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Important Guidance on 2022 Benefit Calculations and Transferring Back to PFML

The Department of Family and Medical Leave (the “Department”) has issued important guidance related to the calculation of benefit amounts based on the rates previously announced for 2022. 

With the increase in the State Average Weekly Wage effective January 1, 2022, the Department is issuing guidance related to the minimum requirements for private and self-insured plans to remain compliant and continue to qualify for exemptions from participation in the state program. This guidance specifically clarifies private plan requirements for:

  • application of 2022 benefit rates
  • renewed leave allotments
  • ownership of claims when a claimant either transitions between the state program and a private plan (or vice versa), or
  • when a claimant is covered by a private plan for one type of leave (medical or family) and by the state program for the other type

Table of Contents

Weekly Benefit Rate Calculation

As a reminder, the weekly amount a claimant is paid while on leave, the “benefit rate”, is determined based on a formula incorporating two factors:

(1) the claimant’s individual average weekly wage (IAWW), and 

(2) the state average weekly wage (SAWW)

Specifically, the portion of a claimant’s IAWW that is equal to or less than 50 per cent of the SAWW is replaced at a rate of 80 per cent; and the portion of a claimant’s IAWW that is more than 50 per cent of the SAWW is replaced at a rate of 50 per cent. This calculation is also subject to a cap that, starting in 2022, will be 64% of the SAWW. For 2022, the new state average weekly wage is $1,694.24 and the new maximum weekly benefit rate is $1,084.31. 

These two factors – the IAWW and the SAWW – must be applied in distinct ways.

  • For calendar year 2022, the SAWW – and the corresponding figures, including the 50% threshold used to calculate the benefit rate and the maximum benefit cap – will apply to all new claims that start in calendar year 2022.  Leaves that start on or after January 1, 2022, must be eligible for up to $1084.31 per week and providers must use 50 percent of the 2022 SAWW to calculate the benefit rate. 
  • To calculate benefits for leaves starting before January 1, 2022, providers must use the 2021 SAWW to calculate the benefit rate and claimants must be eligible for a maximum benefit rate of up to $850 per week.  (A plan that pays more than these requirements will still be compliant.) 

For calendar year 2022, although the SAWW will be determined based on the start date of a claim, the IAWW is calculated at the start of the benefit year and remains the same for all claims submitted during that benefit year. The benefit year is a period of 52 weeks rolling forward from the Sunday preceding the first absence from work for a qualifying leave reason. 

An individual is eligible for up to 12 weeks of family leave (or up to 26 weeks of family leave to care for an injured servicemember), up to 20 weeks of medical leave, all subject to a 26 weeks combined maximum for all covered leave reasons during the course of a single benefit year.  

The four completed quarters before the start of the benefit year determine a claimant’s IAWW: the IAWW is calculated based on the top two quarters of earnings divided by twenty-six weeks (or top one quarter of earnings divided by thirteen weeks if two or fewer quarters have earnings reported).  Accordingly, if a claimant starts a new claim in January 2022, but they had previously initiated a claim in July 2021, the second claim would occur within the same benefit year as the first claim. The benefit rate for the January 2022 claim must be calculated using the IAWW that was established at the beginning of the benefit year.

The compliance implications are as follows:  

Open leave claims that carryover from 2021 into 2022

Claims for benefits for approved leaves that started in 2021 and carry over into 2022 will continue to receive the same benefit rate through the sooner of the expiration of the claim or the expiration of the benefit year. 

  • Claimant A applies for benefits for a ten-week medical leave that starts December 1, 2021. 
  • This is Claimant A’s first leave, and so triggers Claimant A’s benefit year, which will run from November 28, 2021 through November 26, 2022. 
  • Claimant A’s IAWW is calculated based on Claimant A’s earnings during Q4 2020 through Q3 2021 (I.e., October 2020 through September 2021). 
  • Claimant A’s benefit rate during the benefit year is subject to the 2021 benefit cap - $850 and is also calculated using the 2021 SAWW.

