Paid Family Leave

New York Paid Family Leave Update

New York Paid Family Leave Update

I have started to see things creep up in my personal facebook feed about paid family leave. There has been local news coverage this month about the fact that employers can start taking deductions from employee’s wages to cover the premiums. The rate was set by NY Department of Financial Services (DFS) and maxes out at $1.64 per week, which is intended to fully fund the coverage. 

Meanwhile, insurers are still waiting to submit form filings to provide for this coverage. At the LICONY and DFS seminar that was held on July 11, representatives from the Health Bureau stated that they have put ample resources into drafting model language for the program, which they will require to be used. The language is drafted to be a rider that is added to an existing Disability Benefits Law (DBL) policy. The language has also been pre-approved by the Worker’s Compensation Board, which means insurers will only need to submit filings to DFS. At the time of publication, the model language has still not been released, but it was promised to be available soon. Department staff also promised that there will be a checklist that includes detailed filing instructions to aid in these submissions. Given the circumstances, I am hopeful that there will be a very quick turnaround on these filings. 

I am most interested to find out what happens January 1, 2019 after the first year of the program is complete. The rate regulation requires detailed reporting from all insurers and a complete levelling of all experience, categorized by group size. Will it be a loss? Are the premiums adequate?

New York’s Paid Family Leave Program

I was lucky enough to be able to attend the New England Chapter of the AICP’s winter meeting last week, along with my colleague Mandy Bain. The meeting was held at the beautiful Cranwell Spa and Golf Resort in Lenox, MA. It was an intimate gathering, which provided great opportunity to get to know all attendees via a fun networking game called “Yes, I have done that!” There were people there who have ran a marathon, played college sports, lived through a hurricane, been to Disney World, and many more exciting things!

In addition to the networking game, the meeting included the official AICP Chapter Business Meeting, a delicious lunch (I finished every bite!), a Yankee Swap, and a very informative session with speaker Eileen Hayes of Greenberg Touring.  Ms. Hayes provided an update on various New York related issues, one of which was the New York Paid Family Leave (PFL).

As an expectant mother and resident of New York, I have a personal interest in the details of the PFL program. I have recently been navigating the various options available to my partner and me as we try to make decisions on what is best for us to spend time with our son during the first months of his life. Of course, my baby will be born in 2017 and the PFL program isn’t effective until 2018 so it will not directly affect me, but I still feel a personal connection and vested interest in how this program will affect people just like me in the coming years.

Additionally, I have always enjoyed the work I have done with New York’s Disability Benefits Law (DBL) and understanding the process for a carrier to move into that market. Since the PFL policy requires all carriers in the DBL market to offer PFL coverage, it has an impact on many of our clients and we have all been waiting with great anticipation for more guidance from both the Workers Compensation Board and NYSDFS. The Workers Comp Board is in the process of drafting a regulation on requirements related to eligibility, and DFS is drafting a regulation on the rates for the PFL coverage.

When first learning about PFL, it became apparent quickly that developing rates for the coverage is a major hurdle. The law calls for a community rate, which means that DFS will be setting a rate that will apply to everyone in the state. While there are other similar paid family leave programs in other states that can be used for comparison (most notably California and New Jersey), Governor Cuomo is proud to call New York’s PFL program the strongest in the nation. As such, it is not an easy apples to apples comparison. Understandably, there is a great concern that the rate set by the state will not be adequate. While there will be an adjustment at the end of the first year based on reported claims and the actual loss ratio experienced, there is much anticipation for the DFS regulation in order to give companies time to consider all of their options. Those options might include pulling from the DBL market altogether or drafting PFL policy forms and submitting for approval and moving forward with the many administrative and system enhancements needed to provide the coverage. Per Ms. Hayes, regulations should be finalized by “late winter.”

My baby is due March 2017, so I am hoping that means I will get the chance to review the regulations prior to the time I am out for my own maternity leave. I am also looking forward to working with companies to develop and file these PFL policy forms upon my return.