Massachusetts Paid Family & Medical Leave: How to Apply For a Private Plan

Update August 19, 2020: The DFML has extended the expiration date of existing Private Plan Exemptions from 9/30/20 to 12/31/20 and advises that employers renew these existing exemptions no earlier than 11/30/20. 

One important thing to note: Private plan exemptions can only be made effective on the first day of the quarter following an exemption approval. So, if you’re thinking about switching to a private plan, it might make sense for your group to obtain private plan coverage and submit your private plan exemption application to be approved before the start of the last quarter, or you will still be required to make Q4 contributions to the State Fund.

How do you make the switch to a Private Plan? 
How do you apply for a Private Plan exemption?

For your timing and planning, keep in mind that Private Plans (including pre-2021 Private Plan Exemptions) can only be made effective on the first day of a quarter, i.e. the first of the next quarter after approval.

Step 1 – You and your broker

Provide your broker with the information they need to request a quote. Most carriers will have similar information requirements in order to provide your broker with a quote. But, for ShelterPoint* specifically, please provide the following information about your group through your broker:

• Your company’s full information, including full legal name, address, and SIC code.
• Census with employees working at your MA location(s) who are eligible for PFML (more details on employee eligibility in the section below):
  • Gender
  • Employment status (full-time, part-time, or 1099ers)
  • Age
  • Salary
• Include part-timers who meet the eligibility requirements.
• If more than 50% of your workforce are on a 1099-basis, you need to include them as well.
• Desired effective date

If needed, we may require additional information.
 

Step 2 – Private carrier

• Based on your information, private carrier will provide a proposal.
• At ShelterPoint, when you have approved the proposal and instructed us to bind coverage, we will also prepare the Confirmation of Insured Policy Form Number form for you, prefilled with your information and signed by us, which you will need to provide to the State as part of the Private Plan Exemption application.

Step 3 – You

• Counter-sign the Confirmation of Insured Policy Form Number form.
• Through your MassTaxConnect account  (https://mtc.dor.state.ma.us/),  submit your Private Plan Exemption Application, which includes uploading the Confirmation of Insured Policy Form Number form. Here are the step-by-step video and instructions for applying for an exemption. 

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Step 4 – State of Massachusetts

• The State may reach out with questions while reviewing your application in detail.
• Should the State have any questions, your broker and our team of experts can help you with the response.
• You should receive a decision from the State (approved or denied) within 1-2 business days after submission of your Private Plan Exemption Application.

Step 5 – You/your broker

Your broker will then need to notify your selected carrier to issue the Paid Family & Medical Leave policy.

Step 6 – Your Carrier

• Your carrier will issue and send you the policy.
• Here at ShelterPoint, we will also include instructions on how to renew your exemption filing.

Step 7 – You

You may have heard that employers needed to go back to the MassTaxConnect website to amend the approved exemption filing by uploading a copy of the Paid Family and Medical Leave Policy. At this point, the DFML is no longer requiring employers to submit their policy prior to the exemption renewal date. The DFML  will request policy form numbers from employers at the time of exemption renewal and will update its website to describe these procedures. Sign up here to receive updates when these procedures get posted.

It’s important to remember that you will need to renew your Private Plan exemption every year!

Time flies! So we will remind you when it’s time for the renewal and guide you through that process.*

What else do I need to consider about employee eligibility?

Per the State’s website, all full-time, part-time, seasonal or temporary W-2  Massachusetts employees and some 1099-MISC workers (i.e., 1099-MISC workers who work in MA, do not qualify as independent contractors and make up more than 50% of the employer’s workforce) are eligible for PFML benefits if they have earned at least $5,100 (effective 1/5/20) in the previous 12 months and the amount earned is at least 30 times the weekly benefit under the Massachusetts Unemployment Insurance law.

How do I notify my employees about the Private Plan?

If you already have your Paid Family & Medical Leave poster displayed at your worksite, update it to show the information of your Private Plan insurance carrier and check if anything else is changing, such as the amount of employee contributions you’re taking and when the deductions will start. Also provide a written notification of the changes for all employees.

