Health+Benefits the Jan/Feb 2018 issue

Family Time

States and employers are stepping up to implement PFL benefits.
By Breanna Scott Posted on January 23, 2018

The federal government has not enacted any federal programs for family caregiving, or maternity or paternity leave, so states and employers are stepping in. While there are only a handful of proactive programs, the trend is on the rise. A recent Standard Insurance Company survey with the Disability Management Employer Coalition found 18% of employers anticipate offering programs within a year, 33% anticipate doing so before the end of 2018, and 74% of employers hope to offer PFL coverage within the next five years.

As clients weigh the advantages to their benefits offerings, they may turn to brokers for help. So what do you need to know?

New York’s Paid Family Leave Program became effective Jan. 1 and is one of the most robust. As clients begin incorporating it into their benefits offerings, they’re bound to have questions. Here are a few details:

Program Requirements. Private employers that provide Disability Benefits Law (DBL) coverage and have New York-based employees are required to provide paid family leave. This mandate also applies to employers not based in New York but who have remote employees based in the state who receive DBL coverage.

Program Funding. New York’s program is entirely employee-funded through payroll deduction. For 2018, the contribution rate is 0.126% of a covered New York employee’s average weekly wage.

New York’s program will be phased in over four years with the duration and benefit payout set to gradually increase as the program matures. The legislation does not replace the federal Family and Medical Leave Act (FMLA). It has different employee eligibility rules and employer requirements, but in many cases, the leave overlaps and they can run concurrently.

Other states, including New Jersey, Rhode Island and California, have enacted mandatory programs. Washington state and the District of Columbia will soon implement legislation. If the individual state approach continues, staying up to date on each state’s regulations will become a bigger part of a broker’s role. As the New York rule shows, your clients may be required to offer this coverage to employees who work in a state that does.

If the individual state approach continues, staying up to date on each state’s regulations will become a bigger part of a broker’s role.

While there are foundational components to these benefits packages, there are many variables that determine how each is implemented. Programs can range from expanded parental leave to robust family caregiving programs. Fundamental program components include:

  • Funding through payroll deduction and/or by the employer
  •  Opportunities to layer with other benefits, such FMLA
  • Eligibility to all employers and employees and the ability to opt in or opt out
  • Conformity with state regulations.

As the battle for top talent continues, paid family leave can be a helpful recruitment and retention tool. These policies demonstrate an organization’s commitment to its employees and increase employees’ overall engagement, morale and productivity.

For clients who are considering adding these benefits proactively, ask them these questions to determine whether a program is the right fit for their organization.

  • Is paid family leave novel or competitive within your industry?
  • What are the demographics and needs of your workforce?
  • Would a program like this complement your company culture or offerings?

Caregiving benefits are top of mind for your clients. Understanding the nuances of different leave programs, implementation dates and considerations for adding the benefit can help you set yourself up for successful client consultation in this new year.

Scott is director of product and service development at Standard Insurance Company.

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