Massachusetts Representative Richard Neal has introduced a federal paid family and medical leave program that rivals that of the program in his home state. President Joe Biden has also introduced paid family and medical leave provisions in his American Families Plan Act but is getting pushback from Republicans in both the Senate and the House.
If either Biden’s plan or Neal’s plan, which was presented by the House Ways and Means Committee, pass what will this mean for private insurance brokers and carriers who are currently writing paid family and medical leave policies? And what is a federal plan likely to look like?
Here’s what we know so far.
In addition to generous child care for low-to-middle income families, extended public preschool for three and four year olds, and extended child tax credits, Biden’s plan includes a proposed 12 weeks of paid family and medical leave.
The plan calls for 66% income replacement, with up to 80% for lower wage workers. There would be a monthly cap of $4,000, which means that higher wage workers would undoubtedly have to rely on additional means of income replacement to maintain their standard of living and pay their bills if they take leave because they are ill or injured or to take care of family members.
Neal’s plan, called “the Building an Economy for Families Act” dives deeper into specifics for income replacement. It would be based on wages earned and provide up to 85% income replacement. Those at higher income tiers of $8,334 to $20,833 in monthly income would receive just 5% of their income as a paid benefit, while those earning less than $1,256 per month would receive 85% of their wages.
Again, higher income earners would need to plan ahead and rely on savings, investments or other income to continue bringing in the money they need.
The chart below shows the benefits.
The leave could be taken for the same reasons as FMLA (Family Medical Leave Act) job protection, which includes medical leave for an accident, illness or injury that occurred off-the-job, or family leave to care for an ill or injured family member or to care for or bond with an infant in their first year of life or a newly adopted or foster child within the first 12 months.
The definition of family member, now, varies by state. Neal’s federal plan would expand family to include siblings, grandparents, grandchildren, spouses of family members, and also “chosen family.” This mimics the Massachusetts Paid Family and Medical Leave Act, which also has a brought definition of family that includes anyone the claimant considers as family.
As of now, details for Biden’s program aren’t clear. However, the House Ways & Means Committee proposal details three options to fund PFML. Employers could write their policy through a public program managed by the U.S. Treasury Department. In states with existing PFL or PFML programs, employers could opt to continue with these legacy programs. There may also be employer-provided coverage options, which represents an opportunity for insurance carriers and brokers. It is unclear whether the benefit would be employer-funded, employee-funded, or shared costs.
Given the lower payouts for high-wage earners, there may also be opportunities to enrich private policies, similar to the way business owners in New York enrich DBL benefits now. Should a top worker become ill or injured, enriched DBL coverage in New York is one of the best ways to supplement income without having to tap into valuable investments – especially considering new capital gains tax laws.
Additionally, in a highly competitive job market where there are not enough skilled workers to fill available positions, business owners may want to consider offering private short-term and long-term disability policies as an added benefit for managers and c-suite executives. This can help recruit and retain top employees in a variety of industries and provide added value to top talent, as federal programs ensure that lower-income workers have the benefits they need if they are unable to work.
As always, The DBL Center remains your source for news as it develops regarding employee benefits and PFML at the state and federal levels. Top finance site GoBankingRates recently interviewed me as an expert resource for an article detailing everything people need to know about state paid family and medical leave programs and potential federal programs. You can read it here.
by Michael Cohen
New York insurance brokers may be getting questions from customers about the New York State Sick Leave (NYSSL) act, which went into effect September 30, 2020. However, employees cannot take paid sick leave through the state law until January 1, 2021, or at a time after that date if their employer requires them to accrue paid time off.
A direct result of the coronavirus pandemic to help contain the spread of the virus by encouraging employees to stay home, with pay, if they are not feeling well, the Paid Sick Leave Law mandates that employers of any size now provide paid sick leave to employees.
Unlike New York State DBL benefits or Paid Family Leave (PFL), New York State Sick Leave (NYSSL) is funded entirely by employers through payroll. It is not an insurance benefit.
However, employers may have questions about when employees can use their paid sick leave and when they need to file a claim for DBL or PFL. It helps brokers to be aware of the new legislation to reduce unnecessary or unqualified DBL and PFL claims in New York.
