Service Excellence Market Update: New York Paid Family Leave June, 2017 1
Agenda Changing landscape NY PFL Explained Discussion 2
Presenters Jim Huebner Disability Practice Leader Marti Cardi, Esq. VP Product Compliance Matrix Absence Management Janine Kane, CBAP, FLMI, ACS AVP Business Systems/Quality Assurance Reliance Standard 3
Paid Family Leave In the News Why PFL, Why Now? Compete for talent offer a reasonable amount of PPL Support existing corporate social values family friendly Formalize and coordinate local, state, federal, and company leave policies Destigmatize women in workplace Various publicized events Integrated Benefits Institute August, 2016 4
Paid Family Leave In the News 5
Paid Family Leave Not One Size Fits All! Not one-size-fits-all variations in company policies: True maternity leave for mother only funded by disability plan Maternity leave for birth mother plus equal bonding leave for all parents Equal total leave for all parents Paid family leave includes time for bonding and to care for a family member Paid time off ranging from 6 weeks to 12 months Different amounts of paid leave for primary or secondary caregiver Intermittent bonding leave allowed, disallowed, or in defined increments Pay provided at 60% - 100% of employee s compensation Coverage extended to assist with adoption proceedings and/or infertility treatments, or to care for foster children 6
Paid Family Leave Employee Attitudes When employees were asked about paid family/parental leave: 85% say they should get paid family leave for own condition 69% say fathers should get paid leave following birth or adoption Majority says funding should come from employer, rather than from government or employees No consensus over government mandates Percentage of support for paid leave declines with age PFL ranks 2 nd in employee importance vs. other job benefits Higher paid employees are more supported <$30,000: 36% received some level of pay >$75,000: 73% received some level of pay Some male employees report pressure to return to work early http://assets.pewresearch.org 7
Legislated Leave 8
The Lay of the Land Current State Paid Family Leave Laws California : 2004 New Jersey: 2009 Rhode Island: 2014 Washington: Passed in 2007 never funded (bills pending) New York: Effective 1/1/18; 4-year phase-in District of Columbia: Contributions start 2019; benefits start 2020 Current Paid Parental Leave Ordinance San Francisco: 1/1/2017 9
Paid Family Leave Legislation 2017 State PFL Bills Variety of Features Employer funded, employee funded, mixed Tax credits for voluntary employer PFL programs Includes or excludes benefits for employee s own health condition 6-16 weeks paid family leave 6-26 weeks employee s own health condition Include /exclude job protection (most include) Tied to existing state FML law 10
Paid Family Leave The Lay of the Land Washington Montana Minnesota Vermont Maine Oregon South Dakota Wisconsin New York New Hampshire Massachusetts Rhode Island Connecticut San Francisco Nevada Colorado Nebraska Illinois Missouri Indiana New Jersey District of Columbia Virginia Tennessee California Oklahoma Arkansas Georgia Texas Hawaii Existing PFL or PPL Passed Legislation Pending Implementation Legislation Introduced in 2017 - As of 5/1/2017 Legislation Introduced and Failed Note: Also introduced in 2017 was a US House Bill for Paid Family Leave. 11
New York Paid Family Leave 12
New York Paid Family Leave The State of New York has passed legislation that will add family leave benefits to the current Disability Benefit Law (DBL) effective January 1, 2018. Paid Family Leave pays benefits while employees care for a family member. The DBL and other disability benefits only pay during the employee s own disability. Paid Family Leave ALSO provides job-protected leave. Unlike FMLA, it obligates employers with fewer than 50 lives. 13
New York Paid Family Leave Benefit increases every year for the first 4 years. New York State Average Weekly wage is currently $1,306.* Rates will equal 0.126% of an employee s wage, not to exceed $1.65 per week.* Leave must be taken in increments of no less than 1 full day at a time. Effective Date Max length of paid leave Covered % of Employee s weekly income Maximum Benefit (% of NY average weekly wage) 1/1/2018 8 weeks 50% 50% 1/1/2019 10 weeks 55% 55% 1/1/2020 10 weeks 60% 60% 1/1/2021 12 weeks 67% 67% * These are still in flux due to discrepancies between WCB and DFS. Guidance as to monthly and incremental calculations pending. 14
