Oregon and Colorado PFML: Shifting Sands

by Marti Cardi, Esq. - Senior Compliance Consultant and Legal Counsel

& Lana L. Rupprecht, Esq. - Director, Product Compliance

& Rebecca Ford - Product Director - Reliance Standard Life Insurance Co, Strategy Product and Marketing

September 12, 2022

 

Employers are eager – shall we even say anxious? – for concrete information about the imminent paid family and medical leave programs in Oregon and Colorado, but with contribution effective dates and private plan deadlines only a few months away, are there enough details to satisfy them? Maybe not.

At Matrix and Reliance Standard, we have been diligently attending meetings with Oregon and Colorado officials responsible for developing, administering, and enforcing the programs, attending their webinars, and monitoring their websites. And despite the disclaimer above, we do have some information to share and help employers prepare.

But first everyone’s favorite: A legal disclaimer! What we will share is on shifting sands. Paid Leave Oregon (the name of that state’s administering agency) and the Colorado FAMLI Division (ditto) are woefully behind on developing regulations, which put the meat on the bones of the PFML statutes. Without completed and finalized regulations, we have the skeleton but few details. (OK, getting kind of ghoulish here, but Halloween isn’t too far off!) Now in fairness, Oregon is farther along than Colorado and they should be, as they bought themselves an extra year over the original effective dates to implement their program. But even Oregon gives shifting answers to questions in successive public Q&A sessions. So what we present below is based on the most current info available to us at time of writing.

COLORADO FAMILY AND MEDICAL LEAVE INSURANCE ACT – “FAMLI”

Basic Colorado Refresher

Contributions/Premiums:

• January 1, 2023: ALL employers must start withholding from employee paychecks (if the employer is not going to fund the full program cost itself) and submit the contributions to the state. See below for
• Employee/employer contributions due to the FAMLI Division within 30 days after end of each quarter (e.g., first contribution payments due by April 30, 2023)
• Total contribution is 0.9% of each employee’s wages up to a cap that follows the federal Social Security tax ($147,000 in 2022; adjusted annually)
• Employees pay one-half of the total (0.45%);
• Employers with 10 or more employees pay one-half of the total (0.45%); employers with 9 or fewer employees are exempt from employer contributions

Benefits:

• Available for leaves taken on or after January 1, 2024
• Up to 90% of employee’s wages, according to a formula and subject to SSA limit
• 2024 maximum of $1,100 per week; adjusted annually

Leave reasons:

• Employee’s own serious health condition
• Care of a family member with a serious health condition
• Bonding with a new child
• Qualifying military exigency
• Safe leave

Duration:

• 12 weeks for all leave reasons in an Application Year
• Additional 4 weeks for a serious health condition related to pregnancy complications or childbirth complications

Regulations: [Final and draft rules are available here]

• Rules relating to Premiums, Local Governments, and Benefits and Employer Participation are final. (NOTE: the Benefits/Employer Participation rules were finalized on August 26 and have some, shall we say “challenging”, provisions which we hope will undergo further revisions despite their final status.
• Draft rules for private plans have been pre-released to a small group of industry colleagues for early comment (including yours truly). We’re not saying anything about details here, as it’s just too preliminary. Official draft rules for public comment are expected sometime in September.
• Draft rules relating to coordination of benefits and amendments to prior rules are on the agenda; expected dates of publication of drafts unknown.

Employer Deadlines and Private Plans

Employer registration: The Division anticipates a 4th quarter 2022 soft launch of My FAMLI+ Employer where employers will be able to register, file applications for private plans, and pay quarterly employer/employee contributions to the Division.

Private Plans: Employers can opt to have a private plan rather than participating in the state FAMLI plan

• Private plans must confer the same rights, protections and benefits provided by the state plan
• Private plans must be approved by the Division; fully- insured plans must also be approved by the Division of Insurance
• There will be an administrative fee for each private plan application; amount TBD
• Separate business entities must each apply
• Options:
  • Insured private plans: issued by an insurer approved by the state
  • Self-funded private plans: secured by a bond in an amount TBD
• Refunds for any premiums paid in 2023 will be issued to employers with an approved private plan with an effective date on or before January 1, 2024
• October 31, 2023: anticipated private plan filing deadline to get approval by December 31, 2023, and be eligible for a full refund of 2023 contributions paid

What Matrix and Reliance Standard are Doing

As we have done in other PFML states, we are:

• Developing an insured private plan policy and a self-funded private plan template. These will be available following the release by the Division of the final private plan rules.
• Developing an employer guide to private plans.

