What's next for state family and medical leave? Part 1

More states are enacting paid leave laws and this episode of Lincoln Absence Advisor takes a look at the newest rules and regulations. In part one of two, Lincoln legal and leave professionals explore developing programs in Colorado and Oregon. We discuss how far along each state is in developing its program, timelines, and what makes each one unique. Listen in to keep up with the latest trends and plan essential next steps for your company.

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Karen Batson: 0:00

Hi everyone, this is Karen Batson Marketing Manager at Lincoln Financial Group, and today's episode and next week's episode we'll be covering the newest pfml programs, what we know what's coming next what Lincoln is doing. So that means we're covering Colorado and Oregon, as well as Maryland and Delaware and a little conversation on New Hampshire and what's happening in Virginia. Now, the conversation was long, we had guests from both product and legal to provide as much as we could share on an episode but we had to break it up into two parts. So in today's episode we'll be covering Colorado and Oregon, what the state's doing and what you need to be paying attention to. I hope you find today's episode informative. Hi, everyone. So for our listeners, this is the first time we are going to have five guests on the podcast between product and legal. So this will be a great conversation. I'm excited to see how all these minds work together on this topic. So before we get started talking about the newest programs, maybe each of you could introduce yourselves and how you're connected to these programs from Lincoln perspective.

Marissa Mayfield: 1:12

I'll go first. So hello, my name is Marissa Mayfield. I am one of our product managers for state disability and paid family and medical leave programs. And specifically, I manage a number of our products here at Lincoln, but am closely aligned with the Oregon program. And so I'll be speaking to some of the details during this conversation.

Karen Batson: 1:36

Kristen, how are you?

Kristin Seidman: 1:37

Yeah, I'll jump in. So my name is Kristen Seidman. I'm also a member of the product team here at Lincoln and I am the product lead for Colorado. So we'll have some information to share there.

Karen Batson: 1:49

Sarah?

Sarah Montgomery: 1:50

My name is Sarah Montgomery, I manage the legal and compliance team that oversees and manages our paid and unpaid absence products, statutory disability and accommodation service products joined today by two of the members of my team Casey Gemas, and Trish Zuniga so they can take it away and talk a little bit more about what they do.

Trish Zuniga: 2:12

Sure. My name is Trish Zuniga, senior compliance consultant for absence in PFML. And I am a compliance resource dedicated to Oregon PFML In this instance,

Casey Gemas: 2:24

And my name is Casey Gemas. I'm very happy to be here today. I am a compliance specialist. I provide compliance support for the unpaid leave products and some paid family medical leave programs. I also monitor legislative and regulatory changes to leave statutory disability and paid family medical leave programs that we administer with respect to paid family medical leave programs, I've been paying particular attention to Colorado PFML, so happy to talk about that today with you all.

Karen Batson: 2:53

So if you haven't gathered from the intros, we're going to talk about the newest PFML programs, we're going to start with Oregon and Colorado, then dive into what we know about Maryland and Delaware, and then maybe a little conversation on what's happening in New Hampshire and Virginia. Before we go into specific states, though, I want to ask all of you why do you think it's important for us to have this conversation on so many new programs that have information that a lot of our listeners may want to know,

Kristin Seidman: 3:21

I think it's particularly relevant because these programs are coming at us fast and furiously. And they're not just coastal anymore. And it's important to kind of watch the trends because there are some trends within the newer states and just to be informed about what's happening.

Marissa Mayfield: 3:38

And I would just add that there was definitely a lull last year as it relates to paid family and medical leave programs. And I think that this year, there's been quite a catch up with states saying, let's start moving forward. COVID is becoming more and more of something that, you know, is behind us from the degree that we experienced a couple of years ago. And so we're now seeing a lot more activity in this space. And so I think it's very important to call a lot of that out.

Sarah Montgomery: 4:04

Yeah, and new state leave programs mean, a lot of new things that employers need to comply with. So we're here to help talk a little bit more about what we're seeing what the trends are, and what the differences are between the existing programs and new things we're seeing in not only Colorado and Oregon, but also kind of some odd things that we're seeing in Maryland and Delaware that there is still time to fix through legislation but just helping employers navigate a lot of the issues and helping them plan for what's coming up.

