Group STD v. MA FMLA: What’s the Difference Between MA Paid Family Medical Leave Act Benefits and Short-Term Disability?
Prior to the introduction of the MA Paid Family Medical Leave Act, Massachusetts workers relied on group short-term disability plans to cover partial income replacement for a non-work-related illness or injury.
With MA PFMLA benefits set to go into effect on January 1, 2021, (and additional benefits under the act to begin July 1, 2021), employers may wonder how this affects the need for group STD benefits within an organization.
Should employers and employees still invest in voluntary group short-term disability benefits?
What’s the difference between Group STD vs. PFMLA in Massachusetts?
Short Term Disability or Group STD vs. MA PFML (MA Paid Family Medical Leave Act)
MA PFML is a statutory benefit that all employers in Massachusetts with more than 25 employees must provide. It is similar to Paid Family Leave in New York, which is written as a rider to DBL coverage. The Massachusetts law adds a medical component to combine medical disability coverage with family leave benefits.
Employers can write their benefits plan through the Commonwealth of Massachusetts or opt for a private plan that:
- Meets or exceeds the benefits level and duration
- Has the same or more lenient requirements
- Offers the same or lower premiums than the state plan.
Costs will typically be shared between the employer and employee, although the employer may opt to fund more than their minimum percentage.
On the other hand, short term disability or Group STD is a voluntary benefit that can be funded by the employer or employees or shared between the two.
Do Massachusetts Workers Need Group STD Insurance Coverage?
Group short term disability coverage typically lasts until group long-term disability benefits (most commonly called “disability income,” or DI) begin. Your customers should know that MA Paid Family Medical Leave Act benefits offset disability insurance coverage; premiums may be lower for a group STD plan in Massachusetts since the MA PFML plan covers partial income replacement.
In New York, employers have the option to enrich DBL coverage to pay out more than the state maximum benefit. In Massachusetts, a group STD plan can fill this role. The MA Paid Family Medical Leave Act has a maximum weekly benefit cap of $850, which means that high-earners making more than $80,000 will receive a lower percentage of their income than others who are not maxing out the benefit.
As the owner of a Massachusetts business or a c-level executive or human resources director, investing in STD coverage for your employees can also benefit you should you become ill, injured, or unable to work.
Group STD Bridges the Gap Between Long Term Disability and MA Paid Family Medical Leave Act Benefits
In 2021, the MA Paid Family Medical Leave Act pays workers for up to 20 weeks of personal medical leave. However, if the worker already filed a claim for family leave or personal leave within the past calendar year, they may not be able to collect for the full 20 weeks this time around.
On the other hand, employees can collect STD income replacement for up to 26 weeks, regardless of other, unrelated leave.
Long-term disability insurance typically goes into effect 26 weeks after an employee becomes disabled. Short-term disability can provide income replacement for those six weeks (or more), when PFML runs out and before LTD kicks in.
Having financial peace-of-mind with income replacement can reduce stress on the employee and improve retention rates within a company. Combining PFML with Group STD and the best long-term disability insurance , plus ancillary benefits like dental, vision, and Group Life AD&D can help set a Massachusetts business apart. Being able to describe and explain these benefits to business owners can help Massachusetts brokers thrive in any economy.
FMLA vs. PFML in Massachusetts: Understand the Difference
It’s important to reiterate, as well, that PFML and other state paid family and medical leave programs are not the same as the MA Paid Family Medical Leave Act. FMLA only provides job protection, not income replacement. Additionally, some of the requirements and definition of a family member in Massachusetts may differ from the federal legislation. However, since FMLA in Massachusetts covers both partial income replacement and job protection, a Massachusetts employee should be able to take the necessary time off and know they will have a similar job description, position, and salary when they return to work.
View our glossary of short-term disability coverage here for more information on various benefits and protected leave in different states.
Reach out to your friendly DBL Center representatives to learn more about bringing these important employee benefits to Massachusetts business owners.
Massachusetts Paid Family Medical Leave Act Deadline Approaches
Insurance brokers across Massachusetts have an opportunity to increase their commissions and better serve Massachusetts business owners through the Massachusetts Paid Family Medical Leave Act.
By helping your customers privatize Massachusetts PFML before October 1, you can offer premium discounts plus defer fourth quarter premium payments until January 1, 2020.
