Aetna’s New York Paid Family Leave - McGraw...

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Disability insurance plans/policies are offered and/or underwritten by Aetna Life Insurance Company (Aetna).

©2017 Aetna Inc.

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Aetna’s New York Paid

Family Leave August 2017

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New York Paid Family Leave

Aetna is committed to delivering on the promise that

we’ll be able to service the DBL and PFL needs of current and future customer/plan sponsors as required by New

York. We’ll be ready to service NY PFL on its effective

date of January 1, 2018.

Within the following slides, you’ll see details on the

following:

• How we’ve prepared and are preparing

• How an employer should be preparing and what Aetna expects

• NY Paid Family Leave at a glance

• Frequently Asked Questions on:

- overview of law

- how we’re preparing

- our process

• Scenarios on payroll deductions and benefit usage

In the coming weeks, you’ll continue to see updates from

us as we finalize the PFL Rider, as well as our process.

If you have any questions, pass those along. We’ll continue to share new information in future updates.

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Completed Preparation Go-Live

Phase 1 Phase 2 Phase 3

Draft Process/Workflow

File Feed Impact Draft Communications

Staffing Impact

Intake Scripting

Compliance Requirements*

Reporting Requirements* Policy Form Filing*

Claim Forms*

Finalize Process &

Communications* Provide Rider*

Poster Requirements*

System Updates Education

Accessibility for Questions

Training

Billing Ongoing Education

Go-Live

Ongoing Accessibility

for Questions

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Aug-Sept Oct-Jan

*Awaiting guidance from NY to finalize the Policy Form submissions/Rider along with Reporting Requirements and Claim Forms

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Employer Responsibilities

Policies

Update existing leave

or company policies

(in writing) to include New York Paid Family

Leave. If none exist

today, we recommend

creating them given the complexity of

FMLA, FLSA, DBL,

employee

classification and PFL etc.

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Deductions

Time the deductions

in advance of

remitting payment (or

benefit effective date for self-insured)

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Education

Educate impacted

employees of the

benefit while also outlining the payroll

deductions

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What Aetna Expects of an Employer

Certification

There will be an

employer portion of

the certification form

and that is required to be completed

within 3 days of

receipt

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Self-Reported Billing

Employers that self-report will need to

ensure accurate

payroll withholding by

working with their payroll vendor

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Eligibility

We expect an employer to provide

and/or confirm

accurate eligibility

based on how New York has defined full

time and part time

employment

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New York Paid Family Leave Employer Responsibilities

.126% AWW (Capped at

NY AWW $1,305.92)

Maximum Contribution

averaged $1.65/week

for those earning > NY AWW

Max $85.56

per year

= =

*NY Department of Labor releases the updated statewide AWW every March 31

The 2018 weekly maximum contribution for Paid Family Leave is 0.126% of an employee’s weekly wage

capped at New York’s current average weekly wage (AWW) of *$1,305.92.

This means the maximum contribution is capped at $1.65/week (averaged over the year) for

employees earning New York’s AWW or above.

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New York Paid Family Leave Benefit Timeline

Year Weeks

Available

Employee & State Max Average % Weekly

Wage/Benefit Calculation

2018 8 50%

2019 10 55%

2020 10 60%

2021 12 67%

New York Paid

Family Leave benefits will be

implemented over

four years from its

effective date in 2018 and through

2021. During that

time, the benefit will increase year over

year in weeks and

max benefit.

To correspond with

the increase in

benefits year over

year, the State will reassess the

maximum

employee contribution on a

yearly basis.

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Covered Reasons for New York Paid Family Leave

Military Active Duty

When an employee’s

spouse, child, domestic

partner or parent is on

active duty or has been notified of impending

duty.

Maternity & Paternity

For up to 1 year following the birth, adoption or

foster care placement of

employee’s child. Care of a Family

Member

To care for a family member sick with a

serious health condition.

A family member

includes: Spouse, Domestic Partner, Child,

Parent, Parent-in-law,

Grandparent and

Grandchild.

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New York Paid Family Leave Q & A

Question Answer

What is New York Paid Family

Leave and what is the effective date of this benefit?

New York passed a comprehensive law requiring NY private

employers to provide employees with paid family leave as of 1/1/18. Insurance carriers that provide NY DBL coverage must also provide

NY PFL benefit coverage. This is done as a rider to a policyholder’s NY

DBL policy. NY PFL is funded by employee contributions (payroll

deductions).

Which employers are impacted? All private sector employers with employees in New York must

provide NY PFL coverage, regardless of size.

Who is eligible? Full time employees will be eligible after 26 weeks of employment,

and part time employees after a total of 175 worked days with the same employer.

