Northwell Health struggled with PTO policy — then NY’s family leave law upped the stakes
The largest healthcare provider in New York struggled to avoid disrupting patient care when its employees took time off, so it turned to predictive cost modeling and benchmarking to solve the problem.
Northwell Health already struggled with how to avoid disrupting patient care when its employees took paid time off. Like most health systems with a talent shortage problem, Northwell was worried about how health outcomes were affected when employees took vacation and other paid leave.
But when New York’s mandated paid family leave — which gives full- and part-time employees eight weeks of paid time off to care for a sick relative or bond with a new child after birth or placement for adoption or foster care — went into effect Jan. 1, it furthered the concern even more for the largest healthcare provider in New York state.
“At the core, we think it’s a good thing for people to spend time [together] in these circumstances, specifically with caring for family members,” says Gregg Nevola, vice president and chief rewards officer of HR at Northwell Health, which has 21 hospitals and about 450 outpatient practices across the state. “[But] there are some challenges.”
Northwell Health knew it needed to create a comprehensive paid family leave plan for its 65,000 employees — so it turned to its group insurance provider, Prudential, and its consultant, American Benefit Consulting, to craft a policy that would work for a wide variety of workers, from nurses with union contracts to corporate clients. Eligible employees under Northwell Health’s new policy must regularly work 20 or more hours per week for at least 26 consecutive work weeks, or regularly work less than 20 hours per week for at least 175 days, according to the policy.
Northwell Health’s paid family leave policy lengthens incrementally each year over the next four years, from eight weeks of 50% pay — awarded from an employee’s payroll contributions — in 2018 to 12 weeks of 67% pay in 2021.
In accordance with state law, the 2018 payroll contribution is 0.126% of an employee’s weekly wage; employees making more than the state average weekly wage of $1,305.92 cannot contribute more.
Paid family leave may overlap with FMLA, but employees cannot take the leave for their own medical condition or receive short-term disability or workers’ compensation during the same time frame, according to Northwell Health’s policy. Employees can also not take more than 26 combined weeks of short-term disability and paid family leave in a 52-week period, according to the policy.
Spouses or other family members employed by Northwell Health cannot take paid family leave simultaneously to care for the same relative or bond with the same child, according to the policy.
The organization’s workforce is 70% female, which warrants a number of maternity leave requests for the health system, Nevola says.
About 1,200 women went on maternity leave in 2017, and the health system expects that number to potentially double in 2018. At least 700 workers requested paid family leave from Jan. 1 through April. Meanwhile, 1,750 employees take a leave of absence on any given day.
“There are a lot of different systems running at the same time,” says Anna Cunningham, team lead of the Leave of Absence Case Management at Northwell Health. “Some of the union employees have different structures and different rules. It’s very complex.”
Bringing out the big guns — models and benchmarks
To create its policy, Northwell Health enlisted Prudential to run predictive cost modeling and benchmarking while also creating a task force of 25 to 30 representatives from various departments to analyze “every single impact point,” Cunningham says.
Prudential used Northwell Health’s historical FMLA utilization to “take data they had and assume there would be similar absence patterns,” says Matthew Bahl, vice president of financial wellness customer strategies at Prudential Financial Workplace Solutions Group.
Bahl and his team ran various customized models for Northwell Health, then layered those on top of forecasting and benefit models. The cost analysis also compared
potential policies to those at peer institutions such as NewYork–Presbyterian Hospital.
“Industry nuance matters, or at least it matters with the benchmarking we have done,” Bahl says. “Healthcare organizations don’t provide as many paid parental leave policies as do the finance and tech sectors. There are staffing and other practical human capital management impacts.”
Health systems like Northwell Health need to consider the expectations of newer nurses and millennial and Gen Z workers when crafting paidtime-off policies if they want to retain those workers, Bahl says.
“The impact of having another bucket of time for people to be out of work was really important for Northwell,” he says. “Northwell wasn’t thinking about this in terms of staffing, but also retention.”
Only 14% of large employers provided a paid parental leave policy in 2016, with 70% of those companies offering six weeks or less of paid parental leave, Bahl says. The Society of Human Resource Management reported that 17% of companies in 2016 offered paid parental leave, with 18% of companies offering paid family leave. Those numbers are likely to increase as states like New York mandate a paid family or parental leave policy.
“Unfortunately, the state didn’t take into consideration that employers may have already had plans that covered more generously,” says Jeffrey Jones, principal and lead consultant at American Benefits Consulting. “Hopefully a national plan is in the works. If we have 35 or 40 other states put their plans in, it’s going to be very difficult for large corporations to manage that many mandated leave laws — almost impossible.”
During the first six months of Northwell Health’s policy creation, the task force had weekly, and sometimes daily, meetings and phone calls to assess the policy, particularly when the state made tweaks to the law.
“We’re lucky,” Cunningham says. “The majority of our employees are in New York.”
Northwell Health’s task force didn’t receive “a tremendous amount of guidance” from Albany, leaving the health system to determine whether it could stack benefits, who was eligible for the paid time off and how to administer the payouts.
The HR department leveraged tools such as Kronos, MyTime and PeopleSoft — with help from Prudential — to achieve a fully functioning paid family leave platform, Cunningham says.
Now, three third-party administrators help with the distribution of paid family leave, Nevola says.
Once paid family leave rolled out on Jan. 1, the health system was pleasantly surprised: It over-prepared for the number of requests it expected to field.
“We didn’t know how many people were asking for leave on Jan. 1. We were fine,” Nevola says. “We were able to staff the hospital during one of the busiest flu seasons ever.”
Northwell Health and its partners declined to share how much it spent on administrative efforts, human capital, legal fees and HR technology — Nevola says he’s not sure if that number can be quantified — but say the ROI is nonexistent thus far.
The health system, however, hopes the administrative burden will be worth it in the long run.
“I think it will help people stay at work,” Jones says. “I think it will help retention.”