Here’s what you need to know about the important October 1, 2020 deadline approaching for business owners who want to write privatized paid family medical leave in Massachusetts.
1. Massachusetts business owners can only defer taxes on state-run PFML in MA through October 1, 2020.
Business owners must pay PFML premiums on policies written by the Commonwealth of Massachusetts by October 1, 2020. As we still battle the pandemic, many business owners continue to struggle with revenue, paying rent, or even making payroll. Some companies remain closed or at half-capacity right now. If there was ever a time to defer a mandatory expense, it’s now.
If your customers privatize Massachusetts PFML now, they don’t have to deduct payroll taxes for MA PFML premiums for 2020 until January 1, 2021.
Combined with the Paycheck Protection Program portion of the CARES Act, which permits business owners to defer the deposit and payment of the employer’s portion of Social Security taxes through December 31, 2020, this deferment can help free up cash for Massachusetts business owners at a time they need it most.
2. DBL Center brokers can save Massachusetts business owners money on PFML premiums if they privatize before October 1, 2020.
With no signature requirements or red tape, applying for a private plan exemption in Massachusetts is easy. As a broker, you can:
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Help your customers apply for the exemption
Save business owners money on premiums
Show your customers how to defer payroll deductions and premium payments through January 1, 2021
But only if you act now. After January 1, 2021, brokers can still write a private plan with faster, more flexible payments and better service. But premium rates will be the same as the state plan.
As Kelvin Joseph of Kool Kel Marketing stated in a recent interview, “Right now, businesses are looking to increase their revenue and reduce their expenses. [DBL Center] has a way to save people money.”
As a DBL Center broker, you can take advantage of our industry knowledge, connections, and relationships with top-rated carriers to save your customers money while providing superior service with DBL Center as your back-office staff.
3. Private plans, by law, must provide benefits equal to or greater than those required by the Massachusetts Paid Family and Medical Leave Act.
As in New York and New Jersey, Paid Family and Medical Leave plans in Massachusetts must provide benefits equal to or better than the state plan. If you could get the same (or better) product at the same (or lower) price, wouldn’t you?
It makes switching to a private plan a no-brainer, especially with The DBL Center here to help your customers get the lowest premiums available.
4. PFML benefits in MA begin January 1, 2021, with additional benefits to go into effect July 1, 2021.
As of January 1, 2021, Massachusetts will join New York to offer paid family leave benefits for employees to care for:
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A new infant, adoption, or foster child
Family members if a spouse is deployed
A family member with a serious health condition who is also a covered member of the military services
Beginnning July 1, 2021, PFML in MA will also cover time off to care for any family member with a serious health condition.
5. When your customers privatize PFML, you gain access to The DBL Center’s exclusive technology and service to help you track renewals, cancellations, and commissions.
For brokers across the New England region, working with The DBL Center offers many advantages to help you provide outstanding service to your customers as they navigate the confusing terrain of the Massachusetts Paid Family and Medical Leave Act.
We act as your back office staff to manage policies, collect premiums, and even track down late payments for you.
Our Broker Dashboard: Net Revenue Tracker provides all the information you need to manage your business, giving you access to renewals, cancellations, and commissions at a glance.
Massachusetts business owners may not want to think about another mandatory expense during the pandemic. They need brokers like you on their side to help them save money and receive the superior service they deserve. Reach out to The DBL Center today to help your customers privatize state mandated benefits under the Massachusetts Paid Family and Medical Leave Act.
How the Massachusetts Family Leave Act Changes Everything for Massachusetts Business Owners
Last year, Massachusetts passed the Massachusetts Paid Family and Medical Leave Act (PFML).
The law entitles all Massachusetts employees and some independent contractors paid family leave of up to 12 weeks to care for a family member and paid medical leave of up to 20 weeks for a non-work-related injury or illness. (Read more about paid leave in Massachusetts here.)
The law benefits employers and employees who may need to take leave for the above reasons. The benefit is shared, which means employers and employees each pay a portion of the premium. But the onus is on employers to adhere to the law and to understand the benefits available.
Benefits don’t go into effect until January 1, 2021, but Massachusetts business owners should educate themselves on the law now. They can start paying premiums for Massachusetts Paid Family Medical Leave as early as this month.
