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Reimbursements for qualifying paid leave plans through PFML

Under the Paid Family Medical Leave (PFML) law (M.G.L. c. 175M, section 3(c)), a business or organization that has not received an exemption but offers a paid temporary disability, family, or medical leave policy may be eligible to be reimbursed for those paid benefits.

Table of Contents

Overview

If your business or organization offers a paid temporary disability, family, or medical leave policy or extended illness leave bank which provides your workers the type of benefits available under Paid Family Medical Leave (PFML), and it has not been granted an exemption under the law, your business or organization may be eligible to be reimbursed for those paid benefits provided to your employees on or after January 1, 2021.   

Please note that payments for an employee’s earned time (including PTO, sick, and vacation time) are not eligible for reimbursement. Additionally, benefits paid through a self-insured or fully-insured plan that has been approved for exemption by the Department are not eligible for reimbursement. 

If your business or organization makes payments to a covered individual during a period of family or medical leave that are equal to or greater than the amount required under 458 CMR 2.12(2) through (6), your business or organization may be reimbursed out of any benefits due to the covered individual or to become due from the Trust Fund by the Department. 

Additionally, in no event shall employers be eligible for reimbursement where the Department has issued payments directly to the employee for the same period of time covered under the reimbursement application. 

At this time, an employee must first file an application with the Department before a Leave Administrator can request a reimbursement.   

Qualifying for reimbursements

Only certain payments to employees are eligible for reimbursement. To qualify for reimbursements, your business or organization’s   policy or program must make payments to workers for one of PFML’s qualifying reasons, and such payments must be separate from any accrued paid leave earned by the employee such as sick leave, annual leave, vacation, personal leave, or paid time off. Employers will not be reimbursed for payments made to an employee when the employee has chosen to use those types of earned time to cover their absence.  

A voluntary program where employees may donate leave time to fund a bank for the benefit of a co-worker experiencing a qualifying reason may be reimbursable.  

The Department will only reimburse payments that are equal to or greater than the amount required under 458 CMR 2.12(2) through (6), and in no case may the weekly reimbursement exceed the employees weekly benefit amount, as calculated by the Department.    

For example: An employee applies for 12 weeks of family leave with the Department and gets approved for leave with a weekly benefit amount of $650 per week. Their employer offers employees a plan that provides $900 per week for 6 weeks of family leave.  If the employee opts to take advantage of the employer’s family leave policy and the employer makes payments of $900 per week for the first 6 weeks of leave, the Department will reimburse the employer $650 per week for weeks 2-6 (week 1 is a waiting week under DFML and the employee would have received no benefit), and the Department will pay $650 in weekly benefits directly to the employee (with no reimbursement to the employer) during weeks 7-12. 

What payments are eligible for reimbursement?

The following may qualify for reimbursement from the Department to an employer: 

  • Payments from an employer’s temporary disability policy or program or payments made from an employer’s paid family, or medical leave policy 

An employer temporary disability policy or employer paid family and medical leave policy (that has not been granted an exemption) is a policy of an employer that is offered to an employee for use associated with a Qualifying Reason (defined in 458 CMR 2.02). To be eligible for reimbursement the employer temporary disability policy or employer paid family and medical leave policy must be a self-insured plan of an employer. A self-insured plan of an employer is a plan that is exclusively funded by the employer for purposes of benefit payments. Employers who have fully insured, rather than self-insured, plans will not be reimbursed for payments made from an insurer, even where the employee or the employer pays any portion of the premium on the insurance plan.  

  • Payments made from an extended illness leave bank 

An “extended illness leave bank” (EILB) is a voluntary program where covered individuals may donate accrued leave time to fund a bank for the benefit of a co-worker (or themselves). In order to be reimbursable, a payment from an EILB must be granted to a covered individual for a qualifying reason under M.G.L. c. 175M, and the EILB must be separate from and in addition to any accrued paid leave that is made available to the covered individual. 

Requirements for reimbursement eligibility

To qualify for reimbursement from the Department, the employer policy shall notify the employee of its terms which shall include at a minimum the following provisions:  

  • The employee will be eligible for job protected leave under the employer policy where the employee takes leave under the employer policy either i) before any leave is taken with the DFML or ii) in lieu of any leave taken with the DFML; 

  • The leave will run concurrently with the leave period provided in M.G.L. c. 175M; and 

  • The leave can only be taken for a qualifying reason.

