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.


NY Paid Family Leave: What DBL Brokers Need to Know

 With days left to review the proposed NY Paid Family Leave regulations, what should you know?

NY Paid Family Leave, the most comprehensive Paid Family Leave program in the country, is set to go into effect January 1, 2018. But for employers and brokers preparing for the moment, the date isn’t as far off as it sounds. And employers can begin making payroll deductions as early as July 1, 2017. NY Paid Family leave gives this family time together.

A Quick Recap of NY Paid Family Leave

First, a quick recap of the proposed regulations:

NY Paid Family Leave provides employees with the income they need to enable them to stay home and care for:

  • a newborn, adopted or foster care child within the first 12 months
  • an ill or aging family member
  • children while a spouse is serving in the military

Paid Family Leave will be phased in over the next four years, until 2021, when PFL will pay out the maximum coverage of 67 percent of an employee’s average weekly wage for 12 weeks. Coverage will be community rated to promote a fair and efficient market, and coverage will be written as a rider to existing DBL policies.

You can learn more about the specific details of the law in this blog post, when The DBL Center blog broke the news to our network last April.

What We Know

In the past year, we’ve been staying on top of the news and we’ve discovered some interesting facts:

  • Many employers don’t even know these new regulations were introduced.
  • Some P&C brokers are considering leaving the DBL insurance industry because they are worried about the new regulations
  • Brokers are turning to those in the know, such as reputable carriers and The D.B.L. Center, to answer questions they have and find the best ways to educate their customers

Embracing the Opportunities NY Paid Family Leave Offers to Brokers

Because PFL coverage will exist as a rider to current New York State mandatory DBL coverage, these changes affect P&C brokers who write DBL coverage. Brokers SHOULD look at the coverage as an opportunity.

The DBL Center and our carriers are here to help you leverage this opportunity for increased commissions (whatever the actual amount may be!) on mandatory, employee-funded PFL coverage. The process is one of education and consultative selling, rather than hard sales. And The DBL Center is here to assist every step of the way, with the information our brokers and their customers need to make the best decisions and guide you in this new claim process.

Our soon to be released mobile app, combined with the technical infrastructure provided by preferred vendors to process policy riders, gives our brokers the tools they need to be successful in this new venture.

It’s also a good time for our brokers to review and enrich existing DBL policies beyond the state minimum, in preparation for the Governor’s office to potentially increase the DBL benefit.   After all, Governor Cuomo’s father Mario was the last one to increase the weekly indemnity back in 1989.  We never know. Changes are ahead, and they promise to be good ones for brokers who work with The DBL Center as their insurance wholesaler and have the tools to take a consultative approach to selling DBL in New York.

Deadlines Approaching

But what are the rates for NY Paid Family Leave? And how much do brokers stand to make from the new PFL coverage? These are the top questions on the minds of many of our brokers. Certainly, the state acknowledges that brokers’ workloads will increase as a result of the new coverage, and industry experts believe rates will be fair to enable reasonable broker commissions. But right now, all we can do is expect the best.

The good news is that all the uncertainty ends on June 1, when the state announces the coverage rates. Soon after that, carriers will announce broker commissions. And employers are permitted to begin deducting payments for  NY Paid Family Leave premiums beginning July 1.

In addition, brokers have until April 8 to read the draft regulations and make comments. The full text of the regulations can be found here.

Meanwhile, We Wait…

As we wait for the proposed regulations to pass and the State of New York to set the rate, it’s important to continue educating employers on the law. That way, when the time comes for them to purchase this mandatory coverage and, even before then, to begin making payroll deductions on July 1, they will know where to turn.

Stay tuned for further information regarding our Q&A seminar at The Friar’s Club next month in conjunction with The New York Business Council and one of our preferred vendors. With The DBL Center behind you, our brokers are poised to make the most of NY Paid Family Leave.