CT Paid Family & Medical Leave Insurance Impact

By Janîce Malcolm-Beeker
 
CT FMLI On June 25, 2019, Connecticut became the seventh state to adopt a Paid Family and Medical Leave law. Connecticut’s Family and Medical Leave Insurance (FMLI) program is among the most generous in the nation. Nearly all employees are covered and the definition of family has been broadly extended. The CT FMLI law also allows sole proprietors and self-employed individuals to enroll in the program for an initial enrollment term of three years. Benefits will be paid from a state FMLI fund generated from employee payroll deductions.
 
The new CT FMLI law:
 
  • Grants up to 12 weeks of Paid Family or Medical Leave within a 12-month period to most employees in the state, with two additional weeks for serious conditions resulting in incapacitation that occurs during a pregnancy.
  • Uses the broad definition of a family member in the unpaid CT FMLA, which will include siblings, grandparents, grandchildren or people related by blood or affinity whose close association the employees show to be the equivalent of those family relationships.
  • Eligible employees can take leave for the following reasons:
    • Birth, adoption or foster placement of a child
    • Seriously ill family member
    • Employee’s own serious health condition
    • Organ or bone marrow donation
    • Care for ill service member or any qualifying military exigency
    • Family violence issues

CT Employers Have Time to Prepare Ahead of 2022 FMLI Benefits Rollout

It may seem that state-mandated Leave laws are quickly emerging, but there is ample time for employers and brokers to prepare. The Connecticut FMLI program requires employers to begin payroll deductions in 2021, no later than Feb. 1, 2021. Benefits won’t begin until Jan. 1, 2022. And there is a great deal that needs to happen on the state’s end before then.
 
All private employers must participate in the program, but have the option of providing the same or richer FMLI benefits to their employees through a private plan, either fully-insured or self-funded. There are also opportunities for public-private partnerships in administering the state program.
 
Employers must notify their employees about the program at the time of hire and once per year after that, starting July 1, 2022. This notification must include details related to:
 
  • Who’s eligible for Paid Family and Medical Leave
  • How the Paid Leave can be used
  • Employers being prohibited from retaliating against employees for requesting, applying for or using Paid Leave for which they’re eligible
  • Their right to file a complaint with the Labor Commissioner for any violations of their Family and Medical Leave Rights.

New CT Quasi-Public Agency Must Develop the PFML Insurance Program

While the Connecticut law sets the coverage eligibility, benefit levels and duration for the leaves, the specific operating mechanisms of the program are still evolving. That’s because the state must first create the FMLI Authority, a 13-member quasi-public agency that will establish and administer the program. Collectively, board members must be experienced in:
 
  • Labor law
  • Disability Insurance
  • Small and large business
  • Distressed communities
  • Family and Medical Leave programs
  • Technology
The governor and certain Legislative members are required to appoint some of the board members to the FMLI Authority, and the other members are leaders of particular Connecticut state agencies. Once appointed, the FMLI Authority will draft regulations that will ultimately determine the procedures for how the CT program is administered. That includes developing and communicating the approval process employers will use if they choose to opt out of the CT FMLI program and instead provide a private plan for their employees. The regulations the FMLI Authority develops will also include details related to employers’ responsibilities for recordkeeping, collection of contributions, and remittance procedures.
 
The FMLI Authority can solicit bids for claims processing, database development, marketing, website development or other needed services if it chooses to use an outside contractor for those functions. Their evaluation of those bids must take into account criteria that includes transparency, cost, user experience, operational efficiency, accountability and a cost-benefit analysis.
 
This is a positive development for the industry and could provide an opportunity for carriers with Leave Management experience to partner with the state. Connecticut Gov. Ned Lamont is a proponent of public-private partnerships, and had urged legislators to leverage private expertise to administer the program efficiently and effectively.
 

