Unfortunately, news of rising healthcare costs seems less like news and more like the norm. In the last two years, we saw medical cost trend level out a bit, but it’s projected to spike back up. According to a recent survey by PwC’s Health Research Institute, the projected medical trend for 2024 is around 7% year over year, about the same as it was for 2021 and higher than both 2022 and 2023. Other sources predicted an even higher trend, coming in around the 8% – 9% range. Much of the cost burden falls on employees. The Kaiser Family Foundation reports that employees will pay an average of $6,575 for their health plan on a family basis, and around $1,400 for single coverage.

Cost Drivers

What’s behind the increase? There are a range of factors working behind the scenes here, most notably:

It is our job as health and welfare consultants to help employers navigate this landscape and identify solutions that can address the cost curve.

Combative Strategies

In such a difficult environment, it’s important to discern any tactics you can take to establish more control over your plans and create a sustainable program that works better for your organization and your employees. Here are a few of the strategies we typically evaluate on behalf of our clients:

  1. Alternative funding. By considering an alternative risk financing vehicle like captive insurance, employers can expect to save between 10% and 30% on costs in the long run. However, a range of self-insured models exist for organizations lacking the risk appetite for a single parent captive. This is a trend that has caught on. IFEBP reported that 79% of employers surveyed are self-insured. A captive or similar solution is even more powerful if paired with stop-loss insurance, which can protect against those catastrophic claims we mentioned above.
  1. Pharmacy benefits strategy evaluation. With the staggering prescription drug prices we are seeing, it is imperative that you ensure your Pharmacy Benefit Manager (PBM) is truly working on your behalf by considering a PBM audit, contract review, or market check. In addition, make sure that you have protocols in place for utilization control, like prior authorization. We also work with clients to improve plan design, utilize clinical programs geared toward population health goals, and dig into data to make informed decisions around possible solutions, whether they be formulary changes, point solutions, or something else.
  2. Wellbeing. Often overlooked as a buzzword, wellbeing programs can have an impact on your bottom line. To yield results, it’s important to be targeted toward workforce demographics, ensure you can measure success, and that employee engagement is maximized.
  3. Plan design. It may be time to reevaluate items like cost-sharing (high deductible health plans, copays, etc.), dependent eligibility, the inclusion of telemedicine and mental health, and more.

At Spring, we work across four main pillars: plan design, process, technology, and funding while leveraging benchmarks to look comprehensively across clients’ programs and identify areas for improvement. If you could use objective guidance on how your organization might be able to better manage rising healthcare costs, please get in touch.

As societal norms and workplace attitudes continue to shift, the property and casualty (P&C) insurance space has been significantly impacted by a phenomenon known as social inflation. This trend has presented challenges for insurers, actuaries, and risk managers alike, leading to increased costs and complexities in compliance and managing risks. In this article, we delve into the concept of social inflation, explore current trends, and discuss strategies that employers can employ to address its effects effectively.

Background

For the purpose of this article, social inflation refers to the rising insurance claim costs above economic inflation due to societal and legal trends that increase the dollar amount of claims settlements and judgments. It encompasses various factors, including evolving attitudes toward litigation, changing legal interpretations, and increasing jury awards. For instance, more employees are seeking legal counsel to resolve workplace-related issues and asking for higher settlements than in the past. Several underlying elements that contribute to social inflation include:

  1. Litigious Culture: Society’s growing propensity to turn to litigation as a means of workplace conflict resolution has fueled an increase in the frequency and severity of insurance claims.
    • This phenomenon is playing out across multiple lines of coverage including Workers’ Comp, Employment practices liability insurance (e.g., employee misconduct, sexual harassment, wrongful termination, etc.) professional/general liability, and auto (both individual and commercial). It is important to note as litigiousness varies by state/region so does the impact of social inflation on insurance cost between two different locations.
  2. Judicial Trends: Courts’ and jury’s decisions and interpretations of laws, particularly regarding liability and compensation, have become more favorable towards claimants, resulting in larger settlements and verdicts.
  3. Economic Factors: Economic downturns or uncertainties may prompt individuals to pursue legal avenues for financial security, adding to the volume of claims and the pressure on insurers to settle.
  4. Media and Advocacy Influence: Public perception and media coverage of high-profile cases can shape attitudes towards compensation and influence jury decisions, potentially leading to inflated awards.
  5. Litigation Funding: Third-party investors may provide litigation finance to plaintiffs, driving up pressure to prolong lawsuits and possibly resulting in higher awards and increased legal expenses.

