LICONY PAID FAMILY LEAVE WEBINAR November 7, 2017
Welcome Thank you for being here today. I am Kate Herlihy , Director and Counsel at LICONY and I’ll be your moderator. Our panelists today are: • Heather MacMaster , Deputy General Counsel, New York State Workers Compensation Board • David Melman , Chief Legal Officer/Chief Compliance Officer, ShelterPoint Life Insurance Company • Brian Dunham , Chief Actuary, ShelterPoint Life Insurance Company • Abigail O’Connell , Legal & Regulatory Compliance Counsel, Lincoln Financial Group • Judy Buczek , Senior Product Manager, Guardian Life
New York State Paid Family Leave
4 Who Will Administer PFL? Workers’ Compensation Board Department of Financial Services Department of Health, Department of Labor, & Others
5 Basics Paid Family Leave was passed in 2016 Executive budget It will go into effect January 1, 2018 It will cover bonding and care for a close family member, and care where military service prevents someone from providing care When fully operational, will provide up to 12 weeks per year, with max weekly benefit up to 67% Statewide Average Weekly Wage
6 Basics Provides for full job reinstatement All non-governmental employees covered by definition, subject to eligibility requirements Governmental employees subject to their employer’s opt-in, via collective bargaining where applicable
7 Basics Article 9 DB (TDI) FMLA Federal Proposal We are the fourth The only one as an insurance product
8 Law and Regulation Statute enacted 4-1-2016 Effective 1-1-2018 DFS regulations have been adopted DFS Rate set 6-1-2017 WCB regulations 2nd comment period ended 6-24-2017
9 Paid Family Leave Governor Cuomo signed legislation on April 4, 2016 Upon full implementation, NYS PFL program will be the Most Robust Paid Family Leave program in the nation.
10 Coverage: By Employer Type • Virtually all private employers are required to secure Paid Family Leave coverage • Public employers may elect to become a covered employer for Paid Family Leave benefits • Employee organizations (Union) may elect to collectively bargain for Paid Family Leave benefits.
11 Coverage: Employer Obligations • Covered employers must procure coverage for employees by January 1, 2018 – Benefit must be accessible by employees by January 1, 2018 – Employee Paycheck deductions may begin as early as July 1, 2017 • Employee is responsible for the premium payment through payroll deduction.
12 Coverage and Costs • PFL premium will be fully funded by an employee contribution, which employers may deduct from employees’ paychecks. • An employer has two options to maintain coverage: – obtain coverage from a private insurer or the State Insurance Fund, or – seek approval to self-insure. • Every insurance carrier that provides short-term disability benefits in NYS must also offer PFL coverage in those policies • Employers who purchase NYS Disability Benefit insurance coverage from a private carrier or from the New York State Insurance Fund will have PFL coverage included as a rider to their Disability Benefit policy.
13 Coverage through Self-Insurance • Employers that self-insure for disability benefits may purchase a standalone Paid Family Leave policy. • For private covered employers, self-insurance for PFL is only an option if the employer also self-insures for disability benefits. • Municipal employers may self-insure for PFL only
14 Coverage through Self-Insurance • To qualify as a PFL self-insured employer, employers must electronically submit their plan to the Board for approval – DB/PFL-150 – Audited Financial Statement, Form 10K or Annual Report – Business foundation documents such as the Certificate of Incorporation or Partnership Agreement • Following review, the Board will advise – If additional information is required; and – The amount of financial security that must be posted with the Board (up to1% of payroll) • SIE cannot collect any employee contributions above the maximum rate. • Once approved, the employer’s plan satisfies its statutory obligations, and self- insured employers will pay benefits to employees directly. • Employers must have elected to self-insure for 2018 by September 30, 2017.
15 Private Employers with Unionized Employees • Private employers with unionized employees are covered employers and must have Paid Family Leave coverage. • These employers must provide PFL benefits in one of three ways: • As a rider on a current disability policy • By purchasing a standalone PFL policy if self-insured for disability • By collectively bargaining with the private union(s)
16 Private Employers: Coverage through a CBA • If the covered employer will meet its obligation to obtain PFL coverage through the union’s collective bargaining agreement, the union must submit the agreement to the Board for approval. The Board will ensure that the CBA’s terms provide benefits “at least as favorable” as those required by PFL. • Benefits are at least as favorable as PFL if the meet the minimum benefit amount, duration, and eligibility requirements of PFL. • Unions can collectively bargain for benefits greater than what PFL requires. • Unions can also collectively bargain for different terms, including reinstatement and health insurance coverage • Following Board approval of the union’s plan, the covered employer must submit a DB-802 (“Employer's Application to Have Association, Union or Trustee Plan Accepted as Employer's Plan”) form, acknowledging coverage through the CBA. This form must also be signed by the union representative.
17 Coverage: Public Employers Generally • Public employers are not required to provide PFL benefits but may opt in • Public employers may opt in for DB only, PFL only, both, or neither • Opt-in by submitting the PFL-135 form or the PFL-136 form to the Board, depending on whether deductions will be taken from employees. • A public employer who is currently providing disability benefits to its employees must notify its employees and the Board that it will or will not be providing PFL to its employees prior to December 1, 2017. • Must provide 90 days’ notice to unrepresented employees before taking contributions • May opt out with 12 months’ notice to the Chair and employees
18 Coverage: Public Employers with Union Employees • Public employees who are represented by an employee organization (union) may have PFL collectively bargained (WCL section 212-b) • Unions may collectively bargain for different rules than what the PFL statute requires (if no rule mentioned, statute will apply). • Union plans must be submitted to the Board for approval • The benefits provided must be at least as favorable as what the statute requires, which means: • For 2018, at least 8 weeks of leave for the same qualifying events at 50% of the employee’s AWW capped at 50% of the SAWW • Eligibility no longer than 26 consecutive weeks or 175 days with no waiting period
PFL Premium Structure • The PFL rate is set by NY State and will be adjusted on an annual basis effective each January 1. All carriers will be charging the same rate for PFL by law • The 2018 rate effective January 1, 2018 was set on June 1 of 2017: – Rating Mechanism: percent of salary – Premium to be collected by insurance carriers: 0.126% of the employee’s annual wages for the calendar year (capped at the current, annualized NYSAWW of 67,907.84 * ($1,305.92 x 52) *NY Department of Labor releases the updated NYSAWW every March 31. maximum annual contribution: $85.56 per employee ** – ($1.65 /week averaged over the year) **Based upon NYSAWW as of March 31, 2017 Thereafter, updated rates are set and announced by New York State by September 1 of each year for the following calendar year.
PFL Employee Contributions • Employee payroll deductions could have started July 1, 2017 • You as the employers must pay the premium for their entire group whether you withhold from employees or not. • While PFL is considered employee-funded coverage, you don’t have to collect weekly employee contributions. • You don’t have to refund payroll deductions collected from employees between 07/01/17 and 01/01/18 for those employees that leave employment during the same time period • Employers can’t retroactively collect payroll deductions for Paid Family Leave • How it works for new hires
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