PFML Expansion: Absent a Federal Program, States Are Filling the Void

Podcast: Line on LeaveIn the absence of a federal PFML program, states continue to establish their own programs and carrier’s like The Hartford continue to offer new solutions, most recently, the launch of FLI with TDB in New Jersey. Maryland and Delaware are the latest states to adopt PFML. While PFML programs make a significant difference for a family, they are also adding complexity for employers trying to stay on top of all the changes. In this episode we discuss upcoming new programs as well as updates on existing ones. 
Join host Laura Marzi, Group Benefits Chief Marketing Officer, with Meghan Pistritto, Head of The Hartford’s Statutory Disability and PFML product and Susan Tiso, The Hartford’s Regional Relationship Manager in NYC and New Jersey to learn about the status of PFML around the country as well as some of The Hartford’s initiatives. Special guest, Anthony Cortese, Principal and Senior VP for Reuben Warner Associates will offer insight on challenges and solutions for employers in New Jersey.
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Laura Marzi: Hi everyone, I'm Laura Marzi, and welcome to another episode of The Line on Leave podcast. This is another in our series of updates on Paid Family and Medical Leave programs around the country. Congress sure got close last year to passing the first national PFML program but, as we all know that didn't happen. And as a result, states continue to establish their own programs. Maryland and Delaware are the latest to adopt PFML. We're going to talk today about the upcoming new programs plus update you on the status of existing ones. PFML programs make a huge difference for a family as we all know. People can take the time to bond with a new child, care for a sick loved one, and take care of their medical needs. But PFML programs are also adding to the complexity for employers just trying to stay on top of all these changes.
I am very excited today to be joined by Meghan Pistritto, she is head of The Hartford's Statutory Disability and PFML product. And also, from The Hartford, we have Susan Tiso. Susan is our Regional Relationship Manager in New York City and New Jersey, and they're going to specifically bring us up to date on the status of PFML around the country, and some of The Hartford's initiatives.
Also, joining us today is Anthony Cortese, Principal and Senior Vice President for Reuben Warner Associates. Reuben Warner Associates is an independent multi-company general agency that has been in business for over 75 years. And they've represented The Hartford in both state disability and accidental death and dismemberment markets for multiple decades. I'm very pleased Anthony is going to offer insights on challenges and solutions for employers in New Jersey, specifically, where both disability and paid family leave are statutorily required. So, I'm going to start off our conversation today with a question for Meghan. Meghan, how many states right now have paid family leave programs?
Meghan Pistritto: Well, hello, Laura. First, just want to start by saying, thank you for having me back. I'm always excited that the time we get to spend together talking about my favorite topic.
Laura Marzi: Absolutely.
Meghan Pistritto: Paid Family and Medical Leave. So here we go again. And so much has changed I feel like since the last time we talked, not just nationally, statewide, but also here at The Hartford. So, really excited to kind of dive into some of these topics with you, and super excited to have Anthony and Susan here with us today, too.
So, to answer your question, there are 12 states plus Puerto Rico and the District of Columbia that have some form of either mandated disability or paid family leave programs. As you had said, the newest states to adopt PFML just this year, Maryland and Delaware. Those benefits begin in 2025 and 2026, respectively. Also, Oregon is rolling out their benefits. They're beginning in September of 2023, and Colorado will be following in January of 2024. The other states that have been up and running for some time, are California, Connecticut, our home state, Massachusetts, New Jersey, New York, Rhode Island, and Washington state.
And then we also have Hawaii that has mandated disability. They do not currently have a paid family leave program, but Hawaii has been looking at adding a PFML program for some time. And it's a state that we're watching just to kind of see what their progress is. And then, also just wanted to make one more comment because New Hampshire has also passed something. It's not a mandate, so it's different than the other states, but they do have a PFML program that is available.
Laura Marzi: Okay. Wow, that's a lot!
Meghan Pistritto: I know it's a lot.
Laura Marzi: For our listeners, if you need to get more details on each of these states, we update them regularly on our PFML resource center. And you can get to that by going to\pfml. Okay, so I'm going to switch gears, be a little bit more specific. This question is going to be for Susan. I know New Jersey had a statutory Disability and Family Leave Insurance for a while and mandate there. And even though the Family Leave is not a new program, we've got some pretty exciting business updates we can share with our clients. And I was wondering, Susan, if you could tell us more about that.
Susan Tiso: Thanks, Laura, for having me today. And that is very true, New Jersey began their Family Leave Insurance back in 2009. The State of New Jersey allows employers to opt out of the state for one program, but leave the other in the state plan. But, we found at that time there was not a large appetite for us to get involved. But if you flash forward to today with so many other states passing PFML legislation, the request for private plan options for this coverage in New Jersey and the interest has grown considerably. The Hartford is happy to announce, which is very exciting, a new offer for New Jersey Family Leave Insurance with Temporary Disability benefits effective January 1, 2023. Having a private plan for Family Leave Insurance and New Jersey TDB together will ease administration for employers and make a great experience for employees.
