On August 26, 2022, the Department of Labor and Employment’s Division of Family and Medical Leave Insurance (the division) adopted rules on benefits and employer participation in the state’s Family and Medical Leave Insurance program (FMLI). We covered FMLI and earlier rules issued by the division in the May 24, 2022, edition of Compliance Corner.

Although the program does not start until January 1, 2024, the new rules require employers (even those who choose to use a private plan rather than the state plan) to register with the division by January 1, 2023. Employers must also submit wage reports on the same schedule that they remit their premiums. An employer with no Colorado employees will not be required to remit premiums, submit wage reports or otherwise participate in the FAMLI program.

The new rules also outline the procedure for employees to apply for the benefit. Employees must apply to the division 30 days before the expected start date of the leave, although they can have up to 30 days after the leave begins to apply if the circumstances warrant it. The division informs both the employer and the employee that the application is properly filed within five business days and determines whether the applicant qualifies for the benefit within two weeks after the application is submitted. The rules also allow employers to require their employees to let them know of the need for the leave independently of the application to the division, in the same manner as requests for other leave as required by employer policy.

The division will inform both the employer and the employee of its determination. If the division grants the benefit, it will also inform both parties of the duration of the leave. If the employer requests it, the division will also provide the employer with limited information necessary for the employer to coordinate FAMLI benefits with other benefits for which the claimant is eligible, including the wage replacement amount and the reason for leave. Such information provided by the division must be stored and maintained in accordance with all applicable federal, state, and local confidentiality laws and regulations.

The new rules give the employer and employee the right to appeal the division’s determination. An employer may file a grievance with the division if it has a good-faith belief, supported by evidence, that the division has granted benefits to an employee either in violation of the FAMLI Act or if the grant unduly disrupts the employer’s operations. Employees can appeal a denied application within 30 days of the adverse decision; the division will designate a hearing officer and hold an appeal hearing, in which both the employer and employee can participate. The hearing officer’s decision is subject to judicial review.

The new rules also impose certain obligations upon an employee on this leave, including the obligation to inform the division of any change that could affect the duration of that leave. If the division adjusts the duration of the leave as a result, then the division will inform the employer.

In addition to these procedural rules, the new regulations include some clarifications. For instance, a “covered individual” who may receive benefits is one who has earned $2,500.00 from any combination of employers, and a claimant need not earn $2,500.00 from their current employer to meet the threshold. In addition, the division will determine whether a person is considered a “family member” whose serious health condition warrants a grant of benefit to an applying employee by considering not only a significant personal bond that is or is like a family relationship, but also several other factors while looking at the totality of the circumstances surrounding the relationship.

Employers with Colorado employees should be aware of these new clarifications and procedures.

Regulations Concerning Benefits and Employer Participation Requirements »

On June 24, 2022, the Department of Labor and Employment issued guidance for the state’s Healthy Families and Workplaces Act (the Act). The guidance focuses on how sick pay accrues and leave taken for public health emergencies. The Act was covered in our July 21, 2020, and September 1, 2020, editions of Compliance Corner.

Starting in 2021, the Act requires employers to provide employees one hour of paid sick leave for every 30 hours worked, up to 48 hours per year, and unused hours can carry forward into the next year. The guidance states that any unused hours carried over into a subsequent year can be counted against the 48 hour/year total in that year. This also means that if the employee carried over 48 hours from the previous year, then they do not earn any additional sick leave in the current year.

The Act also provides for public health emergency leave for use when leave is associated with a public health emergency, such as the COVID-19 pandemic. This leave supplements the paid sick leave under the Act with up to 80 hours. The paid leave already accrued as of the date the public health leave is requested will count towards the public health leave. For instance, if an employee requests public health leave due to COVID-19, and they have 10 hours of paid sick leave accrued as of the date of their request, the employer must add 70 more hours of supplemental leave. The employee can use the public health leave granted in this way before they use their accrued sick leave.

