Connecticut Joins the Paid Family and Medical Leave Club!

Posted on: June 28, 2019 0

By Marti Cardi, Vice President Product Compliance

June 28, 2019

 

On June 25 Governor Lamont made Connecticut the 9th U.S. jurisdiction to adopt a paid family and/or medical leave program.  As a reminder, here are the jurisdictions with paid leave programs and their status:

  • California –in force
  • Connecticut–JUST PASSED! Employee contributions start January 1, 2021;
    leave and benefits start January 1, 2022
  • District of Columbia – employer contributions start July 1, 2019; leave and benefits
    start July 1, 2020
  • Hawaii – disability benefits (medical leave) only; in force (and studying the addition of a
    paid family leave component)
  • Massachusetts – employer/employee contributions start October 1, 2019; leave and benefits
    start January 1, 2021
  • New Jersey – in force; substantially amended in February 2019 to enrich benefits and broaden
    coverage.
  • New York – in force
  • Rhode Island – in force
  • Washington – employer/employee contributions started January 1, 2019; benefits start January 1, 2020

 

Connecticut Paid Family and Medical Leave – the Details

The following summary is based on our early review of the Connecticut PFML statute.  There are many more details in the law; we will continue to analyze the nitty gritty and watch for developments in the program.

ISSUE PROVISION CT S 1
Administration The statue creates an “authority” comprised of 15
appointed board members to oversee creation of
the PFML program
§2
Covered Employee Has earned $2325 during the employee’s highest
earning quarter within the base period (first 4 of 5
most recent quarters) AND:

  • Is presently employed OR
  • Was employed within previous 12 weeks OR
  • Is self-employed or a sole proprietor and has
    enrolled in the program

 

§1(4)
Covered Employers All private employers, regardless of size

Does not cover:

  • The federal government
  • The state, municipalities, or local or regional
    boards of education, except to the extent
    their employees are “covered public
    employees”
  • Nonpublic elementary or secondary schools

 

§1(8)
Total Leave Entitlement
  • 12 weeks per 12-month period
  • Additional 2 weeks for pregnancy-related
    serious health condition
  • 26 weeks for care of ill/injured
    servicemember

 

§18(a)(1)

§18(i)

Leave Reasons
  • Employee’s own serious health condition
  • Family member serious health condition
  • Bonding (birth, adoption, foster care)
  • Organ or bone marrow donation
  • Military exigencies
  • Care of seriously ill / injured servicemember
  • Matters related to being a victim of family
    violence

 

§§18(a)(2)(A)-(F)

§3(c)(1)

Covered Family Relationships
  • Spouse
  • Sibling (related by blood, marriage,
    adoption, or foster care placement)
  • Son or daughter (no age limit) (biological,
    adopted, foster child, stepchild, legal ward, or
    a child of a person standing in loco parentis)
  • Grandparent (related by blood, marriage,
    adoption, or foster care placement)
  • Grandchild (related by blood, marriage,
    adoption, or foster care placement)
  • Parent (biological, foster, adoptive, step, in-
    law, legal guardian of the employee or the
    employee’s spouse; in loco parentis)
  • An individual related to the employee by
    blood or affinity whose close association the employee
    shows to be the equivalent of
    those family relationships

 

§§17(6), (7), (8), (10), (14), (15), (16)
Leave YearCalculation Methods
  • Calendar year
  • Any fixed 12-month period
  • Measured forward
  • Rolling back
  • Care of ill/injured servicemember
    (measured forward only)

 

§18(i)
Leave Increments Continuous, reduced schedule, intermittent §3(e)

§18(c)

Employee Documentation Certification from Health Care Provider for
employee’s or family member’s serious health
condition or for care of servicemember
§19 (a)-(b)
Claims Procedures
  • 2nd& 3rd opinion process allowed if employer
    has reason to doubt the validity of the
    employee’s medical certification
  • Recertification allowed on a reasonable basis
    but generally not more often than 30 days
§19(c)-(e)
Employer Notice to Employees General notice of employee’s CT PFML rights upon
hire, and then annually
§13
Employee Notice to Employer 30 days if need for leave is foreseeable

