Min/Max Benefit Max Duration 7 Days¹ $100/$1,000 12 wks Medical/12 wks Family/2 wks PDL/18 wks total*

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OREGON PAID FAMILY & MEDICAL LEAVE

STATE LANDSCAPE

• Effec

ective D e Date: Employee/Employer Contributions begin 1/1/22. Benefits begin 1/1/2023. Total contribution may not exceed 1% of employee wages. Employers pay 40% of total premium, employees pay 60%

• Emplo

ployee E Eligib ibilit ility: Employees must earn a minimum $1000 during the base year or the alternate base year

• Leave Reasons: employee illness or pregnancy, parental leave, victims of domestic violence, care of ill child

(any age), spouse, domestic partner, parent, sibling, grandparent, grandchild any individual related by blood

• r affinity
• Income R

e Repla eplacemen ent: 100% of an employee’s AWW for low income earners. For all others, 65% of the employee’s AWW and 50% of the employee’s AWW greater than 65% of the state AWW. Benefits are payable only when funds are available in the PFML Insurance fund

• Priva

vate te Plan: Employers can apply to have obligations met via a private plan.

• Prote

tection: Employee is eligible for Job protection under federal FMLA, OFLA, and OR PFML if employed 90 days before taking leave

*In any benefit year

Waiting Period Min/Max Benefit Max Duration TBD 5% AWW/120% AWW 12 wks medical/12 wks family /2 wks PDL/18 Wks total*

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MASSACHUSETTS PAID FAMILY & MEDICAL LEAVE

STATE LANDSCAPE

• Effec

ective D e Date: Employee/Employer Contributions begin 10/1/19. Benefits begin 1/1/21 for all leave reasons except care of family member, 7/1/21 to add care of family member. Total premium is .75% of wages (.62% for medical, .38% for family). Employees pay 40% of Medical Leave and 100% of Family Leave

• Emplo

ployee E Eligib ibilit ility: Employees must have been paid wages in the base period amounting to at least 30 times the weekly benefit rate

• Lea

eave R Rea easons: Covers Employee illness or pregnancy, parental leave, military exigency, military caregiver, care of ill child (any age), parent, parent-in-law, Spouse/domestic partner, sibling, grandparent, grandchild

• Income R

e Repla eplacemen ent: 80% of an employee’s AWW that is equal to or less than the state AWW plus 50% of employee’s AWW that is over 50% of the state AWW. Can coordinate with employer paid leave programs

• Priva

vate te Plan: Employers can apply for private plan that meet or exceeds the state plan for medical or family or both

• Prote

tection: Employee is eligible for job protection under federal FMLA and MA Parental Leave Act

*In any benefit year

Waiting Period Min/Max Benefit Max Duration 7 Days TBD/$850 20 wks Medical/12 wks Family/26 wks Service member/26 wks Total*

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CONNECTICUT PAID FAMILY & MEDICAL LEAVE

STATE LANDSCAPE

• Effec

ective D e Date: Employee Contributions begin 1/1/21. Benefits begin 1/1/2022. Fully employee-paid! Total premium is ½% of employee wages.

• Emplo

ployee E Eligib ibilit ility: employees earning $2,325 during their highest earning quarter within the base period and presently employed or employed within the previous 12 weeks or self-employed or a sole proprietor and enrolled in the program

• Lea

eave R Rea easons: Covers Employee illness or pregnancy, parental leave, military exigency, military caregiver, organ or bone marrow donation, care of ill child (any age), parent, parent-in-law, spouse sibling, grandparent, grandchild,

• r anyone that is related by blood or affinity (very broadly defined)
• Income R

e Repla eplacemen ent: 95% of base weekly earnings up to 40 times fair minimum wage ($480/wk when benefits begin) plus 60% of the difference between 40x minimum wage and base earnings

• Priva

vate te Plan: Employers can apply to have obligations met via a private plan

• Prote

tection: Employee is eligible for protection under federal FMLA, CT FMLA, (as amended by PFML)

*In any benefit year

Waiting Period Min/Max Benefit Max Duration TBD TBD/$1,000 12 wks Medical/12 wks Family/2 wks PDL/26 wks military caregiver/26 wks total

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WASHINGTON DC FAMILY & MEDICAL LEAVE

STATE LANDSCAPE

• Effec

ective D e Date: Contributions begin 7/1/19. Benefits begin 1/1/21. Fully employer paid! Total Premium is 0.62% of employee’s wages.