New claims filed in 2022 during an open benefit year that began in 2021

Claims for an absence starting in 2022 where the claimant is still within an existing benefit year due to claims filed in 2021 must use the applicable SAWW rates from 2022 but must use the IAWW that was established at the beginning of the benefit year. 

  • Claimant B applies for benefits for a ten-week medical leave that starts on February 1, 2022.  

  • Claimant B had previously applied for and received benefits for an eight-week family leave that started on July 1, 2021.  

  • The family leave was Claimant B’s first leave and triggered Claimant B’s benefit year, which will run from June 27, 2021 through June 25, 2022. 

  • Claimant B’s family leave claim was subject to the 2021 benefit cap and SAWW, and calculated the IAWW based on Claimant B’s earnings in Q2 2020 through Q1 2021 (I.e., April 2020 through March 2021). 

  • The medical leave starting in February must use that same IAWW based on earnings from Q2 2020 through Q1 2021 and will also be subject to the 2022 benefit cap and 2022 SAWW. 

New claims filed in 2022 as part of new benefit year

A claimant’s benefit rate for an absence starting in 2022 where there is no “open” benefit year (i.e., where there are no claims previously filed within the past 12 months) should be calculated using the 2022 SAWW thresholds (including the 2022 maximum benefit cap and 50% of the 2022 SAWW) as well as the IAWW based on the four quarters of earnings immediately preceding the benefit year (I.e., the Sunday before that leave starts). 

  • Claimant C applies for benefits for a ten-week medical leave that starts on February 1, 2022. 

  • This is Claimant C’s first leave, and so triggers Claimant C’s benefit year, which will run from January 30, 2022 through January 28, 2023. 

  • Claimant C’s IAWW is calculated based on Claimant C’s earnings during Q1 2021 through Q4 2021 (I.e., January 2021 through December 2021). 

  • Claimant C’s benefit rate is subject to the 2022 benefit cap - $1,084.31 (or 64% of the 2022 SAW) - and the 2022 SAWW. 

Bonding leave following medical leave for pregnancy or childbirth

A claim for a bonding leave following a medical leave for pregnancy or childbirth will be treated as a separate claim, and the SAWW will apply accordingly. 

  • Claimant D applies for a twelve-week medical pregnancy/childbirth claim starting November 1, 2021. 

  • Claimant D also applies for a twelve-week bonding claim starting after the medical pregnancy/childbirth leave ends, starting January 24, 2022. 

  • The medical leave is Claimant D’s first leave, and so triggers Claimant D’s benefit year, which will run from October 31, 2021 through October 29, 2022. 

  • Claimant D’s IAWW for both claims is calculated based on Claimant D’s earnings during Q4 2020 through Q3 2021 (I.e., October 2020 through September 2021). 

  • The medical claim is subject to the benefit cap and SAWW for 2021, while the bonding claim is subject to the benefit cap and SAWW for 2022.  

Extensions

An extension will be subject to the SAWW and the maximum benefit cap of the year in which the extension starts. 

  • Claimant E applies for a ten-week medical claim starting November 1, 2021. 

  • This is Claimant E’s first leave, and so triggers Claimant E’s benefit year, which will run from November 28, 2021 through November 26, 2022. 

  • Claimant E’s IAWW is calculated based on Claimant E’s earnings during Q4 2020 through Q3 2021 (I.e., October 2020 through September 2021). 

  • Claimant E’s benefit rate is subject to the 2021 benefit cap - $850 – and the 2021 SAWW. 

  • Near the end of Claimant E’s medical leave, Claimant E files for a five-week extension, which would start January 10, 2022. 

  • This extension is subject to the 2022 benefit cap and SAWW, but still uses the same IAWW that was established at the beginning of the benefit year. 

Recalculation at end of benefit year

To be compliant, private and self-insured plans must calculate new benefit rates and new allotments at the start of a new benefit year if a leave extends beyond the current benefit year.  

Scenario 1: 

  • Claimant F took 19 weeks of medical leave starting on January 15, 2021, meaning their benefit year runs from January 10, 2021 through January 8, 2022. 

