Should the State Increase NY Disability Insurance Rates?

Governor Cuomo signs Covid-19 legislation.We’re living in unprecedented times and federal, state, and local governments are looking for ways to adapt. Seeking a balance between regulations and budget, legislation has sought to help Americans keep their businesses open and their employees paid through the vast challenges 2020 has brought us.

Most business owners in New York, along with insurance brokers and other professionals, have concerns about keeping our economy going. Increasing NY disability insurance rates for statutory DBL coverage might be the last thing on people’s minds. But it’s something those of us in the insurance industry should be thinking about.

Should the State Consider Raising NY Disability Insurance Benefits?

NY State Disability Insurance benefits, or DBL, has not increased in decades. With a maximum payout of $170 per week, NYS DBL lags behind New Jersey TDB benefits, and even Massachusetts and Connecticut. The latter two states recently introduced statutory paid leave for non-work related illness or injury.

The last thing New York business owners would want to face right now is a premium increase for any benefits. Many New York City landmarks have shuttered as a result of recent events, and mom-and-pop shops in Main Street areas across upstate and downstate New York have closed permanently or struggle to stay alive.

But an increase in NY state disability insurance pay-outs could yield benefits to employers in the long run, especially as we face uncertainty related to the pandemic. Will DBL claims rise if we see a second wave of the virus? Will the government be so quick to offer Federal aid packages the second time around? Will businesses, already hard hit by recent events, be able to mount a second comeback? No one knows the answers to these questions.

FFCRA Alleviates Pressure on NY State Disability Insurance Brokers

When the first wave of COVID-19, the novel coronavirus, hit, the Federal government intervened with the Families First Act. The FFA alleviated much of the pressure on insurance carriers who otherwise would have faced unprecedented levels of claims because of COVID-19.

Here at The DBL Center, we also sprung to action. Our COVID-19 pre-screening software helped eliminate confusion regarding NY State Disability Insurance claims and FFA claims.

If the Federal government had not signed the FFA to help Americans with income replacement if they became ill from COVID-19 or had to care for family members with the virus, disability insurance carriers and brokers may have experienced a situation similar to what P&C brokers in the northeast experienced in the aftermath of Hurricane Sandy. Business owners and the insurance industry, alike, were not set up to respond to an emergency of this scale. Our country was not prepared; but perhaps there is no effective way to prepare for a global pandemic.

Looking to the Future of NY Disability Insurance

Many people reading this, even our brokers who are tapped into the industry, don’t realize that the governor initially had plans to increase DBL benefits when he introduced Paid Family Leave. A short-term disability insurance increase was in the original legislation, but removed before the Paid Family Leave Act was signed.

Increasing NY state disability insurance benefits will help business owners retain high-quality talent, which is a challenge in any economy. New York City, especially, is suffering from “brain drain,” or young, smart, and affluent couples leaving the city. Reports say five percent of Manhattan’s population fled the city between March 1 and May 1 at the height of the pandemic. Further, 69% of tech and finance employees said they would leave New York if they could work from home.

This exodus began years prior to the pandemic because of real estate prices, but was exacerbated this spring.

No, increased DBL may not tip the scales, but having peace-of-mind that you can survive on your disability insurance benefits should you become ill with coronavirus could give many New Yorkers one less reason to leave. Couple that with the most robust PFL policy in the nation, and New York becomes a more family-friendly state.

It’s a good time to make legislation changes right now. New Yorkers have become accustomed to rapid change and increased benefits, including the $600 Federal boost in unemployment benefits.

As always, because it is a shared benefit, DBL represents one way business owners can provide added value to their top employees at a small cost.

Until the time comes that NY State disability insurance benefits rise, business owners can purchase private disability insurance in New York. DBL Center brokers can offer their customers increased benefits through enriched DBL, white-glove service, and faster, more flexible payouts.

What do you think? Is it time for NY to increase their disability insurance benefits?


