The benefits team at Allen Insurance and Financial continues to monitor the progress of the rulemaking process on the Maine PFML, working with both legal and insurance company experts.
With the recent release of the draft rules for public comment, one previously unclear aspect of the rule has come to light and we are encouraging employers to comment.
Draft rules indicate that an employer may not submit an application to exit the state plan and substitute with a private plan until January 1, 2026, with an effective date not earlier than April 1, 2026.
Regulations towards private plan entry also note the employer as responsible for premiums under the state program until the effective date of the private plan, which would be April 1, 2026. What this means, as currently outlined, is that employers seeking private plan administration will be required to pay into the state plan starting January 1, 2025, without a refund of those contributions.
The regulations are not final and are open to public comment. We want to make you aware of the opportunity to express any impacts the proposed regulations may have on your business.
For additional background, in a number of other PFML states, a Declaration of Insurance process was utilized for employers seeking to use PFML private plans. Declarations of Insurance, effective as of the date state plan contributions begin, administratively assure states the employer is complying with PFML requirements through a private plan. This process also avoids state plan pre-funding as the state plan would not bear the cost of private plan claims. If Maine is amenable to this approach, a Declaration of Insurance process would allow time for rulemaking and for a state plan opt-out process for employers interested in private plan solutions.
To submit your comments, you may do so here: MDOL Proposed Rulemaking. Select 12-702 Department of Labor, Paid Family and Medical Leave Program and within this dropdown identify the applicable section within which you would like to comment.
The public comment period for PFML rulemaking will end on July 8, 2024.
For more information about the benefits team at Allen Insurance and Financial and the services we offer, click over to AllenIF.com/benefits.
