With Massachusetts Paid Family and Medical final leave regulations announced in July, and their launch right around the corner, it is time to talk. In this episode of Lincoln Absence Advisor, we are joined by our partners at Lincoln—Marissa Mayfield, product lead for Massachusetts PFML and Trish Zuniga, compliance lead for leave regulation—to discuss some of the impacts, including:
Additional Resources:
As mentioned in our conversation, MA PFML website is a great resource for details and signing-up for updates from the state.
AM-LWYKT-AUD001 8/23 Z01 LCN-5870481-080923
©2023 Lincoln National Corporation. All rights reserved.
With Massachusetts Paid Family and Medical final leave regulations announced in July, and their launch right around the corner, it is time to talk. In this episode of Lincoln Absence Advisor, we are joined by our partners at Lincoln—Marissa Mayfield, product lead for Massachusetts PFML and Trish Zuniga, compliance lead for leave regulation—to discuss some of the impacts, including:
Additional Resources:
As mentioned in our conversation, MA PFML website is a great resource for details and signing-up for updates from the state.
AM-LWYKT-AUD001 8/23 Z01 LCN-5870481-080923
©2023 Lincoln National Corporation. All rights reserved.
Hi again, everyone. This is Karen Batson marketing manager for leave and disability at Lincoln Financial Group. In July, Massachusetts finalized their regulations for their paid family and medical leave program, which will officially launch in January of next year. With these final regs came new information employers should be aware of, and some things we are getting a lot of questions about. So in today's Lincoln Absence Advisor episode, I'm joined by two of my partners at Lincoln, Marissa Mayfield, product lead for Massachusetts PFML and Trish Zuniga, compliance l ead for l eave regulation, and we discuss areas of impact from t hese f inal regulations. Hi ladies. Thanks for joining me today. Now the live d ate for Massachusetts PFML is right around the corner. It feels like a lot happened in July to finalize the regulations and get everyone ready. So I'm thinking we should start with what happened between the final we had last year and the final this year. Did we see considerable changes between May, 2019 and July, 2020?
Trish Zuniga:I would say that we have considerable changes between last year's regulations and this year's, but what they really serve to do is just fill in a lot of the gaps. From last year we still had some questions about how certain parts of the program were going to work and coordinate with other bene fits and now I feel like we're in a much better place. Marissa, what do you think?
Marissa Mayfield:I agree. So I think that between a lot of the feedback that the state received from different stakeholders in the marketplace, whether it be insurance carriers, business interest groups, employers, they really took a lot of that feedback to heart. And I think that's pretty evident in the changes that came through in the regulations. And so now what's been happening since they were delivered about a month ago is just really working through a lot of the very specific details. Um, based on the stakeholders interest in the program.
Karen Batson:Now, is this final final, or will we see other changes?
Trish Zuniga:Yes, it's it's final, final. So not nothing else is going to get moved before the program goes live. But I think the key thing to remember here is that, um, there are still operational details that need to get worked out, but at least we have a foundation for what these operational changes are going to look like. They're going to be driven by the regulations that the department has drafted.
Karen Batson:Does any of this change, what employers may be expecting for Massachusetts PFML?
Marissa Mayfield:I think if anything, it just kind of clarifies it and it depends on the employer and how much they were originally digging into the prior version of the regulations and what expectations were included there. But I think if anything, at this point, this is a good time for employers to really start to lean in further, to understand some more of the very expectations that they will be held to from the state plan perspective. And then from a private plan standpoint, really carriers and, and TPAs will work more closely with their clients to set the expectations that they will have in place. So now is really a good time to dig into that further.
Karen Batson:Now let's switch gears slightly and talk about some of the biggest things we're being asked about when it comes to coordination and employer impact. Let's start with accrued paid leave. Can you explain the concept of accrued paid leave and its definition in the final regs?
Trish Zuniga:Sure. And this definition of accrued paid leave is something that's new in the 2020 updated regulations. Previously, there were a few references to accrued paid leaves in the regs and this is just one of the things that had to be fleshed out in these updated regulations. So it's now clear that, um, in its definition, accrued paid leave is that leave that's provided to covered individuals pursuant to an employer's benefit plan or policy. So that's things like sick leave or annual leave or basically PTO, and what it doesn't include, what accrued paid leave doesn't include is a disability policy or program of an employer or a paid family or medical leave policy, of an employer or a covered business entity. And this concept of accrued paid leave is something that's important and should be read in conjunction with provisions on stacking or substitution of employer provided paid leave.