As soon as practicable if not foreseeable

§18(f)
Employee contributions Start 01-01-2021

Maximum ½ % of employee’s wages up to
maximum compensation subject to SS contribution

No employer contribution

Weekly Benefits Start 01-01-2022

95% of employee’s base weekly earnings up to:

  • 40 x current state minimum wage plus
  • 60% of employee’s base weekly earnings
    above 40 times current state minimum wage
  • Maximum of 60 x current state minimum
    wage

Subject to reduction if needed to ensure solvency
of the PFML program

Predicted to be ~$840/week when benefits start;
up to ~$900 in 2023 due t scheduled increases in
state minimum wage

§3(e)(2)

 

Private Plan Option

Section 11 of the Connecticut PFML law allows employers to adopt an insured or self-funded private plan.  The requirements are very similar to those in Massachusetts.  To be approved, a private plan must:

(A) Confer all of the same rights, protections and benefits provided to employees under the PFML statute, including:

(i) At least the same number of weeks of benefits;

(ii) At least the same level of wage replacement for each of those weeks; and

(iii) Leave and benefits for the same reasons as specified in the statute;

(B) Impose no additional conditions or restriction on the use of family or medical leave beyond those explicitly authorized by the statute or by regulations to be issued

(C) Cost employees no more than the premium charged to employees under the state program;

(D) Provide coverage for all employees throughout their period of employment;

(E) Provide for the inclusion of future employees;

(F) Not result in a substantial selection of risks adverse to the Family and Medical Leave Insurance Trust or otherwise significantly endanger the solvency of the fund;

(G) Have been approved by a majority vote of the employer’s employees; and

(H) Meet any additional requirements established by the authority.

 

What’s Interesting?

Health Care Provider Obligations

In a new but welcome twist, the statute imposes some obligations on health care providers:

  • The health care provider has a duty to provide a complete and timely medical certification
    upon patient’s request
  • The health care provider cannot charge a fee for completing the certification
  • If CT PFML compensation is paid as a result of willful misrepresentation by a health care provider,
    the provider may be liable for a penalty of 300% of the benefits paid as a result. Perhaps this will
    deter providers who simply approve whatever leave frequency and duration the patient says is
    needed without exercising medical judgment.

Like a family member . . .” 

You will have noted (with your hand to your forehead) that leave is available to care for “an individual related to the employee by blood or affinity whose close association the employee shows to be the equivalent of those family relationships.” The law tasks the Connecticut Labor Commissioner to adopt regulations that, among other things, provide guidelines regarding factors to be considered when determining whether an individual’s close association with an employee is the equivalent of a family member relationship otherwise covered by the statute.

Existing Connecticut family and medical leave law

Current Connecticut law provides job-protected but unpaid leave of absence (up to 16 weeks in a 24-month period) for all of the reasons listed above, with leave as a victim of family violence carved out separately.  The vast majority of the existing law is repealed and reenacted or amended by the new PFML law effective January 1, 2022 – the date the paid benefits will start.  The expanded definitions of family members for whom an employee can take paid family leave will provide broader coverage for that leave reason.  Existing law allows leave to care for a parent, child (under 18 or disabled), and spouse.  As you can see above, several relationships have been added, including sibling, grandchild, grandparent, and “like a family member.”

The text of the final bill as passed can be found HERE

 

MATRIX CAN HELP! It’s early days yet for Connecticut PFML.  As usual, we will be watching for developments and reporting on this blog as new information is available.  IN the meantime, you can find our prior blog posts about other state PFML laws by typing the state name in the search box – a wealth of articles about the pending Massachusetts and Washington laws and the 2019 New Jersey amendments.

 

AND . . . If your company is interested in the private plan option for Washington or Massachusetts PFML, contact your Matrix/Reliance Standard account manager or send us a message at ping@matrixcos.com.

