There is some good news for employers subject to the Massachusetts Paid Family Medical Leave (PFML) and considering the availability of the private plan exemption.¹ Previously, the Massachusetts Department of Family and Medical Leave (Department) took the position that an employer seeking a private plan exemption from the PFML program would need to provide benefits as generous as those offered under PFML at the time the exemption was approved.  This meant that an employer would be forced to provide benefits as early as one and a half years before benefits would be available to employees through the state program in order to obtain the private exemption now.  The Department has, however, modified this earlier position, noting that an employer can apply for a private plan exemption now even though the private plan it submits to the Department for consideration will not provide benefits to its workforce until January 1, 2021.  

Employers may want to reconsider the private plan exemption based on this new development. As previously discussed, the deadline to file a private plan exemption has been moved from June 30 to September 20, 2019 to allow additional time for employers to examine available insurance options. Employers that receive an approval of their private plan will not be required to remit quarterly contributions to the state trust fund. Now, with the Department’s additional clarification, employers need not consider the cost of immediately implementing a generous private plan when deciding the benefits of a private plan exemption.

Employers should note that even though an employer receives a private plan exemption from the Department, an employee who is denied a leave of absence under that private plan can still appeal this decision to the Department.  Employees are also afforded job protection during any leave taken and protections against retaliation from taking leave.

As a reminder, the Department will approve private plan applications provided that the plan meets the following requirements:

• The plan offers benefits that are equal to or better than the state’s benefits;
• The wage replacement must be at least equivalent to the amount provided under the law;
• The cost to employees must not be greater than the cost otherwise incurred under PFML;
• If the private plan is self-insured, for every 25 employees covered by a business, the Department requires a bond value of:
  
  • $19,000 for qualifying family leave plans
  • $51,000 for qualifying medical leave plans
  • $70,000 for qualifying plans for both family and medical

Littler will continue to monitor updates from the Department and provide guidance on implementation of the new law.