The combination of these factors has created a challenging environment for insurers and businesses, leading to increased premiums and retained losses for the insured and reduced profitability, and greater uncertainty in estimating future liabilities for the insurance carriers.

Social Inflation’s Impact on the Market

Here are some ways social inflation has been impacting P&C markets:

These circumstances underscore the need for proactive risk management strategies to mitigate the impact of social inflation on businesses and insurers alike.

Addressing Social Inflation: Strategies for Employers

In today’s dynamic business environment, where the landscape of P&C insurance is continually evolving, addressing social inflation has become a paramount concern for employers. Failing to acknowledge and mitigate the impacts of social inflation can lead to significant financial ramifications and operational disruptions for businesses of all sizes and industries.

Social inflation poses significant challenges for insurance providers, businesses, and risk management teams. This requires a proactive and multifaceted approach to risk management, risk assessment, and corporate risk profile to adapt as the forces behind social inflation are constantly shifting. By understanding the underlying drivers of social inflation, monitoring industry trends, and implementing effective risk mitigation strategies, employers can better navigate this landscape and safeguard their financial stability in the face of uncertain liabilities.

As Captive International and Spring share the same birthday (March 24th), here is a collaborative Q&A with our leadership team. Some of the topics discussed include the progression of the captive industry, market challenges and future opportunities.

Each year on International Women’s Day, I take time to reflect on the women in my life, the state of women in the workforce and the progress and barriers that remain. While there has been great progress to encourage greater equity and opportunity both here and in the workforce broadly, obstacles still exist that prevent women from building generational wealth.

In fact, one of the largest gaps we see in our clients’ employee benefits and healthcare programs pertains to women’s health issues. Organizations and society at large continue to take a narrow view of women’s health, limiting their approach to traditional pregnancy-related benefits. However, women’s health covers a much wider spectrum of issues including infertility, menopause, the stress of caregiving, breast cancer, and so much more.

Over the years, more and more women have joined the workforce, but their home and personal lives have not stopped for the benefit of their careers. Meanwhile, the health and benefits environment has not caught up to where we are or what is needed. I am proud that we routinely help employers assess whether their health plans take a 360-degree view of all components of women’s health issues and if they address gaps that may exist to help provide a level playing field for women in the workforce.

Only when we provide women the healthcare they need to be successful, can we begin to make a real and meaningful impact on ensuring women have the tools and support they need to build the futures they imagined. This means women can be more productive and build wealth to have greater access to opportunity. With greater health equity, she can access the care she needs, along with paid time off and treatment without exiting the workforce, which we have seen time and time again. In fact, healthier women are proven to expand their wealth which, in turn, means expanded opportunity.

While this year I do feel more positive about women’s position in the workplace than in years past, let’s not forget that pay inequity still exists – 84 cents is not equal to a dollar – and that women across the country are struggling to meet their basic health needs with any type of support.

In 2024, let’s make healthcare inequity a thing of the past, and healthier and better-supported women our future. 

As Captive Review celebrates its 25th birthday, they have released a list of the 25 most influential people in the captive space in the last 25 years. Our Managing Partner, Karin Landry was featured in their list for her expertise in risk management and alternative risk financing solutions. You can find the full article here.

Title:

Senior Consulting Actuary

Joined Spring:

I joined Spring in May 2014, shortly after graduating from Northeastern.

Hometown:

Central MA

At Work Responsibilities:

My actuarial focus is mainly health and medical stop-loss.

Outside of Work Hobbies/Interests:

Sports

Fun Fact:

I’ve been known to card count.

Describe Spring in 3 Words:

Never a dull Moment!

Favorite Movie/TV Show:

Inception/Seinfeld

Favorite Food:

Cheese

Favorite Place Visited:

Italy

Favorite Band/Musician:

Changes by the day!

If You Were a Superhero, Who Would You Be?

Batman.

Name One Thing On Your Bucket List:

Retire

What is One of Your Proudest Moments?:

I don’t know that I have any singular big ones, but I am proud every time we get positive client feedback

If You Win the Lottery, What is the First Thing You Would Do?