 

 

Stop the Presses (Again): Massachusetts PFML Final Regulations and Bond Form have arrived

Posted on: June 25, 2019 0

By Marti Cardi, Vice President Product Compliance

June 24, 2019

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
    administrative difficulties.
  • 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 ping@matrixcos.com

 

Massachusetts Passes Lightning Bill to Delay Some PFML Dates–AND, the Final Regulations are Here!

Posted on: June 19, 2019 0

By Marti Cardi, Vice President Product Compliance

June 19, 2019

In a coordinated move so fast it makes your head spin, the Massachusetts governor and legislature have passed the promised bill to delay by 3 months the start of employer and employee contributions to the paid family and medical leave program, to October 1. The bill, MA S 2255, brings about some other modifications to the PFML law as well. What hasn’t changed is the date for commencement of benefits – still January 1, 2021.

In addition, the final Massachusetts PFML regulations have been posted on the Massachusetts Department of Family and Medical Leave (DFML) website here. The regulations are key to fully understanding and administering the Massachusetts PFML law. The DFML received many comments and suggestions for final revisions, and we will be studying the changes made from the 03-29-2019 draft.

In the interest of getting this article about the statutory delays posted timely, we are not including an analysis of the final regulations yet. Watch this blog for another article shortly.

 

THE CHANGES

Here is the content of the announcement sent by the DFML to Massachusetts employers on June 14, 2019, regarding the delays of prior PFML compliance dates, with Matrix’s observations in italics:

 

Required Withholding Now Starts October 1

“The start date for required PFML contributions is now October 1, 2019. On that date, employers must begin withholding PFML contributions from employee qualifying earnings.  Employers will be responsible for remitting employee and (if applicable) employer contributions for the October 1 to December 31 quarter through MassTaxConnect by January 31, 2020.”

Matrix observations: Remember that (1) employers can elect to cover the employee share of contributions, regardless of whether they choose to use the public plan or a private plan to comply with the law; and (2) employers with a private plan approved by December 20, 2019, don’t have to remit any payments to the DFML. So to say the start date for “required PFML contributions” is now October 1 is a little misleading.

This delay in the start date for contributions may be less of a blessing for some employers than for others, if you have already programmed your payroll system to start the employee paycheck deductions on July 1. Now, any such deductions are not required by the law until October 1 (f at all) and so might be a violation of state or federal wage laws if initiated on July 1. Consult your employment counsel if this is an issue for you.

 

Contribution Rate Change

“The PFML law requires that the Department adjust the contribution rate to offset the shorter period for collections that will result from the three month delay. As a result, the total contribution rate has been adjusted from 0.63% to 0.75% of employee qualifying earnings. This adjustment will ensure that full funding will be in place for the commencement of benefit payments in January 2021.”

Matrix observations: The amendments do not specify how long this adjusted rate will remain in effect, but the law requires the Department of Family and Medical Leave (DFML) to review and adjust the rate effective each October 1, if needed.

The PFML statute requires the employee to pay 100% of the contribution attributable to family leave and the employee and employer to share the contribution attributable to medical leave on a 40% employee/60% employer split. This has not changed. The DFML advises that the 0.75% will be apportioned as follows:

  • 0.13% to family leave, of which the employee pays all; and
  • 0.62% to medical leave, of which the employee pays not more than 40%

 

You can see a graphic illustration of the new contribution rates on the DFML website.

 

Timeline Extended for Required Employee Notices

“Employers now have until September 30, 2019, to notify all covered individuals of their rights and obligations under PFML. Check the Department website at mass.gov/pfml in the coming days for updated notices to provide to your workforce.”

Matrix observations: What if you have already sent the notices that were previously required by May 31 June 30? The DFML has this guidance on its website:

“If you provided written notices to your workforce prior to the June 14 delay announcement, you will need to provide them with an addendum sheet explaining the updated program dates and contribution rates. This addendum will be provided by DFML during the week of June 17.”

If you haven’t sent the notices yet, just use the new DFML notice forms. You can find the updated notice requirements and templates (and the addendum once available) here.