The duration of NYSSL is much shorter than New York State’s short-term disability coverage or PFL coverage.
Here are a few other differences between the three types of leave:
DBL or enriched DBL insurance provides partial pay to employees who are seriously ill or injured and cannot perform their normal job functions for up to 26 weeks. The DBL Center can help you bind DBL & Enriched coverage under 50 lives easily online here.
Written as a mandatory rider to statutory DBL coverage, PFL in New York provides partial pay to employees taking time off to care for an ill family member, a newborn (or newly adopted or newly fostered) child within the first year, or to manage family matters while a military spouse is deployed. The maximum duration for Paid Family Leave is 12 weeks. Learn more about New York State PFL coverage, first introduced in 2017, here.
Introduced in September 2020 and going into effect on January 1, 2021, Paid Sick Leave provides full pay for up to 56 hours (in some cases) for employees who are:
The New York State Sick Leave law (NYSSL) also covers a host of other circumstances for which employees may need time off, including:
The reason for Paid Family Leave or DBL must be documented on the appropriate claims form. On the other hand, the reasons for taking NYSSL can remain confidential. Employers may not require employees to disclose any confidential information regarding their need for sick time.
In addition, the definition of a family member as it relates to paid sick leave extends beyond the PFL definition to include siblings, grandchildren, grandparents, and the children or parents of an employee’s spouse or domestic partner.
Business owners in New York have a choice to “frontload” employees’ sick time at the beginning of the calendar year, offering paid sick leave from day one that the benefit goes into effect (January 1, 2021). Or, employers may permit employees to accrue sick time at a rate of 1 hour for every 30 hours worked, up to 40 or 56 hours in total – depending on the company size.
Employers with at least 100 employees must provide 56 hours paid sick leave. Employers with fewer than 100 employees or fewer than five employees but a net income of $1 million for the prior tax year must provide 40 hours paid sick leave.
Businesses with fewer than five employees but less than $1 million in net income must allow 40 hours of unpaid sick leave with no disciplinary action permitted for employees who take that time off without pay.
The decision for an employee to take paid sick time or to file a DBL or PFL claim largely comes down to the duration of the time off required and, of course, the reason. See below:
Until now, Paid Time Off remained the choice of New York State business owners. Many companies provided generous PTO while others didn’t. Some small business didn’t even have a written policy but trusted their workers not to take unnecessary time off.
By standardizing PTO under the NYSSL, and outlining specific permissible reasons for sick time, New York State has eliminated confusion, miscommunication, or gray areas surrounding PTO.
By understanding the new law, you can help your customers reduce unnecessary DBL or PFL claims and continue to act as a resource for them when it comes to managing employee benefits.
by Dawn Allcot
Selena Kutschera, DBL Center’s Director of DBL and TDB never actually applied to work at DBL Center. She joined the family when DBL Center acquired competitor Combined DBL, a competitive insurance wholesaler in NY, in 2014.
How she got the job at Combined DBL, straight out of college with no insurance industry experience, is quite a story.
“I found the job listing in the newspaper,” she tells DBL Center owner and president Michael Cohen. “I begged for an interview, but they had already closed out their interviews because they knew who they were going to hire.”
Kutschera didn’t stop pushing for the interview, however, and, ultimately, got the job. Through her hard work and perseverance, she’s become a leader in wholesale TDB and DBL sales.
It was this tenacity that impressed DBL Center founder David Cohen at the time of the acquisition. “That was the kind of personality my father was looking for,” Michael Cohen recalls. “I remember him saying, ‘I don’t know if we’ll get the deal, but Selena will join us.’ We did make the deal and here we are, five years later.”
Read on to learn how Selena Kutschera is helping DBL Center brokers manage the challenges of PFL and prepare for new opportunities in New Jersey.
Then watch the video to find out Selena’s (second) favorite word, what musician she’s not-so-secretly obsessed with, and what she’d be doing if she wasn’t serving the DBL and TDB insurance needs at one of the top insurance wholesalers in NY.
Michael Cohen: What’s the most exciting thing that we’ve done as a team, in your opinion, since the acquisition?
Selena: The program – the Broker Dashboard. Just coming together and building something, changing the game.
Michael: How has that been an upside for you?
