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Service Excellence

Market Update: New York Paid Family Leave

October, 2017

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Implementation & Rollout

FAQ

NY PFL Summarized

Agenda

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• Chris Smith, Matrix

– AVP, Product Strategy & Solutions - Leave / ADA • Melissa Smith, Reliance Standard

– AVP, Service Operations • Janine Kane, Reliance Standard

– AVP, Business Systems & Quality Assurance

On the call

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New York Paid Family Leave A review

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• The State of New York has passed legislation that will add

paid family leave benefits to the current Disability Benefit Law (DBL) effective January 1, 2018.

• Paid Family Leave pays benefits while employees care for a family member. The DBL and other disability benefits only pay during the employee’s own disability.

• Paid Family Leave ALSO provides job-protected leave. Unlike FMLA, it obligates employers with fewer than 50 lives.

New York Paid Family Leave

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Effective Date

Max length of paid leave

Covered % of

Employee’s weekly income

Maximum Benefit (%

of NY average weekly wage)

1/1/2018 8 weeks 50% 50%

1/1/2019 10 weeks 55% 55%

1/1/2020 10 weeks 60% 60%

1/1/2021 12 weeks 67% 67%

• Benefit increases every year for the first 4 years.

• New York State Average

Weekly wage is currently $1,306.

• Rates equal 0.126% of an employee’s average weekly wage, not to exceed $1.65 per week.

• Leave must be taken in increments of 1 full day.

New York Paid Family Leave

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• Required for all employers with one or more employees working in NY.

• Permitted (but not required) to collect employee contributions starting July 1, 2017.

• May continue to deduct PFL contributions during a leave (no waiver of premium equivalency).

• Must maintain health insurance coverage for the duration of the time the employee is out on leave.

• Must provide employees the right to waive coverage if they do not expect to meet eligibility. If they end up working the required days/weeks, employer may deduct for back premiums. (NY Form Now Available)

• Public Employers are not required to provide this coverage but may opt into the program.

• Religious/Clergy exemption from DBL carries over to PFL.

What employers need to know

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• Premiums will be collected through payroll deductions.

• Employees must be employed in New York State for 26 weeks (175 working days for part-time, < 20 hours per week) before they are eligible for PFL.

– Payroll deduction begins immediately, not after eligibility is established

• Employees with multiple NY employers must pay at each employer where they are eligible; they can take PFL at multiple NY employers simultaneously for the same reason but are subject to an overall annual MAXIMUM.

• Employees MAY, but do not have to, take PTO before using paid family leave.

• Employees must use PFL in full day increments. – Though intermittent leave of less than a full day may still be deducted from

FMLA balances!

What employees need to know

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• Premiums will be deducted from employees’ after-tax

wages. • Benefits paid to employees will be taxable non-wage

income that must be included in federal gross income.

• Taxes will not automatically be withheld from benefits; employees can request voluntary tax withholding. – Employers should report employee contributions on Form W-2 using

Box 14 – State disability insurance taxes withheld.

– Benefits should be reported by the State Insurance Fund on Form 1099-G and by all other payers on Form 1099-MISC.

• Same policy applies for NY state taxes.

About Taxes

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Qualifying Events

• Bond with a child.

• Care for a close relative with a serious health condition.

• Relieve family pressures when someone is called to active military service.

New York Paid Family Leave

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• A parent may take Paid Family Leave during the first 12 months with new child. – Includes foster and/or adoption, not just birth

• PFL only begins after birth (not prenatal conditions). – DBL would apply pre-birth

• Also available for men and women who are preparing to foster or adopt a child.

Child Bonding

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• A serious health condition is an illness, injury, impairment, or physical or mental condition that involves: – Inpatient care in a hospital, hospice, or residential health care facility; or – Continuing treatment or continuing supervision by a healthcare provider.

• A close relative includes: – Spouse; Domestic Partner; Child; Parent; Parent in-law; Grandparent;

Grandchild

Caring for a close relative

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Family member is… a child, parent, grandparent, grandchild, spouse, or domestic partner • Child

– a biological, adopted, or foster son or daughter, a stepson or stepdaughter, a legal ward, a son or daughter of a domestic partner, or the person to whom the employee stands in loco parentis.

• Parent – a biological, foster, or adoptive parent, a parent-in-law, a stepparent, a legal guardian, or other

person who stood in loco parentis to the employee when the employee was a child. – There is no explanation or definition of “parent-in-law,” so we interpret this to be only the parent

of a spouse, not the parent of a domestic partner.

• Grandparent – a parent of the employee's parent

• Grandchild – a child of the employee's child.

• The definition of “domestic partner” for purposes of NY PFL is incorporated from section 4 of the New York workers’ compensation law:

– Persons living together in a marriage-like relationship; OR – Persons who have formalized their domestic partnership under any governmental law or

ordinance (NY does not have a domestic partnership law).

(Almost) All in the Family…

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• Available for families eligible for time off under the

military provisions of FMLA when a spouse, child, parent or domestic partner is on active duty or has been notified of an impending call or order of active duty.

• Paid Family Leave cannot be used for one’s own disability or qualifying military event.

