This article comes from the NYS Department of Financial Services.
Under New York’s Paid Family Leave program, 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. Eligible employees will receive 67% of their average weekly wage, up to 67% of the statewide average weekly wage for up to 12 weeks of leave.
As provided by Insurance Law § 4235(n)(1), in a decision dated June 1, 2017, the Superintendent, in consultation with the Chair of the Workers’ Compensation Board, determined that paid family leave benefits coverage issued pursuant to Article 9 of the Workers’ Compensation Law (“Paid Family Leave benefits”) shall be community rated. Community rating ensures that all employees are similarly treated and are not subject to cost variations based upon age, gender, geographic location, or any other demographic factor.
Insurance Law § 4235(n)(1) provides that the Superintendent shall establish the premium rate for community rated family leave benefits coverage, applying commonly accepted actuarial principles. Specifically, the Superintendent shall, by September 1 of each year, publish the rate for the policy period beginning on the following January 1. The Superintendent shall also set the maximum employee contribution for Paid Family Leave benefits pursuant to Workers’ Compensation Law § 209(3)(b). The maximum employee contribution is the maximum amount a covered employer is authorized to collect from each of its employees to fund Paid Family Leave benefits. The maximum employee contribution shall equal the premium rate for Paid Family Leave benefits.
The premium rate, like the benefit amount, is set as a percentage of an employee’s covered 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 Paid Family Leave Benefit for 2022 of 67% of the statewide average weekly wage. Employees whose income is at or above the statewide average weekly wage are eligible only for the maximum Paid Family Leave Benefit amount.
Accordingly, based on commonly accepted actuarial principles, the Superintendent has determined that the premium rate for Paid Family Leave benefits for coverage beginning January 1, 2022 shall remain at the level as the premium rate applicable for calendar year 2021, and be set at 0.506%, plus 0.005% for the Risk Adjustment for the COVID-19 claims paid under Chapter 25 of the Laws of 2020, for a total of 0.511% of an employee’s wages each pay period up to and not to exceed an annual maximum employee contribution of $423.71. If an employee’s contributions reach the annual maximum employee contribution of $423.71 before the end of the calendar year, the employee shall not be liable for any additional contributions for that year. Employers shall collect employee contributions consistent with this Decision.
All insurers offering Paid Family Leave benefits coverage in New York are requested to forward all Paid Family Leave benefits policy forms and rate submissions through the SERFF filing process. Policy forms and rate submissions are due October 1, 2021. Insurers are directed to the DFS website for submission instructions, the Model Rider, and the PFL checklist.
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