Employers in the state or with employees in the state should be aware of this guidance.

Interpretive Notice and Formal Opinion (INFO) #68 »

In January 2022, the Department of Labor and Employment promulgated new rules relating to the state’s paid family and medical leave insurance (FAMLI) program. The regulations further define key terms relating to the collection and remittance of premiums into the program, as well as provide procedures for local governments to opt out of the program. In addition, the department posted FAQs on its website providing much of this information in a condensed format.

In 2020, voters passed the statute that created FAMLI. Starting on January 1, 2024, the program provides employees who work in the state and earn at least $2,500 at their jobs with up to sixteen weeks of paid leave for the following reasons:

• Caring for their own serious health condition.
• Caring for a new child during the first year after the birth or adoption or for foster care of a new child.
• Caring for a family member with a serious health condition.
• When a family member is on active-duty military service or is called for active-duty military service.
• When the individual or the individual’s family member is a victim of domestic violence, stalking or sexual assault.

This leave is designed to run concurrently with federal FMLA. Note that FAMLI allows employers to use a private plan rather than the state’s plan. To do this, the private plan must provide the same rights, protections and benefits as the public plan. Employers may require employees to contribute to the private plan, but no more than what they would have contributed to the state plan.

The leave is paid for through a fund to which employers with at least one employee in the state and employees working in the state contribute premiums. Starting on January 1, 2023, FAMLI requires employers to remit those premiums to the fund. The premiums take the form of a .9% payroll tax, split 50/50 between employer and employee. The new regulations define the wages that are subject to the payroll tax to include salary or hourly wages, commissions, payments on a piecework basis, bonuses or other forms of compensation (such as board, lodging or payments in kind). The department’s employer FAQs provide formulas for calculating premiums. Note that employers with fewer than 10 employees are not required to pay the employer share of the premiums (although they are still required to remit the employee share to the fund). Employers that report ten or more employees in the first quarter of 2023 will be required to pay the employer share of the premium for all calendar quarters in calendar year 2023.

The new regulations also require employers to remit the premiums on a quarterly basis. Self-employed workers can also participate in the program, and the new regulations outline the process they must use to do so, including a quarterly earnings report as well as quarterly remittance of premiums.

The fund sends payments directly to employees on FAMLI leave, and those payments are capped at $1,100 per week. Employers are not responsible for paying salary while an employee is on FAMLI leave. According to the department’s employer FAQs, employees are not required to use PTO before using FAMLI leave, but employers can allow employees to use PTO to “top off” the remaining balance of their weekly wage.

The new regulations also provide a process through which local governments can opt out of the FAMLI program. To do so, the rules require local governments to hold a vote after providing written notice that they will hold such a vote. If the local government votes not to participate, then it must provide its employees with written notice of the decision within 30 days, along with notice that employees can still opt into the program (participating in much the same way as self-employed workers do).

Employers in the state or with at least one worker in the state should be aware of the law and the new regulations. Further guidance and additional regulation are expected in the next year to clarify and administer the FAMLI program.

Colorado Paid Family and Medical Leave Insurance Act »
Regulations Concerning Paid Family Medical Leave Program (Premiums) »
Regulations Concerning Paid Family Medical Leave Program (Local Governments) »
Employer FAQs »

On January 19, 2022, Commissioner Conway adopted Emergency Regulation 22-E-03. This regulation creates a special enrollment period in the state that allows enrollment in an individual health benefit plan from January 16, 2022, through March 16, 2022. The commissioner adopted this emergency regulation in response to local wildfires and the rise of the Omicron variant. Any coverage provided by an individual health plan that a person enrolls in during this special enrollment period will have an effective date of the first day of the month following plan selection.

Employers should be aware that this special enrollment period is for qualified individuals applying for new coverage. It does not apply to employees who are enrolled in the employer’s group health plan (if the plan complies with the ACA), absent a separate triggering event.

