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Workers’ premium increases likely under PFML program

Workers’ premium increases likely under PFML program likely – The state’s Paid Family and Medical Leave (PFML) program is likely to see premium increases in the future, particularly the premiums paid by workers.

Due to the overwhelming popularity of the program, earlier this year the program’s funds reached a precarious level. The fund’s balance – which had started at more than $467 million in early 2020 – dipped to just $19 million by the end of March. At the end of June, it increased slightly to just over $31 million by the end of June, according to the actuary report. The program is receiving approximately 20,000 claims per month, which is more than original projections. AGC-backed legislation passed in 2022 required that the Employment Security Department hire an actuarial firm to help the department and Legislature get a better handle on the fund’s status and its future projections.

The actuarial firm’s report presented to a legislative task force last week recommends raising the rate to 0.79% of workers’ wages, up from the 0.6% rate that went into effect earlier this year. When premiums first were enacted, 0.4% of workers’ wages funded the program, with 63% paid by employees and 37% paid by employers. But in addition to the rate increase that took effect this past January, employees’ share increased to 73%, with the remainder paid by employers.

The report recommends the higher rate for the next two years, followed by a slight reduction to 0.735% from 2025 through 2027, which “is expected to return the program to a surplus position and maintain fund balances close to target levels in future years.”

The Employment Security Department, which said its projections are slightly different than the actuary report, has estimated that a 0.9% premium rate is necessary. Officials there say they are still in the process of calculating the latest data and will announce the new rate in the coming weeks.

Under the law, eligible workers receive 12 weeks paid time off for the birth or adoption of a child or for a serious medical condition of the worker or the worker’s family member, or 16 weeks for a combination of both. An additional two weeks may be used if there is a serious health condition with a pregnancy. Family members in the military also qualify for leave to spend time with service members about to be deployed overseas or who return home from deployment.

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