Karen Batson: 4:34

So let's dive into Colorado and Oregon then starting with these programs, we're working towards launch now, where are we with this program development from a state and private plan perspective? What's currently happening?

Casey Gemas: 4:48

I guess I could start with Colorado. So for Colorado PFML private plan development today generally we have the statute to work with for the basics, which is kind of the skeleton of the program. We're working with, we are waiting for rulemaking to get underway so we can get details of how the private plans and the benefits themselves will work in more specific scenarios. So that's kind of where we're at now. I don't know if Kristin has anything else to add to?

Kristin Seidman: 5:16

No, I think I think you covered it. I think we're expecting draft rules on both benefits and private plans in the coming weeks. So we'll probably have a lot more to share as we start to get our hands on some of that initial rulemaking from the state.

Casey Gemas: 5:30

Yeah, that's actually a really good point to call out because the state has adopted some regulations regarding local governments and premiums. And we are currently waiting for the as I said before, the benefits rules and the private plan rules. The benefit rules are what's going to have the details for how the benefit works, including claims processes, turnaround timeframes, and notices. The private plan rules are going to give more information about what our plans can and cannot do. Requirements for filing and other timeframes. On the state website, they did say that these rules will come out spring 2022, which, you know, we're kind of into June now. So, in a recent pre recorded webinar for small businesses, I did hear them mention that the draft rules will come out in the coming weeks, and that they anticipate adoption of the rules in the next few months. So we're really hopeful that the draft will come out very soon. So we could get a better idea of how the benefits are going to work.

Sarah Montgomery: 6:29

I know there's a lot of people checking the websites every single day.

Karen Batson: 6:35

Refresh, refresh, refresh.

Trish Zuniga: 6:36

And just a level set for both programs. So we're talking about Oregon and Colorado, because contributions for both state programs are going to begin in less than six months. So they they will start taking those contributions from employees, one 123. And then the thing that's different between these two programs is when the benefits will actually begin to be paid out. So for Oregon, that's going to come sooner, and that's going to start paying out benefits in September of 2023. And then for Colorado, it's January 2024. Right, Colorado, folks?

Kristin Seidman: 7:16

correct?

Casey Gemas: 7:17

Yeah.

Trish Zuniga: 7:18

So with less than six months to go for either program, I think we're both in in the same spot where the state is doing some rulemaking. And for Oregon, specifically, they've been doing the rulemaking in phases and the rules for contributions, small employers, rules governing equivalent plans have been finalized, but they're still going through rulemaking for benefits and appeals and then setting the deadlines for when employers should be making decisions and submitting their equivalent plans.

Karen Batson: 7:59

So from a private plan perspective behind the scenes, knowing that we're waiting on a lot of things, what is Lincoln doing currently, or has done this year so far?

Marissa Mayfield: 8:09

So far as it relates to Oregon. As everyone has mentioned, there's a lot of waiting game that comes with this development all the time. So this happens every time a new program emerges. From an Oregon standpoint, we've been actively working on providing comments as relates to the different batches of regulations that have been in development. That's a very important role that carriers and other stakeholders have in providing feedback to the states. And so that's something that we've really been working through. Oregon's been working very quickly on their regulations. And so with two batches currently, right now, somewhat overlapping, we've been working to provide feedback on each of them, to ensure that the perspective of the private market is accounted for in what they are proposing. That's an important part of what we've been doing now. In addition, you know, behind the scenes working on our overall readiness, to be able to start supporting that equivalent plan process. The state is expected to open up their application process in September. And so there are some dependencies on carriers like Lincoln to be ready for that. So we are certainly working through that. And additionally, I will just add that the state has contemplated a declaration of intent process within their equivalent plan application. However, we're trying to gather more insight into what that looks like, what kind of additional expectations may come with that so that we can then build out our processes to align to that and then ultimately be able to convey additional detail to clients and partners.