Susan Tiso: What we found is that now we're hearing a lot of questions from customers and brokers, there's a lot of interest and a big buzz. So, I'm thinking, Anthony, have you heard the same? What are some of the things that you're hearing? I would imagine that you actually are hearing a lot of information and questions about that as well. Can you tell us a little bit about that?
Anthony Cortese: Susan and Laura, thank you very much. We really appreciate the opportunity to participate in this podcast. I would agree with you. I mean, I think there is going to be a lot of interest. And we're hearing a lot of interest around the idea of privatizing, both New Jersey TDB and with now this offering of FLI insurance for New Jersey. It makes all the sense in the world to consider looking at both. Over the years, we've seen tons of changes when it comes to New Jersey TDB, between fluctuations in employee contributions, changes to the way premiums are being calculated, a very considerable weekly benefit with an 85% income replacement multiplier, there's a lot to consider here. All employers should review how they are providing mandated state leaves to ensure not only competitive costs, we know that that's important, but also how is the plan being serviced, and are the employees receiving the kind of outcomes that they're looking for. With our firm being involved in state leave since the 1940s, that is really what our brokers are trusting and relying on us to help navigate these challenging waters.
Laura Marzi: That makes sense, I want to push on that a little bit more. Anthony, can you share your observations on the impact for employers in states like New Jersey, where they're working with stat disability and paid family leave programs? I'm just wondering more about how complex leave management is for an employer in New Jersey, that not only has Temporary Disability, TDB and Family Leave Insurance, FLI on top of these other state, local, and company leaves. Can you talk more about that?
Anthony Cortese: Yeah, that's a really good question, and probably not always the easiest to answer, right? Overall, we would say that employer should be reviewing how they're administering their programs. Multi-state becomes that much more of a challenge because you have to know the differences between how New York might handle a certain thing. There is changes to definitions when it comes to family members, et cetera, that are occurring in different states. In particular, in New Jersey, it may be easy for an employer to sit back and say, well, hey, the coverage is supposed to be with the state, that's the automatic default, we'll just leave it there. That's not really the best answer. I mean, this becomes more of a consideration for groups, as I mentioned, that are operating in multiple states because now it's not just one set of leave laws to adhere to, it's multiple.
When we're looking at TDB and we're talking through the idea of privatizing with our brokers and their respective clients, it's really a twofold conversation. Really, the most important is a service and the administration, right? Remember that when someone is going out, an employee is going out on leave, it's already a very stressful situation. Couple that with a reduction in income, delays in claim handling can really just make that situation that much worse. The objective for an employer, and really even our carriers is to get the employee back to work as quickly as possible. While they're out, however, it is also an important consideration for employers to provide coverage for these situations that will respond in a timely fashion and without causing additional stress.
The other factor that I think goes unspoken, but we spend a lot of time talking about this, is what goes into it at the employer level. If we tried to put a dollar amount to what time HR representatives or other individuals within an organization are spending in dealing with phone calls and follow-ups and complaints maybe even from their staff as to when a claim is going to get adjudicated, that's time that's being taken away from other things that those HR folks need to be focusing on.
Anthony Cortese: Privatizing offers a solution to that. And that's really what's being discussed today, is the idea of taking a group out of a state-run environment into a private plan with the trust that the employer has someone to call, they have availability of reporting and real-time information so that they're better equipped to deal with what the individual is facing. W-2 preparation, employer FICA match, online access, all of these things are important. The secondary part is always the financial aspect. In our company's history, we've had tremendous success working with The Hartford and other carriers in creating meaningful savings to go into a private plan, both in reduction to employer rate as well as NJ TDB assessment surcharges.
Susan Tiso: That's great! Let me tell you, you have a lot of information, a lot of knowledge, so I know where to go to when I have some questions, my friend. I might bounce some things off you. Let's play devil's advocate. What are some things that might hold back a customer from going into a private plan? I can't see any, but let's point some out.
Anthony Cortese: Well, look, and I appreciate playing devil's advocate because that's what we always have to do. I would say that something that could hold an employer back is the fact that there are two different programs in New Jersey. You have the option for private for TDB, and you have primarily really only the state fund prior to Hartford's announcement that FLI is a private opportunity. With that being said, even though FLI is a hundred percent employee-funded, with the fact that The Hartford has announced entrance into this, this could be a way to expand the private marketplace as a total, allowing employers to have an option to handle all facets of New Jersey leave, whether it's medical for the employee's own situation or a family leave situation. We see this as an opportunity overall to expand the marketplace.
Laura Marzi: Great. Makes sense. Meghan, any other thoughts or questions for Anthony on that one?
