The past year has brought shake-ups for statutory insurance brokers.
- Record-high rate hikes for temporary disability benefits (TDB) in New Jersey
- New Family Leave Insurance benefits for New Jersey
- Increased benefits for Paid Family Leave in New York
- The introduction of family and medical leave coverage in two more New England states
Smart insurance brokers can easily find a silver lining in much of the new legislation. Opportunities exist for statutory insurance brokers to expand into new regions, upsell enriched coverage, and guide business owners toward the benefits of a private plan rather than writing their insurance through their state’s fund.
In fact, 37 states threw their hats in the ring this past election to pass Paid Family Leave acts on a state level. As more states embrace paid family leave legislation, it could ultimately become federal, where it would work in conjunction with the federal Family Medical Leave Act (FMLA), which offers unpaid job protection for those who are out of work due to illness or to care for family members.”
Statutory Disability Coverage Across the U.S.
Moving into 2021, nine states, Washington D.C., and Puerto Rico offer statutory disability plans to employees. Of those states, only Hawaii, New Jersey, and New York provide options to privatize statutory disability through an independent insurance carrier.
Take a look at this chart to see which states offer self-funding options in lieu of the state plan, and also which states permit private coverage through an insurance company.
Paid Family and Medical Leave Plans Across the U.S. at a Glance
California, New Jersey, New York, Washington, Massachusetts, and Rhode Island offer Paid Family Leave as subsets of statutory disability plans. For instance, PFL in New York is written as a rider to DBL coverage.
In New Jersey, Family Leave Insurance is included automatically with TDB premiums. In Massachusetts and Connecticut, the Paid Family and Medical Leave Act covers both family leave and medical leave. It can be written through the state fund or through a private insurance carrier.
It is important to note that workers cannot collect statutory disability or paid family leave concurrently with unemployment insurance or workers’ compensation benefits.
2020 Brought Changes to Statutory Disability and Paid Family and Medical Leave
Let’s take a look at the year in review and some of the changes that were instituted for statutory disability and family medical leave coverage across the U.S.
After Waiving the Signature Requirement to Privatize TDB, New Jersey Increased Premiums and Benefits
In 2019, New Jersey waived the signature requirement for employers to obtain temporary disability benefits coverage through a private carrier. In the past, employers needed to obtain signature consent from 50% + 1 of employees to privatize TDB in New Jersey.
This presented opportunities for brokers, since it became easier than ever to convince business owners to switch to a private carrier for superior service, more flexible benefits, and up to 20% cost savings.
In 2020, New Jersey increased TDB insurance premiums, but also expanded disability coverage up 85% of a worker’s average weekly wage, up to $881 per week. The state also expanded its Family Leave Insurance benefits and eliminated the 7-day waiting period to begin collecting FLI benefits.
The increased premiums give business owners more reasons than ever to write their TDB coverage through a private insurance broker.
New York Increased PFL Coverage as Per Initial Plans
New York State made headlines in 2017 when it introduced one of the most robust Paid Family Leave plans in all 50 states, rivaling California’s generous policy.
Benefits continued to increase through 2021, when they will reach a high of 67% of the current statewide average weekly wage (AWW). Workers can collect up to $971.61 per week in 2021.
With PFL benefits at their maximum, it’s more important than ever for New York business owners to consider enriching DBL coverage so it is in line with PFL.
Massachusetts Signed the Paid Family and Medical Leave Act
Massachusetts announced the MA Paid Family Medical Leave Act, PFML, in the middle of the year, with coverage beginning January 1, 2021. These benefits cover paid leave to care for infants, or children newly adopted or fostered within the past 12 months. Additional benefits will roll out July 1, 2021, with time off to care for any family member with a serious health condition.
Connecticut Introduced Family and Medical Leave Insurance
Following in the steps of neighboring New York and Massachusetts, Connecticut also introduced a Paid Family Medical Leave Act that goes into effect January 1, 2022, but employers must register with the CT Paid Leave Authority by December 31, 2020. Payroll deductions for PFML begin on January 1, 2021 for the state plan.
Private Plans Create Happy Customers
As more states add paid family leave benefits to their statutory disability programs, it’s important to understand the opportunities insurance brokers have to give their customers top-notch service, flexible claims, and potentially lower premiums through private coverage.
Reference the PDF here for clarity on the states currently offering PFL, FMLA and statutory disability or rolling out programs in the new year so you can be prepared to provide your customers with the best statutory disability benefits for their money.
To provide quotes for statutory disability for new customers, you’ll need a census containing the ages, genders, and salaries of all the owners and employees of the corporation. Reach out to The DBL Center through our chat box or call us at 631.293.5100 to get started.
