Bond requirements for approved self-insured plans

Self-insured employers seeking an exemption from making Paid Family and Medical Leave (PFML) contributions must provide a bond. These employers must furnish a bond running to the Commonwealth in an amount based on MA workforce size.

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General information about PFML Bond Coverage

A self-insured employer seeking an exemption from making Paid Family and Medical Leave (PFML) contributions must complete an exemption application and furnish a surety bond running to the Commonwealth of Massachusetts in an amount based upon its Massachusetts workforce size.

You may apply for an exemption online using your MassTaxConnect account. Learn more about exemptions

As of March 2020, our bond calculation formula and bond forms have changed for exemptions that are effective on April 1, 2020, and July 1, 2020. If you have applied or plan to apply for a self-insured exemption between January 1, 2020, and June 30, 2020, please be sure to use the correct bond form and instructions provided here.

Both the employer and a surety that is authorized to transact the business of indemnity and suretyship by the Massachusetts Division of Insurance must fully complete and execute the bond form. Please include your Federal Employer Identification Number (FEIN) on all bond submissions. An electronic surety bond is acceptable, but please ensure that the signature and seal is visible on all bonds.

You may upload a scanned copy of your complete bond form at the time of application. If you have already been provisionally approved for a self-insured exemption, further instructions about how to upload the bond form will be sent to your MassTaxConnect account.

Once you are informed that you are fully approved for a self-insured exemption, you will be required to mail the original bond to the Department of Family and Medical Leave (DFML) at:

Massachusetts Department of Family and Medical Leave
200 Arlington Street
Chelsea, MA 02150
Attn: Exemptions Department

Please do not send the bond form or other exemptions documentation directly to the DFML until you are instructed to do so.

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Contributions Bond Coverage

Information for April 1, 2020 and July 1, 2020 effective date exemptions

Self-insured employers with exemption applications submitted between January 1, 2020, and March 31, 2020, will have an exemption effective date and a bond effective date of April 1, 2020. The bond period will end on December 31, 2020, for 39 weeks of coverage (three quarters).

Self-insured employers with exemption applications submitted between April 1, 2020, and June 30, 2020, will have an exemption effective date and a bond effective date of July 1, 2020. The bond period will end on December 31, 2020, for 26 weeks of coverage (two quarters).

A Contributions Bond will be required from employers with an April 1, 2020, and a July 1, 2020, effective date. This is required so that the Commonwealth of Massachusetts may recover PFML contributions if an employer fails to maintain its self-insured PFML private plan prior to January 1, 2021.

Please note that the bond calculation and the bond form may change depending upon the effective date of your exemption. Please use this form and bond calculation for all exemptions with an effective date of April 1, 2020, or July 1, 2020.

Prior to the bond expiration date of December 31, 2020, employers with a self-insured private plan exemption will be required to obtain new bond coverage in an amount sufficient to cover its obligation to provide PFML benefits to its workforce. The DFML may require the employer to renew its plan and bond with an effective date of January 1, 2021. The DFML will post instructions on its website for obtaining sufficient bond coverage for the remainder of the employer’s exemption period at a later date. At that time, the DMFL will also provide further information about the exemption renewal requirements. Employers will also be notified via MassTaxConnect.

What's needed to calculate the Contributions Bond Value

For April 1, 2020, Effective Date Exemptions

The Contribution Bond formula for exemptions effective April 1, 2020, is based on the following values, which are multiplied by the 39 weeks in the bond period:

  • Your 2019 Average Workforce Count: Learn how to count your average Massachusetts workforce here.
  • The 2019-2020 Statewide Average Weekly Wage: The 2019-2020 Statewide Average Weekly Wage (SAWW) is $1,431.66. The SAWW is determined by the Director of the Department of Unemployment Assistance annually on October 1st.
  • The 2019 PFML Contribution Rate: This amount is set by the Director of the DFML annually on October 1.
    • The 2020 PFML contribution rate for family leave only is 0.13%
    • The 2020 PFML contribution rate for medical leave only is 0.62%
    • The 2020 PFML contribution rate for both family and medical leave is 0.75%

For July 1, 2020 Effective Date Exemptions:

The Contribution Bond formula for exemptions effective July 1, 2020, is based on the following values, which are multiplied by the 26 weeks in the bond period:

  • Your 2019 Average Workforce Count: Learn how to count your average Massachusetts workforce here.
  • The 2019-2020 Statewide Average Weekly Wage: The 2018-2019 Statewide Average Weekly Wage (SAWW) is $1,431.66. The SAWW is determined by the Director of the Department of Unemployment Assistance annually on October 1.
  • The 2019 PFML Contribution Rate: This amount is set by the Director of the DFML annually on October 1.
    • The 2020 PFML contribution rate for family leave only is 0.13%
    • The 2020 PFML contribution rate for medical leave only is 0.62%
    • The 2020 PFML contribution rate for both family and medical leave is 0.75%

Please round up to the nearest cent. Further instructions are available on our Contributions Bond instructions.

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What happens at the end of the bond period?

Before the bond period expires on December 31, 2020, a new bond will be required to cover the employer’s obligation to cover the repayment of PFML contributions if an employer fails i) to maintain its PFML private plan or ii) to provide paid family and/or medical leave benefits to its covered workforce on or after January 1, 2021. As stated above, the DFML may require the employer to renew its plan and bond with an effective date of January 1, 2021.

Because of these additional obligations, the bond value as of January 1, 2021, will be greater than the Contributions Bond value outlined above.

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