Selena: We can track now. We can track the business. We can track what we’ve lost, what we’ve gained, the brokers, who’s writing, who’s not writing. It just makes it easier.
Michael: Can you describe the process we use when we get together and track retention and new business?
Selena: When we look at our book through the Broker Dashboard, we look at what we can keep out of what’s lost. Our cancellations. We know DBL’s a moving target. Your DBL’s come on, they come off, there are non-pays all the time. That’s the first thing we address, the non-pays. Can we get them reinstated? If we can, that puts business back into the books.
Any time coverage is replaced, we want to find out why it was replaced. Was it something we lost? Did the broker lose it? Did they replace it on us, and why did they replace it? We have to analyze what happened—and why—to get that business back.
Michael: What has the feedback been from the brokers since we implemented the dashboard?
Selena: They’re surprised about their non-pays and what’s cancelled and what’s not.
Michael: Everyone thought Paid Family Leave was going to be a home run, but in the beginning, it wasn’t. Why? And what have you been doing to help overcome those challenges?
Selena: It just added another layer of tracking. Who doesn’t want to pay their PFL [rider]? Who didn’t think they needed Paid Family Leave? They pay the DBL; they don’t pay the PFL. That’s really been the issue. Now, we’re getting the complaints that the insured made the payment, but they only paid a portion of it, or they shortchanged it. So now it’s a matter of them understanding how to pay the bills.
Mike: What do you feel is the biggest dilemma in the overall statutory environment? You’re in the trenches and you’re also involved in commissions. What’s an issue for us that’s outside of our control as a wholesale insurance broker in NY?
Selena: I guess what’s outside of our control is just the insureds making payments. That’s out of our control as an insurance wholesaler in NY. Is the $170 [weekly] benefit in New York State for disability low? Absolutely.
What I do find is some employers want to buy up and some employers don’t want to hear it. I agree with the buying up because the reality is the Paid Family Leave is for somebody else—to take care of a baby, child, or family member—and the disability is for yourself. And if you need to go out on disability, why do you need to go out at a $170, when the PFL benefit is $750 and change? It’s $752 [for 2019].
Mike: Are you excited about what’s happening in Jersey? Explain that.
Selena: Absolutely! Jersey just lifted its signature requirement—there’s no more signature requirement to move to a private carrier. So, it makes it easier for us to write this product, as 98% of it sits with the state right now. And the benefit is going up tremendously.
If you’re shopping for a new insurance wholesaler in NY or NJ or need help writing TDB or DBL, let Selena Kutschera and DBL Center help you. Reach out today.
View the full Broker Dashboard video here.
DBL Center’s proprietary Broker Dashboard app enables DBL Center’s New York-based brokers to track renewals, cancellations, revenue, and commissions on NYS DBL policies with a click.
With 250 brokers now using the Broker Dashboard, and interest from insurance carriers to partner and expand the capabilities of the cloud-based software, DBL Center President and CEO Michael Cohen took a few minutes in his Melville, NY office to explore the history, present, and future of Broker Dashboard. He also hinted at even more advanced technology for brokers and insurance carriers on the horizon.
Where did the Broker Dashboard concept come from?
The broker dashboard evolved mainly from my father, David, Cohen, who was the founder of DBL Center. He always shared two mantras with me: “Nickels, dimes and quarters make dollars,” and “It’s not what you earn, it’s what you keep.”
After he passed away nearly two years ago, I decided to look at his tracking mechanisms with his old-school number two pencil and general ledger, take that ideology, and convert it into our own proprietary digital management system. That ultimately evolved into our broker dashboard, which we’re making available to all our sub agents across New York State.
How has the Broker Dashboard helped DBL Center?
It’s helped us in two ways. The first way has been the growth aspect of it. If I go into a broker’s office who is using the Broker Dashboard, their immediate question to me is, “Why don’t I see exhibit A or this specific policy?”
The answer is: “Well, that’s because it’s not an account we service. But if you’d like us to service that account, you can roll it over. We’ll become the servicing general agent. And you’ll then see it under your broker dashboard.”
The second way has been in helping our brokers to keep accounts and monitor their retention, which results in preserving profits for everyone, including the carriers where we are acting as not only a servicing general agent but a bill collector. Every two weeks we send out a reminder email to track their retention, so they can realize what they’re keeping. This goes back to one of my father’s mantras: “It’s not what you earn, it’s what you keep.”