• Emplo

ployee E Eligib ibilit ility: Employees must work for a DC employer, and during some or all of the 52 weeks preceding leave, they must spend more than 50% of their work time in DC or spend a substantial amount

• f work time in DC and not more than 50% of work time in a different jurisdiction.
• Lea

eave R Rea easons: Covers Employee illness or pregnancy, parental leave, care of ill child (any age), parent, parent-in-law, Spouse/domestic partner, sibling, grandparent.

• Income R

e Repla eplacemen ent: Provides up to 90% of 150% of the District’s min. wage X 40 plus 50% of the amount by which the employee’s AWW exceeds 150% of the District’s AWW X 40. Can coordinate with employer paid leave programs.

• Priva

vate te Pans: Employees must apply through the state. Voluntary Plan is not an option!

• Prote

tection: Job protection provided under D.C. FMLA and Federal FMLA.

*In any benefit year

Waiting Period Min/Max Benefit Max Duration 7 Days TBD/$1,000 2 wks Medical/6 wks Family/8 wks Parental/8 wks Total

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IMPACT TO STD, LTD, & COMPANY PAID LEAVE

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STATE & LOCAL TRENDS

• Stay current with PFML rulemaking nationwide
• Reach out to vendor partners (Carriers, Consultants, TPAs, Payroll, Legal ) to

explore LOA support services

• Be aware of fast approaching deadlines prior to PFML effective dates
• Begin reviewing PFML current employee benefits programs and how PFML

laws will impact them:

• STD/LTD
• Company Leave Policies
• Paid Parental Leave and/or Paid Family Care Leave
• PTO/Sick Leave/Extended Illness
• Collective Bargaining Agreements (CBAs)

IMPACT TO STD, LTD, & COMPANY PAID LEAVE

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HOW DOES PFML COMPARE WITH STD/LTD

• Disability is wage replacement that covers OWN medical condition (typically

not work-related injury/illness) – no family leave; PFML much broader in scope

• Statutory definition of disability likely differ from the STD/LTD plan definition
• STD/LTD is not job-protected leave with rights to continued health coverage

and job reinstatement; PFML is protected leave in certain states

• Eligibility requirements will differ
• Approved STD/LTD benefit durations are typically determined by clinical

guidelines and occupation in conjunction with medical records; PFML required leave certifications typically differ

IMPACT TO STD, LTD, & COMPANY PAID LEAVE

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CONSIDERATIONS FOR STD/LTD

• Do you want to discontinue STD in states that offer statutory plans?
• Do you want to top off and/or extend benefits in states that offer statutory

plans?

• Do you want to offer a richer plan for all employees?

IMPACT TO STD, LTD, & COMPANY PAID LEAVE

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CONSIDERATIONS FOR PTO

IMPACT TO STD, LTD, & COMPANY PAID LEAVE

• Old trends reversing due to tracking requirements under certain Paid Sick

Time Laws

• PFML will provide additional income replacement, allowing employees to

stretch existing banks

• PFML creates an inability to require the substitution of Company PTO plans

during FMLA leave

• Plan Change Considerations
• Reduction in Accruals
• Reduction in Carryover or Max accrual limit

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CONSIDERATIONS FOR STATE VS PRIVATE PLAN

IMPACT TO STD, LTD, & COMPANY PAID LEAVE

• Model Cost of Assuming Risk vs. Paying State Tax
• Impacts to leave incidence and duration under new state regulations
• Costs of additional staff and resources to self-manage the state-mandated plan
• Compare to cost of state-administered plan
• Assess the Employee & Employer Experience
• Timely Claims Handling and Benefit Payments
• Customer Service
• State Filings
• Assess Expertise of Internal Team(s) and/or Vendor Partner
• Assess Technology Needed to Self-Administer
• Assess Plan Design for Current Leave Programs (Benefit Percentage,

Eligibility, Waiting Periods, Duration, and Claim Filing Requirements)

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RESOURCES

IMPACT TO STD, LTD, & COMPANY PAID LEAVE

Rel elativel ely S Spea eaking ng! www.standard.com/paid-family-leave State D e Disa sability a and P nd Paid Family L Leave Q e Qui uick Refer erenc nce G e Gui uide e www.standard.com/eforms/19866.pdf