Invest!

What are You Passionate About?

Financial Literacy

As seen in the New England Employee Benefits Council (NEEBC)’s blog.

Paid Family and Medical Leave continues to evolve throughout New England and the country. While most of the activity has been at the state level, proposals have also been put forth federally. The programs passed by states vary in a number of ways, which leads to complexity for employers trying to navigate this landscape. Compliance concerns and complexities have also grown as the trend for remote work has continued, and employers that hire across the nation must comply with laws where employees work.

Massachusetts: Experience Over the Years

We have now completed our third year of the Massachusetts Paid Family and Medical (PFML) program! In those three years, the program has seen changes in contributions, benefits, claims experience, as well as changes to how it operates and coordinates with other benefits.

As shown in the summary below, the number of applications for the MA state PFML program has increased annually, as well as the number of approved claims. The most common reason for leave is own medical condition, while bonding with a new child is slightly lower in FY 2023 than FY 2022. Additional points of interest are shown below.

MA PFML Increases as of 1/1/24

The MA PFML weekly maximum benefit amount and contribution rate increased effective January 1, 2024.  The maximum weekly benefit is now $1,149.90, which is an increase of about $20 from the 2023 weekly maximum. For any employees who may have leave that runs from 2023 into 2024, the weekly benefit will be based on the beginning of the benefit year.

The total contribution is increasing from 0.63% to 0.88%, for employers with 25 or more covered individuals. The medical leave contribution will be 0.70%, with employers funding 0.42% and employees responsible for up to 0.28%. The family leave contribution will be 0.18%, with employers able to collect the total contribution from employees. Employers with less than 25 employees are not required to submit the employer portion of premium, so the effective total contribution rate is 0.46%.

The financial earnings requirement was also updated in 2024. Employees must have earned at least $6,300 and 30 times the PFML benefit amount during the last 4 completed calendar quarters to be considered eligible for MA PFML.

Additional Changes to MA PFML

Effective November 1, 2023, employees taking Paid Family and Medical Leave (PFML) in Massachusetts have the option to “top off” PFML benefits with available accrued paid leave (e.g., PTO, etc.) so the employee can receive up to 100% of their regular wages. This was not previously allowed for employers providing PFML through the state plan, however, was an option employers could allow through a private plan. The Department amended its FAQs in December clarifying employers can apply the terms of their company policies to the top up option.

Connecticut: A Year in Review  

Connecticut has now had PFML benefits available for 2 years. The program continues to grow, as shown in the summary below.

Based on the experience in the state in 2022 and 2023, Connecticut is not making any major changes to the program in 2024. The contribution rate will remain at 0.5% up to the social security wage contribution cap, which is increasing to $168,600 in 2024 ($160,200 in 2023). In addition, the CT minimum wage increases to $15.69 per hour in 2024, which correlates to an increase of about $40 for the maximum weekly benefit, now $941.90.

Connecticut’s Key Differences

The CT PFML program has some key differences when compared to MA PFML, such as the availability of leave for organ and bone marrow donation, as well as leave related to family violence. Differences in benefit amounts, leave duration, and eligibility conditions make it not directly comparable to MA PFML experience.

Rhode Island: Changes for 2024

Rhode Island established the first statutory disability program in the country in 1942, known as Rhode Island Temporary Disability Insurance (TDI). In 2014, they became the third state to offer family leave benefits through temporary caregiver insurance (TCI). The state does not allow private plans, making the model slightly different than other PFML programs in the region.

On January 1, 2024, a few updates to TDI and TCI became effective. The state’s taxable wage base increased to $87,000 in 2024, up from $84,000 in 2023. The contribution rate in 2024 is 1.2%, which is an increase of 0.1% from the previous two years.  The maximum weekly benefit is $1,043, not including the dependency allowance8, and the minimum weekly benefit is $130. 

The financial eligibility conditions claimants must meet increased. Employees must have paid contributions of at least $16,800 in the base period or meet the alternative conditions wherein they earned at least $2,800 in one of the base period quarters and base period taxable wages equal at least $5,600.

Rhode Island provides data on a weekly basis, which can be found on the State of Rhode Island Department of Labor and Training’s website.

