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.

Employee Benefit News - - Strategy Session - By Amanda Eisen­berg

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.”

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