Confused about paid family and medical leave (PFML) terminology? Learn about the evolution of PFML and get tips on how employers can set realistic expectations with private-sector employees in states where voluntary PFML is available from Jessica Bolar, senior product manager, PFML and Absence Management with The Standard. While there are two of these “voluntary plans” today, there will be 16 by 2026 and industry experts like Bolar question whether there will be more. As a result, the best approach is for employers to start preparing now. Listen in for details and guidance.
DMEC: Welcome to Absence Management Perspectives: A DMEC Podcast. The Disability Management Employer Coalition, or DMEC as we're known by most people, provides focused education, knowledge, and networking opportunities for absence and disability management professionals. DMEC has become a leading voice in the industry and represents more than 18,000 professionals from organizations of all sizes across the United States and Canada. This podcast series will focus on industry perspectives and provide the opportunity to delve more deeply into issues that affect DMEC members and the community as a whole. We're thrilled to have you with us and hope you'll visit email@example.com to get a full picture of what we have to offer, from webinars and publications to conferences, certifications, and much more. Let's get started and meet the people behind the processes.
Heather Grimshaw: Hi, we're glad you're listening. I'm Heather Grimshaw, communications manager for DMEC. We've asked Jessica Bollard to join us and talk about paid family and medical leave. Jessica is a senior product manager at the Standard, a regular DMEC speaker, and a contributor to the DMEC @Work magazine. In a recent article, Jessica noted that while paid family and medical leave can be challenging for employers, it also represents an opportunity to demonstrate a culture of caring. We've asked her to elaborate on that concept, share some suggestions for how employers can demonstrate this type of culture, and also help us unravel some of the nuances to paid family and medical leave options around the country. So, Jessica, to set the stage for our discussion, would you give a high-level overview of paid family and medical leave options across the US? There seems to be some confusion around terminology, and I'm hoping you can talk a little bit about that here too.
Jessica Bolar: Yeah, sure, I'd love to. So thanks for having me. When it comes to state mandated programs, which are programs that a state puts forward and sets requirements for employers and employees to participate in, those have had really quite the transformative experience, if you will, over the last decade or so, we started really down this road. There's path with what is called statutory disability or disability insurance programs actually starting with New Jersey as the oldest program, along with New York, California and Hawaii also having these disability insurance programs. The benefit that these programs were set up to provide was for employees who needed to take time off due to their own disabling condition. And then as time progressed, these programs, starting with California, actually moved into also mandating a paid family leave component for employees so that they could take time off for things like caring for a family member with a disabling condition or bonding. Now the family leave additions. While they're technically separate from the disability insurance programs they work with the statutory disability. They often share factors like eligibility parameters. There is one exception though to this paid family leave component, in that Hawaii actually doesn't have a family leave component that is a part of their programs. But they have consistently, over their most recent legislative sessions, worked to try to get this added. And they've gotten very close the last two sessions. So it's a space that I would anticipate they'll move into in the near future as well to help make that program more holistic. And that's what those statutory disability programs were doing, is trying to create a holistic program for both an individual's own need and that family component. Now of know, fast forward a bit to future state following these other programs, starting with Washington, we've moved into programs that encompass both components under that same mandate. So both that disability and family leave are within the same program, and they are often referred to as paid family and medical leave. You're going to hear a lot of names related to PFML for each state because each state has their own act name or law name, but in general sense they all can be referred to as PFML programs.
Heather Grimshaw: I appreciate that context because it is easy, as you said, to get lost in the acronyms.
Jessica Bolar: Yeah, there's quite a bit Alphabet for sure. There really is.
Heather Grimshaw: So DMEC dedicated a full day of the 2023 compliance conference to paid family and medical leave topics, and I was struck by an attendee's comment that the voluntary paid family and medical leave legislation scares him the most. Is that something that you've heard from other employers? And if so, why is that?