Karen Batson:Now we discussed earlier last week, um, the concept of no stacking, which I actually am not very familiar with. What does that mean for our listeners and what do they need to keep in mind?
Trish Zuniga:So stacking is when you use leave consecutively rather than concurrently. So it's one leave stacked on top of another leave. And so, uh, what Massachusetts provide is that if you, an employee chooses to use accrued paid leave through your employer, you can't receive your Massachusetts PFML benefits for that period, for which you received accrued paid leave, but that accrued paid leave is going to run concurrently with any available leave under Massachusetts PFML.
Karen Batson:Okay. Marissa, do you have anything to add to that?
Marissa Mayfield:A couple of things. So the whole concept of stacking, it's such an important part of employers and even employees understanding how a paid family and medical leave program is going to work and each state takes a slightly different approach. I think Massachusetts probably took the most stringent might not be the right word, but certainly maybe more of an aggressive approach to the way that they are looking at this whole concept of stacking really where they're accounting for time, that's been taken under different programs to Trish's point as a decrementing in a lot of cases against the employee's entitlement bank that they might have under the paid family and medical leave program. So really, they're really trying to mitigate the practice of stacking occurring through that particular program. So it's going to be important that employers understand that. And this is partly what we'll talk about. I'm sure as we, as we progress in this discussion about some of the employer impacts where the state's going to want more visibility into broader programs that an employer has as well as utilization of those programs, to this very point of being able to ensure that that concurrent scenario is happening and they're maintaining the balance of entitlement that they really intended to do under the regulations.
Karen Batson:And what about impacts with prior time taken off?
Marissa Mayfield:I'll take that one. It depends on the time period. So what the state has established is they're not going to be looking back to time before January 1st of 2021 for prior time taken. So if I was out because I had a medical condition in 2020, that time is not going to count against my entitlement for future leave in 2021. However, as we progress further into the program, there is this concept of look back. And at this point, honestly, we are working through that as, as a company. And we, we believe also that the state is working through the specific mechanics of what that looks like to look back for prior time taken, to determine what is the actual entitlement that would be available under the Massachusetts program, but it is contemplated in the regulations. So it's important that people keep that in mind, that it will be something that will very likely emerge as an impact as the program is operational. And as people are trying to apply for benefits under the program.
Karen Batson:Now, as we talk about all this, all of these things working together, what does it mean when an employer has their own paid programs and how does that interact, interact, excuse me, with that PFML program.
Trish Zuniga:So we have to think about this from the perspective of the covered individual, and then also the perspective of the employer and what their responsibilities and obligations are. And so if an employer has their own paid programs covered, individuals would still have to follow the employer's policies, including the notice and certification processes related to the use of this separate accrued paid leave program. And on the flip side, the employers have a responsibility too, um, in that they have to inform their employees who choose to use this accrued, leave that the use of these leave accruals are going to count and run concurrently with the PFML leave period.
Marissa Mayfield:And I would just add to that. I think part of that whole communication is the fact that that time is going to be counted against the PFML entitlement, but it's not actually payable to the employee in that instance. So it definitely becomes helping to, you know, explain that so that they understand it. The other thing to keep in mind, and this is another area where we are currently working through the implications as an insurance carrier, but, you know, I, I gather the, the state is working through as well if an employer has a paid leave program, but it's not, it's not accrual based. So it, you know, maybe they have some type of salary continuous program. There could be a scenario where that employee, if they are on that particular claim under that employer's program, that could be a scenario where there could be a reimbursement that triggers to the employer based on the language that's been outlined in the regulations as well. So really I think as you think about the types of programs that are going to be in play, whether it's an accrual program or not, will definitely materially impact the claim and, and the different action steps that have to occur, but then there also could be the potential for reimbursement to the employer based on the type of program that it is.
Karen Batson:So intermittent leave also had some definition changes, correct? Yes. So we've seen some changes in the state's approach to intermittent leave management and expectation. Where did we land in the final regulations for that?
Trish Zuniga:So I can start us off there. The definition and the regulations around intermittent leave have changed in several iterations of the regulations and where they have landed on finally, is that the increments of intermittent leave should be consistent with the employer's policy, which they use for other forms of leave. In terms of the department, the department, isn't going to pay in increments of less than 15 minutes. We think that's really for administrative ease. And then there's this concept of accrual in that a covered individual cannot apply for a payment unless they have eight hours of accumulated leave time, unless more than 30 calendar days have passed since the initial leave.