Massachusetts business owners can privatize benefits under the Massachusetts Paid Family and Medical Leave Act, gaining personalized service and better rates. By law, private benefits must be as good – or better – than the state-funded plan.
Business owners should not go it alone. DBL Center and its vast network of brokers can help business owners understand the advantages of privatizing PFML coverage for cost savings and better service.
Who Is Subject to the Law?
The new law applies to all the employers and businesses with more than one Massachusetts employee, though with limited exception.
The law covers:
- Massachusetts employees
- 1099-MISC contractors
- Self-employed individuals
Calculating Massachusetts Paid Family and Medical Leave Act Premiums
Premium payments, often a combination of employer and employee contributions, depend upon the makeup of the company’s workforce.
To ensure an accurate premium bill, Massachusetts business owners should ensure they are correctly reporting the size and makeup of their workforce in Massachusetts to the Department of Family and Medical Leave. The total workforce generally includes:
- All Massachusetts W2 employees (part-time, full-time, seasonal)
- 1099-MISC contractors only if they comprise more than 50% of the total workforce
Under the law, Massachusetts employers are responsible for providing coverage for all W-2 employees. However, 1099-MISC contractors are included in the total number of covered individuals only if they comprise more than 50 percent of the total workforce, which means W2 workers and 1099-MISC contractors combined. It’s also worth remembering that a contractor is considered a 1099-MISC only if they are paid a minimum of $600 in the tax year.
Employers are not required to provide Massachusetts Paid Family and Medical Leave Act coverage to 1099 contractors, even if they make up 50% of the workforce.
Who Pays the Premium?
Employers who employ 25 employees or more are required to make a contribution of 0.75 percent of eligible payroll to the Department of Family and Medical Leave.
This contribution may be split between the employer contribution and employee payroll deductions. Payments will help the state of Massachusetts to fund both family and medical paid leaves.
Employers with less than 25 employees must make contributions to the Department of Family and Medical leave, but they are not responsible for paying the employer’s share. PFML in Massachusetts is fully funded by employee contributions for businesses with under 25 lives.
What Should Employers Do?
Employers should calculate the number of covered individuals you employ and get in touch with their accountant and payroll provider to make sure that they are prepared to start deducting premiums.
Then they should get in touch with a local broker who can help Massachusetts business owners save money by privatizing Massachusetts Paid Family and Medical Leave Act coverage.
As experts in statutory disability and PFL coverage across the Northeast United States, The DBL Center is prepared to help Massachusetts brokers help employers find the best rates for PFML.
The DBL Center and our brokers are ready to deliver superior service as business owners navigate a new world under the Massachusetts Paid Family and Medical Leave Act.
Interview with Kelvin Joseph: Kool Kel Marketing To Help Brokers Profit from Massachusetts Family Leave Act
With news of the Massachusetts Family Leave Act and PFML benefits now mandated in Massachusetts, The DBL Center is seeking ways to scale our high-touch business model and give Massachusetts brokers selling PFML even better access to our personalized service, knowledge, insight, and relationships.
Kelvin Joseph, Founder and CEO of Kool Kel Marketing, has helped companies from new startups to Fortune 500s maximize their sales by executing a marketing strategy that communicates their “Kool.” By working with Kool Kel, The DBL Center seeks to duplicate President and CEO Michael Cohen to build a legacy.
Kelvin, a marketing strategist who has specialized in sports marketing and built relationships with C-level executives across both New York and Massachusetts, recently shared his thoughts with The DBL Center on marketing Massachusetts Family Leave Act benefits successfully.
Let’s get right to it: How do you plan to help Mike duplicate himself to build a legacy?
We’re in the relationship business. Short-term disability or PFL is mandated in New York, New Jersey, and Massachusetts [through the Massachusetts Family Leave Act] right now. I believe other states are going to start mandating it, too.
The DBL Center is going to have to learn how to expand into different states, where we can be as high-touch as we have been, especially here on Long Island, which is our strongest community.
What steps can The DBL Center take to bring that level of service we provide to Long Island brokers into Massachusetts and then other places?
We’re in the relationship business and Mike cannot be everywhere. It’s not possible to keep the same model we have in New York and New Jersey for every state. But this has been done before, and we have the strategic partners to help.
