As we alluded to in last week’s PFML blog post, its extremely important to understand – and make sure your employees understand – how your organization’s disability benefits interact with Massachusetts’ Paid Family and Medical Leave. There is bound to be confusion around the administrative handling of PFML with other leave policies like Sick Pay, federal FMLA, vacation time, other company policies, etc.
However, the coordination of PFML with Short- and Long-Term Disability is a conversation that should take place and be communicated as soon as possible.
DEFINITION OF DISABILITY
Short-Term Disability (STD)
Unable to perform major duties of own occupation or [and] loss of earnings.
Paid Medical Leave (PML)
Serious health condition as determined by your healthcare provider.
DURATION OF BENEFITS
Short-Term Disability (STD)
Per disabling event
Meaning any time there is a disabling event, an employee is entitled to the full duration of the policy (often 13 weeks).
Paid Medical Leave (PML)
Per benefit year
Meaning the first time an employee goes on leave, a 52-week clock starts where they get a MAXIMUM of 20 weeks for PML.
Example:
An employee uses all 26 weeks on Paid Family Leave (PFL), they will NOT be able to use any PML benefits until the benefit year ends.
ELIMINATION BENEFIT/WAITING PERIOD
Short-Term Disability (STD)
Zero-day residual; does not require Total Disability
Paid Medical Leave (PML)
7 day waiting period; does require Total Disability
There is a stigma that Short-Term Disability can be all but canceled due to the Paid Medical Leave benefits due to the similarities in how they are structured. PFML is also the first payer before an STD policy. At first glance, that type of thinking holds true. Many company paid STD policies are looking to be condensed or maybe even converted to a voluntary type policy. Voluntary policies (including those with companies like Colonial/Aflac) should have a clearly laid out communication plan to ensure those employees understand PML and to make sure they are not paying for an STD benefit they may not be able to use. However, if you dig deeper, there are stark differences that should be understood before any decisions are made.
There are other nuances that differentiate STD and PML, a blanket statement advising employees to cancel STD since PML offers similar coverage can be very misleading. We are making sure to have a very clear conversation with our clients so they fully understand the benefits and drawbacks of altering STD coverage as PFML is underway as well as understanding what potential contribution strategies are available.
The RogersGray team is available to help guide employers through the process to make sure you are compliant.
Visit our PFML page for more information and other MA PFML updates.
STILL HAVE QUESTIONS?
Send them our way and we will do our best to help!
Jeff Bastien
Senior Vice President | Partner
Jeff Bastien is a Partner and Senior Vice President at RogersGray. With over 12 years in the industry, he serves as a trusted advisor for employee benefit and human resources-related topics, such as Healthcare Reform, HR Business Planning, and Alternative Funding Strategies.
