Massachusetts and Connecticut follow New York in adopting paid family leave benefits

Tri-state area insurance brokers, take note. Big changes are afoot again when it comes to employee benefits, paid leave, and family leave insurance.

New York’s Paid Family Leave has been in full swing since January 2018 and is set to reach the maximum benefit of 67% of the employee’s salary for 12 weeks by January 2021. With New York as a model, Massachusetts and Connecticut have become the next states to roll out comprehensive medical and family leave insurance programs.

Family Leave Insurance Programs: More Inclusive and Expansive than NYS PFL

The programs in Massachusetts and Connecticut are even more inclusive than New York’s policy, allowing time off for more expansive reasons than New York permits.

Both Massachusetts and Connecticut expand on New York’s PFL policies, which allow employees to take time off following the birth, adoption, or foster care of a child within the first year; to care for injured, ill, or disabled family members; or to care for children and take care of household duties while a military spouse is deployed.

Connecticut’s plan also fills the role of DBL in New York, allowing for paid time off when an employee has a serious health condition. In addition, the new law allows paid time off for an employee:

  • serving as an organ or bone marrow donor,
  • who is the victim of family violence
  • who is caring for “any blood relation or “the equivalent of a family member.”

The Massachusetts law, slated to go into effect on October 1, 2019, is an employer-funded program that permits leave of up to 12 weeks to care for a loved one (and 26 weeks if that loved one suffered a health condition as a result of active duty military service) and up to 20 weeks for an employee’s own illness or injury.

Understanding Massachusetts’ Paid Family and Medical Leave Act (PFMLA)

Massachusetts rushed the legislation through on June 28, 2018, and it went into effect on January 1, 2019. The start date to begin collecting taxes for the benefits was originally stated as July 1, 2019, but Massachusetts has delayed the start time to collect funds to October 1, 2019. Benefits will go into effect January 2021, with some caregiving benefits becoming available that July.

Massachusetts PFMLA covers paid medical leave for employees as well as for caregivers, similar to NYS DBL with the PFL rider. PFMLA pays 80% of an employee’s average weekly wages up to one-half of the state’s average weekly wage (AWW), which is currently $1,338.05.

Here’s where it gets confusing. For employees earning an average of more than half the AWW, they receive an additional ½ of their average weekly wages that are in excess of the cap, up to a total of $850 per week, or 64% of the state’s AWW.

Essentially, the maximum allowable benefit for PFMLA in Massachusetts is $850 weekly, more than New York’s maximum weekly benefit for 2019, which is $746.41.

More About Connecticut Paid Family and Medical Leave Insurance Program

Connecticut is the most recent state to launch a paid family leave insurance program and, like Massachusetts, it combines leave to care for family members with paid leave for employees who are injured or ill.

The law goes into effect as of June 25, 2019, but contributions won’t start until January 1, 2021, with benefits becoming available January 1, 2022.

Employees may collect up to 95% of the employee’s base weekly earnings, up to 40 times the state minimum fair wage. Employees who earn more than 40 times the state minimum fair wage receive an additional 60% of their base weekly earnings above that minimum, not exceeding the weekly maximum benefit, which is 60 times the minimum fair wage.

When minimum wage reaches $15/hour in 2023, the maximum allowable PFML benefit in Connecticut will be $900 per week.

Employers may opt out of the state plan if the private plan they intend to adopt meets or exceeds the state plan, with contributions not higher than the state’s rate. Additionally, 50% + 1 of the employees must approve the plan.

What All This Means to Tri-State Area Employers and Insurance Brokers

There’s little doubt that Connecticut adopted the plan to compete with neighboring New York in terms of employee benefits. As a suburb of New York City, Connecticut draws from the same talent pool as downstate New York. Providing a robust medical leave and family leave package to rival DBL with the PFL rider can help Connecticut industries grow with high-value employees.

For tri-state area insurance brokers, Connecticut FMLA, and even Massachusetts PFMLA, could represent new opportunities to expand your book of business. New York-based businesses with offices in Massachusetts and Connecticut will need to revisit employee benefits packages in these states. Bundling FMLA and PFMLA with ancillary benefits such as vision, dental, and group life can help these companies save money while recruiting and retaining top talent.

Connecticut offers options for self-insured and fully insured plans. The Massachusetts plan, which won’t go into effect for a few years, has yet to announce these finer details.

In both cases, tri-state area insurance brokers are wondering: Will the new paid family and medical leave benefits be commissionable?

The DBL Center was here to walk you through New York’s PFL roll-out. We will continue to be your source for details on employee benefits, and paid family medical leave across the tri-state area.

Reach out with any questions you may have about the new family leave insurance: FMLA in Connecticut or PFMLA in Massachusetts. We will keep you up-to-date as new details are announced.