Meghan Pistritto: No, but I mean, I couldn't agree more with around the complexities of the programs, right? It's when you see one paid leave program, you see one paid leave program. And as we were talked about beforehand, we have 12, 13 states that are passing. And, in absence of a federal program, we're just going to continue to see more and more states pass, which just increases that complexity for employers. So, like I said, beginning in 2023, Oregon is going to start paying their benefits, Colorado, 2024. Both states will begin taking employee and employer contributions on January 1st, 2023. So that's really, again, the date that employers need to start paying attention to if they're looking to opt out of the state program and go private because they'll want to make that decision prior to deductions happening.
Benefits are similar in nature to some states, but they're not exactly the same. I mean, again, they have medical leave, they have family leave reasons, but definitions of family are different from state to state, durations are different. The way that medical leave and family leave interact are different from state to state. But, by allowing private plans to participate, carriers are able to really work closely with employers or who are working closely with the states during their rule-making process to try and streamline that process for employers too. Maryland and Delaware, like we had said earlier, they passed in April and May. We're continuing to monitor that, so make sure you continue to check our resource center.
And then I had said earlier, New Hampshire did do something different and they passed a program that allows employers to voluntarily opt into their program. The state will be partnering with a private carrier. New Hampshire issued an RFP, and we're expecting to hear an update soon around next steps in New Hampshire, so more to come on that. And I know that you had mentioned it earlier and I'm always a fan of plugging our resource center, but we'll be continuing to update employers, our customers, I mean really anyone that's interested in the topic at\pfml. So, continue to look at the website for updates on any of the states, but more specifically some of the most recent states.
Laura Marzi: Got it, okay. So, this is a trend that is going to continue and more states are going to enact their own PFML programs. It feels like nearly all of them are going to give employers the option of using a private plan, so maybe we'll pivot back to Anthony. Do you think this option of the private plan is a trend that's going to continue? And if I'm on the employer's side, what should I be watching for?
Anthony Cortese: And thank you. We don't see that trend changing. I mean, if anything, we're expecting thinking more and more states will look to implement some sort of Paid family Medical Leave program. And if you just look at in the last several years, look at the East Coast, what started out as really just New York, New Jersey, Rhode Island having programs, Connecticut is now in, Maryland and Delaware just passed something, DC has something. And I don't really see that stopping. I would imagine that others will certainly follow suit and maybe even the rest of the country may follow suit at some point. We see this as both opportunity for The Hartford and for our firm to expand our services and capabilities to bring these kinds of services to brokers and clients. I mean, that's really what they've been relying on us.
They've been relying on Hartford for all these years is to help navigate these waters. I know at the very beginning it was discussed that we came close at a federal level to having a program. My only two cents on that is that even if the Federal Government does create a program, I can't imagine that there still wouldn't be some place for the states to continue to run their own programs and whatever appropriate offsets need to happen between what you can collect under a state program, and then what's available federally will continue to occur.
Susan Tiso: I just wanted to jump in one minute just to also mention one additional thing. Only the State of Rhode Island and the District of Columbia did not allow private option for Paid Family Leave. So, setting up these new programs is really complicated and expensive for states. Insurers have decades-long of experience in disability benefits including state-mandated benefits. And The Hartford has been there to partner and educate employers the whole time where we could. For instance, The Hartford has been writing statutory business since 1950 and paid family leave since 2018. The states, more and more are recognizing the importance of public and private partnership. And as we mentioned earlier, The Hartford has been working closely with the states as they implement their Paid Leave programs. And we are committed to working with employers wherever private plans are available.
Laura Marzi: That’s really helpful, Susan, thank you. Certainly, a lot of complexity, but I love these conversations because it allows us to really get all the facts out on the table and offer some, I think, really sound insights on what's happening at the landscape. PFML will not stop evolving, and I'm very, very excited that all of you were here to offer and shine a little bit more light on the complexities behind it. If our listeners want more information about the latest news in Paid Family and Medical Leave, we've said it before, we'll say it again. Please check out The Hartford's PFML Resource Center. And again, it's a very easy click away at\pfml. And if you like what you hear, please subscribe to our podcast and share it with your colleagues. Susan, Anthony, and Meghan thank you so much for being with me today. And until next time, be well and stay safe, everyone. Gracias.
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This informational material is subject to change as The Hartford continues to receive guidance from states and municipalities. It shall not be considered legal advice. The Hartford assumes no responsibility for legal compliance with respect to an employer’s business practices, and the views and recommendations contained herein shall not constitute The Hartford’s undertaking on a company’s behalf, or for the benefit of others, to determine or warrant that an employer’s business operations are in compliance with any law, rule, or regulation. Employers seeking resolution of specific legal or business issues, questions, or concerns regarding this topic should consult their own attorney or business advisors; and employees should continue to consult their employers’ Human Resources or other employment benefits department for guidance on the application of any law, rule, or regulation.
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