In what other ways has the Broker Dashboard helped your brokers?
Tracking all their commissions. We are in a nickels and dimes business, and Paid Family Leave has emphasized that point. The Broker Dashboard helps brokers understand the status of all their policies and determines whether a policy is active or cancelled. I’m staying one step ahead of the insurance carriers by letting our brokers know their clients’ status so they can stay on top of non-pays.
Sometimes, if you lose a DBL policy, you might ultimately lose a workers’ comp policy or a major medical policy. I’m all about helping our brokers retain their book of business through us. We have thousands of brokers and we currently insure 1.7 million lives.
How many sub-producers are currently using the Broker Dashboard?
Two hundred and fifty brokers are currently using the app. It can be three users per agency, and if they want more than that we unlock it and for a nominal fee, they can have up to 50 users. But the average right now has been between three and five users per agency.
What response have you gotten from the insurance carriers about the Broker Dashboard?
Two carriers, specifically, showed interest in wanting to partner with us through doing some technological advancements to the Broker Dashboard. Those talks evolved into a software company my business partner and I started called Net Revenue Tracker (NRT).
If anybody wants to learn more about NRT, we will do a future video and blog post about how NRT works to track retention and revenue through cloud-based software.
In our last post, we spoke about using ancillary benefits to help reduce the financial stress that’s placed on employees.
This is especially crucial for employees in the New York tri-state area, which includes regions with the highest cost of living in the country. An accident or illness can leave an employee’s finances depleted. The New York State minimum for DBL coverage hasn’t kept up with inflation and isn’t enough to live on. In fact, the statutory disability benefit in New York has not increased since 1989.
The Rule of 72, for example, states that a specific dollar amount invested at an annual fixed interest rate of 10% would take 7.2 years to double. Yet, in 30 years the DBL benefit has remained the same.
Why not enrich DBL for a very low cost, ramping up the ROI on the investment?
Enriching DBL helps this important benefit keep pace with inflation to cover more of an employer or employee’s living expenses if they are ill or injured.
Consider the Needs of Your Customers
While it’s important to consider hourly workers who may be living paycheck to paycheck, it’s also important for brokers to consider the needs of company owners and top-level employees, including CEOs, CFOs, and HR managers, who make the buying decisions when it comes to employee benefits.
Of course, c-level executives want the best benefits for their employees to improve morale, maximize productivity, and aid recruiting and retention. But if you can also sell decisionmakers on the benefits that also serve their best financial interests, you’ll earn their lifelong trust.
Twenty years ago, Governor Mario Cuomo voted to increase the statutory disability benefit. His son, Andrew Cuomo, decided not to increase DBL. Instead, he introduced Paid Family Leave as a statutory benefit in New York.
But PFL – while it’s undoubtedly an important benefit – doesn’t apply to a vast majority of workers. Many middle-aged and older employees are past child-raising years and have already faced the loss of their parents. People in these demographics, especially middle managers and top executives, need benefits that will appeal to their needs.
Enriched DBL is a “set it and forget it” benefit. Once a business owner enhances their short-term disability benefits in New York, they will renew automatically each year. They aren’t likely to go back to the state minimum benefits.
Why Is Enriched DBL Such a Good Investment for Company Executives?
Many business owners and executives have savings and investments to cover a worst-case scenario such as an accident or illness that could leave them unable to work.
But, in fact, enriching DBL can be the smartest investment company leaders can make.
If it takes 7.2 years to double your income from investments at a rate of 10%, you don’t want to pull that money out to cover your living expenses.
Enriched DBL allows employers and employees – from c-level executives to hourly wage workers – to keep their savings where it is and receive a rate-of-return on their insurance premium that is far beyond any investment.
If a company enriches DBL by 5X, they will only pay $9.75/mo/male in premium and $11.50/mo/female, and if they need to make a claim, receive $850 per week for up to 26 weeks.
When you show your customers the math – and the benefit of leaving their investments growing – they will ask you to enrich DBL for their own financial peace-of-mind.
