Employers have many factors to consider when it comes to choosing a private plan versus the state plan. To determine if a private plan is the best solution, here are some advantages and disadvantages employers can keep in mind:
Advantages:
- Employers have the ability to enhance benefit offerings under a private plan. The state plan is a one size fits most model, and employers would have to supplement the state benefits with separate leave policies if desired.
- Many states begin contributions prior to the start date of benefits to prefund the PFML program. If an employer’s private plan is approved according to the state’s opt-out deadline, the employer is exempt, or receives a refund, from remitting the prefunding contributions.
- Compliance guidance and resources may be available through a private plan carrier.
- If an employer has multiple lines of coverage with a carrier, employees can expect better coordination between products than if PFML is handled through a state plan.
- Additional reporting and claim management may be available.
Disadvantages:
- Employees cannot pay more for a private plan than they would with the state. If a private plan’s rates are higher than the state rate, the employer is responsible for the additional cost.
- Small employers may be exempt from the employer’s portion of the contributions. For example, in Oregon employers with fewer than 25 employees only owe the employee’s 60% portion. Private plans will require the full premium amount.
- Some states charge a fee for private plan applications.
Response Provided by: Sarah Hipp, PFML Compliance Manager at Mutual of Omaha Insurance Company, Chris Gillogly, Claims Consultant Manager at Insurance Company, Megan Holland, VP, Distribution & Marketing at Insurance Company and Kaitlynn Boone, Director at Workplace Solutions Compliance