Kristin Seidman: 9:53

I would add for Colorado that the work has been much the same. So we've been reviewing the rulemaking that that's already come out and providing comments where we need to. And then we've been doing a lot of work internally to prepare the teams here that will have to participate in our product builds, for some of the things that we expect, so the benefit rules and, you know, making sure that the folks here are ready to absorb that information and, and work on our private plan products.

Karen Batson: 10:26

I'm curious with each state, may we start with Oregon, what's different in this program now that we've seen launched quite a few programs, seeing them develop and change what's something unique with each of them.

Trish Zuniga: 10:38

$So with Oregon, what I'll say is that we're seeing a lot of the things that other states have done, they've done faced rulemaking, the state is going to administer the state PFML benefits, and they're not outsourcing. But the way that Oregon is different is in how their benefits are structured, aware of some workers are going to receive 100% of their regular pay. So in Oregon their PFML law states that if their average weekly wage is equal to or less than 65% of the average weekly wage, the employee's weekly benefit amount will be 100%. So right now, if you look at the numbers, the projected state average weekly wage in 2023, is$1,190. So that translates to if you calculate 65% of that, that's $774, weekly, and $40,238 annually. So there are a lot of occupations under that $40,000 threshold. So employees who have that as their annual salary are going to be able to receive 100% of their PFML benefit.

Sarah Montgomery: 11:58

we see with like each one of the states that's come online is that everybody's tried to outdo prior states benefit amounts. So Oregon come along with not for everybody, of course, but for certain, Trish just mentioned, like for certain those certain income levels, they will get 100% of wage replacement, which really is something you know, truly unique and different about the Oregon program.

Trish Zuniga: 12:19

But I will just add to, though, that Oregon is dedicated to making sure that they have enough funds in their trust fund to cover their benefits. And that's why they've made that hard decision to set their rate at 1%. So that the trust fund is stable enough. And there's going to be enough money to pay out all those benefits even at 100% wage replacement.

Marissa Mayfield: 12:45

And I'll just add a couple of additional things that come to mind regarding this question. So first and foremost, their program references both paid and unpaid leave allowances in the overall amount of time that an employee can qualify for benefits. So we're working to better understand the unpaid leave component, as well as the overall intersection between paid family and medical leave. And the existing Oregon Family Leave Act, which is better known as Of lot of people know it is that is that term. And so we're trying to understand that in greater detail. And I'm sure more detail will be forthcoming on that. And then additionally, this is the first program to launch benefits with a non January 1 Effective Date. And so that's an important piece to keep in mind as relates to some of the ongoing administrative responsibilities, some of the things that we might see change from year to year from an annual benefit perspective. So when changes in benefit amounts may go into effect, when changes in wage caps for premium contributions will take effect. So we're going to be learning more about some of those nuances as well, given that the program did start on that kind of off date.

Sarah Montgomery: 14:01

Still, we didn't even get it doesn't start, it doesn't start on the first of the month even

Marissa Mayfield: 14:08

that aligned with Labor Day, but it doesn't. So I don't even know where the third came from.

Karen Batson: 14:15

How about Colorado, what's unique there?

Casey Gemas: 14:18

So I can start there. So with Colorado, what I've noticed is what's different about it isn't really anything particularly huge. It's just that many of the provisions have the concepts are similar that other pfml programs already have, but they change the little details of it just to make it a little bit different. And they kind of pick from from other things where they want. And I know when Kristin and I were first talking about Colorado and some of the things we were seeing were like, Oh, this seems a little bit like Connecticut. So that's that's kind of one of the pieces you know, they'll have certain things that are kind of similar to other states like Connecticut, but then they'll just change a little piece about it. So one example that I can give is Colorado has the safe leave as a leave reason, which helps victims of domestic violence. But for Colorado, the entitlement falls within the 12 week benefit instead of having a 12 day limit, like Connecticut has. So that's kind of one difference that I was seeing. Another difference that I saw was, or similarities slash difference was that they have an earnings test similar to Connecticut for an employee to be eligible for benefits. So that just has a different dollar amount in threshold than other states. So for Colorado, they need $2,500, earned in the first four of the last five recently completed quarters, and it's slightly different for other states like Connecticut. So that's the kind of examples where they just changed little pieces of things. I don't know, Kristin, if you have any other examples you'd like to add? Yeah,