New Hampshire: The First Year for the First Voluntary Program  

New Hampshire began paying benefits for the first Voluntary PFML Plan in the nation on January 1, 2023. New Hampshire employers can purchase coverage for 6 or 12 weeks through the state’s insurance carrier, MetLife, at any time. Employers may purchase coverage through other carriers, however the 50% Business Enterprise Tax (BET) Tax Credit will not apply. Individuals who are not covered by a NH PFML plan or equivalent plan may purchase individual plan coverage for 6 weeks. Individuals may only enroll during the open enrollment period, which is December 1, 2023, through January 29, 2024, for the 2024 plan year.

Premium amounts are determined through the underwriting and enrollment process but may not exceed $5 per week for individuals. No limit applies to employer premium.

The maximum weekly benefit for NH PFML is 60% of the Social Security wage cap ($168,600). Therefore, the maximum weekly benefit is $1,945.38 in 2024, an increase from $1,848.46 in 2023.

The state has not yet published 2023 claim data.

Other New England Updates

In addition to Massachusetts, Connecticut, Rhode Island, and New Hampshire, Vermont and Maine have evolving PFML programs.

Vermont launched their voluntary Family and Medical Leave Insurance (FMLI) program in 2023. Beginning on July 1, 2023, state employees were covered under the program. Other private and public employers with 2 or more employees can access the program on July 1, 2024, and small employers with one employee and individuals can purchase coverage for benefits beginning on July 1, 2025. Similar to New Hampshire, Vermont will offer 6 weeks of benefits at 60% of the Social Security wage cap. Cost will vary.

Maine officially created their Paid Family and Medical Leave program through the budget signed on July 11, 2023.  Rulemaking will launch in 2024, with contributions beginning January 1, 2025, and benefits becoming available on May 1, 2026. 

Are You Up to Speed?

Outside the region, California, Colorado, Delaware, Hawaii, Maryland, Minnesota, New Jersey, New York, Oregon, Washington, and the District of Columbia, as well as Puerto Rico, have mandatory paid family and medical leave and/or statutory disability insurance programs either in place or launching in upcoming years. As the PFML landscape continues to evolve at the local, state and federal level, policies need to be monitored on an ongoing basis.

PFML requirements are based on an employee’s work location. Employers should ensure they are compliant with the requirements of each individual leave program where they have employees working, and are aware of the differences by state. If any of your employees are subject to state PFML, you should review plans, policies, and processes to confirm they align with any legislative changes. To do so, the following checklist can be helpful:

If you need assistance ensuring PFML compliance or to assess the optimal plan set up for your organization, visit our Spring Consulting Group Paid Family and Medical Leave dashboard for additional information. 

The Problem

In the insurance, healthcare and benefits world, we have been helping clients challenged by things like inflation, hardened insurance markets, rising healthcare and prescription drug costs, remote and hybrid work, and other trends that continue to ebb and flow. On top of these dynamics, many consumers and organizations are beginning to open their eyes to the crisis that is long-term care in the U.S. The issues in this area became alarmingly obvious in the wake of the pandemic, and has continued to remain a top concern over the last several years. State Medicaid programs pick up significant long-term care costs and they are looking for ways to minimize these expenses.

Multiple studies show that 70% of Americans over the age of 65 will need Long-Term Care (LTC) at some point in their life, with the average duration being 3 to 4 years. The cost of an LTC stay is even more unaffordable than other components of healthcare in the U.S., with 2021 national annual averages as follows:

Long-Term Care insurance (LTCi) exists to prepare and provide a cushion for LTC needs.  With the LTC costs and expected use of the LTCi policy,  individual LTC is expensive. Forbes reported that the average LTCi cost for a male age 60 looking to purchase an LTC pool of $165,000 of coverage costs $1,200 a year. When we weave these factors into the aging population shift we’re experiencing, where the number of Americans aged 65 or older is expected to increase by 47% by 20501, we can see a huge problem on the not-so-distant horizon. Over the last 2 decades, the challenging environment has caused many LTCi carriers to exit the market, making coverage and pricing even more of an uphill battle.

Legislative Developments Driving New Entrants and Programs

Like with Paid Family and Medical Leave (PFML), states are starting to take things into their own hands regarding an LTCi funding solution, recognizing the dire situation for their constituents and the extensive drain LTC puts on publicly-funded programs like Medicare and Medicaid.

