Colorado voters approved Proposition 118 in November 2020, paving the way for a state-run Paid Family and Medical Leave Insurance (FAMLI) program. The FAMLI program will ensure all Colorado workers have access to paid leave in order to take care of themselves and their family during life circumstances that pull them away from their jobs. These situations may include, but are not limited to:
Taking time off after the birth of a child
Taking care of a loved one with a serious health condition
FAMLI will start providing benefits to employees beginning January 1, 2024. While the rollout of this program is still a year and a half away, there are important items that will begin to impact your business as early as January 2023. The following information will help ensure you understand what needs to be done to remain in compliance with the new FAMLI program requirements.
Funding for the Program Starts a Year in Advance
Both employers and employees will contribute premiums for the program.Employees may start to see a premium contribution on their pay stubs beginning January 1, 2023.
Make sure you inform your employees of this deduction from their pay so that they are aware it is coming and have an opportunity to ask any questions prior to their first premium contribution in January 2023.
Private Plans Can Be Used to Fulfill FAMLI Obligations
The FAMLI Act allows employers to satisfy their obligations by offering an equivalent private plan. Equivalent private plans may take the form of:
An insurance policy offered by a third-party insurance provider
A plan self-funded and self-administered by the employer
Equivalent plans must be approved by the FAMLI Division in order to satisfy an employer’s obligations under the new program. The FAMLI Division is committed to developing and implementing rules that will govern the processes and procedures surrounding approved private plans. As part of this process, the FAMLI Division is working closely with employer organizations, the Colorado Division of Insurance, insurance companies, and workers’ rights organizations to ensure that the forthcoming Private Plan Rules work for all affected Coloradans.
The FAMLI Division recognizes that this intensive due diligence work with all stakeholders involved may mean that the market of equivalent private plan options will not be available to employers before 2023, which is when employers must start paying FAMLI premiums. However, the FAMLI Division also recognizes that employers who intend to have an approved private plan in place and effective by January 1, 2024 should not have to contribute funds to the state plan if they are receiving benefits elsewhere.
Therefore, the FAMLI Division has created a temporary procedure that will allow all Colorado employers to begin paying premiums in 2023, and those who secure an approved private plan effective on or before January 1, 2024 will be issued a refund of paid 2023 premiums, minus the private plan administration fee.
Additional Provisions Associated with the New FAMLI Program
Under the FAMLI Act:
All employers covered by the FAMLI Act must register with MyFAMLI+ Employer and will need to start collecting premiums in January 2023
Employers will begin remitting premiums and wage reports on a quarterly basis
Employers intending to meet their FAMLI obligations through a private plan must apply for and obtain a private plan exemption from the FAMLI Division in accordance with the forthcoming Private Plan Rules
Employers who apply for private plan exemption are subject to an administration fee in the amount specified by the forthcoming Private Plan Rules
The FAMLI Division will reimburse an employer for premiums paid in 2023, minus the required private plan administration fee, if the employer has an approved private plan with an effective benefits date of no later than January 1, 2024
Once an approved private plan is in effect, the employer is no longer required to submit premiums or wage reports to the FAMLI Division, but must continue to maintain internal records in accordance with the forthcoming Private Plan Rules
Employers with approved private plans effective after January 1, 2024 will not be eligible for reimbursement of premiums
To ensure that the FAMLI Division can review and approve private plans in time for a January 1, 2024 effective date, employers must apply for private plan approval by October 21, 2023
The FAMLI Division will allow employers to cover the entire cost of the program in the event they do not wish for their employees to have to pay out of pocket for this benefit
PassioHR Will Keep You Apprised as New FAMLI Program Developments Are Announced
The information discussed above is a summary of all the important details released by the FAMLI Program to this date. Details are still being worked out, and there may be additional updates at a later time as this program evolves.
PassioHR is your go-to source for all information associated with the new FAMLI Program. We will provide updates on our website as new details emerge. In addition, all of our clients can reach out to their PassioHR benefits consultant at any time if they have questions regarding the new program. We will communicate regularly with our clients when deadlines approach or new requirements are announced to ensure your business remains in compliance.
At PassioHR, we’re committed to elevating the success of your business. When you receive employee benefits services from us, you’ll have peace of mind that your business will always remain in compliance with any new laws, regulations and requirements that arise over time.
Contact us today to schedule a free consultation or to learn more about the new Colorado FAMLI Program.
Roger Hays currently serves as President and CEO of PassioHR, Inc., based in Englewood Colorado. PassioHR was founded in 2021 by Roger after having spent over twenty years working in various positions in the Professional Employer Organization (PEO) market.
His areas of expertise are Human Resources management; Benefits Administration; Government Affairs; and Business Management.
Mr. Hays currently serves as the Chair the Leadership Council for NAPEO in Colorado and serves on their PAC committee, Federal Government Affairs and State Government Affairs Committees as well. In addition to NAPEO Roger is a past Leadership Council Chairman for the National Federation of Independent Business (NFIB) in Colorado and serves on their PAC committee as well (NFIB is the voice of small business, advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals). He is a past Board President for the Colorado Civil Justice League (Colorado Civil Justice League is the only organization in Colorado focused exclusively on limiting unreasonable lawsuits and preserving common sense in the courtroom). Roger has been appointed by the Governor of Colorado, three times, to serve as a Board member on the Colorado Uninsured Employers Board. (The CUE board was established by the CO legislature to provide financial assistance to individuals injured while working for employers who did not carry workers’ compensation insurance in violation of Colorado Statute.)
Roger spends many hours each Legislative session working with state Legislators in Colorado on behalf of the PEO industry as well as small business in general testifying in front of committees or just interacting with individual legislators on issues important to those groups. He also works with the Colorado Department of Labor and Employment, serving on a number of taskforces to help guide the department in dealing with Unemployment and Labor issues.
Mr. Hays Graduated from North Dakota State University with a BS Degree in Political Science and is an avid Bison supporter.
The FAMLI Act allows employers to satisfy their obligations by offering an equivalent private plan. Equivalent private plans may take the form of: