Colorado Releases Final Rules on Benefits and Employer Participation Requirements for Paid Medical and Family Leave Insurance Program, Clarifies Private Plan Option | Smaller
Colorado’s rule-making process for its new Paid Family and Medical Leave Insurance (“FAMLI”) program continues.1 On August 26, 2022, the state released the Final Benefits Rules and Employer Participation Requirements (“Benefits Rules”),2 which provide the most concrete guidance to date regarding the benefits employees will be entitled to under the FAMLI program as of January 1, 2024.3
This article focuses on key parts of the Colorado Employer Benefit Rules as they prepare to implement this new benefit for employees in Colorado, and provides updates on the status upcoming rules, including FAMLI-compliant private plan rules and coordination of FAMLI benefits with other employer-paid leave.
The benefit rules specify which employees are eligible for FAMLI benefits. Under FAMLI law, all individuals in Colorado are eligible for FAMLI benefits once they earn $2,500 during a “base period,” which generally means they have earned at least $2,500. $ salary in Colorado at any time during the previous year.
Importantly, the benefit rules specify that this $2,500 threshold can be reached “by any combination of employers.”4 In other words, the $2,500 threshold does not mean that the employee must earn $2,500 in compensation from a single employer to qualify for benefits. Functionally, therefore, most Colorado employees will be eligible for FAMLI benefits on or shortly after their first day of employment, unlike the federal Family and Medical Leave Act (FMLA), which provides that employees are not eligible for FMLA benefits as long as they have not been employed for at least 12 months (among other prerequisites).
Twelve rolling months
Under FAMLI, an employee is entitled to FAMLI benefits – up to 12 weeks of paid leave for qualifying reasons, and an additional 4 weeks for reasons related to pregnancy or childbirth – over a period 12 months counting down, beginning on the first day an employee begins receiving FAMLI benefits. Again, this differs from the leave provided by the FMLA, which gives employers the option of calculating a 12-month period based on a calendar leave, a fixed 12-month period, or a 12-month period. month sliding forward or backward. Employers can only use the 12-month period to assess eligibility for benefits under the FAMLI program.
Applications for FAMLI benefits
Additionally, the process for applying for employee benefits is more clearly spelled out in the Benefits Rules. Employees will apply for benefits directly to the FAMLI Division, unless an employer has been authorized to use a private plan to meet their FAMLI obligations. These requests can be submitted at least 30 days before an expected benefit start date, although the Division will also consider requests submitted at least 30 days after the leave commenced if notice was impracticable in the circumstances.
Employees must provide different forms of information to the Division depending on the nature of their leave. For example, a request for leave for an employee’s serious medical condition will require the employee to submit a “certificate of serious medical condition – personal form”, while a “certificate of serious medical condition – separate family member form” will be used if the leave is related to the serious medical condition of a family member.5
Notice to Employers of FAMLI Leave
Once a claim for FAMLI benefits is received by the Division, the Division will notify the claimant’s employer of the claim within five business days of submission.
Separately, however, the benefits rules specify that employers may require employees to notify the employer directly of the need for FAMLI leave, regardless of which Division notifies the claim for benefits. Employees should notify employers of their need for leave in the same manner as they would generally communicate their unavailability for work and should follow the employer’s usual and customary leave notices and procedures.6
Claims and Appeals Arbitration Process
Once a claim for FAMLI benefits is fully and correctly submitted by an employee, the Division will adjudicate the claim for benefits within two weeks.seven The Division will simultaneously notify the employee and employer of the outcome of the claim.
If benefits are approved, the Division’s notification will include the start date of the leave, the duration of the leave, any denied portions of the leave requested, and a description of any approved reduced leave or intermittent leave, if any. In addition, at the request of the employer, the Division will share certain information regarding the amount of benefits and the reason for leave to coordinate with other leave benefits provided by the employer, such as PTO, sick leave or other paid leave benefits.8
The benefits rules also provide separate and distinct mechanisms through which employers and employees can each file a grievance or appeal a determination of benefits:
- Employer grievance process. If an employer believes in good faith, supported by evidence, that an award of benefits was wrong, they may submit a “grievance” to the Division. This grievance may be based on the fact that the approved benefits are of an amount, duration or frequency beyond what the claimant is entitled to, or in a manner that unduly interferes with the activities of the employer. The Division will then investigate and rule on the employer’s grievance.9
- Employee appeal process. If a claim for benefits is denied, employees can appeal the unfavorable decision. Upon receipt of a timely appeal – such appeals must be filed within 30 days of the determination of the adverse claim, although this period may be extended to 60 days upon showing good cause – the Division will appoint an agent hearing to consider the case. Both the employee and the employer will have the right to participate in the appeal hearing. If the appeal is upheld, the employee can go to court.ten
Fitness for work certificates
The benefits rules confirm that employers can require a covered person to submit a fitness to work certificate upon returning to work for a serious medical condition, similar to the process provided by the FMLA.
Private plans and coordination of benefits rules
In addition to releasing the benefit rules, the state also released on August 31, 2022 a online seminar which specifically addresses a topic of great interest to Colorado employers: the process by which employers can meet FAMLI requirements through a private plan as opposed to the default state-run public plan.
It should be noted that the state has repeatedly emphasized in this webinar that the private plan rules have not been adopted and that it is currently holding meetings with stakeholders to ensure that the final rules on private plans respond to the interests of employers and insurers. In short, its current directions are not final and are subject to change. Still, the state has shed light on its current understanding of how employers can choose to use a private plan instead of the state-run FAMLI program.
In short, a private plan must offer benefits and protections equal to or superior to those of the public FAMLI plan. More specifically, with respect to the public FAMLI program, the private plan must:
- Provide the same number of weeks of benefits.
- Offer the same level of wage replacement.
- Do not include any additional requirements or conditions.
- Do not deduct more than the same amount from employee paychecks to fund the plan.
- Cover everything employees throughout their employment. This means that new, part-time, or temporary employees must be eligible for family leave and medical leave benefits as long as they earned $2,500 in the state of Colorado.
- Stay compliant with all other FAMLI requirements.
- Be state approved as compliant.
Additionally, the state has confirmed that all employers will be required to collect and remit premiums under the FAMLI program beginning January 1, 2023, even if the employer intends to meet FAMLI requirements through a private plan. However, employers will be eligible for a refund of these premiums if they have received state approval for a private plan with an effective date no later than January 1, 2024.
The state also confirmed that in addition to the private plan rules, it will also release separate rules on the coordination of FAMLI benefits with other paid and unpaid leave benefits, as well as changes to local government rules adopted at the beginning of 2022.11
Although employees will only be entitled to FAMLI benefits from 1 January 2024, employers have certain obligations which are due closer. Specifically, by January 1, 2023, Colorado employers will be required to register with My FAMLI+, the state-run FAMLI portal scheduled to launch in Q4 2022. Then, beginning January 1 2023, employers will have to start withholding premiums. payments and submit quarterly salary reports through the My FAMLI+ portal.
Once the private plan rules are released, Colorado employers will be able to make more informed decisions about meeting their FAMLI obligations through the state-run insurance program or a private plan.