An employer temporary disability policy or employer paid family and medical leave policy may have different tiers for various employees (for example, based on years of service), but availability of the paid leave period is based solely on use associated with a Qualifying Reason (for example, bonding with a newborn, caring for a family member with a serious health condition, tending to an employee’s own personal serious health condition, etc.,) and not an employee’s permissible use of earned, accrued or otherwise available paid time off.   

How to request a reimbursement

To submit a request for reimbursement, a Leave Administrator for your organization will need to log into PaidLeave.mass.gov where they will find a link to a form to submit a request for reimbursement. The Department cannot accept a request for reimbursement from any business or organization that does not have a Leave Administrator contact set up with the Department.   

At this time, an employee must first file an application with the Department before a Leave Administrator can request a reimbursement.   

The Department will continue to explore a solution where an employer can submit an application for reimbursement where an employee is only receiving payment from their employer during their leave and is not otherwise applying for a benefit from the DFML.   

To complete the reimbursement form, the Leave Administrator will need to provide:  

  • The name of business or organization to be reimbursed

  • The organization’s FEIN 

  • Contact information for the leave administrator filling out the application 

  • A copy of the business or organization’s paid leave plan 

  • The employee’s PFML application ID number 

Confirmation that the business or organization’s paid leave plan: 

  • Is self-insured and fully funded by the employer and not funded by an external insurer

  • Is paid separately from any of your employees earned accrued time, not including an extended illness leave bank

  • Allows employees to use other accrued time, such as sick leave, to supplement this plan

  • Allows employees to use the plan only for one of PFML’s qualifying reasons 

  • Provides that leave will run concurrently with the leave period provided in M.G.L. c. 175M 

  • Affords employees job protection pursuant to 458 CMR 2.16 

  • Name of entity that sent or will send payment to the employee in connection with the claim 

  • Proof of the number and amount of payments that have been made or will be made to the employee 

  • The dates and amounts of each payment 

  • The qualifying reason (See 458 CMR 2.00) for the leave requested and approved by the employer 

  • Dates of leave approved by the employer 

  • If reimbursement is approved, who within the organization should receive reimbursement payments 

  • The mailing address where payment should be sent (reimbursements will be sent via check) 

  • Employers will also need to agree to the terms and conditions involving the request for reimbursement payments 

If approved for reimbursement payments please allow up to 30 days following approval for Department to issue payment. 

All reimbursement payments will be sent via check. 

What Is a Temporary Disability Policy or Paid Family or Medical Leave Policy of an Employer?

An employer’s temporary disability policy or paid family and medical leave policy (that has not been granted an exemption) is a policy of an employer that is offered to an employee for use associated with a Qualifying Reason (defined in 458 CMR 2.02). The employer’s temporary disability policy or paid family and medical leave policy must be a self-insured policy exclusively funded by the employer. A self-insured plan of an employer is a plan in which benefit payments are made directly to the employee by the employer, and not by an insurer.  

An employer’s temporary disability policy or paid family and medical leave policy may have different tiers for various employees (for example, based on years of service), but availability of the paid leave period must be based solely on its use being associated with a Qualifying Reason (for example, bonding with a newborn, caring for a family member with a serious health condition, tending to an employee’s own personal serious health condition, etc.,) and not an employee’s permissible use of earned, accrued or otherwise available paid time off.   

All temporary disability policies or paid family and medical leave policies or plans of an employer may be used for top offs, but only self-insured plans where benefit payments are made directly by an employer rather than an insurer are reimbursable under 458 CMR 2.12(9). 

Contact

Phone

For questions about benefits and eligibility: (833) 344-7365

Department of Family and Medical Leave - Hours of operation: Monday-Friday, 8 a.m - 5 p.m.

Fraud Reporting Hotline: (857) 366-7201

Department of Family and Medical Leave - Hours of operation: Monday-Friday, 8 a.m - 5 p.m.

For questions about contributions and exemptions: (617) 466-3950

Department of Revenue - Hours of operation: Monday-Friday, 8:30 a.m. - 4:30 p.m.

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