Kristin Seidman: 15:51

Yeah, the only other thing that comes to mind, and it's true for both Oregon and Colorado, and I take the same approach, it's similar, but different. It's different than the old programs, it was similar to a state like Connecticut, where we have a very broad definition of family relationship, which is kind of exciting to see the states start to adopt this more broad categories categorization, if I can talk correctly, that includes all of the unique family relationships that exist and that you didn't traditionally see in some of the older programs out there.

Casey Gemas: 16:24

Yeah, I agree. And I guess to to add to kind of what Trish was talking about with benefit calculations, they are also for Colorado, they'll have a tiered benefit based on different percentages. So it has to do with the employee's average weekly wage, as compared to the state average weekly wage, which is going to be different every year. It's set by what they do for unemployment insurance, and it gets set every July. So there are pieces of you know, we generally know how the benefits are gonna work, but we don't, there are pieces of it that we don't yet know, that are kind of vital to the calculation. So once it gets closer there, you know, we'll have more information on that. But just something to keep in mind for people, too.

Karen Batson: 17:06

So what are some questions that we're receiving now from employers who are in these states, thinking about it, trying to understand what's going on?

Kristin Seidman: 17:16

Like some of the common questions have to do with? How do we get an approved private plan? What's Lincoln going to offer? Those sorts of things? And it's kind of a challenging question to answer right now, because private plan rulemaking is still underway in these states. But I think, you know, to help employers with that question, one of the things they can start to think about is how they approach other benefits. And other programs, do they, you know, do they have an outsourced vendor where they they have someone else administering them? Do they typically remain in state programs, they can start to think about those things as they think about their approach to whether it makes sense to stay in a state run, plan or look at a private plan. So that's one of the questions that we've had a lot of for Colorado, specifically. And then what does it look like? How do we apply and that information is still forthcoming. So that'll come from the draft private plan rules that we expect, here in the next few weeks?

Casey Gemas: 18:12

To add to the Colorado piece of that, too. I know, at least as far as questions the state was getting, for a bit there, they were getting a lot on local governments opting out of Colorado PFML, especially during their last live Q&A session. So last month, they ended up posting on their website, a pre recorded webinar with information about that. And they also added to their webpage specific spot for local governments to help answer the questions on voting timelines and things like that. So I know that's not one that we've necessarily been probably asked a whole lot about, but I know it's something the State was definitely getting. So there's more information

Trish Zuniga: 18:48

up there. Yeah. And in Oregon, we're also getting to hear what employers are asking the state because the state has been conducting these community engagement sessions and since April, and so what we've been hearing are questions from small employers really on on how they're required to comply with this mandate. So even though the Oregon PFML law was passed in 2019, I think the fact that they've gotten their communications up and running just fairly recently is how employers are just learning about this mandate that's coming up. So that's that's just a reminder for employers who are listening that Oregon PFML is coming and that you're, you're going to be required to comply with this. So so get ready for it. One 123

Sarah Montgomery: 19:47

It's really hard because it really is, if you're a multi state employer by now you're getting used to these programs. So you're used to the fact that there's kind of like a base benefit with different permutations by state but for the new The states that are coming online for the employers that are only have employees in that state, it's a lot to process and a lot to get ready for.

Karen Batson: 20:08

Well, I guess next question is what's happening next in each of these states? Like what should be the next expectation of whether that's information process from Lincoln or the state? What comes to mind? When I asked that question?