Marissa Mayfield:And so just a couple things to add on from a practical standpoint, this is definitely something where we are going to be very interested to see where the state lands in, how they're going to gauge what that minimum increment is in place, because this will vary from one employer to another based on the policy that they have in place, as Trish mentioned. So there's an impact there. And honestly, I think a lot of that is going to come and be determined as they are working through their own process documentation and their own operational expectations. I think additionally, what you will see is as insurance carriers work through this we're really responsible for ensuring that our insurance policies, as we're filing them are equal to or greater in some way than the state program, you know, in all regards. So there is some flexibility that carriers can take in how they ultimately administer the intermittent leave. I think what that will most likely land on is potentially differences in how that time gets aggregated for payment purposes. I do believe that a lot of times you'll see that honoring of the intermittent leave increment. So it's going to be working through the specific operational impacts of client A has an increment of one hour. Client B has an increment of 15 minutes and ensuring that that's accounted for, from a policy and an operational perspective. Um, so honestly I think the intermittent leave is, is, um, it's an interesting part of this program. I think the States always try to keep things interesting with the way that they build them out. And so I think in practice, um, this is going to be a very important part of delivery as everyone who is involved in administering benefits prepares for the implications of managing the intermittent leave, given this structure,
Karen Batson:I feel like intermittent leave as an area. We also always get questions. So I'm sure we'll be covering some of this again, at some point. Now let's talk about private plans. The July changes for the final regulations came with more details, I believe. Did they change anything regarding what a private plan is for Massachusetts or did they just really provide more information that we needed?
Marissa Mayfield:So nothing changed as far as what a private plan is. I mean, I think they've been very clear on the expectations and ensuring that as employees are covered under a private plan, there's no adverse impact to them. And whether that be a employee covered under a fully insured program or a self-funded insured program. So, you know, what the expectations are of what a private plan is, seemed to be pretty consistent. They have made some tweaks to some of the broader kind of responsibilities around the renewal of the exemptions, which I know we'll talk about in a moment, but otherwise I think a lot of those previous expectations are in place, um, which is very helpful because it ensures that the work that's already been underway is consistent with where we're heading. And there's not a need to kind of double back and tweak things further. We also are, uh, from a private plan perspective, working through the implications of refiling our policies to be able to align with the changes there. So, I mean, I guess that's more of an indirect impact in ensuring that what we're filing aligns with the program expectations, but, you know, when I think about just like the way that they structured the expectations for private plans, they seem pretty consistent
Karen Batson:Now out of the details on the private plan, uh, what are some of the more important revisions to be aware of?
Trish Zuniga:So from an employer and carrier perspective, I found it very interesting that the updated regulations clarified responsibilities for who's going to be well who's on first and who's going to provide paid leave benefits to covered individuals when employers move from the Commonwealth's plan to a private plan and vice versa. And I think the state's primary thought process was just to make sure that the employee does not suffer from a gap in coverage. So an employer has to continue to provide benefits for the entire leave duration of claims filed before the plan was terminated. And then on the flip side, the department has to continue benefits for the entire leave duration of claims filed before the effective date of an employer's private plan exemption.
Karen Batson:Does this effect switching from a private plan to say another private plan?
Marissa Mayfield:I think it does. Um, so we encounter this as we deal with just determining claim liability for other statutory programs like the Massachusetts program that we're preparing for now. So really looking at the program that was in place when the initial event, whether it's a, you know, the, the first day of leave or when the medical event first triggered. So that will be very important as the different carriers that may be in play are working through some of that. The other part we're going to have to continue to kind of vet out as a company. And I think probably even broadly more from an industry perspective is managing how you gather additional expectations when someone was on leave for one reason previously, and then as the employer is transitioning to a new carrier and they have leave for a completely different reason how you go and look at the previous time taken account for that. And then some of the more specific mechanics of managing that claim. I imagine a lot of that will get fleshed out over the next few months, as everyone is working tirelessly, really to prepare for what this looks like to administer as, as a carrier.
Karen Batson:Now, another area of change that was brought up was the exemption renewal process. What's changed there?
