By Marti Cardi, Vice President Product Compliance
Last week the Massachusetts Department of Family and Medical Leave issued the final PFML regulations AND the form for the bond required of self-funded private plans. Here’s the rundown on both. With the 3-month delay (see our last blog post here) and these 2 developments, I’m hoping things will be quiet in Massachusetts for a while!
Final PFML Regulations
The final regulations were issued on June 17, 2019. I’ve now read them top to bottom and compared them to the March 29, 2019 draft version. Sad to say, there are not many revisions that help employers, and many unanswered questions remain. Here are noteworthy changes or additions:
- Intermittent leave. The definition of “intermittent leave” allows an employer to designate a minimum
increment of time that can be taken as intermittent leave, up to 4 hours per segment. 458 CMR 2.02.
It may be tempting to require employees to use time in larger chunks but, as a practical matter, this may
prove a challenge when MA PFML and FMLA are running concurrently. FMLA allows intermittent leave
in increments of no longer than an hour. 29 C.F.R. § 825.205(a). If the time increments don’t match up,
the employee will be using the two job-protected leave entitlements at different rates, which can cause
- Groups of employees. The final regulations allow an employer to deduct differing percentages from the
wages of different groups of employees, as long as no employee is assessed more than the statutorily
allowed amounts per employee. 458 CMR 2.05((5)(d).
- Definition of “incapacity.” This definition has been clarified and now reads:
“. . . an inability to perform the functions of one’s position, or where the covered individual is a former employee, to perform the functions of one’s most recent position or other suitable employment as that term is defined under M.G.L. c. 151A, § 25(c), due to the serious health condition, treatment therefor, or recovery therefrom.” 458 CMR 2.02.
- Certification follow-up. In a new provisions, 458 CMR 2.08(5)(g) states:
Where it determines that a certification lacks required information, or is not accurate or authentic, or is otherwise insufficient, the Department may contact the health care provider and require that it verify, supplement, or otherwise amend the information in the certification.
This appears to be a “lite” version of the FMLA procedures an employer can follow when it receives an
incomplete, insufficient, or otherwise questionable certification. See 29 C.F.R. §§ 825.305(c) and 825.307.
Presumably this will also apply to employers and their TPAs when administering claims under a private plan.
- 7-day waiting period. An employee will not receive benefits during the first 7 calendar days of leave.
This 7-day waiting period will count against the total available period of leave in a benefit year. The final
regulations have added this clarification: “Where the approved claim involves leave on an intermittent
or reduced leave schedule, the wait period shall be seven consecutive calendar days, not the aggregate
accumulation of seven days of leave.” In other words, once an employee takes any increment of leave the
7-day waiting period starts and is completed after the 7th calendar day, regardless of how many days of
leave the employee has (or has not) taken during that time.
- Definition of “child.” Under MA PFML, an employee can take paid leave to care for a child with a serious
health condition. The final regulations have modified the definition of child by deleting the provision that
a child must be either under age 18 or, if age 18 or older, incapable of self-care because of a mental or
physical disability at the time the leave is to commence. This has the effect of expanding the family members
for whom the employee can take PFML, and creates another category (adult child who is not disabled) that
is not covered by the FMLA.
- Private plan recordkeeping. A new provision specifically requires employers with an approved private plan to
retain all reports, information, and records related to the approved plan, including those related to all claims
for benefits made under the plan, for three years. The employer must submit this documentation to the
DFML upon request. 458 CMR 2.07(7) (b)
The final regulations can be found here.
The Bond Requirement for Private Plans
The PFML statute requires employers with a self-funded (uninsured) private plan to support their application for approval with a bond from a surety company. We previously wrote about the bond requirement here. The DFML has now published the required bond form and filing instructions. One requirement I don’t recall seeing previously is that the employer must attach a copy of its most recent audited or consolidated financial statement for the previous year. There is also reference to the “self-insured plan number.” Based on previous communications with the DFML it appears that the employer can designate any number as an identifier for its self-funded PFML plan.
MATRIX CAN HELP! As noted above, there are still many uncertainties regarding how Massachusetts PFML will actually function. Matrix will administer Massachusetts PFML for our clients who elect the private plan option. Rest assured, we will be posing our questions to the DFML so that our clients will receive best in class administrative services. If your company is interested in the private plan option for Massachusetts PFML, contact your Matrix/Reliance Standard account manager or send us a message at firstname.lastname@example.org.