Jessica Bolar: I think there's probably three most likely scenarios that would scare employers when they hear that term voluntary PFML. First off, a possible potential scare of voluntary PFML could be private plans. They're often referred to by states as a voluntary plan. And that's where a state that has mandated PFML programs allows for an employer to take their participation out of the state administration and then satisfy those PFML obligations through either like a fully insured or self-insured plan that's administered by a carrier. I wouldn't necessarily myself qualify these as scary, but I could see the potential for uncertainty with these programs. Right. The employers exiting state administration, and with that comes some additional responsibilities and additional reporting requirements. How do I get out of it all those questions that come with that? And there are things that they might not potentially have, that they'd be responsible for if they were to participate in a state plan that they would then have with a private plan or a voluntary PFML plan. The thing, though, for employers to remember related to this particular voluntary PFML discussion is that employers aren't alone in this. They have a partner in their carrier to help manage these additional responsibilities, and they're not going to be left to figure out how to comply with these on their own. And also, oftentimes employers, when they leave and go into a private plan, carriers are the ones that end up being responsible for a lot of the additional items that come with that exiting of the state plan. So there's a good partnership there. So not technically scary in my mind, but understandably different and a new way of going about it. Secondly, I think another possible voluntary PFML that could maybe create a scare is states are of course throwing it in another flavor potentially, and they're allowing for their insurance code to be adjusted to have PFML as a form of insurance. And these laws provide for an insurance carrier to file a PFML product that they would then offer to an employer as insurance. The law is going to outline a base as to what the offering needs to meet, and then the carrier will kind of play with the nuances towards the administration and determine how that offering is going to be structured. And it's a pretty big unknown on how this product is going to develop when it's offered by a carrier. So I would say this one probably scares people most in terms of if they hear about a program coming up, it's just the uncertainty as to whether or not it applies to them and whether or not it's mandated. That's the concern primarily with this. And then I think honestly, once we notify those that are asking questions as to whether or not this applies to them and we let them know really the concept behind it and what it is and that it's not a mandate that they participate, that concern really kind of fizzles out that third, one of those potential voluntary PFML scares that is probably very most likely what you overheard the individual speaking or having related to is the programs like New Hampshire and Vermont have. They both have a mandatory program for state employees that allows for, after a designated time of the program running for private employers to opt into the program. And to make it even more interesting for private know, these states allow for individual employees to opt into the state program if their employer has chosen not to opt in themselves. So there are different parameters for each state around how it takes place. But ultimately, the employer is still going to have requirements or obligations to the state could potentially, I should say, on behalf of the employees that enter into it, even though the employer isn't in the program. And that's like things like submitting state contributions on behalf of the employee who is elected into the program, if that qualifies to that extent, there are some caveats and nuances as to whether or not employers and what level of responsibility they have. So it just creates additional confusion on how they engage with a program that they're not actually engaged with, if you will. And I truthfully don't blame this individual you heard saying that that scares them the most, giving an employer the option to not participate in a mandated program for state employees, but then requiring them to participate and fulfill items on behalf of an employee who opts into the program. It's really a confusing position to put an employer in. It's new, right? It's not a common thing. And so in addition, these states have chosen administrators for their state programs. So for both states, if an employer has an individual in the state plan, they're more likely than potentially or more likely than not dealing with a different carrier for that individual in the state plan that operates on the state's behalf versus where they might have all of their other benefits. It's for sure a unique situation for an employer who they run a certain benefit package. They know what they're entering into with that benefit package because they've chosen it, they've vetted it out, and then they have a program they don't participate in, but they have an employee participate in. It's just a whole new thing for them. And of course, to add on to that potential level of uncertainty for an employer, when employees use benefits, the employer is the one that gets the questions primarily right from their employees. And it's a hard situation for an employer to be in when really they can't necessarily help their employee with the program. And when it comes to those kind of things, I think it's really important that employers start setting expectations with their employees about to what extent they can help an employee when they enter into these type of programs. I think ultimately my suggestion for employers here is I would lean on the state to provide them, the employer, with the necessary information as to how they're supposed to engage with them in these scenarios when employees enter into the program. And also if you have an employee who's individually purchasing these coverages, employers, in my opinion, they have the right to require in their benefits handbook that an employee needs to notify them of their enrollment with the state. Or also I would suggest setting up an outreach to your population to confirm state enrollment following the open enrollment period. The state of New Hampshire, for example, they have a set designated time at the end of the year into the early new year when individual employees can opt in. So you could do outreach following that. Now, Vermont, they're going to allow for employers, sorry, employees starting July of 2025 to opt into the program. So you could also follow that same outline of once that enrollment period has closed, do a reach out to your population to understand and identify who has opted into the programs. I think the question I would have related to these programs, since there are two of them and a mass of about 16 that will in total be out there in 2026, is are other states going to do this? I would say it's possible. In this world we can't give definitives, unfortunately, but I would say given that an overwhelming majority of states, they're really looking to impact entire populations of their state and not just those employees who work for the state. So I would put more money on these types of programs being an outlier versus the norm. However, to be fair, statutory PFML programs. So these mandated programs that come through the state legislature, their approach is really dependent on the actual makeup of the legislature in your state. So that group might feel the best way to roll this out is to start with that smaller population to get buy in for those state employees and then broaden it. We can't necessarily count this out as a possibility in the future that it's going to be kind of a scary spot to enter into for more states than just these two.