  • Claimant F subsequently requested an additional 20 weeks of medical leave benefits starting on December 1, 2021. 

  • Because Claimant F only has 1 week of medical leave left for F’s current benefit year, they would be approved for leave for December 1, 2021 through December 8, 2021 but denied for the remainder of the leave. 

  • Claimant F may reapply for medical leave benefits – up to 20 weeks – after January 8, 2022, the end of Claimant F’s first benefit year. 

  • Assuming Claimant F is otherwise qualified, Claimant F will be entitled to take up to 20 weeks, subject to a waiting week. 

  • Claimant F’s benefit rate for this new claim will be calculated based on Claimant F’s IAWW as of the start date of the new benefit year, and the 2022 SAWW and 2022 weekly benefit cap will apply.  

Scenario 2:  

  • Claimant G took 2 weeks of leave starting January 15, 2021, meaning their benefit year runs from January 10, 2021 through January 8, 2022. 

  • Claimant G subsequently requested 8 weeks of leave benefits starting on December 1, 2021. 

  • Claimant G would be approved for leave benefits from December 1, 2021 through January 8, 2022 (the end of Claimant G’s current benefit year). 

  • Claimant G may submit a new claim starting on January 9, 2022, which will start a new benefit year. 

  • Claimant G’s benefit rate for the new claim will be calculated based on Claimant G’s IAWW as of the start date of the new benefit year, and the 2022 SAWW and the 2022 weekly benefit cap will apply.  

The Department will consider compliant any plans that provide more generous benefits or allotments than described above. The above points should be seen as minimum standards for compliance.  

Claim Ownership

Under the PFML Program, it is possible for employers to switch coverage between the state and a private plan and vice versa. It is also possible for an employer to have an exempt private plan for medical leave benefits but participate in the state program for family leave benefits (or vice versa). Where multiple plans could cover a particular employee, coverage is determined for each claim individually and applies based on the plan in effect for those types of claims (I.e. family or medical) as of the start date of the leave covered by the claim. 

Employers who are transitioning between plans should provide employees as much notice as feasible about the change so that employees can submit their application under the appropriate, applicable plan. 

The compliance implications are as follows: 

  1. Claimants who apply in advance of their leave will need to apply with the carrier providing coverage as of the date the leave starts, and not the carrier providing coverage as of the date of the application. 

    1. Scenario 1: 

      • On May 15, Claimant Z submits an application to Insurer A, which is the carrier providing an approved exempt private plan to Claimant Z’s employer. 
      • Claimant Z’s leave starts July 5. 
      • The Employer’s exemption lasts until June 30. 
      • The Employer has decided not to renew the exemption – instead, the Employer’s employees will be covered by the state effective July 1. 
      • Claimant Z’s application for leave will be rejected by Insurer A. Claimant Z will be covered by the state and will need to reapply with the state. 
    2. Scenario 2: 

      • On May 15, Claimant Y submits an application to the state program. 

      • Claimant Y’s leave starts July 5. 

      • The Employer has applied for and been approved for an exemption starting July 1. 

      • Claimant Y’s application will be rejected by the state.  Claimant Y will be covered by the new insurer and will need to reapply with that insurer. 

    3. Scenario 3:

      • Through June 30, Claimant X’s Employer had an exempt private plan with Insurer B.

      • Effective July 1, Claimant X’s Employer has returned to the state plan.

      • On July 15, Claimant X files with the state a retroactive claim for a leave starting June 15.

      • Claimant X’s application will be rejected. Claimant X will need to reapply with Insurer B. 

  2. Medical pregnancy and new child bonding leaves are two separate claims and coverage must be analyzed separately, even if the bonding leave immediately follows the medical leave. 

    1. Scenario 1: 

      • Claimant W’s Employer provides medical leave through an exempt private plan with Insurer C and participates in the state plan for family leave only. 

      • Claimant W files an application with Insurer C for medical leave benefits and for bonding leave benefits immediately following the medical leave. 

