I just got off the telephone with our representative from Guardian. They have just come out with an insured product for the Massachusetts Paid Family and Medical Leave. Here are some specifics:
- They are quoting groups with 25 or more employees, starting with existing customers first.
- The product will require some additional lines of business. They prefer the group LTD plan because it will make sense to package the two, but the LTD is not a requirement at the moment. Guardian will consider dental, life, and even voluntary or worksite products.
- It is up to the employer to determine who is eligible, including which 1099 employees are eligible.
- If an employer decides to go with Guardian, they will send a letter outlining the “intent of sale” along with a sample policy to help an employer get the exemption from the state.
- Guardian knows the policy will work because they used it to get their own exemption for Massachusetts employees.
- Quotes will not be firm until they are finalized in the fall of 2020. Prices could go up or down a bit at that time, especially if the census changes.
- Employers who get the exemption now for 2020 will need to re-file for another exemption in 2020 for the 2021 plan year.
- This is a fully insured product, so there is no bonding requirement.
- No premium is due until 1/1/21, which means employers and employees will not have to pre-fund the state plan. This will save employers 15 months of pre-funding expenses.
- Rates could be higher or lower than the 0.75% of payroll prescribed by the state. However, if the rate is higher, the math could still make sense when you take into account that premiums aren’t due until 1/1/21.
As mentioned in a previous post, there is another company doing quotes for the 100+ marketplace in addition to Guardian. See this link: https://www.millbrookbenefits.com/ma-pfml-updates-and-private-option-available/
I really like the fully insured concept for MA PFML for these reasons:
- No pre-funding, which could save employers money and delay remittance headaches.
- The PFML product can be coupled with the group LTD plan using the same claims management team.
- Many of the disability insurers, Guardian included, already manage disability and leave programs as part of their core business. This is not new to them, and as such, one would hope that claims processing will be very smooth from the beginning.
If you’d like to talk about the Massachusetts Paid Family and Medical Leave law or learn how your company can get a private plan exemption, call us at (866) 724-0008 or click the link below.