We are 11 days into the existence of New York Paid Family Leave (NY PFL) and there has been a lot of chatter to say the least. Here are some (very) early observations we’ve noticed that are hopefully helpful to you and your clients.
What are clients talking about?
Many expected billing to be problematic (more on that below) but most groups won’t get a bill until the end of the quarter so that is secondary for the moment. What has been going on is a raised awareness of the program at the employee level leading to Human Resources being bombarded with questions/confusion and a large amount of claim filings. In Western NY, the state has been running TV commercials and targeted Facebook ads to get the message out to the masses. With the minimal NY DBL benefit in existence ($170/week), this is big news to employees who can potentially collect on a much higher PFL benefit ($652.96/week). Very different than when NJ introduced Family Leave Insurance (NJ FLI) in 2009 because the benefit amount matched the already in place State Disability benefit. That program was implemented relatively low key.
One 120 life client in Albany has already received 12 PFL claims in 11 days! While employees are eager to use the benefit, there is a lot of confusion around what constitutes a claim, how long a claimant can go out for, etc. Some employees are viewing it as quasi vacation time which is not the case at all. Even if a claim is going to be ultimately denied, there is still a lot of work to be done by HR to complete and file said claim to the carrier.
Another challenge is that employees are able to take intermittent leave in daily increments to bond with a newborn. As another curveball, employees can have multiple intermittent claims at the same time! To track that at the employer level is a nightmare. The same Albany based HR Director from above says the company may have to create a position just to track PFL intermittent leave.
What other challenges are on the horizon?
Billing is going to be an issue as employers have to self-report PFL wages for the quarter or month depending on billing frequency. They are used to just reporting Male/Female count for NY DBL. We have seen the challenges of self-reporting wages on the NJ TDB side, to the point where we audit clients on an annual basis because of the discrepancy of reported vs. actual wages. There are examples of some carriers already outsourcing NY PFL billing to TPA’s because of the complexity and potential added overhead to track appropriately.
How can we help our clients?
While PFL has created a lot of headaches early on, this is a time to bring added value and deepen relationships with clients. “In the midst of chaos, there is also opportunity” (Sun-Tzu). HR is definitely being flooded with questions and probably overwhelmed. This is new for everyone so even the carriers are learning on the fly. Groups that are large enough should entertain implementing an Absence Management Solution with a carrier to outsource that responsibility and workload. If that’s not a solution, at least set up a call with the in-force carrier to help answer questions. We did a lot of those calls in the 4th quarter and it went a long way.