Can an employee receive both NY

DBL and NY PFL benefits at the same time?

No. Employees can’t receive both benefits at the same time. However,

an employee may opt to receive disability and paid family leave benefits during the post-partum period, just not at the same time.

When has an employee

exhausted NY PFL benefits?

An employee will exhaust upon using 8 weeks of NY PFL (in 2018)

within 52 weeks or upon a combined NY DBL/NY PFL use of 26 weeks in the previous 52 weeks.

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Question Answer

Will the employee be subject to a

waiting period before benefits are payable?

No, there is no waiting period under NY PFL like under NY DBL.

If an employee does not work in

NY but their employer is based in NY, are they still covered?

No, the employee themselves must work in NY to be eligible for NY

PFL.*

If an employee is paid

PTO/Vacation, are they still entitled to payment under PFL?

No. But, if an employer issues payment under the form of salary

continuation, an employer will have the opportunity to request reimbursement from Aetna for time paid equal to the NY PFL benefit.

Does an employee have to

participate in the Paid Family Leave program?

Yes, but with one exception being those employees who won ’t meet

eligibility for paid family leave (26 continuous weeks or 175 working days). These employees have the opportunity to sign a waiver (e.g.

seasonal workers).

How long can an employee

receive benefits in NY?

In 2018, an employee is allowed up to a total of 8 weeks paid family

leave within a 52 consecutive week period (max of 12 weeks at full implementation). The time taken under PFL also deducts the amount

of time an employee may have been eligible to receive benefits under

the DBL plan. An employee is only allowed a combined total of 26

weeks between DBL and PFL within a 52 consecutive week period. *Employees entitled to PFL are those who physically work in NY all or part of the time and the services isn't based/localized in another state, AND those whose work base is within NY, OR if not based in

any other state, then NY is the place from which the employee's service is directed/control, OR if the employer's base of operations that directs the employee's services isn't in a state where the employee does work, then the employee has to live in NY.

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Question Answer

What’s the minimum increment of time

that an employee is allowed to take NY PFL?

At a minimum, NY PFL must be taken in full day increments. An

employee cannot request a partial day like they are allowed under FMLA.

If employees split their time between

New York and New Jersey, are they eligible for NY PFL?

As long as they meet NY PFL eligibility requirements, they could

be. To be eligible as a full-time employee, one must work on average 20 hours or more a week and have worked 26 weeks

for that employer. To be eligible as a part-time employee, one

is working fewer than 20 hours a week and must have worked

a total of 175 working days to be eligible.

When would an employee working 2

days per week at 8 hours a day become eligible?

Because an employee working 2 days a week at 16 hours a

week is considered part-time, this employee won’t gain eligibility within a year (52 weeks), and must be given the

option to sign a waiver opting out of NY PFL. If they choose

not to sign the waiver, they could likely gain eligibility within the

following year after having worked a total of 175 days.

Do health benefits continue while an

employee is out on NY PFL?

Yes, an employer is required to extend Health Coverage much

like they do under FML. An employee is expected to continue paying their premiums to maintain coverage.

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Question Answer

Can an employer contribute

on behalf of their employees?

Yes. NY introduced this benefit as a means to ensure employees have

access to paid family leave without burdening the employer. However, employers can opt to cover the costs on behalf of employees.

What if employee

contributions/premium are insufficient to cover the costs

of the benefits paid?

The State will adjust insured premiums collected across all carriers each

year to balance risk.

May an employer withhold the

NY PFL weekly premium pre-tax?

Aetna is not in a position to provide this tax advice to employers.

Employers should discuss this with their tax advisor or payroll processor.

Are NY PFL benefits

considered taxable income to the employee?

While employees should evaluate their personal tax situation with their

tax advisor, the NY Workers’ Compensation Board has indicated that its understanding of federal tax law is that NY PFL benefits are subject to

federal income tax. For individuals interested in further information on

this, IRS publications should be reviewed. NY PFL benefits may or may

not be subject to NY income tax depending on an individual’s financial situation. And, as employees eligible for NY PFL may not all be NY

residents, employees should discuss with their tax advisor other state

income tax requirements which may apply to their NY PFL benefits.

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Question Answer

Why would an insured employer

consider withholding employee contributions prior to January

2018?

Insured employers need to consider how to time the start of

withholding employee contributions for PFL premiums, with the timing of the billing cycle/premium due for January, 2018 and thereafter.

Most Aetna DBL and PFL customers are invoiced monthly, with the

January, 2018 invoice issued in December 2017. Employers will need

to work with their payroll processors (or accountants) to align collection of the PFL premiums prior to the due date for the premium. Employers

on a billing cycle other than monthly will need to adjust the

commencement of PFL employee premium withholding accordingly as well. Finally, State rules also permit employers the option to fully-fund

the PFL premium on their employees’ behalf.

