Reprinted with permission from Insurance Advocate Magazine, August 2022
New York Paid Family Leave Program – Evolution
State-mandated Paid Family Leave (PFL) took effect in New York in 2018, providing eligible employees with job-protected, partially paid time off to bond with a new child, care for a seriously ill family member, or attend to family matters due to a military exigency. The program gradually phased in over a four-year period, starting with benefits set at 50% of an employee’s average weekly wage (AWW), capped at 50% of the NY State Average Weekly Wage (NYSAWW). The maximum amount of leave in 2018 was 8 weeks.
By comparison, at the end of the phase-in period in 2021, the maximum leave duration reached 12 weeks, with benefits set at 67% of an employee’s AWW, capped at 67% of the NYSAWW. While the benefit is expected to remain at this percentage level, the cap can change every year since it is based on the NYSAWW. And New York can, of course, make enhancements to the program any time, such as COVID-related benefits 2 years ago and the addition of siblings as qualifying family members for leaves starting on or after January 1, 2023.
While PFL is governed by the State, the coverage in New York is primarily provided by private insurance carriers in a unique public-private partnership. Notably, when tailoring their program for their predominantly small business communities, New York didn’t require employer contributions for Paid Family Leave benefits – consequential in a state where small shops make up 99.8% of all New York businesses.1
The Road to PFL
As New York’s largest Disability Benefits Law (DBL) carrier2, ShelterPoint3 recognized soon enough that the introduction of PFL would present a major change in NY’s insurance landscape with uncertainty and disruption for carriers, brokers, and employers alike.
In the midst of this backdrop, ShelterPoint played a significant role in preparing New York for Paid Family Leave. It worked closely with the insurance and regulatory community to help make the public-private partnership successful and provided New Yorkers with a wealth of easy-to-understand resources on the road to PFL – such as an independent, educational Paid Family Leave microsite (fully stocked with educational resources), as well as expert panels and webinars. Let’s not forget: New York insurance brokers and agents also played an important role in keeping their clients informed of the new requirements and deadlines.
New York Paid Family Leave Program – Adoption
An inside look at ShelterPoint claims data suggests that overall PFL utilization has been steadily growing, with an almost 42% growth in NY PFL claims overall since the inception of this program (not including any COVID-related quarantine claims and adjusted for growth in covered lives during that period – the same adjustments are consistently applied to other numbers referenced in this article.)4. This was not unforeseen since the program was designed to roll out over 4 years, and a steady adoption during the phase-in period was anticipated. Utilization, as well as adoption rates, vary drastically depending the type of leave. Bonding Leave remained the most utilized leave type as it represented 76.7% of PFL claims in 2018, and remained steady at 76.4% in 2021.
Let’s look at a few key learnings and trends in Bonding Leave more closely.
- Shifting composition of Bonding Leave utilization among men & women
A trend among ShelterPoint claimants has emerged since PFL began in 2018 -- the usage rate between men and women has been going up at different rates: while both, more moms and dads, have been taking leave to bond with their new child, the number of dads taking Bonding Leave has increased faster than the number of moms.
The number of dads taking leave almost doubled from 2018 to 2021 (they saw a 93% increase). This also increased the share of dads among parents on bonding leave from 28% in PFL’s inaugural year to 31% in the following year and reached 38% in 2021. (Surprised the 93% jump in bonding claims from dads only translates to a 10-point share increase? This is because there is a much larger pool of claims from moms that dilute the impact dads’ claims have on the total number.) The growth possibly indicates that the matured benefit level may now be a more adequate partial salary replacement and/or that it may be becoming more widely acceptable for men to take this type of leave.
Conversely, while moms accounted for over 3/4 of ShelterPoint’s PFL bonding claims in 2018, they made up just under 2/3 of bonding claims in 2021.
- Moms and dads are not taking the full leave allowed
In 2018, the average leave length among moms was 7 weeks out of a maximum leave length of 8 weeks, i.e., they used 88% of their available time. In 2019, the maximum leave went up to 10 weeks, with moms using on average 85% of their allowed leave, i.e., 8.5 weeks of bonding leave. This percentage held up steadily through 2021, when the program reached its final stage with a 12-week maximum duration, resulting in an average leave duration of 10.2 weeks for moms. So, while longer leave became available and moms started taking longer leave, moms did not max out on their leave, and the amount used out of the maximum allowed time remained fairly proportionate.
Dads followed a similar, proportionate growth pattern of leave taken compared to time allowed: from 56% of leave time available to dads in 2018 to 57% in 2021. While, yes, dads took consistently shorter leaves than moms (4.5 out of 8 weeks in 2018 and 6.9 out of 12 weeks in 2021), their leave durations did increase and almost reached the same length moms had taken in PFL’s first year.
This is another indicator of a slow trend toward a more equal share of bonding with the new baby or, adopted or foster child, which also qualifies as Bonding Leave.
- More support for moms during the postpartum period
The fact that more men were bonding during the first year of a baby’s life is crucial! Studies show the quality of both maternal and paternal bonds during early infancy is one of the most important predictors of a child’s eventual ability to thrive in adulthood.5
While the postpartum period may be a joyful time, it may also be a stressful and overwhelming time for moms6. While the program has been helping a growing number of moms in New York, nationwide, there may still be financial pressures resulting in a shorter maternity leave. A survey conducted for the U.S. Department of Labor, reports that nearly 25% of U.S. moms return to work less than 2 weeks after giving birth7
This nationwide trend may result in health risks as obstetricians generally recommend a new mom wait at least 6 weeks after giving birth to return to work, but many advise waiting 12 weeks. Returning to work too early after childbirth can cause extreme exhaustion in a new mother as well as increase the risk for postpartum depression.8
This may be why the Paid Family Leave program is so impactful for working moms in New York, with its partial wage replacement, job protections, and 12-week leave length.