We’re building systems and situations to create warm leads without needing Mike to be everywhere.
How did you and Mike first meet and what made you decide to start working together?
I’ve known Mike since high school. We’re just two regular guys from Huntington who are CEOs of our own companies, and we’ve stayed friends.
We’re always talking business, but it was never the right moment [to collaborate.] What I was selling at the time was really kind of one-dimensional. My core business is sports marketing. Now, because of the pandemic, I can’t really have big events. So, I’ve been helping a lot of companies with their marketing strategy.
Can you share some of the details of the upcoming marketing strategy for The DBL Center?
I always feel like it’s better to be introduced [to someone] than to introduce yourself. That’s why referrals are so powerful. And a lot of the brokers reading this blog understand the power of referrals.
Instead of going in cold into a new market like Massachusetts, where we don’t know anybody, I actually do know about 800 people there. C-level executives.
It made sense to start with people I had some kind of relationship with and see what comes of that. We’re in the relationship business. If people already know me, and I introduce Mike, that’s a win. That’s the strategy we’re starting with – referral marketing and warm introductions.
Here’s the thing about Massachusetts: On June 15, most of the companies there are going to get a bill that they don’t understand [for Massachusetts Family Leave Act premiums]. The DBL Center knows how to help those companies save money by privatizing their state-mandated paid family leave plan in Massachusetts.
On your website and your LinkedIn, you describe a company’s “Kool” as the passion and unique value proposition that fuels consistent and reliable revenue growth. How will you help DBL Center communicate its “Kool?”
Mike not only has passion; he has a great value proposition. These benefits are mandated in New York, New Jersey, and now Massachusetts. And Mike has a way to save people money. Right now, businesses are looking to increase their revenue and reduce their expenses.
If we can reduce their expenses, we’re helping them. And it’s probably something they’re not going to be able to figure out on their own. We’re going to help them avoid that pain and get help from an expert who’s been doing this pretty much his whole life. It’s something with a lot of value.
I posted two teaser posts on Linked In over the last three days, and we already have 20,000 views on the two posts I made. I built up a strong LinkedIn base of c-level executives who also have a reach, so our message is going far. In two days to get 20,000 views is amazing. Because we know how important even one client can be.
It seems pretty obvious, but how will this benefit DBL Center brokers?
Mike knows his brokers are the lifeblood of his business. He asked me to figure out how we can help his brokers in this time. We hope they’re all using the Broker Dashboard they have. That’s a key.
A lot of brokers are entrepreneurial and driven, but don’t have the kind of marketing budget they want. I’m going to be available for consulting. When we can have events again, I’ll be able to invite some of the brokers to some of the things we’re doing together.
But the reality is, Mike knows how to take care of his people. And the more that’s on the table, the more there is to share.
What single tip would you have for brokers looking to reinvent their marketing strategy or approach this new market in Massachusetts?
I would advise brokers to make friends before you need anything. That’s super-important. How do we get people to know us, like us, and trust us?
There’s still some negativity associated with the insurance industry and insurance brokers. It’s almost a necessary evil to a certain extent.
So, if we know that our clients are trying to increase their revenue and eliminate their expenses, we have to be careful that we don’t look like an expense. Business owners are trying to eliminate expenses.
Sometimes, brokers go in and start talking about how this will be good for your employees. In these times, with something like 40 million people unemployed right now, just keeping your employees employed is the best some business owners can do.
If you’re a broker, you need to be talking about how you’re either increasing revenue by passing some business along to your clients and giving them referrals, or you’re reducing expenses. You better have something in your back pocket to save them money.
The approach is: “This is the business I can bring to you.” Because insurance brokers know other companies. They should be introducing their clients to one another and helping their clients make more money.
And the other thing they should be doing is making sure they’re talking in the language a CEO can understand: Either my revenue is going up, or my expenses are going down.
Thank you for all this information, Kelvin. In closing, do you have anything you’d like to add?
I would like to say that the reason I’m working with Mike Cohen is because he thinks big, he follows through on his promises, and his humility exceeds his ability.
I think he is going places, and I think any broker reading this should understand that you need to surround yourself with the right people. I challenge you to find a DBL guy better than Mike Cohen in the whole country. That’s why I’m with him and I think brokers around the country, specifically New York, New Jersey, Massachusetts, should be happy to work with him as well.
