If you have ever trained a puppy, you can probably sympathize with the fact that the first time you own a dog is always the most difficult.
You have no previous experience to trust or learn from. Many things are trial and error. You test what works and what does not work and then you go from there. And then after a long period of time, you have a well-trained companion – even if there were some accidents in the house and shoes chewed along the way.
Of the other dog you train, you are more like a veteran. You have previous experience of learning from and understanding what works and what does not work. The only problem is that each dog is different. So even if the past experience really helps, you may not necessarily go through the process.
Preparing and administering the newly approved permit laws (PFML) for family members and medical leave is much like taking home the second, third or fourth puppy. Carriers and TPA have a strong background and framework to build from, but each has sufficiently nuanced differences to create headaches.
As state PFMLs become more common ̵
The front and center of New Hampshire's uniqueness is the fact that of the ten state PFMLs that have passed, it is the first paid family leave plan that provides a voluntary participation option for private and public non- state employers and individuals.
The stated intent of the program is to use the state's purchasing power to provide an incentive for carriers to enter into agreements with the state to administer the plan. As a condition of winning the state contract, the winning tenderer (s) must allow non-state employers and individuals to participate in the state plan. The state believes that this will require the carrier (s) to create and offer an affordable family plan that employers and individuals can purchase.
But will that turn out to be the case? We do not know until after the program begins in 2023. The aggressive timeline set in New Hampshire puts transportation companies bidding to win the state in a challenging position. The state has until the end of March 2022 to issue requests for proposals, which gives some time for the winning carriers to meet the requirements for the state, which still need to be fully defined and ironed out.
What's in the New Hampshire Plan and why is it unique?
The new law provides payment benefits to family members of government employees with effect from 1 January 2023. Government employees will receive a compensation for salary change of 60 percent of their average weekly salary limited to the social security salary for a maximum of 6 weeks per year . The plan covers leave for the reasons for family care set forth in the Federal Family and Medical Leave Act (FMLA). It does not cover paid medical leave for an employee's own illness for government employees or employees covered by a voluntary non-governmental employer plan. The plan will be provided and administered by an insurance company in accordance with an agreement with the state. It is not clear from the language of the bill whether a single carrier will be chosen or whether several carriers will be able to participate.
As mentioned above, the plan for paid family leave for Granit State differs from other paid family and medical leave. currently exists by providing voluntary participation for private and public non-governmental employers and individuals. Under the voluntary option for non-state employers, employers with more than 50 employees can choose to enter into an agreement with the transport company that administers the state employee's plan to provide their employees with paid family leave. The plan contains job protection, continuation of health insurance protection during the leave and provisions on non-discrimination and non-retaliation that apply to employees whose employers voluntarily participate in the plan. Finally, the plan also includes a provision that allows employers who voluntarily participate in the plan to claim a tax relief of 50% of the premium cost paid to provide paid family leave to their employees.
Individuals whose employers either choose not to participate in the plan or who do not qualify for the threshold of more than 50 employees will be able to participate voluntarily in the program through a purchasing pool. Although government employees and employees of private and public non-state employers are not eligible for medical leave under the plan, people who voluntarily participate in the plan through the purchasing pool can take medical leave for non-work related medical conditions if their employers do not provide short-term disability insurance. It is unclear from the urban language whether individuals who choose to participate in the purchasing pool will receive the same job protection, the continuation of health insurance protection and non-discrimination and non-retaliation protection that employers covered by workers are entitled to but the likely answer is that they will not be entitled to these protections.
As explained above, the benefits for New Hampshire government employees must be available from January 1, 2023, and the language of the bill states that coverage must also be available for the purchase of private and public non-governmental employers and individuals.
The language of the charter is very high so interested parties will have to wait a while to get clarity on what will be available and what is required by the charter. The charter indicates that a number of details about the administration of leave will be prepared by the Commissioner of the Administrative Services Department. We may not know much more until that happens.
Continuous change and tight timeframes Emphasizes the need for flexible, configurable absence management technology
The aggressive timeline set in New Hampshire will mean that for the first time ever, three states are expected to launch a PFML program within 12 months. What is already a high task for carriers and TPAs is further complicated by the fact that there is still much to decide in these three states: Oregon, New Hampshire and Colorado.
Oregon, which had a planned launch date of January 1, 2023, is trying to postpone that date to September 3, 2023. The state has still not announced whether it plans to administer its PFML internally or outsource it to a carrier, as what New Hampshire is planning.
Colorado, which became the first state to send the PFML through voting initiatives, will not be rolled out until January 1, 2024, but again, details of the Colorado Plan are scarce at this time.
So in a span of 12 months beginning in January 2023, we will have the following:
- A PFML program that can be self-administered by the State of Oregon or a provider
- The first state program for paid family leave ever which will be outsourced to one or more carriers
- A third state PFML (Colorado) which may also be self-administered by the state or a supplier
The ability to win business for these different programs depends on the underlying technology provided by insurance companies and TPA with flexibility and framework to quickly incorporate the state-specific rules into its existing model.
The COVID-19 pandemic has accelerated many companies' timelines for digital transformation of front and back office systems. In our research on strategic priorities in 2021, improving digital capacity was the highest-ranked internal challenge among leaders in the insurance industry – 40% higher than the industry's laggards. When we look at the future of PFML in the United States, the importance of a sophisticated, leading absence management solution could not be clearer.
Success for New Hampshire Voluntary Paid Family Vacation May Come to Education, Awareness, and Commitment
While New Hampshire's planned granite state family vacation plan will cover all government employees, the program is voluntary for the rest of New Hampshire's employees, which means that the market opportunity for the carrier or carriers who win the state plan is relatively unknown. We do not have historical data on the recruitment rate of a voluntary program, but we do know that employees tend to lack an understanding of PFML.
In Majesco's FMLA and PFL Knowledge Gap published earlier this year, we found that employees do not know if their state offers a PFL program or not. A majority of employees who responded (67%) incorrectly stated that they live in a PFL state when they do not or answered that they do not live in a PFL state when they actually do.
Given that New Hampshire will have the country's first voluntary program, there is a higher probability that government employees are unaware of the offer and what exactly it covers. In the same research, we found that only 47% of employees currently working in a PFL state could correctly identify the leaves they are entitled to take.
Voluntary participation in the state program by private and public non-state employers and individuals will ultimately be what determines the success and longevity of the program, and education and awareness will be at the heart of whether participation meets what the carrier (s) do. ) which offers the state plan hopes to be able to consider it successful.  Co-author:
Angie Brown, Sales Director, Absence Practice, Majesco
Lynne Sousa, Senior Abence Management and Compliance Counsel, Majesco