Caregiver Leave: Women Continue to Take on the Brunt of Caregiver Duties
While Caregiver Leave also started to get leveraged more by men in 2021 compared to 2018, it is at a smaller growth rate than for Bonding Leave. Caregiving still continues to be shouldered by women with 68% requesting Paid Family Leave for caregiving in 2021 compared to 73% in 2018; conversely, men went up from 27% to 32% of all caregiver leave for the same time period.
This does, however, suggest that men are increasingly taking a greater role in caregiving duties – as in bonding leave.
While the leave duration among caregivers has gone up between 2018 and 2021, men and women used about the same amount of time. For example, in 2018 the average duration leave among men and women was 4 weeks; in 2021, that grew about 50% to 6 weeks on average. Both men and women took a little over 6 weeks. Six weeks still falls far short of the 12 weeks caregivers are eligible to receive.
PFL for Military Exigencies
PFL is also available for eligible employees who have to attend to family matters due to their family member’s ‘qualifying military event.’ Under PFL, qualifying military events occur when a spouse, domestic partner, child, or parent is, for example, on active duty, called to active duty status, or notified of an impending call to active duty.
ShelterPoint receives few claims for military exigencies. In fact, overall incidence for military exigency claims was 0.03%.
Paid Family Leave Among the States
Since New York began providing benefits in 2018, Washington, Massachusetts, and Connecticut have set up their own Paid Family (and Medical) Leave programs, following the early pioneers of similar state-mandated programs like California, New Jersey, and Rhode Island. It is worth noting that each state envisioned and implemented their programs in different ways, with New York being the prime example of a successful implementation in which the State governs and regulates the program while relying on the expertise of the insurance industry to assure smooth administration of their mandated Paid Family Leave program.
Paid Family Leave in the United States is a relatively new phenomenon. While traditional short-term disability programs began initially in 6 states/jurisdictions9 as far back as 1942, Paid Family Leave began in the 21st century in the United States. More recent Paid Family Leave programs, especially in states that didn’t have required short-term disability programs in place, include a Medical Leave component which is a comparable statutory short-term disability solution. Those are usually described as Paid Family & Medical Leave (PFML).
So, while state-mandated Paid Family & Medical Leave, Paid Family Leave, and Short-Term Disability laws all reflect the same general concept, they vary by state. Benefit amounts, durations, reasons for leave, etc. differ from state to state – even down to the name of the respective program.
State Plan and Private Plan Model
As mentioned earlier, the New York model of a quasi- public/private partnership is novel, and has not been adopted in quite the same way by other states thus far.
While New York technically has a public option for PFL through the NYS Insurance Fund, New York’s long-standing and well-established private market for statutory short-term disability, DBL, (since 1949), has proven itself as the primary solution for PFL coverage, coupled with the fact that NY businesses don’t get coverage by default but rather have to actively secure coverage to remain compliant.
This opt-in model has adapted well to Paid Family Leave and, in fact, has proven itself advantageous for New York’s insurance industry, spurring economic competition and diversification for the benefit of New York’s business community, employer and employee alike. Managed by the Worker’s Compensation Board and the Department of Financial Services, the DBL/PFL program runs like a well-oiled machine between the state and industry, and has been great for insurance brokers and agents as well.
Some of the other states only provide a State Plan, and others, like New Jersey, Connecticut and Massachusetts, allow for Private Plans (which includes equivalent, fully insured coverage from private carriers as well as self-insured options). However, many of those states place employers in their State Plan by default and require an active opt-out process in order for employers to provide private plan or self-funded PFML coverage to their employees. Depending on the employer’s situation, selecting a Private Plan can be a valuable option over the State Plan and may provide extra advantages including competitive pricing, and being able to rely on the private carrier’s experience, scalability, and agility to manage statutory benefits coverage – and may be an entirely new revenue stream for insurance brokers and agents.
States Adopting Paid Family Leave
Other states, too, have chosen to not wait for the U.S. federal government to come to a consensus and have enacted their own versions of a Paid Family Leave program. Oregon and Colorado are setting up the parameters of their programs now, and are expected to go live in 2023 and 2024 respectively. Maryland and Delaware just enacted their PFML laws in 2022 for future implementation. Paid Family Leave is soon to be established in almost 25% of the United States (by population), at the state level. This raises many questions that will need to be addressed, such as the possibility of a national standard with regulation on the federal level or the state level. Nevertheless, two things are for sure: Paid Family Leave is being used here in New York, and, at least for now, states are marching forward with their own programs to address this important need.
To read the full article in the Insurance Advocate Magazine, please click here.
1. SBA, Small Business Statistics, 2018.
2. State of New York Workers’ Compensation Board, form DB-680, 2016 – applies to ShelterPoint Life Insurance Company only.
3. The ShelterPoint family of companies operates under the “ShelterPoint” name strictly as a marketing name, and no legal significance is expressed or implied. The ShelterPoint family of companies consists of ShelterPoint Life Insurance Company, a NY-domiciled carrier, and its wholly-owned subsidiary ShelterPoint Insurance Company, a FL-domiciled carrier, depending on the state. ShelterPoint is a registered service mark.
4 For the purposes of this article, whenever statistics are provided for the Paid Family Leave program, it refers only to ShelterPoint’s claims data and not the program as a whole in New York State.
7 https://www.thebump.com/a/moms-return-work-2-weeks-postpartum , 2012 In These Times Survey for the U.S. Department of Labor
9. California, Rhode Island, New Jersey, New York, Hawaii, Puerto Rico