State residents not using paid family leave as much as expected
Connecticut workers have yet to stampede for money set aside from their paychecks to cover time off for family needs — with claims to the Connecticut Paid Leave Authority running about 19 cents below every dollar collected for payouts this summer.
Starting last January, Connecticut workers have been able to file for up to 12 weeks of paid time off, with the program supported through a tax equal to half a percent out of paychecks. Information is online at ctpaidleave.org.
Some employers and politicians had balked at the law on grounds it would put a greater burden on them to make up for valuable workers taking time away from the job, while representing one more tax on many residents. As it turns out, January represented the peak month for claims at just over 9,750 in all, with claims not topping 8,200 filings in any month since.
Through November, about 90,000 workers had filed applications to receive compensation while away from work, with three of every 10 rejected and 8 percent still pending. That equates to about one in every 19 workers in Connecticut putting in for compensation under the program, with the possibility some people filed multiple applications against their allotted 12 weeks of paid time off annually under the law.
Time off to recuperate from illness or injury — including COVID-19 infection — is the most prevalent reason for claims, followed by pregnancy, child birth and bonding with children. Substantial numbers of people are also taking time off to care for family members.
In the first half of 2022, the Connecticut Paid Leave Authority paid out $104 million in claims, while reserving another $40 million to cover additional payments owed or claims that remained pending otherwise.
Between July and September, the Connecticut Paid Leave Authority received another $69.5 million in claims, which was $16.4 million less than actuaries had projected. October claims action was similarly lower than expectations, at about $22.5 million.
That puts projected payouts for the full 2023 fiscal year through next June at $348 million, well below the nearly $365 million that actuaries had anticipated. But that is taking a conservative approach, on the possibility that the subdued claims activity between July and September represented an aberration and that the original projections will otherwise hold.
“We’re still very early in the program, and we do expect some will ramp up claims,” said Harindra Sebastian, senior consulting actuary for the Spring Consulting Group subsidiary of Alera Group, during a November update to the finance committee of the Connecticut Paid Leave Authority.
Sebastian said the Connecticut Paid Leave Authority’s trust fund should top $500 million by next June, based on current levels of collections, payouts and other expenses.
The program’s benefits max out at $840 weekly, the annualized pay for a person making less than $44,000 annually. The median worker in Connecticut makes just over $66,000 according to federal estimates.
Aflac processes claims for the Connecticut Paid Leave Authority, receiving $5.7 million in the third quarter for its claims administration services. Claimants who are denied can appeal to Aflac within 10 days, and if not getting a reversal through that channel, to the Connecticut Department of Labor.
Connecticut is one of 11 states requiring employers to offer paid family leave along with New York, Massachusetts, Rhode Island and New Jersey. Massachusetts, New York, Vermont and California are in a smaller group of states that require employers to offer unpaid time off for “small necessities” as employees may want them, like attending school events.
This month, Gov. Ned Lamont announced Andrea Barton Reeves will become the next head of the Connecticut Department of Social Services, after leading the Connecticut Paid Leave Authority as CEO in its first year of operation.