Marissa Mayfield: 20:22

i think starting with Oregon, it's the all of the readiness around the equivalent plan process being opened, you know, September, it's definitely around the corner, a couple of months out. And I anticipate that a lot of the things that are going to be needed to be ready for that, because it really is a coordinated effort between carriers, employers and the state to make sure that everyone is aware of what the expectations are for success, because the last thing you want to do is have a bunch of employers going through the process and hitting roadblocks and running into challenges with getting their plans approved. And so really, I think that's probably one of the biggest things from our standpoint, is just making sure that we have clarity around that. And then we can relay that information to our, our clients and our partners. And then I think Additionally, the next step from the state's perspective is equally to finish out all their work around rulemaking. I mean, there's so much dependency on where the rules land and having a full picture of what it looks like in practice, and how everyone that is involved in this effort is able to prepare for that. And so I believe that Oregon is expected to complete the rulemaking process in September as well. So it's all kind of coming together, around the same time. And so those are the couple of things that stand out to me as kind of what's next from the state perspective.

Trish Zuniga: 21:53

And what I'll just add to that is that the state has shared that they're building their technology and folding their PFML processes into their modernized system in the Employment Department. It's called Francis online. It's in honor of the first woman to serve as the US Secretary of Labor and the first woman to serve in a presidential cabinet. So what that looks like is that in the same way that we carriers are waiting for the rules to build out our equivalent plans and claims administration, they're also waiting for the same same rules so that they can build their business processes and their logic. And what that looks like is that they're going to start taking in questions about equivalent plans, they're going to have phone lines open in two months, they say, to answer questions and to provide assistance on on requests about equivalent plan information. And then lastly, they're supposed to have their paid leave website that's more employee and employer facing by the end of the year,

Kristin Seidman: 23:11

I can take a stab at Colorado too. So I think some of the things that are going on are educational webinars, so opportunities for employers to come and ask questions and, and start to really absorb the program. We've talked a lot about rulemaking. So that will continue throughout the year. And then much like Oregon, the private plan application process will open later this year. I think the date was at some point in October and Casey, keep me honest. But you know, towards the end of the year, that will become a very important period of time for employers looking to make a decision about what they want to do. And if they want to apply for a private plan to to understand how that rulemaking progressed and what that process looks like.

Casey Gemas: 23:54

So they had a draft bulletin back a couple months ago. It was back in March, I think. And yeah, they did say that they were looking for carrier policies filed by November 1 2022. In that draft, but we are still keeping an eye out for the final bulletin. They haven't quite posted that yet. But definitely anywhere to look to keep an eye out for any of these updates. The webinars Kristin was talking about the private plan rules and benefit rules I was talking about earlier. And that bulletin, they are putting all that information on their website. So it's famili.colorado.gov and families spelled F A M L I.colorado.gov. So there is an employer section of the website that they have that has a lot of relevant information for employers. That's where they have all their webinars and calendar of any upcoming webinars. I know there's going to be another live Q&A Open Forum format on Thursday, June 30, at 11am Mountain Time, so that's an opportunity for employers to learn more about calculating premiums. There's a lot of information on the web. They already about that there's a calculator. There's more a whole table as far as how premium contributions work for different types of employers. So, all definitely great things to look at. So get ready to be able to ask questions if you do want to. So definitely that website. famili.colorado.gov is where employers should be looking for any updates

Karen Batson: 25:21

And listeners, we'll add that to the description so you can get to it easily. Last question on Colorado and Oregon, you covered a little bit of it. But is there anything else to say about what Lincoln's doing next?

Kristin Seidman: 25:33

I think so we've committed to providing products to support these programs. So our next steps are to continue to follow rulemaking in both states and to continue internally preparing for the launch of these programs. So we'll continue to update absence advisor so anybody that reads our compliance report will get updates as they become available and will share information in that way.

Karen Batson: 25:57

Thank you everyone for listening today. I hope you join us next week for part two, and we'll dive into Maryland and Delaware as well as New Hampshire and Virginia. We just could not fit it in today. But hopefully you found what we provided on Colorado and Oregon informative. We'd love to hear from you about what you think about the podcast series or even a particular episode. You can do that by sharing an episode reaching out to your Lincoln benefits professional or following us on Apple Spotify or wherever you get your podcast.

Disclosures: 26:26

The information contained in this podcast is for general use and is not a substitute for the advice of an attorney or your human resource professional. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Affiliates are separately responsible for their own financial and contractual obligations.

Lincoln Absence Advisor

What's next for state family and medical leave? Part 1

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