LICONY PAID FAMILY LEAVE WEBINAR November 7, 2017
Welcome Thank you for being here today. I am Kate Herlihy, Director and Counsel at LICONY and I ll be your moderator. Our panelists today are: Heather MacMaster, Deputy General Counsel, New York State Workers Compensation Board David Melman, Chief Legal Officer/Chief Compliance Officer, ShelterPoint Life Insurance Company Brian Dunham, Chief Actuary, ShelterPoint Life Insurance Company Abigail O Connell, Legal & Regulatory Compliance Counsel, Lincoln Financial Group Judy Buczek, Senior Product Manager, Guardian Life
New York State Paid Family Leave
4 Who Will Administer PFL? Workers Compensation Board Department of Financial Services Department of Health, Department of Labor, & Others
5 Basics Paid Family Leave was passed in 2016 Executive budget It will go into effect January 1, 2018 It will cover bonding and care for a close family member, and care where military service prevents someone from providing care When fully operational, will provide up to 12 weeks per year, with max weekly benefit up to 67% Statewide Average Weekly Wage
6 Basics Provides for full job reinstatement All non-governmental employees covered by definition, subject to eligibility requirements Governmental employees subject to their employer s opt-in, via collective bargaining where applicable
7 Basics Article 9 DB (TDI) FMLA Federal Proposal We are the fourth The only one as an insurance product
8 Law and Regulation Statute enacted 4-1-2016 Effective 1-1-2018 DFS regulations have been adopted DFS Rate set 6-1-2017 WCB regulations 2nd comment period ended 6-24-2017
9 Paid Family Leave Governor Cuomo signed legislation on April 4, 2016 Upon full implementation, NYS PFL program will be the Most Robust Paid Family Leave program in the nation.
10 Coverage: By Employer Type Virtually all private employers are required to secure Paid Family Leave coverage Public employers may elect to become a covered employer for Paid Family Leave benefits Employee organizations (Union) may elect to collectively bargain for Paid Family Leave benefits.
11 Coverage: Employer Obligations Covered employers must procure coverage for employees by January 1, 2018 Benefit must be accessible by employees by January 1, 2018 Employee Paycheck deductions may begin as early as July 1, 2017 Employee is responsible for the premium payment through payroll deduction.
12 Coverage and Costs PFL premium will be fully funded by an employee contribution, which employers may deduct from employees paychecks. An employer has two options to maintain coverage: obtain coverage from a private insurer or the State Insurance Fund, or seek approval to self-insure. Every insurance carrier that provides short-term disability benefits in NYS must also offer PFL coverage in those policies Employers who purchase NYS Disability Benefit insurance coverage from a private carrier or from the New York State Insurance Fund will have PFL coverage included as a rider to their Disability Benefit policy.
13 Coverage through Self-Insurance Employers that self-insure for disability benefits may purchase a standalone Paid Family Leave policy. For private covered employers, self-insurance for PFL is only an option if the employer also self-insures for disability benefits. Municipal employers may self-insure for PFL only
14 Coverage through Self-Insurance To qualify as a PFL self-insured employer, employers must electronically submit their plan to the Board for approval DB/PFL-150 Audited Financial Statement, Form 10K or Annual Report Business foundation documents such as the Certificate of Incorporation or Partnership Agreement Following review, the Board will advise If additional information is required; and The amount of financial security that must be posted with the Board (up to1% of payroll) SIE cannot collect any employee contributions above the maximum rate. Once approved, the employer s plan satisfies its statutory obligations, and selfinsured employers will pay benefits to employees directly. Employers must have elected to self-insure for 2018 by September 30, 2017.
