The Business Council opposes this legislation that would amend the Workers’ Compensation law and expand coverage under the Paid Family Leave (PFL) law to include teachers in religious, charitable or educational institutions. In addition to the burden on these employers in scheduling employee absences, all workers in New York State are entirely responsible for sharing in funding the costs of this program. Increased costs to workers, and a strain on an already fragile disability/paid family leave insurance system would be significant. These concerns were reflected in Governor Cuomo’s 2018 veto message in response to similar legislation.
PFL is not yet fully implemented. With scheduled increases in income replacement benefits and benefit time not scheduled to be fully implemented until January 2021. However, it is already clear that PFL is a loss leader for insurance companies that provide disability benefits to employers in New York State. The current law requires that all providers of disability insurance also provide PFL insurance. Significant losses are piling up for these carriers as utilization far exceeds expectations and premiums received from workers.
Because carriers cannot sustain these losses, several small carriers are no longer providing disability/PFL insurance. And several large carriers will not quote employers disability/PFL insurance coverage rates without the employer agreeing to use this carrier for other insurance coverages (life, long-term disability, dental, etc.). The costs of paid family leave – again, not yet fully implemented – are already proving to be problematic for insurance providers.
As for these teachers specifically, Workers’ Compensation law has long identified workers exempt from the coverage. It has, however, allowed for employers of these workers to offer “voluntary” coverage. Religious, charitable, or educational institutions that choose to offer disability/PFL coverage to these workers (including teachers) may choose to do so and pass those costs on to employers. Many have.
Now that paid family leave is here, The Business Council hopes a thriving insurance market will continue to exist that will provide innovation and competition in service and products. Rapid expansion of the program – even before its full implementation – threatens this market.
For these reasons, The Business Council, on behalf of its more than 2,300 members around the state, OPPOSE this bill.