Heather Grimshaw: That context is really helpful. Thank you for sharing not only the details there, but also that recommendation. And just for context, the person who made that comment works for a national employer.
Jessica Bolar: Those multistate employers, they're put in a position where they've got a lot more to pay attention to. Right. And I think setting yourself up for success in the beginning of just identifying and keeping tabs on those programs and what they're doing and how they essentially impact your benefits book. And if you're keeping that up to date as much as possible, working with either your carrier partners or your legal and compliance partners, it's really going to put you in a better position to understand what things you might need to change when something else gets impacted within those laws.
Heather Grimshaw: And that sets me up very nicely for my next question, which taps into your article titled The Eye of the Storm: The Evolution of PFML Trends and Paid Leave Policies, which we will unlock for listeners. You mentioned that a lot of employers are, and I'm using air quotes here, forging their own paths by enhancing their disability benefits and other leave benefits to remain competitive as paid family and medical leave becomes increasingly popular. Would you give a few examples of what you're seeing companies add to their programs?
Jessica Bolar: Absolutely. And I mean, to [be] completely honest with you, Heather, it's not really anything that feels groundbreaking and what companies are adding to their programs. But employers are in essence forging new paths because they're truly and heavily focusing on things that I would say as a result of the pandemic employees have identified as being intrinsic values that their employer needs to support them with in order for the employee to obtain balance and the employer to retain that talent. I think, of course, pay is obviously always an important component, right? But it's not the only thing anymore that takes to attract and keep that talent with you. And in a survey that I saw that Forbes did, 40% of employers said workers were leaving their job to find a role that offered better employee benefits. So employers, they're a part of their employees lives, and really understanding and addressing what those values are, are really crucial. And so in light of that understanding that has come to the forefront in this new wave of assessing and forging their own paths, I would say that we're really seeing an emphasis on two to three programs out there. One of the top priorities that we see employers addressing is creating, if they don't already have in place parental leave policies, they're really looking at that equity piece across their population and how programs apply to their population as a whole, and not just a subset. Many employees, they're now eligible for PFML because there's a very low eligibility threshold, but they may not have been eligible for those, what we consider like traditional benefits. And so they maybe didn't qualify for their parental programs. And so we are seeing a lot of expansion of entitlement to those populations not previously served by these program. It's not only good for the employees, but administratively for employees and your HR partners. They have really less nuances to tend to with this as an option out there. Of course, these programs aren't free, they cost money, right? So employers are also looking a lot at modifying the entitlement in their paid parental benefits to encourage or require use of that paid parental leave to run concurrently when it's applicable with PFML. When the employee applies for that paid family medical leave, this provides an additional benefit to the employee, so they supplement their income with that paid parental on top of the PFML. That helps bring them to 100% of their earnings. But also importantly for the employer, it's of benefit because the employee is utilizing their available paid leave concurrently with PFML and they're not stacking those entitlements, extending that time that they have off. So in addition, in this parental place, we also are seeing a lot of employers that still have maternity leave programs, but since they don't address that whole family, we see employers shifting those existing programs really to meet the needs of non-birthing parents as well, so that they can also have that crucial time to bond with their children and make sure as an employer that they're being equitable and providing that benefit to their employees. Outside of parental leaves employers are creating, or really, I would say probably more likely starting to more heavily consider care of family leaves or caretaker leaves. We get a lot of requests on how many do we have of these out there? The sandwich generation is a big population. It's 26% of Americans, [who] are impacted with aging parents, and more and more of the expectation of employees is that employers are needing to meet them where their lives are at. Right? And this space is really a crucial area for employers to start paying more attention to. I read an article the other day that had stat after stat after stat that just really, frankly, kept blowing my mind on the need for caretakers, and that the U.S. has an estimated 53 million unpaid American caregivers, who, of course, also work full-time or part-time. And over 50% of us workers have caregiving responsibilities outside of work. And they spend, 37 million Americans spend, an average of four hours a day looking after an elder. So, I mean, it's a huge need, right? And this research also suggested that the caregiver shortage is going to increase and that by the year 2030, it's going to cost an estimated $290,000,000,000 annually. Yeah. Right? I mean, it's definitely not pocket change. And then with all of this in mind, still only 12% of companies offer some form of elder care support.
Heather Grimshaw: Wow.