15 Private Employers with Unionized Employees Private employers with unionized employees are covered employers and must have Paid Family Leave coverage. These employers must provide PFL benefits in one of three ways: As a rider on a current disability policy By purchasing a standalone PFL policy if self-insured for disability By collectively bargaining with the private union(s)
16 Private Employers: Coverage through a CBA If the covered employer will meet its obligation to obtain PFL coverage through the union s collective bargaining agreement, the union must submit the agreement to the Board for approval. The Board will ensure that the CBA s terms provide benefits at least as favorable as those required by PFL. Benefits are at least as favorable as PFL if the meet the minimum benefit amount, duration, and eligibility requirements of PFL. Unions can collectively bargain for benefits greater than what PFL requires. Unions can also collectively bargain for different terms, including reinstatement and health insurance coverage Following Board approval of the union s plan, the covered employer must submit a DB-802 ( Employer's Application to Have Association, Union or Trustee Plan Accepted as Employer's Plan ) form, acknowledging coverage through the CBA. This form must also be signed by the union representative.
17 Coverage: Public Employers Generally Public employers are not required to provide PFL benefits but may opt in Public employers may opt in for DB only, PFL only, both, or neither Opt-in by submitting the PFL-135 form or the PFL-136 form to the Board, depending on whether deductions will be taken from employees. A public employer who is currently providing disability benefits to its employees must notify its employees and the Board that it will or will not be providing PFL to its employees prior to December 1, 2017. Must provide 90 days notice to unrepresented employees before taking contributions May opt out with 12 months notice to the Chair and employees
18 Coverage: Public Employers with Union Employees Public employees who are represented by an employee organization (union) may have PFL collectively bargained (WCL section 212-b) Unions may collectively bargain for different rules than what the PFL statute requires (if no rule mentioned, statute will apply). Union plans must be submitted to the Board for approval The benefits provided must be at least as favorable as what the statute requires, which means: For 2018, at least 8 weeks of leave for the same qualifying events at 50% of the employee s AWW capped at 50% of the SAWW Eligibility no longer than 26 consecutive weeks or 175 days with no waiting period
PFL Premium Structure The PFL rate is set by NY State and will be adjusted on an annual basis effective each January 1. All carriers will be charging the same rate for PFL by law The 2018 rate effective January 1, 2018 was set on June 1 of 2017: Rating Mechanism: percent of salary Premium to be collected by insurance carriers: 0.126% of the employee s annual wages for the calendar year (capped at the current, annualized NYSAWW of 67,907.84* ($1,305.92 x 52) *NY Department of Labor releases the updated NYSAWW every March 31. maximum annual contribution: $85.56 per employee ** ($1.65 /week averaged over the year) **Based upon NYSAWW as of March 31, 2017 Thereafter, updated rates are set and announced by New York State by September 1 of each year for the following calendar year.
PFL Employee Contributions Employee payroll deductions could have started July 1, 2017 You as the employers must pay the premium for their entire group whether you withhold from employees or not. While PFL is considered employee-funded coverage, you don t have to collect weekly employee contributions. You don t have to refund payroll deductions collected from employees between 07/01/17 and 01/01/18 for those employees that leave employment during the same time period Employers can t retroactively collect payroll deductions for Paid Family Leave How it works for new hires
Employee Contributions Employers who decide to take deductions from their employees, by the end of 2018, will want to have collected 0.126% of annual wages capped at 0.126% of the annualized NYSAWW of $67,907.84, or $85.56* *NY Department of Labor releases the updated NYSAWW every March 31. 2 reasonable ways to make this happen: Do it like FICA (although PFL is not intended to be a tax): Withhold 0.126% of every wage dollar paid in 2018 until the $85.56 cap is met, then stop withholding. Bucket employees at the beginning of the year into those who you are pretty sure will make more than $67,907.84 and those who will make less. For those who make more, withhold $1.65 per week. For those who make less, withhold 0.126% of every wage dollar. Just be aware to reconcile at the end of the year if there were salary changes along the way that moved employees between buckets. Employers cannot collect more than the allowable maximum contribution for PFL through payroll deductions. But if they do, the employer must return the excess amount to the employee.
