Bill Amending Paid FMLA Clears State Senate
The state Senate approved legislation May 24 amending the Paid Family and Medical Leave Act as it relates to private short term disability policies—a move that could harm, rather than help, many Connecticut workers.
SB 1179 amends both the paid FMLA law and Connecticut Family Medical Leave Act to prohibit disability benefits from being offset by benefits received under such programs.
Prior to passage of the state’s paid FMLA law in 2019, CBIA and other advocates predicted that employers would respond to the new mandate by dropping voluntary (and often employer-sponsored) short-term disability policies for employees.
However, insurers responded to the new mandate by reducing the price on short-term disability policies as a result of the offset—prompting many employers to continue to provide short term coverage for employees.
Organized labor saw that as employers receiving a “windfall” in the form of savings on short-term disability policy costs (despite the fact many employers entirely pay for such policies) as employees contribute to the state-mandated FMLA program.
Paid FMLA advocates were also under the misguided impression the two benefits would be stacked to provide employees with their entire salary while on leave, leading to the proposed elimination of this offset.
There are significant public policy implications for eliminating this offset.
For one, there will be circumstances where beneficiaries are incentivized to remain out of the workforce because their benefits will be equivalent to their wages.
This will exacerbate Connecticut’s current workforce shortage crisis.
However, the more likely result will be that employers will no longer be able to afford the short-term disability policies they currently provide.
Employees will then have to rely solely on Connecticut paid FMLA program for wage replacement during periods of leave.
The Connecticut program provides up to 14 weeks of leave each year for an employee or family member’s medical condition.
Short-term disability policies typically provide up to 26 weeks of annual leave.
This will significantly reduce the total wage replacement benefits and benefit weeks available to employees who need to take time off for a disability.
An amendment called on the Senate floor made slight modifications to the limitation on offsets.
The bill also permits tribal enterprises to join the state paid FMLA program.
SB 1179 passed on a largely party-line vote, with Sen. Heather Somers (R-Mystic) the lone Republican joining all Democrats to support the bill.
The bill is bad for employers and bad for employees, but regardless, is on its way to the House.
For more information, contact CBIA’s Eric Gjede (860.480.1784) | @egjede.
EXPLORE BY CATEGORY
Stay Connected with CBIA News Digests
The latest news and information delivered directly to your inbox.
1 thought on “Bill Amending Paid FMLA Clears State Senate”
The state takes a lot of money out of my check every week I myself I have to go in for a double knee replacement, the insurance I pay for through my work I will not be able to pay my rent or put food on my table while I am on short term disability Having a double knee replacement I will be out of work for three months. Looks like I might be out of residence to.