Expansion of (Unpaid) CT FMLA Coverage

The FMLI law requires the Labor Commissioner to adopt regulations by Jan. 1, 2022 to implement certain guidelines for the FMLI program, including the amendments to the state’s existing unpaid FMLA. On Jan. 1, 2022, Connecticut’s FMLA provisions will also change to be consistent in many ways. Here are some details about what’s changing with the unpaid CT FMLA:
 
  • CT FMLA will now apply to private employers that have at least one employee, when it previously was 75 or more employees.
  • The threshold to qualify for job-protected leave has been lowered from 1,000 hours in a 12-month period to three months of employment and no minimum hour requirement.
  • The maximum CT FMLA leave allowed is changing from 16 weeks over a 24-month period to 12 weeks over a 12-month period, with two additional weeks of leave for health issues related to pregnancy.
Though we expect to get further details through regulations about the interaction with the FMLI program, generally, employers will be able to require – or their employees can choose – to use certain accrued PTO as a substitute for the unpaid leave reasons, except that the employee can keep not less than two weeks of such leave.
 

CT Family & Medical Leave Insurance Private Plan Option

For employers to provide the required Leave benefits through a fully-insured private plan, they must first have their proposed plan approved by the FMLI Authority. The Connecticut Insurance Department will also be involved in the evaluation of the plan to ensure that it meets all applicable state insurance laws and regulations. The private plan must also be approved by a majority of the employer’s employees.
 
Employers can also opt to self-insure and would have to provide a surety bond approved by the FMLI Authority.
 
The plan – either fully insured or self-funded – must have the same or more generous benefits than the state program and cost employees no more than the state plan. Employees covered under a private plan are not required to contribute to the state Family and Medical Leave Trust Fund.
 

More to Come on CT’s Paid Family & Medical Leave Insurance Program

The implementation of the Connecticut FMLI program continues to be a work in progress. The Hartford will monitor all the developments as they become available to keep our customers and brokers informed every step of the way. For more information on what the CT PFMLI program covers, please visit our CT Paid Family and Medical Leave page or our nationwide PFML Resource Center.
 

About the Author

An attorney for more than 20 years, The Hartford’s Assistant General Counsel Janîce Malcolm-Beeker has extensive knowledge and compliance experience in health, Disability and Leave insurance and administration, particularly in FMLA, ERISA and Disability management.
 

Upcoming Key Dates

  • Jan. 1, 2022: Employees meeting the eligibility criteria under the state plan started to receive Paid Leave benefits.
  • Jan. 1, 2022: The Hartford began accepting claims from Private Plan customers, and providing coverage for qualifying leaves to bond with a new child, recuperate from a serious medical condition- including serving as an organ or bone marrow donor, address specified needs associated with family violence, address the Military Exigency needs of a family member, and to care for a seriously ill family member- including one whose illness or injury is the result of service in the armed forces.
  • May 1, 2022: First private plan data reports by employer are due to the Paid Leave Authority. Data is for Quarter 1 of 2022.
Annual Employer Approval Schedule for Private Plan Exemptions:
 
  • 1/1 Approval Effective Date - Must be approved by 11/30
  • 4/1 Approval Effective Date - Must be approved by 2/28
  • 7/1 Approval Effective Date - Must be approved by 5/31
  • 10/1 Approval Effective Date - Must be approved by 8/31
Private Plans are in force for three years from the date of approval unless a material change is made to the plan. For more information regarding CT Private Plan Exemption Approvals visit the “I Want to Apply for a Private Plan” page on the Connecticut Paid Leave Authority’s website.
 
 
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This informational material is subject to change as The Hartford continues to receive guidance from states and municipalities. It shall not be considered legal advice. The Hartford assumes no responsibility for legal compliance with respect to an employer’s business practices, and the views and recommendations contained herein shall not constitute The Hartford’s undertaking on a company’s behalf, or for the benefit of others, to determine or warrant that an employer’s business operations are in compliance with any law, rule, or regulation. Employers seeking resolution of specific legal or business issues, questions, or concerns regarding this topic should consult their own attorney or business advisors; and employees should continue to consult their employers’ Human Resources or other employment benefits department for guidance on the application of any law, rule, or regulation.
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