Billing vs Employee Contributions They are not the same! Even if you recoup PFL premiums via PFL contributions from your employees, you as the policyholder have to remit the actual PFL premium to your insurance carrier. You will need to pay the actual calculated premium, not what you have collected at the time of bill pay in contributions from your employees.
What You Can Do NOW To Prepare Decide what to do with (early) payroll deductions (withholdings) Keep in mind: Several payroll vendors started default deductions effective 07/01 DBL & PFL premiums need to be paid together Look into payroll tracking/administration solutions May add to the complexity of your current payroll tracking/administration Start looking into absence management solutions Consider solutions that may help you keep track of intermittent leave efficiently Create written guidance about PFL Got an employee handbook? Or maybe you don t have any written employee guidelines Display and keep posted a printed notice in our common area
What You Can Do NOW To Prepare See if I can expect any of my employees to be out on January 1, 2018 All employees that are currently covered under DBL will be covered under and thereby have the right to take- PFL effective 01/01/18 PFL Expert Tip: Any new dads in your company? They re eligible too! Plan to avoid staffing gaps Look for temp agencies Cross-train teams Study up on PFL do s and don ts Got 50+ employees? Review your current FMLA policies
What You Can Do NOW To Prepare Review your company s paid time off/leave policies PFL Expert Tip: Providing paid leave on a company basis, does not void your business from providing PFL if you re a Covered Employer under DBL Review your group s current income replacement insurance policies Educate and prepare your employees
NY PFL and Family & Medical Leave Act (FMLA) NY PFL is not part of the FMLA Eligibility is different NY PFL is a paid benefit FMLA NY PFL Both are job protected and require health continuation coverage NY PFL applies to all private employers with at least one employee 12 months 1,250 hours and in year preceding the leave 50/75 26 consecutive weeks 175 work days if <20 hours per week Employees not expecting to meet PFL eligibility requirements may elect to waive coverage and forego payroll deductions 26
FMLA v. NY PFL FMLA Up to 12 (or 26) weeks of leave in a 12-month period Intermittent leave in smallest increments tracked by the employer but no greater than 1 hour increments Allows employers to require that an employee exhaust PTO while on an approved leave NY PFL In 2018, provides up to 8 weeks of leave in a 52-week period Intermittent leave in increments of 1 day or more Does not require an employee to exhaust paid time off (PTO) prior to an approved leave 27
Interplay of FMLA, DBL, PFL and STD Weeks BIRTH OR BIRTH OR BIRTH 1 2 3 4 5 6 7 8 9 10 11 12 13 14 DBL Claim for 6 weeks 4 weeks of STD FMLA 12 weeks if eligible 8 weeks of PFL available to Men and Women 6 or 8 weeks of STD for Women FMLA 12 weeks if eligible DBL Claim for 6 or 8 weeks 6 or 8 weeks of STD for Women FMLA 12 weeks if eligible 8 weeks of PFL PFL taken within 12 months of Birth 28
New York PFL Claim Forms Care for a Family Member with Serious Health Condition Bond with a Newborn, a Newly Adopted or Fostered Child Assist Families in Connection with a Military Deployment www.ny.gov 29
Definition of Serious Health Condition Any illness, injury, impairment, physical or mental condition involving: Inpatient care (hospital, hospice, or residential health care facility) Continuing treatment or supervision* by a health care provider, and requiring assistance to perform the activities of daily living A long-term or permanent period during which a family member is unable to work, attend school, perform regular daily activities A period during which a family member is unable to work, attend school, perform regular daily activities, or is otherwise incapacitated because he or she is receiving treatment The healthcare provider must certify that the family member meets the definition of a serious health condition. * Continuing supervision requires a permanent or long-term period of incapacity, but active treatment is not required 30
NYPFL Benefit Payments For 2018, PFL will pay 50% of an employee s average weekly wage up to a max of $652.96 per week* Example of how benefit will work for a qualified leave: Annual Salary Benefit Payment Calculation Actual Employee Payment Employee #1 *$652.96 is 50% of NY s current Average Weekly Wage of $1,305.92 $67,000 ($1,288/week) Employee #2 $90,000 ($1,730/week) 50% x 1,288 = $644 50% x 1,730 = $865 $644 $644 is LESS than $652.96 max $652.96 $865 is MORE than $652.96 max 31