Build Relationships with the Right Advice
Smart insurance brokers are serving two customers – the employees who use the benefits, and the company owners and HR executives who are making the decisions on what benefits to offer.
When you can open doors to give them a low-cost, high-return benefit that appeals to employers and employees alike, you can gain trust and earn their business for life.
Paid Family Leave has changed the modern workplace for many New York businesses. In a blink, New York companies became more family-friendly and flexible, setting standards with one of the most generous PFL policies in the country.
But what about employees left behind while their co-workers took leave to bond with a newborn or care for an ill, aging, or disabled family member?
As a New York broker, you have a unique opportunity to help your clients improve retention and company morale by addressing the demographic that is least likely to need family leave benefits but may be left behind to pick up the slack for employees on leave.
For companies who already had a generous maternity policy in place, it is probably business as usual. But companies who have never provided maternity leave for employees may have faced some challenges through the first year of PFL, which insurance brokers can help them address.
“New York businesses should explore company operations and their existing employee benefits packages to develop a plan to help keep all employees, not just those who may be eligible for PFL, engaged and happy with what the company offers,” says DBL Center President Michael Cohen.
Who’s Covering the Job Duties of Employees on PFL?
When an employee informs announces they will be taking PFL – or when managers first discover that an employee or their spouse is expecting a baby – it’s time to develop a contingency plan for those who will be picking up the slack.
Planning ahead is crucial so employees don’t feel put upon. In most cases with PFL coverage – as opposed to DBL which is available when an employee is injured or ill – employers have plenty of warning. They may not know the exact date a worker will go on leave. But the expectant parent can begin training their co-workers two-to-three months before the expected due date or adoption day to minimize frustration and ensure the employees understand how their new role will mesh with their existing duties.
Consider Who’s Using PFL – And Who Isn’t
Last year, 76.7% of people who used PFL through DBL carrier Shelterpoint took leave to care for a newborn baby or newly adopted child. Another 23.2% used it to care for a disabled, ill, or aging family member, and 0.1% used it to hold down the fort while a military spouse was deployed.
Now, let’s look at who is less likely to take PFL benefits. In general, baby boomers, millennial or GenX couples not planning to have children, and (for now) most GenZ employees just entering the workforce won’t have any need for PFL.
While Baby Boomers and child-free couples may not seem like a large percentage of the workplace, let’s consider some recent statistics:
• People aged 55+ took 1.4 million of the 2.9 million new jobs in 2018
• 39.2% of Americans ages 55-and-up were working in 2018
• 65.5% of 55- to 64-year-olds are still in the workforce, and 19.6 percent of 65+ are still working, too
• Boomers and the Silent Generation (born between 1925 and 1945) made up 27% of the workforce in 2017, according to PEW Research
Boomers possess massive amounts of knowledge and experience in the workplace. Because of that knowledge and experience, they are well-equipped to help pick up the slack when their co-workers take PFL. “It’s important to make employees feel appreciated for their extra work, and there are many ways to do this,” Cohen says. “Enriching mandatory DBL can give employers the most bang for their buck and provide employees with an important benefit that will give them peace-of-mind if they become ill or injured.”
Enrich NYS DBL Coverage
The first step is for brokers to help customers examine their existing employee benefits packages. Current mandatory NY State DBL coverage only gives employees a maximum of $170 per week for 26 weeks. Very few people can live on that in New York, especially in the New York metro area.
Employers can enrich DBL coverage to pay up to 50% of an employee’s salary up to $850 per week up to 26 weeks. This puts DBL coverage on pace with PFL. In fact, enriched DBL can exceed current PFL pay-outs, which max out at 55% of an employee’s average weekly salary for 8 weeks, with a maximum benefit of $746.41 per week.
Your customers can also add Hospital Cash indemnity insurance through Shelterpoint to give hospitalized employees who are collecting DBL an additional $165 per day ($240 in NY metro areas) with no cap for the number of continuous days of coverage. Patients staying in Skilled Nursing Facilities receive the same benefit level, limited to a stay of 5 consecutive days.
“Compared to neighboring New Jersey, New York’s statutory disability benefits package is lacking,” Cohen says. “Enriching DBL benefits has always been a good idea to help attract top talent and increase retention. In light of PFL, it’s more important than ever before. It’s up to brokers to educate employers, creating a win-win situation, increasing commissions for brokers while creating happier customers.”
