By Darren Ambler, Principal, Managing Consultant, OneDigital
When the legislation for MA Paid Leave was passed, it had included a provision for employers to provide the benefit through a private plan. The stipulation for a private plan was very clear; the benefits offered must be on par or better than all benefits offered in the public option. A number of the provisions in the state leave plan are not generally found in conventional disability plans. In addition, mistakes made in the rollout of other state leave programs that have resulted in financial losses have left insurers weary of participating in private options. As a result, it was unclear if insurers would be able to provide a private plan for Massachusetts employers as an option.
Over the past few months, the landscape has changed. A number of insurers have expressed interest in providing private options, two of which are actively releasing proposals to employers. These plans can be offered in either an insured or a self-funded model. A private plan exemption can offer the employer a number of advantages over the public option.
- Ease of communication with employees/easier for employees to understand
- Single claim filing for MA Paid Leave, Group STD, and Group LTD plans
- Potentially lower monthly costs depending on risk profile/claims experience
- Exemption from contributions to public trust fund over the next 15 months
- Ability to customize plan to better suit needs of the employer
- Streamlined plan administration
In a joint effort by the Department of Paid Family and Medical Leave and the Division of Insurance, the state is currently meeting with insurers. The goal of this effort is to streamline the exemption process by certifying plans from insurers. A certified plan would provide the employer with a simplified solution that will pass through the exemption process and provide an appropriate plan for your employees. If the Division of Insurance is able to move at the pace they have laid out, this process will continue over the next few weeks and certifications will begin in late September.
Your OneDigital team members are working with insurers and state officials on a daily basis so that we can deliver the most up to date information to you. As solutions become available, we will be discussing them with you. Our goal is to make sure that you know your options and are able to select the solution that best fits your unique needs.
Key Dates Remain:
- September 30, 2019: Deadline for distributing acknowledgement notices to employees
- October 1, 2019: Payroll deductions must begin
- December 20, 2019: Submission deadline for private plan exemption applications
- January 31, 2020: Final day to remit Q4 2019 contributions through MassTaxConnect
Please contact a member of the OneDigital/Insight team with any questions that you might have regarding the law.