Marissa Mayfield:There's more leeway, which is a positive thing. So I think where you get a little bit of room to breathe is a positive. Um, and so in this instance, what the state did, they kind of distinguish the expectations between fully insured and self-insured programs. So from a fully insured perspective, they are extending the deadline for the exemption renewals until December 31st of 2020. So those that otherwise would have had an exemption renewal triggering in September. I've heard even some dates that were earlier, they're all now being put off to the December 31st deadline. The state's also working through and actually just communicated about this within the past couple of days, a process that will help to automate and streamline the renewal so that as the employer is providing the policy form number from their policy, that is going to hopefully be automatically recognized from the state via the insurance carriers filing to help facilitate that. Because otherwise, I imagine there's probably going to be thousands of renewals going in at the same time, especially because employers are expected to file at their entity level. So you could have one overarching company that has 20 business entities that are all in Massachusetts. So it's, it's magnified by the number of entities that are filed in the state. And so with that process, they're looking to really help to streamline that. And they're also establishing a window for, for that renewal application. So they don't even want people to start applying until November 30th. Now all of that is potentially subject to change. This is the information we have as of today, but within that, they're giving a 30 day window or 30, 31 days, I guess, depending on how you look at it for everyone that needs to file that exemption from a fully insured perspective, to get those in at the individual entity level. And then for, for self-funded programs, they have established that they're still going to require those to be renewed as of September 30th. So the deadline itself is not changing if also made some updates to the bond requirements. So I would encourage those that are impacted to go out and look at the DFMLs website to specifically know exactly what those expectations are. Um, additionally, they are looking for employers to be providing their, the declaration document, the IDD, the self-funded version of that to accompany their application. So for anyone that's already filed for an exemption, the state has communicated directly with those contacts. Um, so I would certainly encourage it if needed to reach out to the DFML for any additional information. And certainly if you're a Lincoln client proceeding with our Massachusetts offering, you can reach out to your Lincoln client directly, if you need more help with that.
Karen Batson:And one more question on private plans, what do we see, Um, in regards to the private plan appeals?
Trish Zuniga:So generally a covered individual has the right to appeal the denial of family or medical leave benefits to the department. And this applies whether you're in the Commonwealth's plan or whether you're in a private plan, but if you're in a private plan, there is an expectation for you to go to your private plan administrator first. And this is one of the additional requirements that we see in the updated regulations is that the private plan administrators have to establish an internal appeals process first, prior to appealing with the department. So there's hopefully a quicker way for an employee to resolve their dispute. And if the dispute doesn't get resolved to their liking, then they still have that opportunity to appeal to the department.
Karen Batson:Now, I think we need to dive into employer responsibilities if they have a state plan. So let's start with application process. What is the employer responsible for in the initial application?
Marissa Mayfield:So I'll start with this and Trish, certainly if you'd like to pile on a bio means. So the state has outlined in the regulations, some very specific expectations about types of information that they may be requesting as they are working through a claim that they've received important to keep in mind that kind of the mode in which they're going to do that is still to be determined from a public perspective. So we're not exactly sure how they would go about requesting that information, but some of the things that they have listed in the regulations include wage information for the past 12 months, a description of the employee's position and schedule amount of paid leave already taken for a qualifying reason during the current benefit year. Additionally, a description of the employer's paid leave policies and detail regarding leave. The employee will take concurrently and has taken in the last 12 months. So they're really trying to make sure that they have a broad view of not just the employees, uh, position with the employer, but also information about other leave programs that might be in place again, to ensure that they are able to manage that concurrent effort that we talked about earlier in this, um, in this conversation.
Karen Batson:Trish, anything to add there?
Trish Zuniga:I'll just add that just between the employee and the employer. When the employee has to take paid family and medical leave, they're also required to provide notice to their employer. And Marissa has gone through the list of the information that the employer has to provide to the department. Um, one of these things is whether notice was provided by the employee and the department, isn't going to accept an application of benefits unless notice was made to the employer. And if they don't comply with this notice requirement, and there aren't any unusual circumstances that justify the failure to comply the leave and the application for benefits may be delayed or even denied by the department.
Karen Batson:Now we chatted about intermittent leave, does the employer have a different level of responsibilities there in a state plan?
Marissa Mayfield:So a couple of things to keep in mind here, the same intermittent leave rules apply as far as you know, the increment itself and how you're utilizing the employer's plan to really determine that, but how the state is going to gauge that information is, you know, we haven't seen that publicized yet. The other thing to keep in mind is for employers that have employees that are on intermittent leave. Currently, the regulations do reflect an expectation that employers are providing a monthly snapshot of the wages that were provided to that employee during that time period. So there is going to be this ongoing effort on the employer's part to comply with the state's information expectations throughout the life of the claim, depending on the claim itself and the reason and whatever information that the state is gathering, but at least from an intermittent perspective, they were prescriptive. And that expectation on that monthly reporting expectation
Karen Batson:Now is the amount of the employer participation at the same level as other state programs we've seen?