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STATE RESOURCES

IMPACT TO STD, LTD, & COMPANY PAID LEAVE

Calif ifor

• rnia

ia Employment Development Department: https://www.edd.ca.gov/ Connecti ticut t – link to bill as passed: https://legiscan.com/CT/text/SB00001/2019 Distr trict o t of C Columbia Universal Paid Leave: https://does.dc.gov/page/district-columbia-paid-family-leave Massa sachuse setts s Department of Family & Medical Leave: https://www.mass.gov/orgs/department-of-family-and-medical-leave New J Jers rsey Department of Temporary Disability and Family Leave Insurance: https://myleavebenefits.nj.gov/ New Y York S k Stat ate Paid Family Leave: https://paidfamilyleave.ny.gov/ New Y York S k Stat ate Disability Benefits: http://www.wcb.ny.gov/content/main/DisabilityBenefits/Employer/introToLaw.jsp Orego gon – link to bill as passed: https://olis.leg.state.or.us/liz/2019R1/Measures/Overview/HB2005 Rhode I Island Department of Labor & Training – Temp Disability/Caregiver Insurance: www.dlt.ri.gov/tdi Washingto ton Employment Security Department – Paid Family & Medical Leave: https://esd.wa.gov/paid-family-medical-leave

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APPENDIX

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CALIFORNIA PAID FAMILY & MEDICAL LEAVE

APPENDIX

• Employers can elect to opt out of State Disability Insurance or Paid Family Leave if they offer a

voluntary disability insurance plan that offers at least two enhancements over the state plan

• There is significant regulatory filing and reporting requirements in order to offer this
• Benefits are paid based on State Average Weekly Way not to exceed 60 percent of weekly wage
• For employees who earn less than 1/3rd of the State Average Quarterly Wage the maximum

benefit increases to 70 percent of SAWW

• SDI and PFL benefits are only administered through the State of California EDD division
• VDI and PFL benefits can be administered by a third-party administrator or carrier
• Employee Maximum contribution is one percent of annual taxable wage base (current max

contribution is $1,183.71). This figure adjusts annually.

*6 weeks in a 12-month period – This is will increase to 8 weeks as of 7/1/20

Benefit Waiting Period Min/Max Benefit Max Duration SDI 7 days $50/$1,252 52 weeks PFL N/A $50/$1,252 6 weeks*

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SAN FRANCISCO PAID PARENTAL LEAVE ORDINANCE

• Although this is a municipal benefit, it directly ties to CA PFL
• 100% funded by employers
• Law requires employers provide supplemental compensation that equals 100% of the employees

gross weekly (subject to a maximum weekly amount)

• Maximum benefit between PFL and Paid Parental Leave Ordinance cannot exceed a maximum

weekly benefit of $2,087

*6 weeks in a 12-month period

Waiting Period Min/Max Benefit Max Duration N/A $0/$835 6 weeks*

APPENDIX

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HAWAII TEMPORARY DISABILITY INSURANCE

• Hawaii does not administer a state plan but requires all employers carry a minimum Temporary

Disability Insurance plan

• Employees can earn a maximum of 58 percent of their weekly earnings under a TDI plan
• The maximum employee contribution is 0.5 percent or $5.44 per week (currently)
• Carriers and TPAs are able to provide this service for employers, but they must have a physical

presence on the islands in order to be able to administer TDI Waiting Period Min/Max Benefit Max Duration 7 days $14/$632 26 weeks

APPENDIX

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NEW JERSEY TEMPORARY DISABILITY INSURANCE

• Employers can elect to create a self-insured version of the state plan, provided that the provisions

are at least equal to the provisions of the state plan.

• Fully insured or self insured
• Benefits are 66 2/3rd percent of the employee’s weekly average wage
• Employee maximum contribution is .017 percent of annual taxable wage base (currently max

contribution is $58.48). This figure adjusts annually.

