PFL enters its third year with another benefit increase
The Department of Financial Service (DFS), New York, has announced that the benefits under New York’s Paid Family Leave program will be increased to 60% of the average weekly wage for up to 10 weeks of leave beginning January 1, 2020. The new average annual wage will be $72,860, with a maximum weekly benefit of $840.70 per week.
The decision to increase the benefits will stay unless the Superintendent of the DFS announces a delay citing non-compliance with Workers Compensation Law 204(2).
In the first two years of the family leave program, the benefits were 50% and 55% of the average weekly wage of the eligible employees.
About Paid Family Leave in New York
New York’s Paid Family Leave program is the most comprehensive program in its category in the entire country. The program, which began in 2018, allows eligible employees to take time off to address important personal matters and still receive a portion of their salary, which can help alleviate financial concerns.
Employees can use family leave benefits to cover time off during three key events:
Attending to the needs of a family member with a serious health condition;
Handling personal matters when a family member is called to active duty in the US Armed Forces
Bonding with a new child.
PFL Premiums at a Glance
The premium rate for the family leave benefits is decided by the Superintendent of DFS as stated under Insurance Law 4235(n)(1), which also mentions that these benefits need to be community rated.
The family leave program must offer similar benefits to every eligible employee, irrespective of their geographical location, age, gender, or other demographic factors.
The premium rate is the percentage of an employee’s wage. The Superintendent has established that the premium rate for the coverage starting January 1, 2020, will be 0.270% of an employee’s wages each pay period and shall not exceed a maximum annual employee contribution of $196.72. The Superintendent establishes the maximum amount that an employer is authorized to collect from employees for PFL.
PFL Represents Growing Opportunities for Brokers
When PFL was first introduced in 2018, only 27 insurers offered the program. Today, 29 insurers write PFL as a rider to DBL policies. DFS believes there will be more insurers joining next year.
All statutory disability insurers are law-bound to offer Family Leave benefits, says DFS. The DFS has also asked all relevant insurers to submit Family Leave Benefits policy forms and rates by October 1, 2019. Insurers can visit the DFS website for more information and to view a PFL checklist, submission instructions, and model rider.
DBL Center Is Here to Help Brokers Earn More with PFL
As a mandatory rider to DBL coverage, PFL represents an additional revenue stream for brokers writing statutory disability in New York.
When brokers talk to their customers about PFL, however, it also opens doors to have a conversation about enriching DBL coverage to provide a generous benefits package and peace-of-mind for all employees, including top level executives, and not just those who fit into the requirements to qualify for PFL.