Most of us are aware that as of Jan. 1, 2021, employers in Connecticut began payroll deductions as part of the new Connecticut Paid Family and Medical Leave (CT PFML) Law. Under this law, Connecticut workers have the opportunity to take time to attend to personal and family health needs without the worry of lost income.
As this has begun rolling out over the past few weeks, one of the major questions for employers in Connecticut is which choice to make for Paid Family Medical Leave benefits—a private plan or the state program. In a study released by Guardian Life recently, half of all employers in states with paid family and medical leave laws expect to opt out to a private plan, where available.
Jeff Wasco, New England Regional Director for Guardian Life, wants to try to help employers and employees understand how the new CT PFML law is critical, and why paid leave has taken center stage as a result of the pandemic. Wasco has helped other states in the area – most recently, Massachusetts – navigate the change, and can share helpful insight relevant to Connecticut business owners.
“This is a critical period for Connecticut-based employers in not only understanding what their options are, but in determining the next steps for their organization and how they want to manage employee absence under the new CT PFML,” said Wasco.
Wasco said that the CT PFML benefit can be administered either by the state or a private insurer. States that have already implemented PFML, for example Massachusetts and New York, administer the plans differently.
“For Connecticut’s new PFML plan going into effect 1/1/22, employers have two options – the state-run plan or a private plan, and they have until 3/31/2021 to make their initial decision, so the time for CT employers to take action is now,” said Wasco.
Wasco said that employers who opt to remain with the state-run plan will pay the premium funded by the payroll deductions which began on 1/1/2021, and they will also rely on the state to manage PFML when it goes into effect on 1/1/22. Should an employer select a private plan, most private plans will not have premiums due until 1/1/2022, and they will work with their company of choice to manage the PMFL program. Private plans are required to meet or exceed the state’s requirements for PFML. Connecticut employers interested in filing for a private plan exemption have until March 31, 2021.
“We understand this is a complex and formidable job for employers, and we are here to help them navigate the process,” said Wasco, referring to the Guardian’s latest Absence Management Study. This study showed that 8 in 10 employers say COVID-19 has reinforced the need to have an effective absence management leave program, and that the pandemic, coupled with new federal and state paid leave laws, adds another layer of complexity.
“Based on what we are seeing in Connecticut, there is a need to help employers navigate PFML so they can make the right decision for their business,” said Wasco, noting that the study also revealed that, due to the complexity of federal and state paid leave laws, half of all employers in states with paid family and medical leave laws expect to opt-out to a private plan, where available.
The immediate benefit of opting into a private plan for Connecticut employers is potential premium savings, according to Wasco. Long term, “It’s a win-win for both employer and employees,” he said.
It’s a positive for employers because it enables them to integrate Short-Term Disability (STD), Federal FMLA and the new CT PFML under one system, thus centralizing intake, ensuring compliance and reducing costs, according to Wasco. For employees, the positive outcome is a seamless employee experience, because they have a single point of contact for disability and/or paid leave claims to guide them through the process.
“Additionally, our study – which has tracked leave management programs for 12 years – shows that companies who outsource this service report fewer administration challenges and are more confident in being compliant with the federal and state laws compared to those that don’t,” said Wasco.
As of January 6, there were 16 private carriers offering private plans in Connecticut.
Wasco noted that the CT PFML Authority has also done a great job of outlining different resources on their website: https://ctpaidleave.org/.
“At Guardian, we have seen that there is a strong demand in the marketplace for the private option because of the potential premium savings, the help needed to stay compliant, and the ease of administration,” said Wasco.
Guardian is offering a private CT PFML plan that meets the needs of employers with 10+ employees, and integrates with their other Absence Management products, such as Short Term Disability.
Although the employer does make the decision to go with the private plan, what’s unique about Connecticut is that if an employer wants to pursue a private plan for their CT PFML coverage, the state requires that they host an employee vote that meets several requirements: The vote has to be extended to all of the employees that work in Connecticut, even those who may be out on leave at the time of the vote; The majority of a business’ employees have to approve the private plan choice (50% +1 of the total number of Connecticut employees; The vote results have to be anonymous.