Takeaways From the MA PFML Panel

Last week, I attended the Human Resources Management of Western New England event that featured a panel covering the Massachusetts Paid Family and Medical Leave law.  The panel included the following people:

I was struck by the number of times Bill and Michael candidly told the group that they were unsure of the answers to questions.  Despite the fact that there are still many unanswered questions, I felt like I took away some good information.

  • One of the panelists from Boston referred to “an interesting quirk in the law” that the final regulations aren’t actually due until contributions are supposed to start…July 1.  He added that he hopes to have them done in advance.
  • Applications for exemptions for private plans are supposed to be ready today.
  • Since January 1, 27 other states have introduced legislation that includes paid family leave.
  • MA PFML covers leaves for family members that FMLA does not.  As such, it’s possible for an employee to be able to use both in the same year.
  • Short term disability insurance plans will likely offset with MA PFML, so rates should come down.
  • Your STD plan will not count for the medical portion of MA PFML unless it is changed.  Eligibility, definition of disability, amount of benefit, intermittent leaves and other factors will make the MA PFML different than your current STD plan.
  • MA PFML will not necessarily replace your STD plan for a variety of reasons.  For example, the maximum benefit might be too low for your higher paid workers, the maximum duration for the MA PFML might not dovetail well with your LTD plan, and an employee could potentially exhaust MA PFML with family leave, leaving them with no coverage for their own disabling illness until the LTD plan kicks in.
  • MA PFML only covers people who work in Massachusetts.  If you live in MA, but work in CT, you are not covered.  However, a CT resident that works in MA is covered.
  • Companies with fewer than 25 employees do not have to make the employer contribution to MA PFML.  Employees who don’t work in MA are not counted in that 25.
  • Bill and Michael were asked about the “presumption of retaliation” built into the law, something that is a big concern for employers.  I can’t recall which of them said it, but I found the response really interesting:  “I don’t know how that’s going to play out in the courts.”
  • We do not yet know if MA PFML is going to be taxable at the federal level.  The department is waiting to hear from the IRS.
  • One attendee asked if an employer decides to set up their own private plan, if they are required to start payroll deductions on July 1.  The answer was no, with the understanding that the employer cannot later try to make up for lost contributions by charging more than the state prescribed amounts.
  • If an employee has lots of PTO saved up and can get 100% of his or her pay with the PTO plan, the employee can opt to take the PTO, and the employer can apply to get reimbursed from the state for the MA PFML amount.

Here are the next steps for all employers:

I’ve done an informal poll of some of the group disability companies to see if they will be providing a product for MA PFML.  Here are some of the responses:

  • Sun Life will offer administration for self-insured private plans, and they are exploring the fully insured options subject to final regulations.
  • MetLife is planning to offer administration for self-insured private plans as well, but they are not going to build a fully insured version.
  • My Standard rep said they have “every intention to provide MA PFML insurance for 1/1/21…”
  • Principal, Hartford Life, and Unum all told me they are looking into it.

At least one of the companies offering insured plans for PFML in New York told me that they are planning to increase their pricing if allowed to do so because claims are higher than expected.  As employers think through the idea of self-funding this risk, I thought this was an important thing to mention.  There are a lot of employers that are uncomfortable self-insuring their STD plans today as evidenced by an insured product being part of their benefits package.  Adding broadly defined family leave to the mix will surely increase the claims payouts.  An employee contribution to the plan might help, but on the surface, it would seem that employers should be cautious when considering a self-funded plan.

If you would like to talk about MA PFML, please give us a call at (866) 724-0008 or click the link below.


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