The State of Washington was the trendsetter in this area, passing its WA Cares program in 2022, key points of which include:

While Washington may be the first, many other states have LTC legislation on their docket. In 2019, California created a Long Term Care Insurance Task Force to explore the feasibility of developing and implementing a competent statewide insurance program for LTC services and support. To date, the Task Force has made the following recommendations for a more flexible program of that in WA:

The state of the California legislation is still in flux and it is uncertain when it will go into effect. In addition, some sort of LTCi plan is being or has been considered in over 10 other states including Connecticut, Colorado, North Carolina, Georgia, and Oregon. Legislation has been proposed in New York, Massachusetts, Pennsylvania, Minnesota, and Michigan, in addition to the two programs highlighted above.

While the maximum benefit payout (in the case of WA) will not be sufficient for most LTC needs, it is a step in the right direction, necessitating conversation and planning, and reducing some of the state’s burden. We do believe this trend will gain steam and momentum in the coming years. While some may be tempted to “wait and see,” we saw in Washington that many didn’t have time to secure a different option prior to the legal deadline and so were responsible for the tax. For this reason, we strongly advise our clients and their employees to review their LTC options now, while options still exist.

While state LTCi programs such as WA Cares revolve around an employee or employer tax, there is still administrative and compliance burden on employers to withhold, report, and submit those taxes. For these and other reasons, it may behoove employers to explore other options for employees either through a voluntary program or one partially sponsored by the employer.

Solutions in the Market

Luckily, long-term care insurance products have evolved from standalone LTC insurance to a hybrid program including life and LTC, or life and chronic illness riders. We also expect to see annuities becoming a bigger option in the future. Traditional medical insurance and long-term disability (LTD) typically will not cover much of anything related to LTC. More prevalent options include the following:

These solutions can be structured for groups (employer-paid or voluntary), executive carve-outs, or for individuals. Underwriting can come in the following formats: guaranteed issue, modified, or full.

Takeaways

For employers, LTC needs and insurance should be one piece of your reward and risk management strategy. We encourage companies to look at the LTCi realm and support employees where they can. A captive insurance model may provide a unique and cost-effective funding strategy. For individuals who already have an LTCi plan, you may want to consider “layering up” to ensure adequate coverage. Take a look at your duration limits, inflation riders, and other components. Regardless of your current position, a statutory LTC program could be coming to your state, and it’s best to be proactive in this area. Your broker/consultant should be equipped to help you navigate this complex landscape and provide solutions that make sense for your organization and its employees.

1 https://www.prb.org/resources/fact-sheet-aging-in-the-united-states/

Paid Family and Medical Leave continues to evolve throughout the country. While most of the activity has been at the state level, proposals have also been put forth federally. The programs passed by states vary in terms of covered workers, benefits paid, leave duration, funding, private plan availability and coordination with other leave programs. Variety across states leads to complexity for employers trying to navigate this landscape. Compliance concerns have also grown as the trend for remote work has continued, and as employers that hire across the nation must comply with laws where employees work.

A summary of changes to benefits and contributions in 2024 is below for each state program. Additional information can be found on Spring Consulting Group’s Paid Family and Medical Leave dashboard.

California

California’s Statutory Disability Insurance (SDI) law went into effect in 1946. In 2004, Paid Family Leave (PFL) requirements were added to the law, making it the first state to create a paid family leave program. In 2024, CA is increasing the contribution rate from 0.9% to 1.1%, which is fully paid by employees. Additionally, the SDI taxable wage maximum is eliminated, meaning all employee wages are subject to the SDI contribution requirement. This change does not apply to voluntary plans. The maximum weekly benefit will remain at $1,620.

Colorado

The Colorado Family and Medical Leave Insurance Program (FAMLI) officially begins paying benefits on January 1, 2024, after 1 year of collecting contributions. The contribution rate will remain at 0.9% of wages, however, Social Security wage limit is increasing to $168,600. Employees are responsible for up to 50% of the total contribution. In 2024, the maximum weekly benefit is $1,100.

Connecticut

The state began collecting contributions on January 1, 2021 and benefits became available one year later in 2022. Based on the experience in the state in 2022 and 2023, Connecticut is not making any major changes to the program in 2024. The contribution rate will remain at 0.5% up to the Social Security wage contribution cap, which is increasing to $168,600 in 2024 ($160,200 in 2023). In addition, the CT minimum wage increases to $15.69 per hour in 2024, which correlates to an increase of about $40 for the maximum weekly benefit, now $941.90. 

