Critically Important for Families

America’s life insurers believe that everyone should be able to take time off from work and not suffer financially when they need to provide care for an ailing family member. People in these situations have enough to worry about. They don’t need the extra burden of worrying about their paychecks.

Life insurance companies have been delivering paid leave benefits to millions of Americans for decades through short-term disability income (STDI) insurance. But not enough Americans are covered by STDI. ACLI strongly supports bipartisan efforts that build on this existing framework to expand paid leave coverage.

This week, Senators Deb Fischer (R-NE) and Angus King (I-ME) introduced the Paid Family and Medical Leave Tax Credit Extension and Enhancement Act. The Act updates an earlier version of the tax credit in several important ways. Notably, it makes the tax credit permanent. This will help businesses, particularly small ones, that were hesitant to set up a paid leave program because they were concerned the credit would expire.

The Act also:

• Now allows eligible employers to receive the credit for leave offered in excess of any state or local mandate.
• Allows employers to claim the credit for premiums paid for paid leave insurance products. This will be especially helpful to small businesses that find it more economical to purchase insurance rather than self-fund paid leave benefits. Employers can receive up to a 25% credit towards yearly premiums, depending on the percentage of wages the insurance plan replaces.
• Reduces the minimum employment period requirement for eligible workers to six months.
• Requires the Small Business Administration and Internal Revenue Service to assist in increasing awareness of the credit.

As ACLI’s President and CEO Susan Neely said, “No one should have to choose between a paycheck and caring for themselves or a loved one. Thanks to this proposal, fewer people will have to make that choice.”

Momentum toward paid leave is growing in Washington. This week, ACLI responded to a request for information on expanding access to PFML from a bipartisan, bicameral group led by Reps. Chrissy Houlahan (D-PA) and Stephanie Bice (R-OK) and Sens. Kirsten Gillibrand (D-NY) and Bill Cassidy (R-LA). We reaffirmed our support for building on the current framework, rather than constructing a new federal program from scratch. And we reiterated how important it is that policy solutions be flexible and provide options for employers of different sizes and industries. 

We look forward to working with all interested members of Congress on this issue that is critically important to so many American families.