Increased Family Paid Leave Benefit Come at a Steep Cost
Another increase in the cost of insurance; however, this increase is brought to you by New York State, not the Insurance Companies.
This increase is for the Paid Family Leave. It really isn’t insurance at all. It is a Social Program administered by the Insurance Companies that handle New York State Short Term Disability.
Brief History of NY Paid Family Leave:
On April 4, 2016, Governor Andrew M. Cuomo signed into law New York’s Paid Family Leave program, the most comprehensive paid family leave program in the United States. Under this law, commencing January 1, 2018, all eligible employees in New York have been able to take time off, while still being paid a portion of their wages, to bond with a new child, to care for a family member with a serious health condition, or to handle personal matters arising from an immediate family member being called to active duty in the Armed Forces of the United States.
Four years later, 2021 will mark the final year of the phase-in period of Paid Family Leave benefits in New York. 2021 will bring not only an increase in the amount of the weekly benefit & benefit duration but another significant increase in the premiums paid by employees for the benefit.
Here are the changes for 2021:
Benefit Percentage of Statewide Average weekly Wages 60% 67%
Maximum Weekly Benefit $840.70 $971.61
Maximum Benefit Duration 10 weeks 12 weeks
Annual Maximum Contribution per Employee $196.72 $385.34
Like the Family Leave Benefit amount, the premium rate is set as a percentage of an employee’s wage. Thus, the premium paid by an employee depends on how much an employee earns: those earning less will pay a lower premium, and those earning more will pay a higher premium as they are eligible for higher benefits, up to the maximum Family Leave Benefits for 2021 of 67% of the statewide average weekly wage to a maximum of $971.61 per week. Employees whose income is at or above the statewide average weekly wage are eligible only for the maximum Family Leave Benefit amount. Therefore their premiums will be a percentage of the statewide average weekly wage.
After considering several factors, the Superintendent of the Department of Financial Services has determined that the premium rate for Family Leave Benefits for coverage beginning January 1, 2021, shall be 0.506%, plus 0.005% for the Risk Adjustment for the COVID-19, which is an increase of 89% from the 2020 premium of .27%.
Call Antalek & Moore today to ensure you have the right coverage for the best value!