As an aside, in my communications with the DFML I have confirmed that the poster and the individual notice templates available on the DFML website are examples and can be modified as needed to reflect accurately your own situation, as long as all the notice elements are covered. This will be particularly significant for employers with a private plan or those electing not to withhold contributions from employee paychecks.

 

Timeline Extended for Exemption Applications

“Employers that offer paid leave benefits that are at least as generous as those required under the PFML law may apply to the Department for an exemption from making contributions. Employers will now have until December 20, 2019, to apply for an exemption that will excuse them from the obligation to remit contributions for the full period commencing with the October 1 start date.”

Matrix observations: The exemption referred to here is obtained adopting an approved private plan – one administered by the employer or a by third party such as Matrix or an insurance company rather than the state. See the end of this post for information about private plan assistance Matrix is ready to provide.

If the private plan application is filed by December 20, 2019 (and ultimately approved by the DFML) the employer can avoid paying employee and employer contributions to the state for the period October 1- December 31, 2019. The advantage is retaining those contributions to fund an employer’s own private plan and payment of benefits. Matrix recommends filing in advance of December 20 to ensure plenty of time for approval. Guidance from the DFML about the private plan exemption can be found on the DFML exemption page.

Note that there is no “deadline” to file an application for private plan approval. The DFML will accept filings on a continuous rolling basis, but a plan won’t be in effect until the first day of the quarter following approval, so the employer will have to pay to the state any employee and employer contributions accruing prior to that date. As a result, there is a financial incentive as described above to get your plan filed by December 20, 2019.

 

PFML Regulations Will Be Final and Effective on July 1, 2019

“The final regulations will be posted on the Department website at mass.gov/pfml on Monday, June 17, 2019. The regulations will be formally published under the title 458 CMR 2.00 DEPARTMENT OF FAMILY AND MEDICAL LEAVE.”

 

Matrix observations: And, they’re here! The regulations are key to fully understanding and administering the Massachusetts PFML law. The DFML received many comments and suggestions for final revisions, and we will be studying the changes made from the 03-29-2019 draft. In the interest of getting this article posted timely, we are not including an analysis of the final regulations yet. Watch this blog for another article shortly.

 

Other Provisions of the Amendments to the PFML Law

In addition to the above changes, the newly-passed amendments address some of the concerns expressed by employers and other stakeholders. The effect is to better align the PFML law with the federal Family and Medical Leave Act:

  • Unable to perform: The definition of a serious health condition for which an employee may take medical
    leave has been expanded to require that the condition “makes the covered individual unable to perform the
    functions of the covered individual’s position.” The amendment further explains: “This provision shall be
    construed consistent with the equivalent provision of the federal Family and Medical Leave Act of 1993,
    codified at 29 U.S.C. 2612(a)(1)(D).”
  • Former employees: The amendment also explains: “A covered individual who is a former employee shall
    be considered unable to perform the functions of the covered individual’s position if the covered individual
    is unable to perform the functions of the covered individual’s most recent position or other suitable
    employment as that term is defined under [the PFML law].”
  • Medical certification: The required contents of a medical certification to support leave are expanded to
    include:

    • A statement by the health care provider that the covered individual is unable to perform the functions
      of the covered individual’s position;
    • A statement of the medical necessity, if any, for intermittent leave or leave on a reduced leave schedule; and
    • If applicable, the expected duration of the intermittent leave or reduced leave schedule.

Unfortunately, still missing is a requirement to provide an estimate of the frequency and duration of each episode of a condition’s flare-up requiring intermittent leave – an important bit of information to manage intermittent leave effectively.

Similar requirements relating to medical necessity and the duration of intermittent or reduced schedule leave have been added to the certification in support of leave to care for a family member with a serious health condition or covered servicemember.

MATRIX CAN HELP! 

In addition to keeping you abreast of developments through these blog posts, Matrix is taking other steps to assist employers interested in the Massachusetts and Washington private plan options.  These include developing state-specific sample private plans for use by our clients and a guide for our account managers to assist you with the private plan decision and application process.

