Background:
Beginning January 2021, most workers in Massachusetts will be eligible to receive up to 12 weeks of paid family leave and up to 20 weeks of paid medical leave through Massachusetts Paid Family Medical Leave (“MA PFML” or “the Program”). The Program went into effect October 1, 2019 and requires all employers with at least one employee working in Massachusetts to remit contributions for “covered individuals” that perform services localized in MA. W-2 employees (including full time, part time and seasonal employees) are always “covered individuals.” 1099-MISC Contractors may be “covered individuals” (individuals for whom an employer files an IRS Form 1099-MISC). Whether an individual is a “covered individual” depends on the employer’s workforce count and the makeup of their workforce in the prior year. For more on how to determine covered individuals, see the Department’s web page, “Who’s a covered individual under the PFML law?”
Alternatively, employers may apply for an annual “Private Plan Exemption” to the Program (and may avoid collecting and remitting contributions to the Program) by establishing a compliant private plan that has been approved by the Massachusetts Department of Revenue (DOR). Exemption applications are accepted on a rolling basis, and exemptions take effect the quarter following approval.
For general information about the Private Plan Exemption, please see visit our prior post.
New Guidance for Carriers Developing MA PFML Insurance Products
Employers who intend to utilize private plans provided by an insurance carrier must ensure the plan meets minimum state requirements. To date, the DFML and Department of Insurance (DOI) have worked together to verify and create an approved list of insurance carriers that can provide a declaration that complies with the DFML’s standards. However, on April 7, 2020, the DFML announced new guidance that is useful for employers.
This new guidance requires insurance carriers who offer private plans to submit the plans to the Division of Insurance (DOI) for review before June 3, 2020. Once approved, the carriers will receive an approved policy form number. If an employer previously applied for an exemption with the DFML with a carrier-issued approved declaration, the employer will be required to provide its policy form number in order to renew its exemption. Further guidance from the DFML on this process is anticipated.
Although the guidance is intended for insurance carriers, the policy template and checklist provided by the DOL can assist employers in understanding the standard provisions required by the DFML for a compliant private plan.
Additional Resources:
PFML Exemption Application Process for Employers
Private Plan Benefit Requirements for PFML Exemptions
Bond Requirements for Approved Self-Insured Plans
Employer’s Guide to Paid Family and Medical Leave
PFML Mandatory Workplace Poster
The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.
