New York Paid Family Leave (NY PFL) - Prudential …

1 Premium and Billing Resource Guide New york paid Family Leave (NY PFL) Effective January 1, 2018 This guide is provided for informational purposes only to assist our NY DBL/PFL customers with the administration of their plan. The guide is not intended to provide legal advice or substitute for the compliance obligations of clients, brokers, or other non- Prudential employees. The information provided is accurate as of the date provided, and may change over time. Publication of the guide is a complimentary activity of Prudential and Prudential reserves all rights concerning content, frequency, and distribution, as well as the right to cease publication at its discretion. Edition Date: 11/2017 PREMIUM CONTRIBUTIONS AND WITHHOLDING The cost of NY PFL may be collected through payroll deductions. Although the State of New york frequently refers to this program as employee-funded, employers are not required to withhold employee contributions.

2 Employers may choose to pay all or part of the premium. Employers are required to remit premium to Prudential and may elect to withhold NY PFL contributions through payroll deductions. Employee contributions would be taken post-tax. The maximum employee contribution and the insured rate is the same and was established by the New york Department of Financial Services. When the New york State Department of Financial Services published the rate on June 1, 2017, they indicated that it was of the employee s weekly wages up to and not to exceed the Statewide Average Weekly Wage (SAWW) of $1, You may have previously read that that the maximum contribution for any employee would be $ per week. Subsequently, the New york State Department of Financial Services published Circular Letter No. 11 ( ). This guidance acknowledged that some employees wages may fluctuate due to commissions or bonuses. Insurers were instructed to collect premiums equal to of the employee s annual wages up to the annualized SAWW.

3 The annual cap for 2018 is $ Wages for purposes of calculating the NY PFL contributions include commissions, bonuses, overtime, tips, etc. Payroll deductions should be withheld at a rate of on all wages until the cap has been reached. This will mean that for those employees earning less than the SAWW, payroll deductions will be withheld throughout the year. Employers must stop payroll deductions once the cap is reached for higher wage earners. Employers should start withholding NY PFL payroll deductions from the date of hire. The following exceptions apply: o Employees not expected to meet NY PFL eligibility requirements (temporary or seasonal employees) may opt-out of coverage and premium contributions by filing a waiver with the employer. Example: Employees working 20 hours or more per week who will not work more than 26 weeks, or employees working less than 20 hours who will not work more than 175 days in a 52-consecutive week period.

4 The waiver may be revoked within 8 weeks of a change in the employee s work schedule that requires the employee to work more than: 26 consecutive weeks (if working 20 or more hours per week), or 175 days in a 52-consecutive week period (if working less than 20 hours per week). Once the waiver is revoked, the employer may begin to withhold payroll deductions, including deductions retroactive to the date of hire. o If an employee is receiving DBL benefits but is not yet eligible for NY PFL, contributions cannot be withheld until he/she returns to work. o Employers are not permitted to retroactively collect NY PFL contributions. Exception: As noted above, if a waiver is revoked, the employer may begin to withhold payroll deductions, including deductions retroactive to the date of hire. Edition Date: 11/2017 Page 2 ESTIMATING ANNUAL NY PFL PREMIUM WORKSHEET Please follow the following steps to estimate annual premium to be paid to Prudential for NY PFL.

5 Example Step 1: Indicate the number of Employees with Annual Wages of $67, or More 10 Step 2: Multiply the number in Step 1 by $ $ $ Step 3: Indicate the number of Employees with Annual Wages of less than $67, 25 Step 4: Sum of the Wages for the Employees with Annual Wages of less than $67, $ $976,000 Step 5: Divide the number in Step 4 by 100 $ $9,760 Step 6: Multiply the answer from Step 5 by $ $1, Step 7: Add the answers for Steps 2 and 6 together.

6 This is your estimated Annual Premium. $ $ + $1, = $2, NOTE: Actual premium may vary due to fluctuations in your employee population and their salaries. Edition Date: 11/2017 Page 3 Prudential BILLING PROCESS Beginning with your January 2018 coverage bill, NY PFL charges will be included with your Disability Benefits Law (DBL) premium insurance statement. The billing frequency and due date for your NY PFL will be the same as your current DBL. If you are collecting payroll deductions and are interested in a different payment schedule for DBL and NY PFL, please contact your Prudential representative to discuss options. If you are billed Annually for DBL, you may continue this option but there are some consequences for you to consider, including: If you intend to collect payroll deductions, you will not have collected the funds you need from your employees at the time you pay for the cost of coverage.

7 As you collect payroll deductions at a rate of of the employees wages up to the cap, you will need to determine how much of these funds you paid Prudential when the annual bill was due and how much of these funds you need to put aside for the yearly reconciliation. For these reasons, you may consider switching your DBL and NY PFL billing frequency to monthly or quarterly. Please contact your Prudential representative to discuss this option. Client Bills Although the insured rate is the same for males and females, the New york State Department of Financial Services is requiring insurers to report the number of males and females covered for each group customer. We are also required to distinguish between covered payroll for males and females in our reporting for each group customer. Our bills will be requesting this break-out. Please refer to the Sample Bill. Roster Bills We are unable to support Roster Bills for this coverage.

8 Unlike other coverages on our Roster Bills, the NY PFL premium varies based on the employee s current wages, which may fluctuate due to overtime, bonuses, and commissions, etc. Our current DBL customers may continue to have the DBL coverage on their Roster Bill. If necessary, you may discuss changes to your NY PFL payment schedule with your Prudential representative. If such a change is made, it would not impact the due date of the Roster Bill coverages. As noted above under Client Bills, although the insured rate is the same for males and females the New york State Department of Financial Services is requiring insurers to report the number of males and females covered for each group customer. We are also required to distinguish between covered payroll for males and females in our reporting for each group customer. Our bills will be requesting this break-out. Please refer to the Sample Bill. (Coverages currently on your Roster Bill will remain on the Roster Bill.)

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