NYPFL Claim Scenarios Scenario Employee gave birth on Jan. 1, 2017 Resolution Not covered for any leave Employee gave birth on Jan. 7, 2017 Covered for 6 days of leave Employee has adopted child placed in their home on Dec. 20, 2017 Covered for the max of 8 weeks Employee breaks their leg and is unable to work Not covered for NYPFL; may be eligible for benefits from NYDBL/another disability policy Employee needs to miss 2 work days to care for daughter with a common cold Not covered for any leave Employee needs to care for mother-inlaw who undergoes chemotherapy Covered for the max of 8 weeks 32
NYPFL & NYDBL Benefits Combined benefits are limited to a total of 26 weeks in a 52-week period for both NYDBL and NYPFL Entitlement to NYPFL and NYDBL benefits are dependent on each other; therefore, tracking of time taken for each is critical to minimize overpayment. Unlike NYDBL, intermittent NYPFL is allowed in full-day increments 33
Employee Reinstatement Rights Job Protection under NYPFL Following a NYPFL leave, a covered employee should be reinstated to his or her employment and need not take any action Under NYPFL, employees have a right to return to the same or comparable position as when leave commenced and with comparable pay and benefits 34
NYPFL & Group Health Insurance Continuation of Health Coverage If provided by the employer, group health insurance benefits continue under NYPFL as long as the employee continues making premium payments. Changes to Group Health Benefits While on Leave An employee on NYPFL is entitled to any new group health plans benefits that become available while he/she is on leave. Suspension of Health Benefits While on Leave An employee may choose to waive group health coverage while on NYPFL, but is entitled to be reinstated to the plan upon return to work. 35
No Discrimination or Retaliation An employer may not discriminate or retaliate against employees for taking or inquiring about Paid Family Leave. Employers must ensure that their employees are aware of the Paid Family Leave program and that their policies comply with the law. Specifically, employers should: Include Paid Family Leave information in their employee handbook, or similar employee materials; and By January 1, 2018, display a poster regarding Paid Family Leave coverage in their place of business, similar to the poster required for Workers Compensation or Disability Benefits coverage. The employers insurance carrier will supply this poster. 36
NYPFL, FMLA & Paid Time Off (PTO) NYPFL covers employees who may not be protected under FMLA Employers may require employees to choose between using NYPFL benefits or PTO If the PFL absence is concurrent with FMLA, an employer may require an employee to use accrued and available PTO time. Employers that pay full salary during NYPFL may request reimbursement from their insurance carrier for advance benefit payments. Employees are entitled to be reinstated to the same or similar position, regardless of which pay option they choose. 37
NY Paid Family Leave FAQs Just a few Can I have multiple Intermittent Paid Family Leave claims at the same time? Yes, an employee may need to care for multiple qualified family members but cannot exceed the maximum combined benefit in a 52 week period Which employees are ineligible for NYPFL? An employee seeking leave due to his or her own serious health condition Employees who have filed a waiver of leave benefits Any employee already receiving total disability benefits (i.e. the coverage an injured worker may receive during his/her recovery) Employees on administrative leave Employees who work for an exempt employer Employees who are excluded from coverage under Article 9 of the Disability Benefits Law (DBL) and the Paid Family Leave (PFL) Law 38
Interaction with State Leave Laws State Leave Things to Consider Over 34 States and D.C. have specific Leave Laws Eligibility criteria is separate from Federal FMLA Most run Concurrently with Federal FMLA Different Reasons for Leave Covered including Parent-In-Law or Domestic Partner o Greater Leave Time o Additional Protections beyond FMLA 39
Questions Please type your questions into the question box and we will get to as many as we can. Thank you