The Allen Benefits Team
Greg Karlik
Group Health Insurance, Individual Health Insurance ProducerCamden Direct: email hidden; JavaScript is requiredg Karlik joined our company in October 2022 to work with individual and group health insurance clients. Following a three decades-long career in the television broadcasting industry, since 2019 Greg has been a licensed insurance professional in the individual health insurance market place, helping customers manage and [...]
Sherree Craig, CEBS
Employee BenefitsLicensed Life and Health ConsultantCamdenDirect: email hidden; JavaScript is requiredrree Craig is a lifelong Mainer and knows employee benefits inside and out. After graduating from the University of Maine at Orono with a BA in journalism and broadcasting, she began working for Blue Cross and Blue Shield of Maine and obtained her life and health license, specializing in [...]
Daniel B. Wyman, JD
Employee BenefitsProducer CamdenDirect: email hidden; JavaScript is required Maine native, Dan is a graduate of Williams College and the University of Maine School of Law, where he was an Editor of the Maine Law Review. He practiced law with the Portland firm of Richardson & Troubh, specializing in insurance law litigation, and represented employers throughout Maine. Since 2004, Dan [...]
As Maine gears up to implement its Paid Family and Medical Leave Act (MPFML), there are important details for employers to consider. While the 1% state premium tax takes effect on January 1, 2025, the first paid benefits won’t begin until May 1, 2026. This long lead time allows the state to pre-fund the program, but it also creates a unique window for employers to explore alternatives.
The Benefits Team at Allen Insurance and Financial is recommending that employers seek quotes for private replacement plans. Starting April 1, 2025, the state will begin accepting applications for private insurance plans that can substitute for the state-run program. If approved, employers would be excused from paying the state’s 1% premium after the first quarter of 2025. With private plans commencing coverage on May 1, 2026, this strategy could create significant cost savings for businesses during the interim, without any loss in benefit coverage.
Why Consider a Private Plan?
Private insurers have extensive experience managing PFML programs in other states and offer plans that fully comply with Maine’s requirements. In contrast, the state’s 1% tax is based on preliminary estimates and may not reflect actual costs. Private insurers have more accurate data on pricing and also offer fully trained staff, ensuring smoother administration.
Employers could save significantly by adopting a private plan. For one of our customers, an 80-employee group could save more than $14,000 annually in PFML premium cost and avoid more than $88,000 in state tax pre-funding over 13 months.
For employers with existing short-term disability (STD) plans, it’s worth noting that private insurers we work with plan to re-price STD policies to reflect the introduction of PFML coverage. In other words, since mandated PFML coverage will pay many of the benefits currently covered by an STD plan, the cost of STD will come down.
Why would an employer continue to have both PFML and STD? PFML pays 12 weeks of benefits compared to 26 weeks for typical STD plans, and the PFML benefit is capped at the State Average Weekly Wage. An STD policy would fill those gaps, ensuring that employees are not having their benefits reduced. This would also remove any gap in coverage for those with Long Term Disability coverage.
By exploring these private options, Maine employers can optimize their benefits strategy while controlling costs.
Questions? Contact a member of the Allen benefits team. We’re here to help.