If your company is interested in the private plan option for Massachusetts or Washington PFML, contact your Matrix/Reliance Standard account manager or send us a message at ping@matrixcos.comAnd stay tuned here for more PFML information as it develops!

Massachusetts Announces Likely 3-Month Delay in Collecting PFML Premium Contributions

Posted on: June 12, 2019 0

By Marti Cardi, Vice President Product Compliance

June 12, 2019

 

Vast amounts of uncertainty and unanswered questions surround the Massachusetts Paid Family and Medical Leave program.  The law currently provides that employers participating in the plan administered by the Massachusetts Department of Family and Medical Leave (DFML) must start withholding contributions from employee paychecks as of July 1, 2019.

On June 11, Massachusetts Governor Baker and leaders of the Massachusetts house and senate announced an agreement to postpone the start of PFML contributions for 3 months, until October 1, 2019.  The change must be accomplished via an amendment to the PFML statute but all parties are on board to get this done.   This is welcome news for employers as they will have more time to get payroll arrangements perfected, decide whether to apply for an exemption from state coverage with a private plan, and otherwise implement.

The anticipated amendment to the PFML statute may also include technical changes to clarify program design.  Clarifications are expected to include amendments relating to intermittent leave, the definition of “serious health condition,” and closer alignment of the Massachusetts PFML law with the federal Family and Medical Leave Act.  (See aimblog published by the Associated Industries of Massachusetts, which was instrumental in advocating for the delay.)

In order to maintain the level of funding for the program that would be achieved if contributions commenced July 1, the combined employer/employee contribution of 0.63% of an employee’s wages will be increased to 0.75%, or from $872 to $1038 per year for an employee earning the state average weekly wage.  It is not yet known how long this increase will stay in effect.  At present, the law requires the DFML to adjust the contribution rate annually, depending on various economic factors, starting October 1, 2021, effective the next January 1.

Massachusetts PFML Reminders

Massachusetts employees and other covered workers can start receiving paid leave benefits January 1, 2021.  The law provides for annual paid leave up to 20 weeks due to an employee’s serious health condition, 12 weeks for family leave purposes (bonding, caring for a family member with a serious health condition, and military exigencies), and 26 weeks to care for a family member with a service-related illness or injury.  There is a 26-week cap on total annual leave benefits.

Over time we have published several articles on Massachusetts PFML.  You can take a look back at our overall summary and periodic developments by entering “Massachusetts” in the search box of this page.

Other Massachusetts PFML News

If an employer chooses to comply with the PFML through a private plan, the law requires the employer to either post a bond or provide benefits through an approved insurance company.  The DFML expects to publish an approved bond rom and instructions any day now.  Watch this blog and the DFML website for that development.

Also, the DFML is constantly updating its website with new information, so a periodic check-in just to see what’s new is worthwhile.  Of course, we will report any major developments here.

MATRIX CAN HELP! 

In addition to keeping you abreast of developments through these blog posts, Matrix is taking other steps to assist employers interested in the Massachusetts and Washington private plan options.  These include developing a sample private plan for use by our clients and a guide for our account managers to assist you with the private plan decision and application process.

If your company is interested in the private plan option for Massachusetts or Washington PFML, contact your Matrix/Reliance Standard account manager or send us a message at ping@matrixcos.comAnd stay tuned here for more PFML information as it develops!

 

Good News for Massachusetts Employers – A Delay of Pending Deadlines (and a Word on Taxes)

Posted on: May 2, 2019 0

By Marti Cardi, Vice President Product Compliance

May 2, 2019

 

 

That’s right, yet another Massachusetts paid family and medical leave update! Today’s news will be welcomed by Massachusetts employers, especially those considering whether to adopt a private plan rather than use the state program.  Let’s be honest, though – it’s only good news because it backs off from some of the imminent deadlines that were going to be extremely difficult for employers to meet.

Here are the updates, quoted directly (in italics below) from the DFML announcements available on its website. See our comments and analysis below each DFML update.