• Employers contribution can be between 0.1 to 0.75 percent

¹ Will change to $850 effective 7/1/2020 per new bill just signed into law *26 weeks or the period necessary for benefits to equal 1/3 of total wages in a base year, whichever is lesser

Waiting Period Min/Max Benefit Max Duration 7 days $0/$650¹ 26 weeks*

APPENDIX

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NEW JERSEY FAMILY LEAVE INSURANCE

• This plan can only be administered through the state. TPA’s and carriers cannot provide
• utsourcing administration like NJ TDI
• Employee maximum contribution is .08 percent of annual taxable wage base (Currently max

contribution is $27.52). This figure adjusts annually

• Employers do not contribute to this benefit
• Family and Medical Leave Insurance does not provide job protection or a leave entitlement. It’s

merely a monetary benefit

¹ Will change to $850 effective 7/1/2020 and EP will be eliminated per new bill just signed into law in 2/2019 * 6 weeks consecutive or intermittent weeks (will increase to 12 weeks effective 7/1/2020). Can also be taken in 42 intermittent days during a 12-month period beginning with the first date of the claim.

Waiting Period Min/Max Benefit Max Duration 7 days¹ $0/$650¹ 26 weeks*

APPENDIX

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NEW YORK PAID FAMILY LEAVE

• This plan can only be administered through the NY State Insurance Fund, TPA’s or carriers or it can

be self funded and must be included as part of an employers DBL offering

• There is a NY State Plan Option
• Employee Maximum contribution is .153 percent of annual taxable wage base (currently max

contribution is $107.97 per year)

• Employers do not contribute to this benefit
• NY PFL was updated after it went live on 1/1/18 to now include bereavement leave as one of the

qualifying conditions

• Benefits are subject to FICA tax

* The maximum weekly benefit will continue to increase until is represents 67% of the Average Weekly Wage in 2021

1 This will increase to a maximum length of 12 weeks in 2021. Max length for DBL and PFL combined

cannot exceed 26 weeks

Waiting Period Min/Max Benefit Max Duration N/A $100/$746.41* 10 weeks1

APPENDIX

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NEW YORK DISABILITY BENEFITS LAW

• This plan can only be administered through the NY State Insurance Fund, TPAs, carriers or it can be

self funded

• Employee Maximum contribution is .5 percent of annual taxable wage base (Currently max

contribution is $31.20)

• Employers pay the balance of the benefit plan costs not covered by the employee contributions
• Benefit rate is 50 percent of the average weekly wage base in the previous 8 weeks earnings to a

maximum benefit of $120 per week

• Benefits are subject to FICA tax

¹ Based on 52 consecutive weeks

Waiting Period Min/Max Benefit Max Duration N/A $100/$746.41 10 weeks1

APPENDIX

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PUERTO RICO TEMPORARY DISABILITY INSURANCE

• Can go through the public plan or “private” insured or self-insured plan that equals or exceeds the

public plan benefits

• Employee and employer contributions are shared to a maximum contribution rate of 0.6 percent.

The maximum annual employee contribution is currently $54.00 based on an annual taxable wage

• f $9,000.00
• Benefits are 65 percent of weekly earnings and are paid from a schedule based on total wages

received in a base year

• Additional benefits can be added for death or dismemberment

* Based on 52 consecutive weeks

Waiting Period Min/Max Benefit Max Duration 7 days or 1st day of hospitalization $12/$113 26 weeks*

APPENDIX

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RHODE ISLAND TEMPORARY DISABILITY INSURANCE

• Insured or self-insured plans are not allowed (state administration only)
• Employee Contribution Rate is 1.1 percent
• Earnings include overtime, vacation, sick leave pay, bonuses and commissions
• Earnings excludes holiday pay and employee must have medical certified disability

¹ In Any Benefit Year ² Maximum annual benefit up to 5 dependents

Waiting Period Min/Max Benefit Max Duration 7 days $98/$852/$1,150² 30 weeks¹

APPENDIX

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RHODE ISLAND TEMPORARY CAREGIVER INSURANCE

• Insured or self-insured plans are not allowed (state administration only)
• Employee contribution rate is 1.1 percent and employee must have paid into the TDI fund in order

to receive TCI payments

• Designed to care for seriously ill child, spouse, domestic partner, parent, parent-in-law,

grandparent or to bond with new child (birth, adoption or foster)

• Bonding claims may only be requested in the 1st 12 months of parenting, and proof of parent-

child relationship is required

• Benefits are subject to federal and state income taxes

¹ In Any Benefit Year ² Maximum annual benefit up to 5 dependents

Waiting Period Min/Max Benefit Max Duration 7 days $98/$852/$1,150² 30 weeks¹

APPENDIX