Employee benefits come in certain flavors of insurance, typically group benefits or worksite/voluntary benefits. In the former, employers purchase an insurance product and pay the premiums with employees sometimes sharing part of the premium expense. This can include health insurance and short- and long-term disability insurance. Worksite/voluntary products are offered to employees for purchase with the employee paying the full premium. Examples of such insured products include accident, hospital indemnity, and pet coverage.
When it comes to leave-related insurance, until recently, employers could only offer insured paid leave to employees suffering from a significant illness, injury, or pregnancy through short-term or long-term disability policies. No state law permitted employers to offer insurance that covered paid family leave to care for an ailing family member or to welcome a new child.
Now, two states are paving the way for insurance to create new market offerings in the forms of insured family leave (IFL) and insured family and medical leave (IFML): New Hampshire and Virginia.
New Hampshire
New Hampshire’s Granite State Paid Family Leave Plan is one of the first attempts to allow private industry to voluntarily provide much-needed insured IFML benefits to workers. (i) While the law first seeks an insurance carrier to provide New Hampshire state employees with paid family leave benefits, it also allows an unlimited number of insurance carriers to further provide IFML or IFL products to private employers with more than fifty employees if those employers opt into the program. The law goes one step further for employees who work for an employer who doesn’t opt into the Granite State program: those individuals can participate in an IFML plan for no more than $5 a week.
Virginia
In April, Virginia passed a ground-breaking bill that authorizes family leave plans as a type of insurance (IFL) that employers can voluntarily purchase for their employees. (ii) “Enactment of these laws is a major milestone for advancing paid family leave for workers nationwide. Virginia has built a model for other states to also help employers meet the needs of the modern workforce,” said American Council of Life Insurers (ACLI) President and CEO Susan Neely.
Paid leave remains incredibly popular among Republican, Democratic, and Independent voters.
However, Americans have been consistently divided on whether the government should become involved (51%). Given these sentiments, these new insured IFL or IFML products are a timely new market offering for our post-COVID world.
FINEOS makes life and leave easier. Carriers that use the FINEOS Platform, a purpose-built SaaS employee benefits platform, can quickly meet these new product opportunities in the market and provide important benefits to employees worldwide.