Delaware

The Delaware Paid Family and Medical Leave Insurance program was signed into law on May 11, 2022. The state has been developing rules and regulations prior to contributions beginning on January 1, 2025 and benefits become available on January 1, 2026.

The state was the first to provide an opportunity for employers with comparable leave programs to opt-out of the Delaware Paid Leave and grandfather their employer plan for up to five years. Employers had to submit applications by January 1, 2024. Additionally, employers who are interested in applying for private plans under Delaware PFML will be able to do so beginning in September of 2024.

Hawaii

Hawaii enacted the Temporary Disability Insurance (TDI) law in 1969 and remains the last state (other than Puerto Rico) to not add paid family leave provisions to their statutory disability program. 

In 2024, the maximum weekly benefit will increase by $33 to $798. The total contribution rate will vary by employer, however, employers can collect up to 0.5% of the maximum weekly wage base from employees, which equates to $6.87 per week. The maximum weekly wage base in 2024 is $1,374.78.

Maine

Maine officially created their Paid Family and Medical Leave program through the budget signed on July 11, 2023. Rulemaking will launch in 2024, with contributions beginning January 1, 2025, and benefits becoming available on May 1, 2026. 

Maryland

Maryland will begin collecting contributions on October 1, 2024, and begin paying benefits on January 1, 2026. The total contribution rate will be 0.90%. Employers can collect up to 0.45% from employees and are responsible for funding at least 0.45%. However, employers with less than 15 employees are not required to contribute the employer portion of the premium. Additionally, employers interested in applying for a private plan will be able to do so this fall.

Massachusetts

Massachusetts Paid Family and Medical Leave (PFML) began paying benefits for medical leave, bonding, and military reasons on January 1, 2021 after collecting contributions for 15 months. Leave to care for a family member began on July 1, 2021. After three years of experience, Massachusetts will be increasing the weekly maximum benefit amount and the contribution rate, effective January 1, 2024.  

The maximum weekly benefit is now $1,149.90, which is an increase of about $20 from the 2023 weekly maximum. For any employees who may have leave that runs from 2023 into 2024, the weekly benefit will be based on the beginning of the benefit year.

The total contribution is increasing from 0.63% to 0.88%, for employers with 25 or more covered individuals. The medical leave contribution will be 0.70%, with employers funding 0.42% and employees responsible for up to 0.28%. The family leave contribution will be 0.18%, with employers able to collect the total contribution from employees. Employers with less than 25 employees are not required to submit the employer portion of premium, so the effective total contribution rate is 0.46%.

The financial earnings requirement was also updated in 2024. Employees must have earned at least $6,300 and 30 times the PFML benefit amount during the last 4 completed calendar quarters to be considered eligible for MA PFML.

Minnesota

Minnesota is working to develop the rules for PFML. Contributions and benefits are set to begin at the same time on January 1, 2026, which would mean they are one of the only states to not pre-fund a PFML program in recent years. The contribution rate will be 0.7%, with employers funding at least 50%. Beginning in 2024, most employers will be required to submit a report detailing quarterly wages and hours worked for each employee.

New Hampshire

New Hampshire began paying benefits for the first Voluntary PFML Plan in the nation on January 1, 2023. New Hampshire employers can purchase coverage for six or 12 weeks through the state’s insurance carrier, MetLife, at any time. Employers may purchase coverage through other carriers; however the 50% Business Enterprise Tax (BET) Tax Credit will not apply. Individuals who are not covered by a NH PFML plan or equivalent plan may purchase individual plan coverage for six weeks. Individuals may only enroll during the open enrollment period, which is December 1, 2023, through January 29, 2024, for the 2024 plan year.

Premium amounts are determined through the underwriting and enrollment processbut may not exceed $5 per week for individuals. No limit applies to employer premiums.

The maximum weekly benefit for NH PFML is 60% of the Social Security wage cap ($168,600). The maximum weekly benefit is, therefore, $1,945.38 in 2024, an increase from $1,848.46 in 2023.