Jessica Bolar: Right? That was one of the stats that just absolutely blew my mind. But I understand it. We've focused on parental care needs or bonding needs and things like that, which we needed to focus on those. And so I loved this article for the attention it was bringing and the potential cost and impact it has. So with all of this in mind, employers that are even considering adding this to their portfolio, in my opinion, they're forging a new path in that those that are actually providing or actively creating these benefits are really trailblazers. They're going to attract a lot more talent as well, in my opinion. I mean, we've also have PFML in the spotlight, right? And it's offering benefits that allow employees to use time for this exact need. But not every state or every employee has access to PFML. So in my opinion, it stands to reason that the demand employees put on employers to provide this type of benefit is really only going to increase. The reality is not everyone is a parent, but I think everyone does have a person or a support system that they care about and they want to help take care of when that need arises. So I think regardless of where an employer sits related to this, the need is there. Employees are in the driver's seat. Right? And so employees are looking to find an employer who provides benefits that meet them where they're at in their lives. I mean, like I noted earlier, 40% of employees are leaving for better benefits.
Heather Grimshaw: So really, having employers assess their benefits, and structure those packages to ensure that they are, as you said, meeting their employees where they are. And that is, in and of itself is a lot of work and increasingly important.
Jessica Bolar: Yeah, it really is. And I mean, obviously everyone has variable needs, right? But you can find some consistency, I think in some of them, it's not just those either, Heather. Of course, we've got our traditional benefits. Right? So your short-term disability, those are of course impacted by PFML, and employers needed to pay attention to those. And that is another key area we see employers impacting. Primarily, they are adjusting their benefit percentage on a weekly basis to be a little bit higher to impact those higher wage earners who aren't as proportionally helped by PFML benefits like lower wage earners are. So we see a lot of attention to that for that population because we want to make sure that, again, there's equity across our groups because we have a wide bandwidth of how much PFML is actually going to help the individual who's out based on the variable percentage that people get back in terms of what they make and how that program applies to them. I think also because I'm an elder millennial, I need to slip this in. I would be remiss if I didn't mention other considerations outside of paid leave that employers need to take to heart and take into account really related to meeting employees where they're at in their financial aspects of their lives, things like student loan repayment or fertility treatments. We're seeing a lot of these benefit programs popping up at employers across the country, and I think it's really another strong sign that employers are acknowledging that they need to work harder to enter into an employee's life where they're at, and it just encourages loyalty, right? But I think, bottom line, ultimately, these things I've talked about and what employers are doing really has a lot to do with coverage gaps. So whether that's a population of employees not previously covered and including them as a gap or a type of leave not previously provided, like caregiver and that gap, or if it has to do with a monetary gap in which employees are receiving disproportionate income, that's what employers need to be focusing on, I think, as a bottom foundational aspect. What are your gaps and how do you impact and address those?
Heather Grimshaw: I would assume from an employer vantage point, get to an overwhelming state pretty quickly.
Jessica Bolar: Absolutely.
Heather Grimshaw: And I think your point of working harder to be there when employees need you and also to make sure that they know that you are doing this.
Jessica Bolar: Yeah. And I think one thing that's important to keep in mind, that I feel like I would be doing a disservice if I don't mention it, is that this can't all happen overnight. Right. This is a process. And identifying those gaps, you might have four or five of them, but you can really only address one. That's okay. I think having a conversation, to the extent that you can and you feel comfortable with your employees as to what you're addressing, why you're addressing it, and how you look to increase or adjust your benefits programs as you go along helps employees feel like they're being listened to when they do share what they need. And we all know employees are not shy about sharing what they need. Right? Right.
Heather Grimshaw: I think that's such a great development that more employees are voicing [what they want and need].
Jessica Bolar: Absolutely.
Heather Grimshaw: Or gaining more exposure and that executives are hearing them. I think that's really good news. And it's also incredibly stressful for employers.
Jessica Bolar: Yeah, no, I'm definitely not going to say that I wish that I was a part of compiling all that information, because it's wonderful nuggets and I think it's great, and I love all of it. But cataloging that, I mean, our HR partners are ridiculously wonderful in how they manage all of this work. And so it's a lot. And so also, I want to say I hope they know that we all know how much they have on their plates and appreciate the attention to it.
Heather Grimshaw: One of the key takeaways from your recent article, as I mentioned earlier, is that paid family and medical leave represents an opportunity for employers to demonstrate a culture of caring. You've talked about that a little bit in your previous answers, but I'm hoping you'll elaborate on that.
