Learn about updates to the CT PFML program in the latest Line on Leave episode.
Connecticut and Oregon are the newest states to adopt Paid Family and Medical Leave in 2019. The Hartford’s Janîce Malcolm-Beeker, Asst. General Counsel, Meghan Pistritto, Dir. Product Management and host, Laura Marzi, CMO Group Benefits explore what employers and brokers need to know about CT & OR PFML programs including:
- Covered employer requirements, funding and deadlines
- Employee eligibility, benefits and reasons they can take Leave
- If Private Plans are an option
Laura: Hi, I’m Laura Marzi, the host of The Hartford’s “Line on Leave” podcast. This is where we discuss the updates and trends in Paid Family and Medical Leave. As the leader in Leave Management,1 The Hartford understands the importance of this issue absolutely to many of our employers and valued brokers. Today, I’m delighted to be joined by Janîce Malcolm-Beeker, who’s our Assistant General Counsel, as well as Meghan Pistritto, Director of Product Management as we discuss emerging PFML programs in Connecticut as well as Oregon.
Thank you both for joining us. I guess you could say the PFML programs in Connecticut and Oregon are still works in progress? They were just signed into law by their governors this summer. So what do we know so far? And I’d like to start close to home with what Connecticut is doing, Meghan.
Meghan: Oh Laura, Connecticut! Yes. Two words for you: Brand new. There is still a lot of work that has to be done from the state’s end and we’re keeping an eye on developments as the pieces – and as the regulations – really come together.
But what we do know for CT as a program is that they are the seventh state actually to create a PFML program. Employees will start paying into it January 1, 2021 but benefits actually won’t begin until January 1, 2022. So it’s about one year of deductions that take place before the program and the benefits really start.
There will be private plan options available, but surety bonds will be required if the plan is self-insured. This is like I said, brand new, the CT PFML program was enacted in 2019, and again regulations, and processes are still being developed. So we are keeping a close watch on that.
But what we do know is that the program will expand the definition of family and expands reasons for leave under the state FMLA to larger number of employees as well. So that’s a change to some of the existing legislation that Connecticut currently has.
And there’s also an opportunity for public-private partnership to administer program. Program oversight will be done by a newly created PFMLI Authority. This authority will really drive a lot of the regulations and a lot of what we’re really going to be keeping an eye on.
In terms of covered employers, so who actually has to have this law and abide by it, is all private sector businesses with one or more employees. State, municipalities and boards of education, but only for those employees that don’t have a collective bargaining agreement unless negotiates inclusion in the program. So there may be some exceptions to that.
Additional exceptions would include anybody that’s self-employed or sole proprietors. They have the actual opportunity to opt in if they wish to actually elect this program, as well.
Laura: Got it, OK.
Meghan: In terms of an employee eligibility. An employee must have earned at least $2,325 in highest earning quarter within first four of five most recent quarters. So it’s a little bit confusing but that’s something we can obviously help you with in determining eligibility. And you must be employed for at least 12 weeks.
Benefits for the program, there’s up to 12 weeks for combined Family or Medical Leave with added 2 weeks for pregnancy complications. And it’s one of the richest benefits in the nation with up to 95 percent of employee’s base weekly earnings. That’s up to 40 times the state minimum wage. And what’s happening in the state of Connecticut, is that in conjunction with this program, the minimum wage is also increasing. So year over year, your maximum benefit will actually increase with the minimum wage. So in 2022, the maximum is $840 and by July 2023 the maximum will actually be $900 a week.
Employees can take PFML, so the reasons for leave can be to bond with a new child through birth, adoption or foster placement. To care for a seriously ill family member, that’s broadly defined as anyone related by blood or the “equivalent of a family member.” This is another trend we’re seeing in the market or actually with the states. Is that they’re really becoming, they’re giving this more broadly defined definition of family member not just to include blood relatives but somebody that’s equivalent to a family member. And again, Connecticut is one of the first to do it but it’s definitely a trend that we’re seeing.
Recover from personal illness, injury or pregnancy. Serve as an organ or bone marrow donor. This is also unique to Connecticut. And respond to military-related events or care for ill or injured service family members – and also address needs of family violence victims. So again CT not only has one of the richest benefits in the country but it also has really one of the longest in terms of reasons for leave or the most lengthy in terms of what employees are actually eligible for.
So, great program. Again, we’re keeping an eye on as things kind of emerge. But we love that our home state is right there at the forefront with the rest of the nation.
Laura: So, a few weeks after Connecticut passed its bill, Oregon approved its program. So now we’ve got two new laws in rapid succession. And again, the employers who are impacted by these pieces of legislation should have a lot of time to prepare. Is that right, Janîce?
Janîce: That’s right, Laura. They should have a lot of time. And we know that employers are going to have a lot of questions as the program begin to develop. But there is almost three full years to prepare. Like Connecticut, Oregon still has to create the regulations that are ultimately going to implement the program. That will allow employees and employers to understand what the benefits require, all the details to be able to give this program teeth and height and breadth and depth.
Laura: OK, OK.
Janîce: So here’s a little background information and tidbits that will help our audience get a full understanding of this law.
So there was some political background going on at the same time this Paid Family and Medical Leave bill was being considered. The GOP senators didn’t vote for a controversial climate change bill that was being considered at the same time as the Paid Family and Medical Leave bill. They left and returned just in time to pass the Paid Family and Medical Leave bill. And just as an aside, the climate change bill never passed. But it was in quick succession after the Connecticut law, so it’s the eighth state to pass a Paid Family and Medical Leave program and the latest state.
Both employees and employers are going to pay for the cost of the program and the payroll contributions are going to begin in January 1, 2022. And benefits begin one full year later on January 1, 2023. And this program is considered one of the most generous in the nation of the eight. In fact, lower income workers can make up to 100 percent of their pay and that’s really very, very generous.