Marissa Mayfield:Sure. So, I mean, I think Massachusetts took a very similar approach as other States in essentially most of the whole private sector is covered under the program. We've seen that under a number of different programs. So from a coverage standpoint, I think they've really adopted an approach that other States have from a level of engagement, um, within the kind of facilitation of the program, it does seem like Massachusetts has introduced some additional responsibilities on the employer's part. And I think that really aligns to the fact of the way that they built out the expectations for the program to run concurrently with, uh, the different leave programs that might also be in play that the employee has access to. So by nature, in building out the program with that expectation, it introduces their need for additional information, kind of a broader view of that employee's leave to ensure that they are administering the paid family and medical leave program in that particular leave in alignment with what they've outlined in the regulations. So from that standpoint, I think that that is distinct from maybe other programs, but certainly we'll have to see if new States that emerge might take a similar approach. So it's, it's always a, um, a lot of mystery, I think when it comes to these programs. You never know what's coming.
Karen Batson:Now, we've covered a lot. Um, and I want to end our convo with this question. What should everyone be focusing on going into Q4 to prepare for the official launch?
Marissa Mayfield:So a couple of things come to mind, and Trish, I'm sure you have some thoughts as well. Um, it depends on whether or not you are going to have a private plan or whether you're going to be in the state plan. So I'll start first from a private perspective because that's just, my proximity is closer to that. Um, I would recommend certainly keeping very close to your carrier's information that's being shared, timelines, expectations, milestones, making sure that you're fully clear on that. The good thing is typically, especially from a Lincoln standpoint, there's that guidance there to ensure that you're checking all the boxes that you need to check in that you're fully ready for the program to launch. Any employer that hasn't met, all of the notification requirements to their employees, whether that's just providing initial notice that the program is coming, I would say do that as soon as possible, given that that was an expectation to be done last year. And then certainly if you have opted to go into a private plan, ensure that you're also providing employees notice of the private plan and that they will be covered under a private plan instead of under the state plan from a state perspective, um, I would say really stay close to the communications that are coming from the department. They tend to provide, especially as, as they send emails, some very material updates through those emails. So if you're not on their distribution currently go out to their website and get added. So you can get information as it's coming through. I'm sure that they will also be ramping up communication efforts as we get closer to January. So anything that they provide by way of guides, you know, reference material and kind of webinars or live meetings, I would highly encourage you to get engaged so that, you know, the expectations as an employer or as a broker, as well as being able to have that information, to convey to the employees themselves,
Karen Batson:Anything to add Trish?
Trish Zuniga:So that's a lot of information to take in, and we've given you a lot of information through this podcast through webinars that Lincoln has conducted through the state materials. So what employers may want to do if they haven't done so already is in Q4. You might want to take all of this information and then, you know, it's, it's time for analysis. You might want to weigh the merits of opting out and obtaining an exemption through your own private plan and it's time for employers to decide again, if they haven't already that having a clear line of sight into your employee's absences and providing a seamless absence reporting experience, not just for employees, but for yourself, it might be worth the effort.
Karen Batson:Now I said that was gonna be my last question. I have one short follow- up question. Is it too late to go into a private plan?
Marissa Mayfield:It's not so the state has established a rolling application process. So employers really can apply at any time. One thing to keep in mind, however, is if you're looking for this plan to be in place for 1/1 that window, I would say from my perspective is, is starting to close given that carriers, uh, I'm sure Lincoln has and other carriers, um, I would expect, have established certain timelines for timely implementation and getting ready, getting everything in place for one, one. So, you know, while the state will assess and determine whether or not they can approve your private plan in December, if that's when you apply. And there's a potential that that might be approved in time for, for January 1st, that might be more challenging from an administrative perspective to get set up. So I would say that anyone that's considering it certainly for 1/1 now is the time to make those final decisions, I would say. And then for anyone that's considering this as a future consideration, you have the opportunity to do so. You might start in the state plan for a couple of months or for the first year and decide that then is a time to, um, to opt out and the state will be willing to review that application At that point too. So the good thing is that they have flexibility in when they would want to work through this.
Karen Batson:Well, thank you both so much for all the info and the conversation. To everyone listening, thank you for joining us. We will continue to cover topics that help employers and their employees navigate through this new environment. So be sure to subscribe to Lincoln Absence Adviser on Apple, Spotify, or wherever you get your podcasts.
Disclosures: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.