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Important Guidance on Benefit Calculations and Application Ownership

Employers must meet 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 2024 benefit rates
  • Renewed leave allotments
  • Ownership of applications when an employee either transitions between the state program and a private plan (or vice versa), or
  • When an employee 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

Important Terms

  • What is the benefit rate?  The weekly amount an employee is paid while on leave.

  • What is the individual average weekly wage (IAWW)? The IAWW is the amount an employee earned in their base period. The IAWW is the average amount an employee earned per week in the two quarters when they earned the most money (or the one quarter with the most money if they only worked in two or fewer quarters).

  • What is a base period? An employee's base period is the last four completed quarters before the start of the benefit year.

  • What is a benefit year?  A benefit year is unique to the employee and based on when they take time off through any leave program. The benefit year starts the Sunday before their first day of leave and lasts for 52 consecutive weeks. The benefit year determines their benefit rate, which will stay the same for the entire benefit year even if the employee files multiple applications or take different types of leaves. The benefit rate will only change when the employee starts a new benefit year.

  • What is the state average weekly wage (SAWW)? The SAWW is a fixed amount established by the commonwealth of Massachusetts every calendar year. DFML uses the SAWW from the calendar year when an employee's benefit year starts.

  • What is a qualifying reason? A qualifying reason is the cause or event that makes you unable to work and eligible for leave benefits.

Weekly Benefit Rate Calculation

The formula

The weekly amount an employee is paid while on leave, or the benefit rate, is initially calculated based two factors:

  1. The employee's individual average weekly wage (IAWW)

  2. The state average weekly wage (SAWW)

DFML calculates the benefit as follows:

  • The portion of the IAWW that is equal to or less than 50% of the SAWW is replaced at a rate of 80%

  • Then, the portion of a the IAWW that is more than 50% of the SAWW is replaced at a rate of 50%

  • This calculation is also subject to a maximum weekly benefit amount, which is 64% of the SAWW

For 2023, the state average weekly wage is $1,765.34 and the maximum weekly benefit rate is $1,129.82. For 2024, the state average weekly wage is $1,796.72 and the maximum weekly benefit rate is $1,149.90.

Other factors that affect benefit calculations and the length of the leave

  • The benefit year determines how much leave an employee has available. An employee is eligible for up to 12 weeks of family leave (or up to 26 weeks of family leave to care for an injured service member) and up to 20 weeks of medical leave.  However, an employee can only take a combined maximum of 26 weeks during the course of a single benefit year.  
  • If a portion of an employee's leave spans two benefit years, DFML will split their leave into two parts. DFML will calculate the weekly benefit amount for each part of the leave separately because the weekly benefit rate could be different. As a result, the employee may receive different payment amounts for each part. They will also have two 7-day waiting periods, one for each part of their leave.
  • Other instances of paid and unpaid leave (for any qualifying reason) may reduce the weekly benefit an employee is paid.

Compliance

  • Open leave applications that carryover from 2023 into 2024
    • Applications for benefits for approved leaves that started in 2023 and carry over into 2024 will continue to receive the same benefit rate through to the expiration of the application or the expiration of the benefit year, whichever comes first.
  • New applications filed in 2024 during an open benefit year that began in 2023
    • Applications for a leave starting in 2024 where the employee is still within an existing benefit year due to applications filed in 2023 must use the applicable SAWW rates from 2023 but must use the IAWW that was established at the beginning of the benefit year. 
    • In addition, the maximum weekly benefit amount for 2023 will be applied since the employee is still in the benefit year that started in 2023.
  • New applications filed in 2024 as part of new benefit year
    • An employee's benefit rate for a leave starting in 2024 where there is no “open” benefit year (i.e., where there are no applications previously filed within the past 12 months) should be calculated using the 2024 SAWW thresholds (including the 2024 maximum benefit cap and 50% of the 2024 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). 
  • Leave to bond with a child following medical leave for pregnancy or childbirth
    • An application for a family leave to bond with a child following a medical leave for pregnancy or childbirth will be treated as a separate application, and the SAWW will apply accordingly. 
  • Extensions
    • An extension will be subject to the SAWW and the maximum benefit cap of the benefit year that if fall within.
  • 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.  
    • DFML will consider compliant any plans that provide more generous benefits or allotments than PFML.

Application 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 application individually and applies based on the plan in effect for those types of applications (i.e. family or medical) as of the start date of the leave covered by the application. 

If you are not planning on renewing your exemption, it is imperative that you inform us immediately to avoid any problems with applications filed by your employees for leave.

Here are the steps you need to follow:

  1. Fill out this form to let DFML know that you will not be renewing. Provide your tax I.D. number, your MassTaxConnect PFML account number, and the name, title, and work email of the person who will be the leave administrator for your PFML employer account.

  2. Create a PFML employer account for the person(s) you have named as the leave administrator for your organization. You will need to provide their work email (the same as in the form), a password, and the Employer ID Number (EIN). DFML will verify this initial leave administrator for your organization. You will need to enable MFA when you create the account in order to add additional verified leave administrators for your organization.

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.