There is going to be a private plan option so that employers can opt out of the state and private plan options can be something the employers choose to self-fund or to fully insure. And the program oversight is going to be with the Oregon Employment Department.
So I’m going to give you a little bit more detail. It covers almost all business and organizations regardless of the size, as long as they’re in the state. And self-employed individuals and sole proprietors or even tribal government employees can even opt in. But federal employees are not included. Those are definitely excluded.
To be eligible you have to be an employee of a covered employer. And your benefits are calculated from the base earnings and that’s determined from four of the last five calendar quarters. That’s what we call the base year. Employees must have earned at least $1,000 during that base year.
So eligible employees are going to be able to get up to 12 weeks for a combined family and medical leave. And they’ll be able to get up to 100 percent wage replacement if they make 65 percent or less of the state average weekly wage. So that’s how the generosity of this program shows its face. And for those making more, the benefit percentage is 65 percent of the state average weekly wage plus 50 percent of an employee’s average weekly wage. And that’s over 65. So it’s a little bit confusing but it can be up to $1,253 per week based on the current state average weekly wage.
Laura: Ok, I think I got it. Thanks.
Janîce: Now employees can Paid Family and Medical Leave to bond with a new child within the first year of either year of birth or adoption or foster placement. They can take this leave to care for their own serious health condition or to care for a seriously ill family member. And as Meghan said, those are broader definitions than they used to be. Anyone related by blood or the “equivalent of a family member.” And also to seek legal or medical help from a domestic violence incident or harassment, sexual assault or stalking under the safe leave law.
So again, it’s quite rich. We will stay tuned for the state to implement regulations to help employers begin to prepare. But that’s a quick hit right now, Laura.
Laura: Ok, so Janîce, both you and Meghan have described what you’ve portrayed as some of most generous benefits programs in the nation. The question I’ve got at this point is who’s paying for it? Meghan, can you help us start to understand that?
Meghan: Laura, great question. As we have said they are the most generous benefits and people are really excited about the Paid Leave programs that their states are implementing. But the next big question then does become who’s actually paying for these programs? And it seems most of the burden will fall on employees through payroll deductions. Employers in Connecticut, however, have the option to contribute. For Oregon employers, there is no option. They must contribute, although they have small share than their employees do.
So again for Connecticut, employees contribute a half of a percent of earnings not to exceed Social Security maximum, which in 2019 is about $132,900. And employers are not required to contribute but may choose to pay all or some of the premium. Connecticut is actually a little bit of an outlier in this regard. Most of the other states actually do require some form of employer contribution, whereas Connecticut, as we just said, is employee contribution only.
For Oregon, payroll contributions will be shared by employers and employees, except for employers with fewer than 25 workers. They do not have to contribute. So for those small businesses, they’re not mandating that employers have to contribute for the program. The rate cannot exceed one percent of employees’ wages, again up to Social Security maximum, which again in 2019 is that $132,900. What the contribution breakdown really equates to is that employers are going to be responsible for about 40 of the premium or the deduction and that employees are responsible for about 60 percent. Employers though can choose to pay all or part of the employee portion as well. So if they choose to pay for the program on behalf of their employees – that is allowed.
Laura: So we know that regulations and more details are still being developed, got that. But what do we know so far about opportunities for private plans? Janîce could you help us understand that a little bit more?
Janîce: Sure Laura. And you’re right and there are a lot of details that we don’t yet know that are yet to be developed. But what we do know is that there is a private plan option for both states. And like all the other states that allow private plans, employers do need to get state approval first.
There are some similarities in Connecticut and Oregon that we can point to. In both states employers have to meet or exceed the state requirements to be able to have a private plan. That’s one. There can’t be a cost to employees that is more than the state plan. The cost to employees can’t be more than the state plan cost. The private plan has to be extended to all employees of the business. You can’t split it. All employees. And employees covered under a private plan do not have to contribute to state plan. That would be an obvious understanding. And then employers can choose to pay for all or part of the premium as sort of an employee benefit on the employee’s behalf.
There are some differences in these two states from the other states that do have PFML programs. Some differences from the other states is that in Oregon and Connecticut there doesn’t seem to be an option to split the plans as is available in other states, like Massachusetts, for example. Meaning the employer’s plan, the private plan, is going to have to offer both Paid Medical Leave and Paid Family Leave. Employers don’t seem to have the option to split the two.
Laura: With so many details still outstanding and deadlines a few years away, what should our audience be thinking about in terms of what’s next? What should they really be prioritizing right now? What do you think, Meghan?
Meghan: Of course. First and foremost, we know that the days are long but the years are short. So even though it feels like it’s a long time away, these come very quickly. So employers really should be starting to think about how this are going to impact the benefits that they currently offer today.
But again, The Hartford is staying on top of this. All the developments in both the states and we’ll continue to communicate with our customers and brokers as things progress. We’ll certainly keep everyone in the loop. But what we, The Hartford, can do to help today, this again is a brand new law, is we’ll continue to monitor all the developments. We’ll update employers and broker communities with latest info. And as more states consider adding PFML, you can stay updated on Connecticut, Oregon and the rest by visiting our PMFL resource page at thehartford.com/pfml
Laura: Well, thank you Janîce, thank you Meghan. This has been a great conversation with a lot of helpful information. I appreciate your insights. And I also want to thank our listeners for your time, as well. You can find this episode along other Leave on Line podcasts as well as additional resources on this extremely important topic at The Hartford’s Paid Family and Medical Leave resource center. And again the web address for that is https://www.thehartford.com/pfml. Thanks for listening.
1 LIMRA 2018 Absence Management / Family Medical Leave In Force Data Report (# Lives Covered).
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