New Jersey

New Jersey was the third state to create a statutory disability insurance program when the Temporary Disability Benefits (TDB) law went into effect in 1948. In 2008, the state added Family Leave Insurance (FLI).

In 2024, the contribution rate and maximum weekly benefit will increase. The contribution rate will be 0.09%, up from 0.06% in 2023. The taxable wage base for employees will be $161,400. FLI is fully funded by employees. For TDI, employers pay a specific rate between 0.10% and 0.75%, up to the taxable wage base for employers of $42,300. Like in 2023, employees will not contribute towards TDI in 2024.

Earnings requirements have also increased. To qualify for NJ TDB and FLI in 2024, employees must have worked 20 weeks earning at least $283 per week or have earned $14,200 in the base year.

New York

New York Disability Benefits Law (DBL) went into effect in 1949. Paid Family Leave (PFL) was later introduced in 2018. In 2024 the contribution will decrease to 0.373%, from 0.455% in 2023. The rate will apply to wages up to the state average weekly wage of $1,718.15, and is fully funded by employee contributions. The maximum weekly benefit is also increasing to $1,151.16.

Oregon

Oregon benefits began paying on September 3, 2023, after collecting contributions for about 8 months, since the beginning of 2023. Effective January 1, 2024, the contribution rate will increase to 1%, up to the social security taxable wage maximum of $168,600. Employers can collect up to 60% of the total premium from employees. The maximum weekly benefit will remain at $1,523.63 and the minimum weekly benefit will be $63.49.

Puerto Rico

Puerto Rico launched their Non-Occupational Temporary Disability Insurance program, El Seguro por Incapacidad No Ocupacional Temporal (SINOT), in 1968. No paid family leave benefits have been added to date. In 2024, the maximum weekly benefit will remain at $113 ($55 maximum for agricultural workers) and the minimum weekly benefit will remain at $12. No change to the 0.6% contribution rate (up to $9,000 of earnings) has been announced for 2024. Employers may deduct up to 0.3% from employees.

Vermont

Vermont launched their voluntary Family and Medical Leave Insurance (FMLI) program in 2023. Beginning on July 1, 2023, state employees were covered under the program. Other private and public employers with 2 or more employees can access the program on July 1, 2024, and small employers with one employee and individuals can purchase coverage for benefits beginning on July 1, 2025. Similarly to New Hampshire, Vermont will offer 6 weeks of benefits at 60% of the Social Security wage cap. Cost will vary.

Rhode Island

Rhode Island established the first statutory disability program in the country in 1942, known as Rhode Island Temporary Disability Insurance (TDI). In 2014, they became the third state to offer family leave benefits through temporary caregiver insurance (TCI). The state does not allow private plans, making the model slightly different than other PFML programs in the region.

On January 1, 2024, a few updates to TDI and TCI became effective. The state’s taxable wage base increased to $87,000 from $84,000 in 2023. The contribution rate in 2024 is 1.2%, which is an increase of 0.1% from the previous two years.  The maximum weekly benefit is $1,043, not including the dependency allowance1, and the minimum weekly benefit is $130. 

The financial eligibility conditions claimants must meet increased so that employees must have paid at least $16,800 in the base period or meet the alternative conditions wherein they earned at least $2,800 in one of the base period quarters and base period taxable wages equal at least $5,600.

Washington

Washington began paying on January 1, 2020, after collecting contributions for a year. Effective January 1, 2024, the PFML contribution rate will decrease to 0.74% of an employee’s wage, up to the Social Security taxable wage maximum of $168,600. Employers must fund at least 28.57% and employees will contribute up to 71.43%. The maximum weekly benefit will increase to $1,456 per week.

Washington, D.C.

D.C. Paid Leave benefits began on July 1, 2020, and they had collected contributions since July 1, 2019. Effective October 1, 2023, the District released an updated Notice to Employees, which included an increased maximum weekly benefit, from $1,049 previously, to $1,118. No change has been announced to the 0.26% contribution rate, which is fully employer-funded.

What’s Next?

As the PFML landscape continues to evolve at the local, state, and federal levels, policies need to be monitored on an ongoing basis.

If you need assistance ensuring PFML compliance or to assess the optimal plan set up for your organization, Spring’s consultants are happy to help.

All information is subject to change.

1 Dependency allowance provides the greater of $10 or 7% of the benefit rate for up to 5 dependents