Why would a self-insured

employer consider withholding employee contributions prior to

January 2018?

A self-insured employer may want to begin withholding early to assist

with self-funding reserves for paid family leave claims as early as January 1, 2018.

Will an employer be allowed to

collect more than the weekly employee contribution if they

wait until January?

No, NY regulations stipulate that employers may not withhold beyond

the weekly maximum. Employers who choose to delay employee premium withholding until 2018 won’t be able to recoup from

employees any premium contributions that they could have withheld in

2017 for the 2018 plan year.

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What is Aetna Doing for New York Paid Family Leave Q & A

Question Answer

When will Aetna provide a

Policy rider covering NY PFL?

Aetna cannot provide the NY PFL Policy Rider until state regulators have

approved policy form submissions made by each of the PFL carriers. The State expects that policy form submissions will be made by carriers in

August, although they have not yet released those requirements to the

carriers. No Policy rider can be provided until the state has received,

reviewed and approved the form filings.

Will Aetna administer NY PFL if

Aetna also administers the LOA?

While this is still a ‘family leave’ benefit, the administration of this benefit

does not follow the leave administrator, but instead the DBL administrator. For example, if an employer’s NY DBL coverage is with the

State Insurance Fund, the employer will go through the State Insurance

Fund for NY PFL in 2018.

Will Aetna require NY PFL to be

funded the same as DBL?

Yes, Aetna expects the PFL to mirror the funding arrangement of DBL.

Insured DBL = Insured PFL Self-Insured DBL = Self-Insured PFL

Will Aetna provide a separate

invoice for NY PFL or will NY DBL and NY PFL be combined?

Aetna will maintain these as separate coverages and separate premiums

within one invoice. There will be an additional line item on your DBL invoice to reflect the NY PFL premium.

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What is Aetna Doing for New York Paid Family Leave Q & A

Question Answer

What is the premium Aetna is

charging for Insured NY PFL?

The State sets the maximum employee contribution (0.126% of the

employees’ weekly wage and is capped at $1.65 per employee per week) and will adjust annually. We will not collect anything more from

employers on NY PFL premium than what the State has already

outlined as the maximum employee contribution rate.

Will the employer have access to

the total benefits that were paid?

Yes, details on the amount of the payment will be accessible by way of

reports, reverse file feed (if applicable) and/or available through our customer portal (as permitted by an employer’s configuration).

Can employees be required to use

all their sick/vacation pay during this time?

No, an employer may permit that an employee use sick/vacation to

supplement their benefit, but cannot require an employee to do so.

What materials will Aetna provide

to employers to communicate the NY PFL benefits to employees?

Aetna will provide employers a poster notification as required by the

State. We do recommend that employers notify their employees prior to the withholding of any contributions. There is an employee

handout provided by the State that we would recommend that

employers share with their employees, along with the State website

for employees to access. It’s an employer’s obligation to update their employment manuals to include information on NY PFL.

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Aetna’s Process For New York Paid Family Leave Q & A

Question Answer

Will Aetna send an email

notification to an employer upon receipt, approval and/or denial of

a claim?

Yes, we intend to notify the employer upon receipt, approval and/or

denial of a paid family leave request.

Will the plan sponsor be notified

of the payment and the amount?

Upon approval of a NY PFL request, Aetna will send an approval

communication to the plan sponsor as well as employee. Additional details on the amount of the payment can be accessed by way of

reports, reverse file feed (if applicable) and/or available through our

customer portal (as permitted by an employer’s configuration).

Will there be a separate claim

form required?

Yes, there will be a separate claim form required. This form is still

under review by the State.

How will an employee initiate a

paid family leave request with Aetna?

Similar to how an employee initiates a disability and/or leave with us

today they can contact Aetna via the phone, online through the customer portal/mobile applications as enabled by the customer or

submit their request by paper form.

How long can a request stay

open with Aetna?

No longer than 52 weeks. At the end of 52 weeks, the request should

close and a new request will need to be filed.

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Aetna Process New York Paid Family Leave Q & A

Question Answer

If an employee delivers her

baby and begins bonding in 2018, will her benefit increase

in 2019 if she’s still bonding?

No. The maximum benefit rate in effect on the first day of paid family

leave taken in 2018, is the rate that employee will continue to receive throughout their bonding claim. If a request was submitted in 2019

unrelated to their bonding event in 2018, they would then be eligible for

the increased benefit.

How will Aetna verify a family

relationship?

Outside of a bonding scenario which will require proper documentation,

we rely on the word of the employee in submitting their request. If an employer knows an absence to be fraudulent, we ask that they notify

Aetna.