OREGON PAID FAMILY AND MEDICAL LEAVE – “PAID LEAVE OREGON”

Basic Refresher

Contributions/Premiums:

• January 1, 2023: All employers must start withholding from employee paychecks (if employer is not going to fund the full program cost itself); employee funds must be held in a separate account until paid to the Division or applied to the costs and benefits paid by an equivalent plan
• The employer must submit employee/employer contributions to Paid Leave Oregon within 30 days after end of each quarter (e.g., first contribution payments due by April 30, 2023)
• Total contribution is 1.0% of each employee’s wages up to a cap $132,900 (adjusted annually beginning in 2025)
• Employees pay 60% of the total
• Employers with 25 or more employees pay 40% of the total; employers with 24 or fewer employees are exempt from employer contributions

Benefits:

• Available for leaves taken on or after September 3, 2023.
• Up to 100% of employee’s wages, according to a formula and subject to annual limit
• Maximum benefit of 120% of state average weekly wage

Leave Reasons:

• Medical leave for employee’s own serious illness or injury
• Family leave to care for a family member with a serious illness or injury or to bond with a new child
• Safe leave for employees experiencing issues related to domestic violence, harassment, sexual assault, or stalking

Duration:

• 12 paid weeks for all leave reasons in a benefit year
• Additional 2 paid weeks for limitations related to an employee’s own pregnancy, childbirth, or a related medical condition, including but not limited to lactation
• 4 additional weeks UNPAID for any reason covered by Oregon Family Leave Act (employee’s serious health condition, family member serious health condition, ill child, bonding, bereavement) that may be taken after the employee has exhausted the 12 weeks of paid leave.

Regulations: [Final and draft rules are available here]

• Rule batches 1-4 are final, relating to Contributions, Small Employer, Self-Employed and Outreach, Equivalent Plans, and Benefits
• Additional Batch 4 and 5 rules relating to Benefits, Contributions, and Appeals are still pending

Employer Deadlines and Equivalent Plans

Plan requirements: Employers can opt to have an equivalent plan (Oregon’s term for a private or voluntary plan) rather than participating in the state’s Paid Leave Oregon program.

• Equivalent plans must provide benefits that are equal to or greater than the benefits the state plan offers and impose no additional conditions or restrictions on employees to use paid leave
• Equivalent plans must be approved by Oregon Paid Leave
• $250 fee for each equivalent plan application
• Separate business entities must each apply
• Options:
  • Insured equivalent plans: issued by an insurer approved by the state
  • Self-funded equivalent plans: must show proof of solvency by providing either:
    • Proof of sufficient assets or
    • A bond or an irrevocable letter of credit

Equivalent plans initial process:

• Beginning September 6, 2022, employers opting for equivalent plans may follow one of two processes to be exempt from paying and remitting contribution payments beginning January 1, 2023:
  • Submit a complete equivalent plan application (including insurance policy template or self-funded plan) between September 6-November 30, 2022, to receive approval by December 31, 2022, OR
  • Follow the declaration of intent process:
    • File a declaration of intent to have an equivalent plan by November 30, 2022
    • File the complete equivalent plan application by May 31, 2023
• Employers can file applications online through State of Oregon: Modernization - Frances Online; download and print applications (to submit by mail) from the Paid Leave website; or request applications by phone: 833-854-0166
• Reapproval: Must reapply for equivalent plan approval annually, for three years. After three years, the equivalent plan will remain in place until withdrawn or terminated.

For more information: Equivalent Plans – Paid Leave Oregon

What Matrix and Reliance Standard are Doing:

As we have done in other PFML states, we are:

• Developing an insured equivalent plan policy and a self-funded equivalent plan template. We anticipate having these available in September of 2022, once Paid Leave Oregon publishes its comprehensive Equivalent Plan Guide.
• Developing an employer guide to private plans.

Matrix and Reliance Standard Can Help!

Our team is constantly tracking legislative updates to stay current on the latest and greatest when it comes to leave, accommodations, and statutory benefit programs. Matrix and our sister company Reliance Standard offer self-funded and/or fully insured options for paid disability, medical, and family leave benefits in every state that allows private plans. If you have any questions, contact us through your Matrix or Reliance Standard sales or account manager, or at [email protected].