Paid family and medical leave & state disability insurance

Understanding types of family and medical leave

There are many reasons why an employee may need time away from work—recovering from an illness, bonding with a baby, or caring for an injured service member—to name just a few. Get to know the types of family and medical leave your employees may be eligible to use:

Paid family and medical leave (PFML) or paid family leave (PFL)

Select states have laws that require paid time off for employees working in those states, regardless of the employer’s location.

If you have employees in one of these states, you may be required to provide eligible workers a portion of their pay when they’re unable to work due to non-work-related illness or injury, pregnancy, childbirth, care for a sick or injured family member, bond with a new child, or certain military-related events.

State disability insurance (SDI)

This state-mandated short-term disability insurance is required by select states. If you have employees working in these states, you may need to provide short-term disability insurance consistent with state requirements. It’s required to cover non-occupational disabilities and pregnancy.

Family and Medical Leave Act (FMLA)

If you have 50+ employees, this Federal law may require you to offer this job-protected, unpaid leave. It allows time away from work for bonding with a new child, or for employees (or a family member) having a serious health condition.

Time off under these programs may or may not run concurrently based on qualification and requirements under each program.

The number of states offering paid family and medical leave continues to grow. That’s why it’s important to understand which states offer paid family and medical leave—and/or state disability insurance—and the highlights of each program.

Select the state to learn more about its paid family and medical leave and/or state disability insurance program.

How do paid family and medical leave and state disability insurance programs work?

Education and enrollment

If eligible, an employee files a claim for their state’s program. Once the claim is approved, the employee then fulfills the elimination period (the amount of time before benefits are available). Then the employee begins to receive benefits.

It’s important employees understand paid family and medical leave or state disability insurance:

  • Covers a portion of their income—referred to the benefit percentage.
  • Provides a maximum weekly benefit.
  • Ends after the maximum benefit payment period is reached.

Specific regulations regarding these programs vary by state.

Why offer short-term disability insurance if the state provides paid family and medical leave or state disability insurance?

Paid family and medical leave and state disability insurance programs are a great foundation for employees’ income protection. But it may not be enough for everyone—especially for those with incomes that exceed the maximum. The weekly benefits an employee can receive under the program may be limited. Depending on the employee’s wages, this may not be adequate income replacement. Short-term disability insurance can help serve as a personal safety net for employees if they’re too sick or hurt to work.

Plus, the amount of time an employee receives benefits under paid family and medical leave is limited. Depending on the situation, an employee may exhaust state leave and be without coverage in the event of a different disability. Without short-term disability insurance, the employee won’t receive any benefits beyond the state program.

Principal offers short-term disability insurance in all states. Talk to your financial professional to design a benefit offering that meets the specific needs of your business and employees.

This is an overview of the benefits PFML and disability insurance provides, but there are limitations and exclusions. For cost and coverage details, contact your Principal representative. Insurance products issued by Principal Life Insurance Company®, a member of the Principal Financial Group®,  Des Moines, IA 50392.

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