By David Clausen, Coastal Insurance
If you’re like most P&C brokers, NYS DBL and NJ TDB insurance aren’t your only niches. Most brokers sell a variety of lines, whether it’s healthcare, business insurance, or personal lines of coverage like home insurance.
But you may not be thinking of ways to cross-sell your lines to expand your book of business and increase your commissions without cold calls or prospecting for new clients.
When you get in the habit of consultative selling, which includes getting to know your customers, their businesses, and additional insurance needs they may have, you’ll discover avenues to increased profits.
Mandatory coverage like workers’ compensation and NYS DBL coverage, along with enriched DBL, provide excellent upsell opportunities. Many business owners don’t realize they need this coverage even if they only have a few employees. Even if they know about statutory DBL coverage, they may not recognize the opportunities available with enriched DBL and ancillary benefits.
As their trusted insurance broker, you can help make sure they are protected from nearly any contingency. Chances are, you are already taking some of these steps. But are you closing the deal?
These tips, garnered from years of experience selling home insurance and other personal and business lines to Long Island-based customers, can help you expand your book of business.
1. Look for opportunities to upsell complementary insurance lines by getting to know your customers.
In Coastal’s niche market of home insurance for high-net-worth homeowners, many of our best clients also own their own businesses. This means they need workers’ compensation insurance and statutory disability coverage in New York State.
Ask your customers, “Who is currently writing your statutory DBL coverage?” to uncover opportunities.
With the introduction of Paid Family Leave as a rider to DBL, they might be looking to shop their policy around, since some carriers have stopped providing DBL.
2. Don’t forget about your customers who hire domestic employees.
Most Coastal customers who aren’t business owners are c-level executives, celebrities, and other high-net-worth individuals who may hire domestic employees to help run their households. A lot of people don’t know that workers’ compensation and NYS DBL coverage is mandatory in New York for full-time domestic employees or for domestic employees who live in your home, even if they don’t work a full 40-hour week.
This includes nannies, au pairs, housekeepers, gardeners, chefs, drivers, personal assistants, and anyone else who works for an individual. Even if people may treat their nannies or housekeepers like family, the State of New York classifies them as domestic workers or residence employees – and they need to be insured as such.
There can be hefty fines for failing to provide the proper insurance coverage for domestic workers, not to mention the liability if an employee gets hurts on the job. Brokers are doing a service to their customers by letting them know what employee coverage is required.
As with any job, providing ancillary benefits to domestic workers can also help improve retention rates and reduce sick time.
3. Discuss the potential for ancillary benefits.
Whether your customers are business owners seeking to hire the best employees, or individuals with a team of domestic help, they may not have considered ancillary benefits as a low-cost way to recruit and retain employees.
Benefits like Group Life, vision, and dental coverage are still highly sought after by workers. In a Harvard Business Review study, 88 percent of employees said they would consider accepting a job with a lower salary if the position had better health, dental, and vision benefits than the job with the higher pay.
Explore these possibilities with your customers, and they will look to you as a trusted business resource rather than just someone selling insurance products.
4. Educate your customers about enriched DBL.
NYS DBL coverage provides a bare minimum to help an employee who is ill or injured (while not on the job). DBL pays out just 50 percent of an employee’s salary up to $170 per week for 26 weeks.
Enriched DBL is a powerful retention tool for middle managers who exceed the maximum payout but may not have private disability insurance or a savings account to help get them through a medical emergency.
With the introduction of Paid Family Leave as a rider to DBL coverage in New York, many employers are looking to enrich DBL benefits in order to provide coverage comparable to PFL for employees who don’t have, or plan to have, families or may want a robust benefits package for themselves.
PFL was the big news in the insurance industry in 2018, but many people still aren’t aware of the policy changes. Stay on the forefront, educate your customers, and they will trust you to write their policies for personal and business insurance.
5. Offer the best rates by bundling coverage.
When you take advantage of The DBL Center’s carrier relationships, you can bundle lines to provide your customers with the best rates for DBL, ancillary benefits, and more.
Why would they go to any other broker if you’ve positioned yourself as a one-stop-shop for their business and personal lines of insurance coverage?