Is an employer’s short-term disability (STD) coverage sufficient to meet the compliance requirements of the various states’ Paid Family and Medical Leave (PFML) programs?

In short, likely no. A growing number of states have implemented or are planning to implement statutory PFML programs soon. A statutory PFML generally applies to an employee who works in the state (including telecommuting) regardless of the physical office location or employee’s residence state. For example, an employee who works from his or her home in California is subject to California’s paid family leave (PFL) and disability insurance even if his or her company is located outside of California and does not have any physical offices there. Having a basic STD insurance from a private insurer is likely not sufficient to satisfy the statutory PFML requirements for several reasons.

First, many of the states’ PFML programs require employers to offer not only medical leave insurance but also family leave insurance. Medical leave insurance covers employees’ own serious health conditions or disability (including incapacity from pregnancy) like what standard STD insurance covers. On the other hand, family leave insurance covers an employee to take time off to care for the employee’s eligible family members’ serious health conditions or to bond with the employee’s new child, which is generally excluded from standard STD coverage.

Second, even those states that permit a private plan option require employers to purchase a private plan that meets the specific state’s PFML requirements, and a private plan must receive approval from each state. Therefore, simply having a STD policy does not automatically provide an exemption from complying with a state’s PFML program.

Third, Washington DC and Rhode Island’s PFML programs do not allow a private plan option. In these states, employers must participate in the district and the state’s programs even when an employer’s STD coverage is comprehensive and satisfies all the requirements.

Finally, below is a list of states that have enacted PFML programs. The effective dates are noted for the new PFML programs that will begin soon. Employers should review their employees’ work locations to confirm that they understand and satisfy the applicable states’ PFML program requirements, including private plan option availability, premium collection and submission processes, and employee disclosures (e.g., notices and poster).

• California
• Colorado (Payroll deduction begins on 1/1/2023 and benefits effective 1/1/2024)
• Connecticut
• District of Columbia
• Hawaii
• Maryland (Payroll deduction begins on 10/1/2023 and benefits effective 1/1/2025)
• Massachusetts
• New Hampshire (Participation is voluntary for private employers. Benefits effective 1/1/2023)
• New Jersey
• New York
• Oregon (Payroll deduction begins on 1/1/2023 and benefits effective 9/1/2023)
• Puerto Rico
• Rhode Island
• Washington

Note: The above list is current as of the date this FAQ is issued. Furthermore, some states, such as NY and CA, label their programs as PFL and disability insurance rather than PFML. However, for simplicity, the FAQ uses the term statutory PFML programs to include paid family leave and disability insurance.