Whether recovering from an injury, managing an illness or welcoming a new child, every American should have the option to be protected from suffering an economic loss when taking time off from work to care for themselves or a loved one.
Across the nation, lawmakers are looking for ways to ensure that workers taking time off are protected with paid family and medical leave (PFML) benefits. It is critical that any state considering a PFML program include private options for employers.
Life insurance companies have been helping employers manage paid leave programs for their employees for decades. Their expertise in handling claims and paying benefits eases the burden for both employers and employees. By integrating new paid leave programs into existing employee benefit programs, life insurers provide companies and workers with an efficient single point of contact. This streamlines the process for employees so they can focus on their leave, not paperwork. More than 47% of full-time civilian workers receive paid medical leave benefits through the private sector.
That’s one reason why Delaware’s PFML law allows employers the option to choose a private PFML plan instead of the state-run plan, which is beginning implementation next year. Delaware joins seven other states that allow private plans instead of state-run PFML programs. More than 10 million employees in these states are covered by private PFML plans.
Delaware employers with more than 10 local workers have until Dec. 1, 2024, to decide whether they will sign on to a private plan or the state plan. It’s important that employers understand the differences in what their administrative role will be if they choose a private plan option versus the state-run plan.
Employers who purchase insured private PFML policies will receive comprehensive claims administration from their provider. Employees apply for benefits directly through the provider, who handles the entire claims process. This includes checking if employees qualify for leave, reviewing medical documentation, approving or denying the leave, and paying the benefits. It could also include helping employees when they are looking to return to work and providing employees with the appropriate tax forms at the end of the year.
On the other hand, in Delaware’s new state-run plan, employers will bear the responsibility for making claims decisions. They also will have to determine whether the employee’s leave qualifies under the law and how long the leave should be. In addition, they will be responsible for reviewing medical documentation provided by their employees to support leave requests and maintaining the confidentiality of medical documentation.
Life insurers and lawmakers agree that no one should have to choose between caring for their family or keeping a paycheck. By building on and expanding the existing employer-based system, insurers, employers, and government can reach more workers with coverage quickly and cost-effectively.
Vince Ryan is Regional Vice President, State Relations at the American Council of Life Insurers (ACLI). He is responsible for state legislative and regulatory affairs in Delaware, New Jersey, Iowa, South Dakota and Wyoming. He joined the ACLI in 2019 from the Delaware Insurance Department.
