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Requirements for self-insured private paid leave plans

An employer seeking an exemption from making Paid Family and Medical Leave (PFML) contributions with a self-insured private plan must provide a surety bond. The surety bond must run to the Commonwealth in an amount based on the size of the employer’s Massachusetts workforce.

Table of Contents

General information

An employer seeking an exemption from making paid leave contributions with a self-insured private plan must submit a Self-Insured Insurance Declaration Document detailing that their plan meets necessary requirements and furnish a Surety Bond running to the Commonwealth of Massachusetts in an amount based upon the size of its Massachusetts workforce.  

Learn more about benefit requirements for private paid leave plan exemptions

Additional Resources

Surety bond coverage

A surety bond must be completed on the designated form approved by DFML. If the surety bond is for multiple entities, please list ALL covered entities on the form and if necessary, obtain surety bond riders to ensure coverage for all entities listed on the form. Please note, the effective date of the bond and the effective date of the exemption must be the same. 

For example: 

If you are applying for an exemption to cover 6 entities with an effective date of January 1, 2023, you should submit the form listing all 6 entities and ensure the bond submitted covers all entities listed. The effective date of the bond also should be January 1, 2023.  

You must file this form with a unique exemption application for each entity. DFML cannot approve more than one entity per application for exemption. Learn more about exemption information for multi-entity employers .  

What's needed to calculate the bond value

The surety bond covers DFML if an employer with a private plan fails to meet their benefits obligations under paid leave. The bond amount is based on the employer’s expected cost of benefits payments.    

DFML estimates that for every 25 employees covered, the total cost of benefits is $16,000 for a combined family and medical leave plan. Most of this cost is associated with medical leave ($10,000) and the remainder family leave ($6,000).   

Bond Formula:  

  • Family leave exemption required surety amount 

    • $6000 * (total workforce rounded up to the next increment of 25/25) 

  • Medical leave exemption required surety amount 

    • $10,000 * (total workforce rounded up to the next increment of 25/25) 

  • Combined exemption required surety amount 

    • $16,000 * (total workforce rounded up to the next increment of 25/25) 

Bond Calculator:

DFML has created a bond calculator to help businesses determine the bond amount required for the exemption type they are applying for. Bonds are administered in increments of 25, so our bond calculator will round up your workforce total. For example: if you have a workforce of 10, your workforce will be rounded up to 25 for your bond calculation. If you have a workforce of 230, your workforce will be rounded up to 250 for your bond calculation.  

To use the bond calculator, you will need your average number of annual W-2 employees and 1099-MISC workers (if 1099-MISC workers account for more than 50% of your workforce) from the previous completed calendar year. Once you have determined your average workforce, enter that number into the calculator and the calculator will give you the bond amount required for the exemption type you are applying for. 

Examples:

Workforce Count 25 100 500 1,000 10,000
Family Leave $6,000.00 $24,000.00 $120,000.00 $240,000.00 $2,400,000.00
Medical Leave $10,000.00 $40,000.00 $200,000.00 $400,000.00 $4,000,000.00
Both $16,000.00 $64,000.00 $320,000.00 $640,000.00 $6,400,000.00

Applying for a self-insured plan exemption

You may apply for an exemption online using your MassTaxConnect account. You will need your Self-Insured Insurance Declaration Document and your Surety Bond Form.   

A self-insured bond form must be executed by both an employer and an authorized surety. You may upload a scanned copy of your completed 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.   

Please include your Federal Employer Identification Number (FEIN) on all bond submissions. An electronic surety bond that clearly displays both a signature of acceptance and the seal of the surety is acceptable. The signature and seal must be visible on all bonds.    

Electronic surety bond submissions are an acceptable form of proof. You aren't required to mail a copy of your original bond to DFML.   

If you are applying for a PFML exemption for multiple entities, go here for exemption Information for multi-entity employers.  

Additional Resources

Reporting a change to your approved exemption

If you are switching your exemption to a purchased private plan before your exemption renewal period, you must inform DFML at least 30 days prior to the change taking effect. You must send an e-message via your MassTaxConnect  account explaining that you are switching to a purchased private plan offered by an insurance carrier and attach the required documents. Call the Contact Center at (617) 466-3950 if you need help.

When switching to a purchased private plan, you must attach a completed Massachusetts Paid Family and Medical Leave Confirmation of Insurance Form.  Learn more about requirements for purchased private plans

Contact

Phone

Get answers to your questions in English, Español, and Português. Translation services for up to 240+ languages are also available. (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.

Last updated: September 29, 2022
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