Here is how coverage works for different scenarios:

  1. Employees 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 (Switching to PFML): 
      • On May 15, Dylan submits an application to Ronco Insurance, which is the carrier providing an approved exempt private plan for Dylan’s employer.
      • Dylan’s leave starts July 5. 
      • Their employer’s exemption lasts until June 30. 
      • The employer has decided not to renew their exemption – instead, the employer’s employees will be covered by the state PFML program effective July 1. 
      • Dylan’s application for leave will be rejected by Ronco Insurance. Dylan will be covered by the state PFML program and they will need to reapply with PFML. 
    2. Scenario 2 (Switching to a private insurer): 
      • On May 15, Aubrey submits an application to the state PFML program.
      • Aubrey’s leave starts July 5. 
      • Their Employer has applied for and been approved for an exemption starting July 1. 
      • Aubrey’s application will be rejected by PFML. Aubrey’s application will be covered by the employer’s insurer (or the new insurer that their employer uses). Aubrey will need to reapply with that insurer.
    3. Scenario 3 (Retroactive applications):
      • Through June 30, Lennon’s employer had an exempt private plan with the employer’s insurer.
      • Effective July 1, Lennon’s employer has returned to PFML.
      • On July 15, Lennon files with the state PFML plan a retroactive application for a leave starting June 15.
      • Lennon's application will be rejected. They will need to reapply with Ronco Insurance.
  2. Medical pregnancy leave and new family leave to bond with a child are two separate applications and coverage must be analyzed separately, even if the family leave to bond with a child immediately follows the medical leave. 

    1. Scenario 1 (Medical with private insurer; Family with PFML): 
      • Maria’s employer provides medical leave through an exempt private plan with Ronco Insurance and participates in the state PFML program for family leave only. 
      • Maria files an application with Ronco Insurance for medical leave benefits and for family leave benefits immediately following the medical leave. 
      • Assuming Maria is eligible, Ronco Insurance will grant the application for medical leave benefits. 
      • Ronco Insurance will reject Maria’s application for family leave benefits. Maria will need to apply to the state PFML program instead. 
      • Assuming Maria’s family leave immediately follows the medical leave, Maria will not incur a waiting week for their family leave benefits even though those benefits are paid by PFML and the medical leave benefits were paid by Ronco Insurance, a private insurer.
  3. Extensions filed within the required timeframe of 30 days from the end of leave are counted as part of the same application for purposes of determining coverage. The extension must continue immediately from the end of the initial leave. 

    1. Scenario 1 (Extension from one private plan to another private plan): 
      • Kai’s employer has an exempt private plan with Ronco Insurance in effect through June 30.  
      • Effective July 1, the employer transitions coverage to a different exempt private plan with Ladybug Insurance. 
      • Kai files an application for eight weeks of medical leave benefits starting June 1 with Ronco Insurance. 
      • Before the end of the leave, Kai files with Ladybug Insurance an application to extend the medical leave by another six weeks with Ladybug Insurance. The extension starts in late July. 
      • Ladybug Insurance rejects Kai’s application. Kai will need to file the extension with Ronco Insurance.
    2. Scenario 2 (Extension with PFML to a private plan): 
      • Rowan’s employer is covered by the state PFML program until June 30. 
      • Effective July 1, their employer transitions coverage to Smith Insurance. 
      • Rowan files an application for eight weeks of medical leave benefits starting June 1 with the state PFML program. 
      • Rowan returns to work in late July. After six weeks at work, Rowan files with PFML for another medical leave. 
      • PFML will reject this application because the leave is a new leave and not an extension of the original. 
      • Rowan can file a new medical leave application with Smith Insurance. This application will be subject to a waiting week.
    3. Scenario 3 (Extension with private plan to PFML): 
      • Finley's employer has an exempt private plan with Stickbug Insurance in effect through June 30.  
      • Effective July 1, the employer transitions coverage to the state PFML program. 
      • Finley files an application for eight weeks of medical leave benefits starting June 1 with Stickbug Insurance. 
      • Three weeks after the end of the leave, Finley files with Stickbug Insurance an application to extend the medical leave by another six weeks. The extension would start in late July immediately after the end of the original leave. 
      • Stickbug Insurance rejects Finley’s application because it is late.  
      • Finley will need to file a new application, subject to a waiting week, with the state PFML program.
  4. Intermittent leave applications 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 (Intermittent leave with PFML to private plan with an extension):
      • Effective July 1, the employer transitions coverage to Doodlebug Insurance. 
      • Bailey files application with PFML for intermittent leave benefits. 
      • Bailey’s medical certification indicates eligibility to take leave up to three times a week for six months, starting on June 1. 
      • Assuming Bailey’s application is granted, Bailey will need to report the absences to the state PFML program and will receive benefits for up to three reported absences a week until December 1. 
      • If Bailey needs additional leave after December 1, Bailey may file an extension with PFML. 
      • If the extension is missed, Bailey would need to file an application for a new leave with Doodlebug Insurance. 
      • This extension cannot go beyond May 31. After May 31, Bailey would start a new benefit year and would need to file with Doodlebug Insurance.
      • Bailey’s employer is covered by the state PFML program until June 30.
    2. Scenario 2 (Intermittent leave with PFML to private plan over two benefit years):
      • Charlie’s employer is covered by the state PFML program until June 30. 
      • Effective July 1, the employer transitions coverage to Junebug Insurance. 
      • Charlie previously took leave starting September 1 of the previous year.  Accordingly, Charlie’s benefit year started the Sunday before September 1 and runs through the end of August. 
      • Charlie files for a new, intermittent leave. 
      • Charlie’s medical certification indicates they are eligible to take leave up to three times a week for six months, starting on June 1. 
      • Assuming Charlie’s application is granted, Charlie will need to report the absences to the state PFML program 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, Charlie may apply to Junebug Insurance for intermittent leave benefits (if leave is still needed), subject to a waiting week.
Last updated: April 3, 2023

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