Likely no. Employer STD policies are typically not sufficient to meet state PFML requirements. While STD policies are designed to provide income replacement for an employee’s own serious health condition, PFML programs provide income replacement for a much broader scope of leave reasons. Additionally, PFML program requirements are state-specific, and a basic STD plan typically will not satisfy each state’s unique requirements.
Statutory PFML programs generally apply to an employee who works in the state (including telecommuting), regardless of the physical office location or the employee’s residence state. For example, an employee who works from home in California is subject to California’s paid family leave (PFL) and disability insurance programs even if the company is located outside of California. State PFML programs generally follow state workers’ compensation rules to determine the applicable state.
Most state PFML programs require employers to offer not only statutory disability coverage (also referred to as temporary disability) but also family leave insurance. Statutory disability insurance covers an employee’s own serious health condition or disability (including incapacity from pregnancy), similar to what standard STD insurance covers. On the other hand, family leave insurance provides paid leave for the employee to take time off to care for the employee’s eligible family member’s serious health condition or to bond with the employee’s new child. Traditional STD policies would not provide this broader coverage to cover caring for a family member.
Employers should review their employees’ work locations to confirm that they understand and satisfy the applicable states’ PFML program requirements, including private plan option availability, premium collection and submission processes, and employee disclosures (e.g., notices and posters). For more information on state PFML requirements, please ask your broker or consultant for a copy of the NFP publication State PFML and Statutory Disability Programs: A Quick Reference Chart.