As Connecticut employers prepare to make their first contributions to the Connecticut Paid Leave Authority for Paid Family Medical Leave in Connecticut, many business owners are wondering if it pays to privatize PFML through a top-rated insurance carrier. Since the program was first announced last year, Connecticut insurance brokers have been wondering the same thing. Is there profit in privatizing PFML in Connecticut?
Cathy Brown, Vice President of Employee Benefits at Brown & Brown of Connecticut, Inc., a publicly-held insurance carrier in Rocky Hill, CT, shares her thoughts on navigating the introduction of PFML, the challenges, pitfalls, and opportunities Connecticut brokers face.
“Since the end of last year, we’ve been exploring opportunities with different carriers to see if it pays to privatize this paid leave and write the policy through a trusted carrier rather than the Connecticut Paid Leave Authority,” she said.
Paid Family Medical Leave Premiums May Vary by Industry
In some cases, the choice looks like a no-brainer. The DBL Center has secured quotes for businesses in certain low-risk industries that save employees money on the 0.5% standard premium charged by the state. “We’ve had some quotes come in at 0.4%,” Brown says, “so automatically we are saving employees money by privatizing the plan.”
That 0.1% point can add up over time, especially for high-earners. But in other cases, the quotes may come in the same. Brown points out that premium prices often depend on the industry, as certain industries are deemed higher risk for employees to take paid family leave or paid medical leave for illnesses not covered by workers’ compensation.
For instance, healthcare workers may have a higher risk of catching a communicable disease in their workplace, but since it can’t be traced back to a specific workday incident, it would not qualify for workers’ compensation and the employee would file for short-term medical leave, instead.
Similarly, healthcare workers may be more likely to take paid leave to care for family members. “The definition of who constitutes a ‘family member’ here in Connecticut is very broad,” Brown says. “It hasn’t been fully defined by the department of labor. But if your line of work is in the healthcare field, you might be more likely to be the one to take a leave of absence to care for someone in your family, because you’re the one who knows how to do that.”
Industries dominated by women of child-bearing age may also have a higher incidence of paid family leave claims. A 2019 report from the University of Chicago found that 48% of new fathers and 55% of new mothers have taken time off to care for a newborn. When it comes to taking leave to care for a family member, the margin gets even slimmer: 28% of working men and 31% of working women took time off to care for a family member.
However, working with an experienced insurance wholesaler like The DBL Center can help brokers get the lowest rates for their clients regardless of the industry. “We’ve been able to work through Michael Cohen and his team at The DBL Center to find out which insurance companies are best for which industries. He’s been able to help us navigate through our choices to get the best plans for our clients,” Brown says.
She adds that The DBL Center has helped her write plans without requiring her clients to add additional lines of coverage, such as long-term disability or other ancillary benefits. Not every employer is ready, financially or from a staffing standpoint, to add other employee benefits as they are just beginning to adapt to the challenges and costs of paid family medical leave.
Additional Benefits to Privatizing PFML for Connecticut Business Owners
Even if the premiums for privatizing PFML end up equal in cost to the state plan, Connecticut business owners can reap other rewards by privatizing paid family medical leave in Connecticut.
“It’s about our clients’ comfort level when it comes to helping their employees file a claim,” Brown says. “You can go it alone and let your employees work directly with the state or you can privatize and work directly with a top carrier, while having your broker to help you.”
Brown points out that The DBL Center’s knowledge has been invaluable in guiding her clients. Cohen’s experience in helping brokers roll out Paid Family Leave in New York, where it is written as a rider to short-term disability policies, is helping The DBL Center stay ahead of the curve as Paid Family and Medical Leave legislation ripples across the northeast states. “We’ve been able to reach out to Michael and his team as a resource. He’s help us interpret some of the legislation for us and even gotten on the phone with our clients to explain it to them in better laymen’s terms than we can, because of our lack of boots on the ground to this point,” Brown says.