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MA Paid Family Medical Leave Act: Overview and Update

/// Posted by Tom Connors

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By now, most businesses are aware and have engaged in the preliminary steps toward rolling out the Paid Family and Medical Leave Act (PFML) in Massachusetts. Starting January 1st, 2021, eligible Massachusetts workers will be able to take up to 26 weeks of paid family and medical leave benefits, meant to cover maternity and paternity leave, military exigency leave, and extended sick leave. On July 1st, 2021, covered workers will also be able to take up to 12 weeks of paid family leave for the needs around caring for a sick family member.

After an initial delay, MA-based employers and employees were required to contribute to the state’s PFML fund to finance the program as of October 2019. MA-based employers with 25 or more covered workers were required to remit a combined .75% of covered wages and smaller employers .378% of covered wages.

Covered workers include all full and part time W-2 employees in MA, as well as self-employed individuals, and 1099-MISC workers who do not qualify as independent contractors and make up 50% or more of their employer’s workforce. Covered workers cannot opt out of the program. Self-employed workers are not required to contribute but they are eligible to opt in directly through the state program.

Employers can apply for an exemption from collecting, remitting, and paying PFML contributions to the state if they offer an approved, private plan with benefits equal to or greater than those offered by the state program. Such exemptions can be granted by using either a qualified insurance-based program or a self-funded program that requires a posted bond and an affidavit filed with the state (Mass.gov) that will need to be refiled every year.

Insurance-based programs will also charge premiums determined by how they assess the risk of each employer, primarily based upon a group’s demographic factors. Rates range from lower than the state, to matching the .75% state rate, and higher, depending on each insurer and the demographics of the covered population. Claim forms for qualifying leaves are sent directly to the insurance provider, and this opt-out approach from the state program has gathered in popularity, particularly with some larger corporations. One major advantage of placing coverage with an insurance company is that there will be coordination with an employer’s short-term disability plan, and employers will have more input with a carrier vs. the state. The state of Massachusetts has recently extended the exemption filing deadline to December 31st, 2020 to submit renewals for fully insured plans.

In addition, all MA employers must display a workplace poster at their job site that is prepared or approved by the Department of Family and Medical Leave that explains benefits available to workers under the PFML law. A written notice to covered workers is also required, and employees need to acknowledge receipt of such notice. Employers should develop strategies to accomplish this “active” communication, and keep records of employee’s acknowledgement of this coverage.

Overview of Dates and Offered Benefits 

  • December 20, 2019: Original deadline to file a private plan exemption request for the first quarter of contributions. Applies to employers that have committed to securing benefits equal to or greater than what the PFML law requires. 
  • January 1, 2021: Covered workers may begin taking, per year:
    • Up to 20 weeks of paid medical leave for personal serious health condition
    • Up to 12 weeks of paid family leave for birth of child, adoption, or foster care placement
    • Up to 12 weeks of paid family leave for qualifying need due to a family member’s active duty in the military
    • Up to 26 weeks of paid family leave to care for a family member who is a covered servicemember with a serious health condition
  • July 1, 2021: Covered workers may begin taking, per year, up to 12 weeks of paid family leave to care for a family member with a serious health condition.

Total leave for workers under the Massachusetts PFML law is capped at 26 weeks per benefit year. Benefit amounts are based on average weekly earnings with a current maximum weekly benefit of $850.

This represents only a high-level overview of a complex and changing law. For a deeper dive into the program with specifics of how to calculate benefit amounts, who is covered, how to file for exemption, job protections, and where to get office posters and written worker notice templates, go to: www.mass.gov/guides/employers-guide-to-paid-family-and-medical-leave

And as always, you should reach out directly with any questions or needs in helping to navigate and best prepare for next steps.

 

Reviewing Life Insurance Needs in the Time of COVID

/// Posted by Aviva Sapers

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As we enter Life Insurance Awareness Month, it seems a good moment to reevaluate why we have the insurance we do and whether it is the right amount to fulfill the needs we have. Against the backdrop of the COVID-19 pandemic and with an election only months away that has the potential to greatly change tax policy, many are considering their mortality and financial security of their loved ones after they’re gone.