Exemption Deadline Extended for Quarter 1
The Department’s current guidance requires that exemptions for private plans must be approved in the quarter prior to the quarter in which they will go into effect. For Quarter 1 only [July-September 2019], however, the deadline to file for a private plan exemption that will be in effect for first quarter contributions for paid family and medical leave has been moved from June 30th to September 20th, 2019. This will allow employers additional time to contemplate private plan options. Going forward, the Department will continue to accept applications on a rolling basis but applications must be approved in the quarter prior to the quarter in which they go into effect.

Please note that contributions to PFML begin on July 1, 2019 and the September 20, 2019 extension of the exemption application deadline only impacts the contribution requirements if the exemption request is approved. If the exemption request is denied the impacted business will be responsible for remitting the full contribution amount from July 1, 2019 forward. Therefore, DFML recommends that businesses in the Commonwealth consult with their tax advisors as to the implications associated with applying for a private plan exemption that may or may not be approved.

Employer Notice to Employees
The deadline for employer notice to employees has been extended from May 31 to June 30, 2019. The notice, which may be provided electronically, must include the opportunity for an employee or self-employed individual to acknowledge receipt or decline to acknowledge receipt of the information.

Please Note: The Department of Family and Medical Leave is continuing to accept comment on draft regulations regarding paid family and medical leave and is planning to host two additional listening sessions in May which will be announced shortly.

What does this mean for employers?

Under the prior rule, if a plan was not approved by June 30, the employer would owe the employer and employee contributions to the Commonwealth for all of the quarter (July-September 2019); and this amount could not be recovered even if a private plan was later approved. Now if your private plan is approved by September 20, 2019, you will not have to pay over the July-September 2019 premium contributions to the Commonwealth but rather can keep those for funding your own private plan benefits payments.

Here is a quick rundown of upcoming dates and obligations:

  • All employers will continue to have reporting obligations for every quarter, including Q1 of the program
    (July-September 2019). The DFML has stated it will issue more reporting guidelines prior to July 1
    so that employers know what data they need to be ready to provide after the close of Q1, probably
    in October 2019.
  • All employers will need to post the required notice for workers in the workplace.  See our prior post
    here for more details
  • Individual notices. All employers will need to send individual notices to every employee and
    contractor and receive an acknowledgement or refusal to acknowledge signed by the worker, but the
    deadline has been moved to June 30, 2019.  More details are available
    here and here.
  • Applications for private plan approval can be filed at any time after April 29, 2019. However, the
    application will need to include a copy of the private plan, a copy of the required bond (see our
    blog post
    here), and if Matrix is applying for your company, a signed authorization for Matrix to
    act on your company’s behalf.

A Word on Taxation Issues

On May 1 the DFML also issued a notice that addresses the taxation question – sort of.  We have received several questions about tax treatment of premiums paid by employees and benefits.  Matrix cannot answer those questions, as we are not tax advisors.  Apparently, the Commonwealth of Massachusetts isn’t either.  Here is their notice:

Tax Information
The tax treatment of PFML contributions for both state and federal purposes is governed by federal tax law. The Commonwealth has requested guidance from the Internal Revenue Service on this question and others related to the tax implications of PFML contributions and benefits. Until IRS guidance is issued, individuals and businesses are urged to consult with their own tax advisors on these questions. Based on its own review of federal rules and following consultation with the Massachusetts Department of Revenue, the Department of Family and Medical Leave anticipates that the IRS will conclude that employee contributions should be withheld from after-tax wages. A definitive rule for proper tax treatment of contributions will be available once IRS guidance is issued.


MATRIX CAN HELP!  In addition to keeping you abreast of developments through these blog posts, Matrix is taking other steps to assist employers interested in the private plan option.  These include developing a sample private plan for use by our clients, and an employer guide to the private plan decision and application process.  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 ping@matrixcos.comAnd stay tuned here for more information about Massachusetts PFML as it develops – we’ll bring it to you daily, if necessary!