On January 1, 2021, payroll deductions commenced to help fund the Connecticut Paid Family Medical Leave Act (PFMLA), which entitles each eligible Connecticut employee to paid family and medical leave. While payment of benefits under the law will not start until January 2022, now is an opportune time for Connecticut-based employers to carefully explore their options for managing employee absences before the first deadline approaches. This includes choosing between a state-run plan or a private plan for their Connecticut PFML.
Over the past several weeks, many employers have had questions regarding the choices available to them and the best solution to help with plan administration. Here is everything you need to know:
1. What Does the Paid Leave Law in Connecticut Mean?
The Paid Family and Medical Leave Act offers Connecticut workers the opportunity to take time to attend to personal and family health needs while maintaining a level of income. If eligible for the Connecticut Paid Leave (CTPL) program, employees may receive up to 12 weeks of paid leave benefits in the case of a qualifying event. The funding to support the CTPL program comes in the form of employee payroll deductions, which began January 1, 2021 for the state plan.
New England Regional Director for Guardian Life, Jeff Wasco, leads a team that consults with employers and employees on understanding new paid leave legislation, and most recently helped Massachusetts employers navigate the complexities of the new Massachusetts law.
“For Connecticut’s new plan, employers have two options – the state-run plan or a private plan,” said Wasco. “The advantage of using a private carrier is that it can streamline the number of steps if and when a leave of absence may be needed and ensures your business remains compliant.”
2. You Have a Choice: A Private or State Plan
As the name suggests, employers who opt to remain with the state-run plan will pay the premium funded by the payroll deductions and rely on the state to manage PFML starting in 2022. In contrast, private plans may not have premiums due until on or after January 1, 2022, and employers can work with an insurance carrier to manage the program. All private plans are required to meet or exceed the state’s requirements for PFML.
While employers are tasked with the initial private or state plan decision, Connecticut is unique in its requirement that should the employer elect a private plan, the company must host an employee vote that meets the following requirements:
- Vote has to be extended to all of your Connecticut-based employees, even those who may be out on leave at the time of the vote.
- Majority of your Connecticut employees have to approve the private plan choice (50% +1 of the total number of Connecticut employees).
- Vote results have to be anonymous.
3. Why Employers are Opting to Go With a Private Plan
According to the 2021 Guardian Absence Management Study, 80 percent of employers say COVID-19 has put a spotlight on the pressing need for effective absence management. Moreover, changes in federal and state paid leave laws have added a layer of complexity to an already confusing space. Because of this, Guardian Life’s research also revealed that half of all employers in states with paid family and medical leave laws expect to opt-in to a private plan.
Based on what we are seeing in Connecticut, Wasco noted, there is a need to help employers navigate PFML so they can make the right decision for their business. The ease of outsourcing PFML management is the main reason employers are opting for private plans, as well as creating an integrated customer experience for employees.
“It’s imperative for employers to make a decision on how to administer PFML to help optimize the administrative and employee experience. For employers, private plans can integrate the administering of short-term disability benefits, federal FMLA leave and the new CT PFML under one system, thus centralizing intake, facilitating compliance, and reducing costs. For employees, the positive outcome is a seamless employee experience because they have a single point of contact for claims to guide them through the process.”
“We understand this is a complex and formidable job for employers, and we are here to help them navigate the process,” he added.
Resources
- Visit Guardian’s Paid Leave Resource Center for Connecticut for more information or to connect directly about Guardian’s plan.
- Review our latest Absence Management Report for trends and insights.
- For additional resources, the CT PFML Authority has outlined different resources on their website.
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2021-117028a (Exp. 2/23)