Active duty deployment

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• Becomes effective January 1, 2018

• Employees may take the maximum benefit in any given 52 week period. – 52 week look-back starts on the first day of Paid Family Leave – There is a combined TOTAL benefit maximum of 26 weeks per

52 week period, inclusive of DBL and PFL

• Payroll deduction can begin at any time

New York Paid Family Leave

Recap

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Implementation and Roll-out

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New Business

FAQ

Current Customers

Agenda

Claims

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• PFL is a rider to our DBL policy

– There is no longer standalone DBL; there is no standalone PFL

• All DBL customers will have their policies amended to include NY PFL in time for the January 1, 2018 billing cycle

• All DBL/PFL customers will be amended to monthly statements as of the January 2018 billing cycle – List bill/Self admin, Advance/Arrears, paper/online but MUST be

monthly to comply with reporting requirements

What about Self-Insured DBL/PFL? Only a few legacy self-insured clients, almost all of whom have elected to fully

insure beginning 1/1/2018. Self-insured questions can be addressed offline.

Current Customers

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• Two out of three DBL clients will have their

policies amended automatically – Communications sent to clients beginning this month – January 2018 premium statement will arrive mid-December and

reflect DBL and PFL premium (one bill) – List bills will be calculated – Self admin billed clients will receive detailed instructions and a

Premium Worksheet to calculate premium • 2018 Premium should NOT be prepaid

– State approved forms will be sent as they become available, including Notice of Compliance, Statement of Rights, Notice and Proof of Claim for Paid Family Leave

Questions in advance of this communication: NYPFL@rsli.com Questions following the communication: Your account manager

What to expect when you’re expecting NY PFL

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• Remaining clients will be contacted by their

account managers to facilitate policy amendment

• Why? – Quarterly/Annual bill mode (must be updated) – 2018 premium already remitted – TPA relationships

• When? – October 15 through December 1

What to expect when you’re expecting NY PFL

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• Quotes and Proposals

– NY DBL Proposal effective 1/1/2018 or later includes NYPFL

• Cases rated/proposed before 10/1 will be updated to include NY PFL

– Rate = 0.126% of average weekly wage based on annual salary (capped at NY AWW)

• State mandated, no rate load, uniform across cases, carriers, etc.

– Billing = monthly only

New Business as of 10/1/2017

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• Complete set of approved forms

• Employee posters and communications • Our Plan Administrator Guide

We will make these available as they become available.

Full Plan Admin Guide will be distributed to clients in January, to

ensure accuracy and compliance with the state

Still to come…

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NY PFL Claims – What you need to know

Claims

RSL

Matrix STD

Matrix LOA

Headline: It is what it is!

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• Same claim intake process • Same claim office (Hawthorne NY) • Approved claim form to come (PFL-1)

• At claim we will calculate benefit based on immediate prior

8 weeks compensation – Employer has 3 days to provide Part B info on claim form – Includes salaries, commissions, bonuses, tips and the reasonable

money value of board, rent, housing, lodging or similar benefit received

• Can pay claim direct or reimburse employer

Insured, NO Matrix

RSL

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• Same claim intake process

– 24/7 web, mobile, telephonic

• All PFL claims managed in Hawthorne NY – Additional services/lines may reside in other claims office

locations

• Data feed will be augmented to include: – Employee waivers – 8 week salary figures – If not, we follow manual process

• We issue benefit payment according to law and policy • Client must track job protection

Insured, Matrix Disability

Matrix STD

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• Same claim intake process

– 24/7 web, mobile, telephonic

• All PFL claims managed in Hawthorne NY – Additional services/lines may reside in other claims office

locations

• Data feed will be augmented to include: – Employee waivers – 8 week salary figures – If not, we follow manual process

• We issue benefit payment according to law and policy • WE track job protection

Insured, Matrix Leave Services

Matrix LOA

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FAQ and Next Steps

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2018 benefit is:

• 8 weeks maximum leave, 50% of average weekly wage (not to exceed 50% NY AWW)

The rate is the same for everyone:

• 0.126% of average weekly wage

Calculate monthly premium like this:

• $Average weekly wage x 0.546% x 12 months = $XX.XX

• Maximum premium for 2018 will be

$1,305.92 x 0.546% = $7.13 x 12 months = $85.56.

Calculate benefits like this:

• Insured, no Matrix – PFL-1 Claim Form (to come from NY State)

• Insured, w/Matrix: Additional data field in Matrix feed = 8 weeks salary prior to claim date

Top Takeaways

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In force DBL policyholders need do NOTHING if current monthly

billed

• Policy will amend, you will be notified

Other DBL policyholders will receive guidance from your Reliance Standard Account Manager beginning now!

• Timing will be based on renewal dates, complexity of current admin, etc.

DBL proposals with PFL live now

State Claim Forms and posters are starting to trickle in

Full Plan Admin Guides will be distributed in January, 2018

Top Takeaways

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With FMLA…?

• PFL applies to all employers with at least ONE employee working in NY; FMLA does not apply below 50

• PFL grants PAID job protection, FMLA provides UNPAID job protection

• PFL includes definitions and qualifying family members not included in FMLA

• PFL will run concurrent with FMLA where applicable

With DBL…?

• DBL covers the employee’s own health issue; PFL specifically covers the employee’s role supporting a family member

• DBL and PFL can never run concurrent (including DBL waiting period)

• DBL and PFL are subject to a COMBINED annual maximum of 26 weeks

How does PFL work with…

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With PTO…?

• Employer cannot require employee to exhaust PTO before taking PFL

• This differs from FMLA

• Employer can ALLOW employee to use PTO to top-up during PFL (e.g. 50% PFL benefit, 50% PTO while balances permit), or extend salary continuation (e.g. exhaust PTO, then file PFL)

• Matrix will manage this for LOA customers

How does PFL work with…

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Matrix-Radar.com

Assistance/Resources

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Questions

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Thank you.