Emergency Regulation 22-E-03 »

On January 19, 2022, Commissioner Conway adopted Emergency Regulation 22-E-04. This regulation requires carriers regulated by the state to immediately cover all FDA authorized or approved vaccines for COVID-19 throughout the duration of the COVID-19 recovery, including all associated costs of administration and no cost-sharing. In addition, the regulation establishes a reasonable rate for COVID-19 vaccine administration as $41.18 and requires carriers to reimburse out-of-network providers administering COVID-19 vaccines at no less than this rate for these services.

Employers with plans issued by carriers regulated in the state should be aware of this development.

Emergency Regulation 22-E-04 »

On January 12, 2022, Commissioner Conway adopted amendments to Regulation 4-2-73. This regulation applies to all carriers marketing and issuing individual and group health benefit plans subject to the state’s regulation. The regulation requires carriers to provide coverage for the federal Food and Drug Administration (FDA)-approved medication prescribed for pre-exposure prophylaxis (PrEP) without copayment or cost-sharing for individuals who, according to their provider or pharmacist, are indicated for PrEP. The amendments update the requirements for individual and group health benefit plans to provide coverage for human immunodeficiency virus (HIV) pre-exposure prophylaxis (PrEP) as well as baseline and monitoring services.

Employers with plans regulated by the state should be aware of this development.

Regulation 4-2-73 »

On October 12, 2021, CMS approved the state’s proposed benchmark plan for policies beginning on or after January 1, 2023. The proposed plan added new services to the current benchmark plan, including an annual mental health wellness exam, gender-affirming care (those mental and physical health services that help align a transgender person’s body into alignment with their gender identity), and 15 new drugs that insurance companies must cover as alternatives to opioids.

Since small group plans issued in the state that cover employers with less than 100 employees must include these benefits, employers with such plans should be aware of these developments.

CMS Letter Approving Benchmark Plan »
Colorado Benchmark Plan for 2023 »

On September 21, 2021, the Division of Insurance adopted Emergency Regulation 21-E-12. This regulation creates a special enrollment period (SEP) in the state’s health insurance exchange for individuals or their dependents who lose either employer or government subsidies for COBRA premiums. This state regulation aligns with federal regulation that also creates an SEP in the federal marketplace under these circumstances. The triggering event is the last day of the period for which COBRA or state continuation coverage is paid for or subsidized, in whole or in part, by an employer or government entity.

Employers who subsidize the COBRA premiums for qualified beneficiaries, either through a severance agreement or ARPA subsidy, should be aware of this regulation.

Emergency Regulation 21-E-12 »

Commissioner Conway adopted emergency regulation 21-E-11, which became effective on July 22, 2021. This regulation applies to all carriers offering individual, small group, large group plans, student health plans and managed care plans subject to the state’s insurance laws. Those carriers must cover all FDA-authorized or approved vaccines for COVID-19 throughout the duration of the COVID-19 recovery, including all associated costs of administration, at no cost sharing. The requirement applies upon FDA authorization or approval and is not contingent on the issuance of a recommendation by the Center for Disease Control’s Advisory Committee on Immunization Practices.

Employers with plans regulated by the state should be aware of this requirement.

Emergency Regulation 21-E-11 »

In response to the extension of the special enrollment period (SEP) in the federal marketplace exchange, the state’s health insurance marketplace (Connect for Health Colorado) has extended its special open enrollment period to August 15, 2021.

While the creation of the SEP will affect individuals that will enroll on the marketplace, employers should be mindful of this extension in case there are employees who seek to drop coverage under their plans to take advantage of the SEP. Specifically, the permissible qualifying event for a revocation due to enrollment in a qualified plan will allow an employee to drop their employer’s plan mid-year if they intend to enroll in the marketplace. Unless future legislation or guidance indicates otherwise, applicable large employers are still required to offer full-time employees minimum value coverage satisfying one of the affordability safe harbors.

Connect for Health Colorado Press Release »