America's Health Insurance Plans Issues Public Comment on Labor Department Notice

WASHINGTON, Sept. 17 -- Jeanette Thornton, senior vice president for commercial, product and employer policy at the America's Health Insurance Plans, has issued a public comment on the Department of Labor notice entitled "Request for Information: Paid Leave". The comment was written and posted on Sept. 14, 2020:

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America's Health Insurance Plans (AHIP) is pleased to have the opportunity to respond, in part, to the questions raised in the Department of Labor ("Department") Request for Information (RFI) regarding paid leave./1

AHIP's response is focused on making the most of the unique expertise and capacity that private insurers bring to the role of managing leave and administering income protection benefit plans.

Among AHIP's members are disability income protection insurers that provide income protection for working Americans against the risk of illness or injury that disrupts the ability to work for an extended period of time. Many insurers that offer private disability income protection coverage also play an important role in helping the nation's employers manage leave required by the Federal Family and Medical Leave Act (FMLA) and other leave from work. Private disability income protection insurers also already play a role in administering public paid leave programs, such as the state programs in California and New York, and will take on key roles in other state paid leave programs.

AHIP and its members appreciate the desire of working Americans to have paid leave when they need to care for a newborn or bond with an adopted child; care for a family member; or take extended time off because their own serious medical condition. We commend the Department's interest in bringing access to paid leave to more working Americans. AHIP and its disability income protection insurer members would like to be partners in this effort. Paid leave public policy should build upon the private short-term disability income protection that for tens of millions of working Americans is already guaranteeing access to income when a serious medical condition requires extended absence from work.

Overview of Private Disability Income Protection Coverage

Private disability income protection provides tens of millions of working Americans with coverage that complements the safety net provided by the Social Security Disability Insurance (SSDI) program. Thirty nine percent of civilian employees in the United States have access to employer-sponsored short-term disability income protection./2

This coverage provides a level of income protection that spares many American families from financial hardship.

Private short-term disability coverage typically provides for benefits for 13 to 26 weeks based on a specified percentage of the covered employee's pre-disability income - often 60% or more - after sick leave has been exhausted. Circumstances that may trigger a short-term disability claim include injuries suffered in an accident, musculoskeletal and connective tissue diseases, and pregnancy.

Short-term disability income protection is often combined with long-term disability income protection coverage as part of a seamless package. Long-term coverage picks up where short-term coverage leaves off and provides for benefits that continue for a specified number of years or to an employee's normal Social Security retirement age. Among the most common conditions leading to a long-term disability income claim: musculoskeletal and connective tissue diseases, cancers, and heart and circulatory system diseases. A common income benefit level is 60% of a covered employee's pre-disability income. Long-term disability income coverage allows disabled working Americans to sustain themselves and their families even if illness or injury leave them unable to work for a period of years - or permanently. Long-term disability income insurers also have the special expertise and capabilities that enables them to work with ill or injured employees and their employers and doctors to help disabled employees get back on the job.

Suggested Principles for Paid Leave Public Policy

Working with our disability income protection insurer members, AHIP has developed the four following principles for federal paid family and medical leave policy.

* Maximize the role of the private sector to serve working Americans and their families better.

* Prioritize employer choice that allows employers to tailor leave benefits to their employees' needs.

* Provide for federal pre-emption to treat working Americans fairly no matter where they live.

* Match benefits to what working Americans and employers can afford.

Additional detail regarding each of these principles follow below.

Maximize the role of the private sector to serve working Americans and their families better. Private insurers have a great deal of experience in managing unpaid and paid leaves and are well positioned to administer paid leave programs that work well for workings and employers. Working Americans will be best served by a public-private paid leave partnership that makes the most of what private insurers are already able to do to provide paid leave to working Americans in manner that is flexible, nimble, and cost effective. As partners in a comprehensive paid leave solution, private insurers can deliver paid leave benefits tailored to individual employee circumstances and deliver benefits timelier and more affordably.

Prioritize employer choice that allows employers to tailor leave benefits to their employees' needs. Any paid leave solution should maintain the prerogative of employers' choice to continue to provide private coverage tailored to the needs of their employees. A new paid leave program must work in concert with existing employer paid leave programs and other employer-provided benefits. The solution should include additional incentives for smaller businesses to offer paid leave, and special provisions for the self-employed, and part-time workers.

Provide for federal pre-emption to treat working Americans fairly no matter where they live. A federal paid leave program that pre-empts state and municipal programs, and that runs concurrently with leave under the Federal Family and Medical Leave Act, would be fairer to working Americans nationwide and much more effective than a patchwork of state programs. It would also be better for employers that operate in multiple states. New federal legislation should establish minimum requirements for paid family and medical leave. Private insurers could work with employers to develop programs designed to meet the needs of their employees. The program should allow a safe harbor for paid leave plans that are already working well for the employees they cover.

Match benefits to what working Americans and employers can afford. Promising more than payers can afford would overburden working Americans and employers - and could eventually lead to broken promises for America's families. As is always the case with creating and implementing new public program, a paid leave solution must match the benefits it promises to the fiscal resources available to fund them. Any paid leave solution should avoid overreach that could lead to moral hazard that induces demand for leave in excess of what working Americans, employers, and the national economy can afford.

AHIP appreciates the opportunity to share the perspective of our income protection members with the Department.

Sincerely,

Jeanette Thornton

Senior Vice President

Commercial, Product and Employer Policy

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Footnotes:

1/ AHIP is the national association whose members provide coverage for health care and related services to hundreds of millions of Americans every day. Through these offerings, we improve and protect the health and financial security of consumers, families, businesses, communities, and the nation. We are committed to market-based solutions and public-private partnerships that improve affordability, value, access, and well-being for consumers.

2/ U.S. Department of Labor, Bureau of Labor Statistics, National Compensation Survey: Employee Benefits in the United States, March 2018.

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The notice can be viewed at: https://beta.regulations.gov/document/DOL-2020-0004-0001

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