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Estate Planning Today for the World You Want Tomorrow

/// Posted by Aviva Sapers

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Often, when I begin a discussion with a client on estate planning, I remind them that they generally have three beneficiaries: family, charity, and Uncle Sam. I follow up with the question, “how much do you want to leave to each?” 

No one ever wants to leave their money to Uncle Sam, but the government will receive a piece of most everyone’s estate none-the-less — whether it be at the federal or state level, so you might consider incorporating philanthropy or bequests into your estate plan. With a deliberate, structured approach, you can leave specific assets to your kids and significant sums to charity, while paying zero estate taxes.

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Podcast Q&A: Estate Planning Today for the World You Want Tomorrow

/// Posted by Aviva Sapers

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Aviva Sapers, CEO & President at Sapers & Wallack, answers questions about our August blog, Estate Planning Today for the World You Want Tomorrow.

There is a pervasive myth that insurance products produce mediocre returns. In truth, though life insurance has been purchased for many years to provide security and guarantees, there are some newer product lines that can be very attractive for investment purposes—particularly in volatile markets. 

In order to remain competitive and relevant, the insurance industry has had to become much more creative with the investment options underlying their products. Years ago, they unveiled variable life insurance and variable annuities, where policyholders can invest monies that were over and above the cost of the insurance itself into mutual funds. Policyholders can choose from a myriad of mutual funds to invest in, much like what they’d find in various 401(k) plans, and now, some even offer target date funds as well. When the market goes up, the investment account or cash value accounts go up with it, and when the market declines, so do the underlying values to match a broader spectrum of risk tolerances.

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Aviva Sapers, CEO & President at Sapers & Wallack, answers questions about our July blog, Mitigating Downside Risk in the Market with Annuities and Life Insurance

Getting Your Financial House in Order

/// Posted by Evan Macedo

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Since many of us are stuck at home with our fiscal future full of bumps and potholes, I’ve found it to be a good opportunity to assess my relationship with personal finances. Full disclosure, I am a bit of an “Excel geek,” so expense tracking and spreadsheets are definitely in my wheelhouse. Nevertheless, this process need not be a burden, even for those of you who hate looking at numbers or facing the realities of your own spending habits. Getting your financial house in order may just be one of the most productive and important things you do this year. As someone who has just gone through the process, here are my favorite strategies that have worked well for me.

Analyze Last Year’s Income vs. Expenses

I, like so many others, spent the better part of a month not spending much money because we were told to only go out if we had to.  When I saw how much my credit card bill went down, I decided to analyze what I had been spending money on. For me, the easiest way to start this process was to export digital copies of online credit card “year-end summary” statements, and input those numbers, broken out by category, into an Excel spreadsheet. Since your credit cards conveniently categorize everything for you, pulling this together should be a cinch. Next, I added in any expenses that came out directly from my bank accounts, and when all else fails, I estimated the rest. The objective of this exercise is to scrutinize where all my spending went, how much I saved at the end of the year, and whether those numbers fell in line with my wealth building goals. I learned that I didn’t save nearly as much as I had planned to. It became painfully apparent that my Amazon purchases and fine dining habits would be the areas where I need to show more willpower in the coming year!

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Podcast Q&A: Getting Your Financial House in Order

/// Posted by Evan Macedo

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Evan Macedo, Vice President Finance & Operations at Sapers & Wallack, answers questions about our June blog, Getting Your Financial House in Order.

/// Posted by Ellen Bohn Gitlitz & Bill Smeltzer

No one would have predicted that we’d all be spending our spring, summer, and possibly beyond working remotely and restructuring how we engage with our coworkers, clients, and lives in general. Unfortunately, this extended period of disruption and uncertainty has also made us all more vulnerable to those who would capitalize on the moment.  As we’ve all turned to online solutions to remain connected, hackers, fraudsters, and thieves across the globe have unleashed their arsenals toward exploiting any weakness. Now more than ever, stringent cybersecurity protocols, backed by a comprehensive insurance policy, are necessary.

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Ellen Bohn Gitlitz, Executive Vice President Property & Casualty, Sapers & Wallack /The Hilb Group of New England answers questions about our May blog, Why Cybersecurity Insurance is More Important than Ever.