Jessica Bolar: I think this is a conversation that we could probably have for a good solid 45 minutes, right? It's a fun new opportunity, if you ask me. Well, I should say PFML opens the door for a fun new opportunity. Employers, I think engaging in that thoughtful conversation with your employees, really about encouraging the use of PFML and other paid leave benefits, reminding them what it is and how it benefits them, it doesn't mean because you're encouraging people to use it when they need it, they're just going to run out and use it. I think instead, it really fosters this connection of the employee with the employer that's like, hey, they have this for me, and they keep reminding me I can use it, and they encourage me to use it if I need it. And I think overwhelmingly when you communicate openly, honestly, and fairly with employees, they respect that. When you treat people like adults, they act like adults more often than not. So I think, for example, I know a lot of companies were hesitant about the shift to remote work, with many really being against it prior to the pandemic. But when that situation was forced, employers overwhelmingly saw really no real change in gains, and many are now fully embracing that remote or hybrid roles across the board. And I think this concept holds true with benefits available for people to take time off from work to care for their health or their health of the loved one approaching leave as a positive option that can and should be used when needed. It's going to also foster that environment that shows employees that they're not going to be penalized for using this benefit when they need it. Employees have enough going on when they're dealing with a serious health condition of their own, or they need to care for a family member and really worrying about how their employer is going to react to that instead of feeling like they're going to be supported, creates an additional burden on the employee that it just cuts at their sense of loyalty to their employer. And by doing that and creating potentially an environment in which we seemingly don't equally value work effort along with taking time when needed. We're inadvertently fostering an environment that pushes people to burnout. And I think we've all seen that in this current labor market, employees are empowered to seek what works for them when they feel like they aren't able to address the things they value. I saw a stat from a healthcare literacy report recently that said 46% of workers actually reach out to their friends, family, or coworkers for insight into benefit offerings instead of HR, and I'm guilty of it too. I think it just really highlights that with the addition of PFML, employers have a lot of work to do in getting employees to use them as a resource for benefits that are provided through the employer and PFML. I think it opens a door like I was talking about a second ago. It's an opportunity, right? It's another touch point to have that meaningful conversation about benefits that the employee has available to them. The pandemic highlighted a desire for these types of benefits. Employees know about them because they're responsible to pay for a portion of them. And so we should really aim to have the employer be the source of truth for how these benefits have a valuable impact to their lives and also how there are other benefits available to them. Work with this benefit. So again, just working to foster that environment of caring for and about one another into your ecosystem, I think really has endless gains.
Heather Grimshaw: You're raising a really good point about the need for employers to communicate differently as they're looking at these leaves in a different way. My last question for you is, while paid family and medical leave legislation is spreading quickly across the US, it still is not everywhere is the expectation that it soon will be and is the recommendation for employers across the US, whether they are in states that have paid family and medical leave legislation or not to be preparing, and if so, what should they be doing? And I realized that as I asked this question, it's like six questions.
Jessica Bolar: Oh, Heather, it's just such a loaded crystal ball type of question. And I'm not going to lie, I love it. Whether PFML should be mandated by a state government or even the federal government, it's not a bipartisan topic. It's really why we have a lot of states with mandated programs, some with mandated programs that have state employees in them and optional for private plan employers, aka the scary voluntary PFML. And some states with an option, I had to throw it in. And some states, they have an option for that insurance to be created for PFML programs. So whether a state gets to the point during their legislative session of putting forward a mandated program or an option to build that insurance-like product. It's really going to heavily depend on the makeup of the state's legislative body. We've only had one state that has gone outside, really in Colorado, that has had it be voted upon by the state and by the population. So it's heavily relied reliant, I should say, on that legislative makeup. And due to that, I wouldn't expect it to be everywhere, but I would expect it to be floated as an idea and talked about everywhere, especially with this upcoming election cycle. This is going to be a talking point for most of those running for office, if not everyone. The difference is, of course, like we've talked about before, it's going to be the approach. I don't know if it's the fifth or the 6th question, should employers be preparing for this? While to an extent it's an up in the air thing, I say, yeah, they should be preparing. What that preparation looks like is, I think, different. And I think that depends heavily on that legislative makeup of your state government. Right. Maybe preparation is lightly watching your legislative body and what they're floating for laws related to PFML or researching what your neighboring states are doing, especially if they have that PFML in place. But ultimately, I think the best preparation is just staying curious and signing up for all of the newsletters from all of the states that have programs in place that run them. I think knowing what's out there and what you could potentially see, while it doesn't apply to you, and just even casually understanding what's out there, it puts you a handful of steps ahead when you get that news that your state is going to be implementing a program. And then also, of course, I know you referenced our article, the evolution of PFML trends and paid leave policies. We've got six steps in there that we outlined as well. So I think just taking a peek at those as well are also good places to start to help get prepared.
Heather Grimshaw: That's a great reference, thank you. And thank you so much for your patience with my inordinately long questions. And your willingness to share your expertise with us today. We really appreciate it.
Jessica Bolar: Absolutely. Thanks for having me.