Federal “Families First Act” Should Relieve Pressure on PFL Claims Amidst COVID-19 Pandemic

In an attempt to keep the economy moving and provide Americans with the financial relief they need during the COVID-19 pandemic, the Federal government has introduced the “Families First Coronavirus Response Act.”

Beginning April 2, this act provides emergency paid sick leave benefits to employees unable to work for a variety of reasons. Employees may be eligible for paid leave if they are unable to work because they are:

  • In quarantine or isolation as a result of the COVID-19 pandemic
  • Exhibiting symptoms of COVID-19 and in quarantine
  • Caring for someone in quarantine or isolation as a result of COVID-19
  • Have children in schools or daycare that have closed because of the pandemic

Employers with fewer than 500 employees must provide two weeks’ worth of paid sick leave. Employers will receive tax credits to offset these costs, hopefully minimizing the financial impact on their business.

Employees are also entitled to up to 80 hours of paid sick time at 2/3 the regular rate of pay, and an additional 10 weeks of paid family leave if the employee is unable to work because they need to care for a child whose school or childcare provider is closed for reasons related to the COVID-19 pandemic.

It’s important to note that this paid leave coverage is from the federal government and is not related to NYS PFL.

The legislation also ensures that employees do not have to use any other paid time off in lieu of federal paid leave benefits. Employers also cannot mandate that employees find replacement workers.

NYS PFL Claims in Light of Coronavirus Pandemic

Until April 2 when Families First goes into action, New York State has stepped in to help employees with COVID-19 Emergency Paid Sick Leave, compensated in many cases through New York State DBL and PFL benefits. To help employees stay afloat during this challenging time, the state has waived the five-day waiting period before PFL benefits kick in.

Employers with fewer than 10 workers and less than $1 million in annual net income will still rely on DBL and PFL benefits for their employees, paid concurrently for a combined $2,884.62.

Those with 10 or fewer employees but net revenue exceeding $1 million, or employers with 11 to 99 employees must provide workers with at least 5 days paid sick leave, not counting any PTO they have accrued in the past. After that, employees can make a concurrent PFL / DBL claim for paid leave from Day 6 onward.

Businesses with 100+ employees and public employers are fully responsible for full salary continuation for a minimum of 14 days.

PFL programs only pay out for the intended duration of the quarantine period, which is 14 days. However, if the employee has not exhausted their paid leave from New York State by April 2, those benefits will end regardless. Employees will have to file a federal claim to begin collecting benefits again, this time under the Families First Act. Benefits under the Families First Act apply to companies with fewer than 500 employees.

Stimulus for Business Owners During the Pandemic

It is not easy balancing the economic well-being of our nation with the health and safety of our residents. It’s a challenge many business owners grapple with, as well, during this trying time.

In addition to lowering the federal interest rate, the U.S. government has introduced – or is in the process of introducing — legislation that will help small and large businesses stay afloat while we fight the pandemic with social distancing and isolation.

Last week, the Federal Reserve introduced the Money Market Mutual Fund Liquidity Facility, a program that lends money to banks to purchase assets from money market funds. Lending will not affect bank capital requirements, according to finance site Investopedia.

The government also introduced the Term Asset-Backed Security Loan Facility (TALF), enabling the purchase of asset-backed securities backed by auto loans, student loans, and small business loans to unfreeze credit and help stabilize the economy throughout the pandemic and during the economic recovery period afterwards. These measures will run until September 30, 2020, unless they are extended at that time.

The Fed is also working on a Main Street Business Lending Program. We will reveal details as they become available.

Ultimately, avenues will be available to keep large and small businesses afloat and give them access to the funds they need through loans and tax credits. Here at DBL Center, we will do our best to keep you apprised of changing legislation as it pertains to our brokers and their customers.

Stay safe, stay healthy, and know that the DBL Center is here, as always, to serve as your back-office staff as we get through these trying times together – remotely.