How will employees receive

payment from Aetna?

As with any paid benefit from Aetna, an employee can request to be

paid via direct deposit or receive a weekly check in the mail.

Will Aetna be incorporating NY

PFL benefits into the customer portal for self-service?

Claims will be visible online from within the customer portal and an

employee will have the same access they do today to submit their request online as they do with other benefits.

Will employees be given a full 8

weeks as of 1/1/2018 or will there be a lookback period to

confirm 26 weeks or 175 days?

While an employee is allowed to request benefits as early as 1/1/2018,

they will need to have met eligibility requirements to qualify for payment.

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Employee Contributions Timing Scenario - Insured

Month to Month Payroll Deductions Premium Due

Weekly Payroll

Deductions Week 1 Week 2 Week 3 Week 4 Jan

Bi-weekly Payroll

Deductions Week 1 & 2 Week 3 & 4 Jan

Most employers insured by Aetna for DBL/PFL are billed on a monthly basis. In the visual below, you’ll

see how it would look if payroll is issued weekly or bi-weekly with deductions taken accordingly*. Within the month of December 2017, most Aetna customers will receive their first DBL/PFL invoice for

the month of January 2018. When remitting payment on or around January 1, 2018, many employers

will have been withholding payroll contributions during the month before the January 2018 premiums

are due to Aetna. Employers who choose to delay employee premium withholding until 2018, won’t be able to recoup from employees any premium contributions that they could have withheld during

2017 for the 2018 plan year. State rules also permit employers the option to fully-fund the PFL

premium on their employees’ behalf.

*This visual only covers those employers with a 26 or 52 week pay cycle. We’ll be providing an

additional tool that will assist in outlining those employers with 12, 24 or 48 pay cycles.

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Employee Contributions Timing Scenario – Self-Insured

Monthly Contributions Payments Can

Begin

Allowable

Weekly Payroll

Deductions in

2017

July Aug Sept Oct Nov Dec Jan

Total Reserves Six Months of Employee Contributions Jan

Self-insured DBL/PFL employers are recommended to coordinate with their payroll processors (or

accountants) to determine when to begin withholding employee contributions. The State allowed employers to begin withholding contributions from employees’ payroll as of July 1, 2017. This was in

large part to assist in funding reserves for those employers whose employees submit PFL claims as

early as January 1, 2018. Employers who choose to delay employee premium withholding until 2018

won’t be able to recoup from employees any premium contributions that they could have withheld in 2017 for the 2018 plan year. State rules also permit employers the option to fully-fund the PFL

premium on their employees’ behalf.

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Bonding Scenario – Max PFL Benefit Used

DBL PFL Combined DBL/PFL Benefit

Nov 2017 Jan 2018

DBL Pregnancy/Maternity 10 weeks

Bonding under PFL 8 weeks

Combined DBL/PFL 18 weeks

Employee A goes out of work on a pregnancy/maternity leave in November 2017 and remained on a

disability claim for a total of 10 weeks. In early 2018, she requests and receives 8 weeks of PFL for bonding. At the end of the 8 week bonding leave, she has exhausted her PFL benefit within a 52 week

period and has used a total combined DBL/PFL benefit of 18 weeks used, leaving a total of 8 weeks of

DBL available.

Remaining Weeks of PFL: 0

Remaining Weeks of DBL: 8

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Bonding Scenario – Combined Max Benefit Exhaustion


Aug 2017 Jan 2018 Aug 2018

DBL Pregnancy 20 weeks

Bonding under PFL 6 weeks 2 weeks PFL

Available


Employee B goes out of work on a pregnancy leave in August 2017 and remained on disability claim

for a total of 20 weeks until she delivered. As of her delivery, she requested to transition to PFL so that she may receive her remaining six weeks of combined benefits under PFL versus DBL. Because

she has already used 20 weeks of DBL, she only has 6 weeks remaining at this time under PFL.

As of August 2018, (and before the baby turns 1 year old), she will be able to use her remaining 2 weeks of PFL (as she had only used 6 weeks) for bonding or another covered reason as needed.

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Bonding Scenario – Combined Max Benefit Usage


May 2017 Oct 2017 Jan 2018

DBL 4 weeks

DBL Pregnancy/ Maternity

10 weeks

PFL for Bonding 8 weeks


Employee C went out of work due to a broken leg in May 2017 and returned to work after four weeks.

She later went back out of work on bedrest in October 2017 and delivered her baby in November 2017. As of 1/1/2018, she is now eligible to transition to 8 weeks of bonding leave under PFL.

Remaining Weeks of PFL: 0 Weeks

Remaining Weeks of DBL: 4 weeks

Aetna’s New York Paid Family Leave - McGraw...

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