      • Assuming Claimant W is otherwise eligible, Insurer C will grant the application for medical leave benefits. 

      • Insurer C will reject Claimant W’s application for family leave benefits (for new infant bonding).  Claimant W will need to apply to the state instead. 

      • Assuming Claimant W’s bonding leave immediately follows the medical leave, Claimant W will not incur a waiting week for her bonding leave benefits even though those benefits are paid by the state and the medical leave benefits were paid by a private insurer. 

  3. Timely-filed extensions are counted as part of the same claim for purposes of determining coverage. Timely-filed extensions are made within 14 days of the end of the leave. The extension must continue immediately from the end of the initial leave. 

    1. Scenario 1: 

      • Claimant V’s Employer has an exempt private plan with Insurer D in effect through June 30.  
      • Effective July 1, the Employer transitions coverage to a different exempt private plan with Insurer E. 
      • Claimant V files a claim for eight weeks of medical leave benefits starting June 1 with Insurer D. 
      • Before the end of the leave, Claimant V files with Insurer E a claim to extend the medical leave by another six weeks. The extension starts in late July. 
      • Insurer E rejects Claimant V’s application and Claimant V will need to file the extension with Insurer D. 
    2. Scenario 2: 

      • Claimant U’s Employer is covered by the state until June 30. 
      • Effective July 1, the Employer transitions coverage to Insurer F. 
      • Claimant U files a claim for eight weeks of medical leave benefits starting June 1 with the state. 
      • Claimant U returns to work in late July. After six weeks at work, Claimant U files with the state for another medical leave. 
      • The state will reject this claim because the leave is a new leave and not an extension of the original. 
      • Claimant U can file a new medical leave claim with Insurer F. This claim will be subject to a waiting week. 
    3. Scenario 3: 

      • Claimant T’s Employer has an exempt private plan with Insurer G in effect through June 30.  

      • Effective July 1, the Employer transitions coverage to the state. 

      • Claimant T files a claim for eight weeks of medical leave benefits starting June 1 with Insurer G. 

      • Three weeks after the end of the leave, Claimant T files with Insurer G a claim to extend the medical leave by another six weeks. The extension started in late July immediately after the end of the original leave. 

      • Insurer G rejects Claimant T’s application because it is late.  

      • Claimant V will need to file a new claim, subject to a waiting week, with the state. 

  4. Intermittent leave claims will be covered based on the approved period of intermittent leave and must be covered until the end of the approved period or the end of the benefit year, whichever is soonest.

    1. Scenario 1:

      • Claimant S’s Employer is covered by the state until June 30. 

      • Effective July 1, the Employer transitions coverage to Insurer H. 

      • Claimant S files with the state a claim for intermittent leave benefits. 

      • Claimant S’s medical certification indicates eligibility to take leave up to three times a week for six months, starting on June 1. 

      • Assuming Claimant S’s claim is granted, S will need to report the absences to the state and will receive benefits for up to three reported absences a week until December 1. 

      • If Claimant S needs additional leave after December 1, S may file an extension with the state. 

      • If the extension is missed, Claimant S would need to file an application for a new leave with Insurer H. 

      • This extension cannot go beyond May 31. After May 31, Claimant S would start a new benefit year and would need to file with Insurer H. 

    2. Scenario 2:

      • Claimant R’s Employer is covered by the state until June 30. 

      • Effective July 1, the Employer transitions coverage to Insurer J. 

      • Claimant R previously took leave starting September 1 of the previous year.  Accordingly, Claimant R’s benefit year started the Sunday before September 1 and runs through the end of August. 

      • Claimant R files for a new, intermittent leave. 

      • Claimant R’s medical certification indicates eligibility to take leave up to three times a week for six months, starting on June 1. 

      • Assuming Claimant R’s claim is granted, Claimant R will need to report the absences to the state and will receive benefits for up to three reported absences a week until the end of the benefit year in late August. 

      • After the end of the benefit year, Claimant R may apply to Insurer J for intermittent leave benefits (if leave is still needed), subject to a waiting week. 

Last updated: December 22, 2021
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