New York Paid Family Leave Employer Requirements Required for all employers with one or more employees. Permitted (but not required) to collect the weekly employee contribution starting July 1, 2017. Unclear how or if employee premiums collected in advance are to be refunded if employee terminates before eligibility May continue to deduct PFL contributions during a leave (no waiver of premium equivalency). Must maintain health insurance coverage for the duration of the time the employee is out on leave. Public Employers are not required to provide this coverage but may opt into the program. 15
New York Paid Family Leave What do Employees need to know Premiums will be collected through payroll deductions. Employees must be employed in New York State for 26 weeks (175 days for part-time, < 20 hours per week) before they are eligible for PFL. Employees MAY, but do not have to, take all of their sick leave and/or vacation before using paid family leave. Employees must use PFL in full day increments. Though intermittent leave of less than a full day may still be deducted from FMLA balances! 16
New York Paid Family Leave Qualifying Events 1. Bond with a child. 2. Care for a close relative with a serious health condition. 3. Relieve family pressures when someone is called to active military service. 17
New York Paid Family Leave A parent may take Paid Family Leave during the first 12 months with new child. PFL only begins after birth (not available for prenatal conditions). DBL would apply pre-birth Maternity and Paternity Also available for men and women who are (preparing to) foster or adopt a child. 18
New York Paid Family Leave A serious health condition is an illness, injury, impairment, or physical or mental condition that involves: Inpatient care in a hospital, hospice, or residential health care facility; or Continuing treatment or continuing supervision by a healthcare provider. A close relative includes: Caring for a Close Relative Spouse; Domestic Partner; Child; Parent; Parent in-law; Grandparent; Grandchild 19
New York Paid Family Leave Active Duty Deployment Available for families eligible for time off under the military provisions of FMLA when a spouse, child, domestic partner or parent is on active duty or has been notified of an impending call or order of active duty. Paid Family Leave cannot be used for one s own disability or qualifying military event. 20
New York Paid Family Leave Effective January 1, 2018. Recap Employees may take the maximum benefit length in any given 52 week period. 52 week look-back starts on the first day of Paid Family Leave There is a combined TOTAL benefit maximum of 26 weeks per 52 week period, inclusive of DBL and PFL Beginning on or after July 1, 2017 employees may see a payroll deduction to pay for their PFL benefit. 21
New York Paid Family Leave Self insured vs. Fully insured? Pick one DBL and PFL must be aligned How early should we deduct premiums? Awaiting guidance, but unnecessary to begin deductions July 1 Can we pay all or part of the employee contribution? Yes The devil is in the details Can we cover non-ny employees? Self-fund, employer paid, Matrix will administer 22
New York Paid Family Leave Can we opt out of the NY plan to offer a richer benefit? Employer can fund the program at or above state requirements Is the benefit taxable? The devil is in the details Awaiting clarification from NY Can new mothers receive benefits under DBL and PFL? You cannot double dip under DBL/PFL one or the other! 23
New York Paid Family Leave The devil is in the details Do employees get reimbursed for premiums paid with no benefits received? There s no specific provision for this, but it does not generally align with insurance and risk principles Note: Employees who will not be employed for a full 26 weeks can opt out of payment of premiums, but must pay in arrears if employment turns out to last longer than 26 weeks What PFL benefits are available to an employee who gained a child through birth, adoption or foster care before 1/1/18? The employee can take up to 8 weeks of bonding PFL in 2018 within 52 weeks of the child s birth/arrival. Example: an employee who adopted a child on August 1, 2017, could take 8 weeks of bonding PFL between 1/1/2018 and 7/31/2018. 24
Proven expertise 25
Proven expertise Long history of PFL Management CA PFL since inception of law Matrix PPL & PFL Services Among first to administer new PPL policies Among first to administer NJ PFL (2009) Among first to administer SF PPL (2017) Will have capability to manage DC Law (contributions 2019 / benefits 2020) Will have capability to manage NY Law 1/1/18 Insured or self-insured RSL/Matrix PPL client base rapidly growing Extensive compliance expertise and consultation Flexible service offerings available (checks, ATP, intermittent, etc.) 26
Proven expertise Matrix BOB Statistics Currently 200,000 PPL/PFL lives in force 34 clients (53 policies), rapidly growing Average 10,000 lives Average incidence 2% Range 0.1% - 7.6% Average durations driven by policy design 27
Questions & Next Steps 28
Thank you. 29