The DFML (Department of Family & Medical Leave) provides a template – or you can create your own, as long as it includes the following information:

• an explanation of the availability of the Paid Family & Medical Leave benefits
• information about your Private Plan carrier
• the employer and employee’s contribution amounts (if you are deducting premium from your employees) and obligations,
• the employer name, address, employer identification number (EIN),
• instructions on how to file a claim for PFML benefits (once available),
• and contact details for the DFML.

For new employees, provide a notice about Paid Family & Medical Leave within the first 30 days of the beginning of employment. 

How does it impact my Paid Family & Medical Leave “tax” and how do deductions work?

When you are approved for a Private Plan exemption, you would pay your premium to your private carrier instead of paying a “tax” into the State Plan. In either case, it is still up to you, the employer, how much of the premium or “tax” you want to withhold from your employees to fund their Paid Family and Medical Leave, as long as you do not exceed the maximum employee contribution which is capped at 0.38% of eligible wages up to the wage base limit established annually by the Social Security Administration.

Paying into the State Plan is only required of employers with 25 or more employees. Small employers don’t need to contribute to the State Plan, as it is fully funded by the employees share only. 

In terms of how the deductions work, here is where the dates matter. If you’re switching to a Private Plan just now, you won’t receive any prior payments to the State Plan back from the State, but you won’t need to make any further contributions to the State Plan once your Private Plan exemption is approved. And, you won’t start paying premium until your Private Plan becomes effective, because Private Plans don’t need to fund the PFML benefit upfront.

When is the deadline to file a Request for Exemption?

Exemptions may be filed on a quarterly basis and may begin only on the first day of any quarter (January 1, April 1, July 1, or October 1). The deadline for filing a Request for Exemption is the day before the effective date of that exemption begins.

For example, employers must apply between January 1 - March 31, 2020, to receive an exemption effective date of April 1, 2020.

Why Choose ShelterPoint for MA Paid Family & Medical Leave?

Specializing in State Disability Insurance and Paid Family Leave, it is a natural progression for us to bring our expertise in this field to Massachusetts, now that Paid Family & Medical Leave (PFML) is a required benefit effective January 1, 2021.

As an approved private plan carrier in Massachusetts, we welcome the opportunity to help MA employers based on our decades of experience in related, state-required coverages.

More than 184,000 employers with 1.9 million employees trust us to help them strike the right balance between compliance, coverage, and cost to complete their benefit equation.

We excel at navigating uncharted waters and are able to quickly and successfully adapt to new market conditions, so you can trust that ShelterPoint will bring you a thoughtful and efficient stand-alone Private Option for your Paid Family & Medical Leave needs.

This includes guiding you on what administrative actions you need to complete for an exemption – we help make the switch to our Private Plan easy.

If you are an employer, please contact your broker to get the ball rolling. 

Brokers are welcome to reach out to us directly with any questions they may have at sales@shelterpoint.com. We look forward to working with you!

The information in this post is based on our knowledge of the current MA Paid Family & Medical Leave law and regulations. If the Department of Family & Medical Leave revises the regulations, adopts new policies or if the law itself is amended, we will update this document. This document is not intended to be and should not be construed as legal advice. Employers are encouraged to consult employment law counsel for legal advice

*ShelterPoint Life is under no legal obligation to provide employers/policyholders with a reminder to renew their annual private plan exemption with the DFML, and ShelterPoint Life assumes no responsibility or liability for failure to issue any such reminder notice to an employer/policyholder, nor does it guarantee the accuracy of the information provided in any such reminder notice. It remains the sole responsibility of the employer/policyholder to remain independently informed of their private plan exemption renewal date and to timely file a renewal of its private plan exemption as set forth in, and in accordance with, any and all MA PFML laws and regulations.

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.

Massachusetts Paid F­amily & Medical Leave is available in MA only and will be underwritten by: ShelterPoint Life Insurance Company (a New York-domiciled carrier): Form# pending