Massachusetts Paid Family and Medical Leave Act Payment Deadline Approaches
Earlier this year, Massachusetts introduced the Massachusetts Paid Family and Medical Leave Act (PFML) for W-2 employees as well as some 1099 independent contractors. Benefits won’t go into effect until 2021, but employers can begin paying into the plan now.
July 1, 2020 marks the first deadline for payments.
As a shared benefit, MA Family Medical Leave Act premium costs are split between the employer and employees or contractors. Organizations with fewer than 25 employees can offer the plan to their workers as a voluntary, employee-funded benefit.
How Much Do Employers Need to Pay?
The DBL Center can write FMLA policies independent of other lines, so you can privatize policies under the Massachusetts Paid Family and Medical Leave Act affordably and provide your customers high levels of service.
With the first MA PFML payments coming up, your customers may wonder how much they owe for their plan, whether it’s funded by the state of Massachusetts or written privately.
Your premiums are based on the total number of your lives in your company, which includes all W-2 employees:
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Full-time
Part-time
Seasonal
You do not need to count 1099 contractors, as they are responsible to write their own policies and pay the full 0.75% contribution.
When clients provide you with the active employee count and wages earned, they should report figures for the prior 3-month period. Contributions made by July 1, 2020 should include the total headcount from April, May, and June.
What About Furloughed Workers?
As COVID-19, the novel coronavirus pandemic continues to strike across the U.S., many employers have laid off or furloughed workers. If furloughed employees or workers on unemployment have earned at least $4,700 in the prior 12 months before filing, they may be eligible to file a PFML claim in January if they meet all other requirements.
In most cases, employers would still pay into benefits packages for furloughed employees, so these workers would count toward the organization’s number of active lives. However, unemployed workers would not.
During the pandemic, many organizations laid off employees and then brought them back to meet the June 1 deadline for loan forgiveness on a Small Business Administration (SBA) loan issued as part of the Paycheck Protection Program (PPP). Employees re-hired by June 1 would need to be counted as part of Massachusetts Paid Family and Medical Leave Act premium payments.
Need Help Calculating Premiums for the Paid Family Medical Leave Act Coverage in Mass?
With so many changes going on for business owners right now, calculating Massachusetts Paid Family and Medical Leave Act premiums can be complicated. It depends on employers’ total lives for the past three months. These numbers may have varied wildly as employees were furloughed or laid off and then brought back as Massachusetts begins its phased reopening this week.
The DBL Center works with top Massachusetts statutory insurance carriers to provide the best service you’ll find. We’ll help you deliver the best rates and superior service to your customers with privatized Massachusetts PFML insurance policies.
DBL Center Helps Its Carriers with COVID-19 Pre-screening Software
Within the first few days of the coronavirus pandemic and the New York On Pause order, DBL Center President and CEO Michael Cohen felt the same as many of those in the insurance business did.
“When I first got news of this being a reality in New York, which is now a hot spot, I felt like I was back up against a wall,” he recalls. “I was nervous.”
He sprung to action immediately, though. He took what he learned from his decades in the statutory insurance industry and his knowledge of what technology can accomplish to create a solution to slow the onslaught of PFL claims. “I felt I had to do something to mitigate the claims,” Cohen says.
Within days of schools and businesses closing across New York State, and shortly after, through Massachusetts and New Jersey, Cohen and The DBL Center launched the COVID-19 Pre-Screening Software for PFL Claims.
PFL or FFCRA? COVID-19 Pre-Screening App Pre-Qualifies Claims
A tool for insurance carriers to manage PFL claims that may not qualify, the COVID-19 pre-screening software requires employers to answer a series of questions to determine if their PFL claim is valid before requesting a claim form from the carrier. Many statutory PFL claims actually qualify for federal help under the Families First Coronavirus Response Act (FFCRA), which was enacted April 2, 2020.
The DBL Center also created a document to help show when an employee may qualify for PFL and when an employee would qualify for FFCRA aid, instead.
“Even though the changes related to PFL and FMLA [in Massachusetts] have been clearly stated, you’re still going to have some confusion at the employer level in terms of what is a valid COVID claim and what is not a valid COVID claim,” says Charles Callery, Regional VP for Lincoln Financial, one of DBL Center’s many preferred carriers. “I thought the software was perfect for that scenario.”
He added that he also sees it having long-term applications once the pandemic ends. “In general, it can help cut down on some of the administrative costs that we incur, and that others occur, taking in paper claims. I bet the industry still sees the majority of our claims in paper form, versus electronic, and this is a good first step to enter the electronic environment. It’s something the industry could use, because it pre-qualifies a lot of claims upfront.”
Following in the Footsteps of the Broker Dashboard Net Revenue Tracker
The Broker Dashboard Net Revenue Tracker was the first technological innovation from The DBL Center, an electronic version of the paper and pen ledger that Founder David Cohen brought to every meeting.
Designed specifically for DBL Center brokers, the Broker Dashboard helps agencies track cancellations and pending cancellations, new policies, and commissions, at a glance. A cloud-based app that gives brokers actionable insights to improve retention rates, the Broker Dashboard brings David Cohen’s paper ledger into the digital age and delivers it to the hands of every broker.
Michael Pellegrino, Lincoln Financial sales representative, reminisced about the way DBL Center tracked revenue when he first entered the industry. “I remember I’d come into your father’s office,” he tells Michael Cohen in the latest Rep Roundtable video. “He’d put down his pen and paper. He was keeping everything in order, but how time-consuming it must have been. “The fact that you took that pen and paper ledger and made that electronic is awesome!”
Watch the Video to Learn More
In addition to discussing the technology that sets The DBL Center apart, Cohen, Callery, and Pellegrino reminisce about summer get-togethers and talk about how the economy and the industry have changed in the past 20 years. Michael Cohen also reveals his secret to surviving the pandemic … all in the latest Rep Roundtable, brought to you by The DBL Center.
Massachusetts Family and Medical Leave Act Opens Doors for Brokers to Privatize Coverage
Massachusetts becomes the fourth state in the Northeast to mandate benefits under a paid family and medical leave act
DBL Center is ready to offer Massachusetts insurance brokers incredible savings on PFML plans under the new Massachusetts Paid Family and Medical Leave Act.
The MA Paid Family and Medical Leave Act applies to individuals who need time off:
• Due to a serious health condition
• To care for a newborn, newly adopted, or new foster child within the first year of the event
• To care for family while a spouse is deployed in the Armed Forces
• To care for a family member of any age with a serious health condition
Help Your Customers Privatize Massachusetts Family and Medical Leave Act Coverage
As in New York and New Jersey, states which have offered short-term disability and paid family leave for several years, business owners in Massachusetts have the option to privatize their FMLA policies for substantial cost reductions.
By law, private FMLA plans must offer benefits of the same amount and duration – or better – than plans underwritten and paid for by the state. That’s why it’s important for business owners to find a source they can trust to write their family and medical leave act coverage in Massachusetts. And that’s where DBL Center insurance brokers come in, offering stellar customer service and lower premiums thanks to the relationships their wholesale general agency has developed over five decades.
Bundle PFML to Save Even More
PFML is a stand-alone benefit, but not every carrier can write PFML as a stand-alone policy. DBL Center has the industry connections and the volume to help Massachusetts insurance brokers get the best deals for their customers.
DBL Center delivers white-glove service, low premiums, and superior benefits packages. Your clients can save even more by bundling FMLA coverage with group ancillary benefits like dental, vision, and group life / AD&D.
DBL Center Enhances Focus on Customer Service and Technology
As testament to the company’s dedication to customer service and education, DBL Center recently launched a Massachusetts Paid Family and Medical Leave Act Resource Center on its website.
DBL Center also recently introduced 24/7 live chat on its website. Simply type in the chat box and a knowledgeable representative will answer your questions about the Massachusetts Paid Family and Medical Act, short- or long-term disability insurance, and group ancillary benefits.
“Massachusetts in the fourth state in our region to introduce paid family leave. As experts in short-term disability and paid family leave in New York, New Jersey, and Connecticut, DBL Center is poised to become the number one source for brokers to privatize PFML in Massachusetts for their customers,” says DBL Center President and CEO Michael Cohen. “We’re looking forward to the profit potential the Massachusetts Paid Family and Medical Leave Act presents to our brokers.”