Brokers play a key role in helping employers navigate the complexities of paid leave

Access to Paid Family Medical Leave (PFML) continues to grow. According to the U.S. Bureau of Labor Statistics, as of 2023, 27% of U.S. private-sector workers have access to paid leave, more than double the 12% total in 2014. While this growth can be partially attributed to the passage of local, state, and federal paid leave laws, employers are also driving growth by expanding leave benefits offered to employees.

“In addition to state programs, we’re seeing many employers expanding their paid leave programs to provide flexibility and meet the needs of their employees, as well as help attract and retain new employees,” said Sharon Andrus, principal of PFML at The Hartford. “Being productive at work requires the flexibility to manage personal and family needs, and paid leave benefits provide employees with peace of mind. Knowing that income will continue while you’re on covered leave can help people worry less about how they’ll make ends meet — and focus more on their own recovery or caring for a loved one.”

Expanded access to paid leave benefits introduces additional complexity for employers and employees looking to optimize benefits. Hartford’s 2024 Future of Benefits Study found that 41% of employers rely on their insurance broker to comply with federal, state, and local leave laws and regulations.

Brokers have a unique opportunity to help their clients understand and optimize paid leave benefits by offering services that simplify leave administration, educate employees and increase overall leave utilization.

Expanded Access, Added Complexity

Paid time off programs are among the most important benefits that help employers with their talent retention and recruiting strategies. Hartford research shows that 58% of employers rank paid time off (PTO) as a top recruiting and retention tool, with paid maternity (43%), medical (42%), family (38%) and parental leave (30%) following close behind.

Many employers report that in 2024, they will add or expand benefits beyond state and federal requirements for each of these leave types, according to The Hartford study.

“Providing a comprehensive benefits package that includes paid family and sick leave benefits can help employers attract and retain employees,” Andrus explains. “Increased access involves a lot of work behind the scenes to coordinate different benefits, such as PTO, the federal Family and Medical Leave Act, state and company paid leave programs, and income protection benefits. The complexity is even greater for employers operating in multiple states.”

Brokers can play a vital role in helping employers navigate the administrative complexities, including deciding whether to waive state leave plans or offer a private plan through an insurer or third-party administrator. When employers decide to go private, brokers provide the necessary support to help secure approval for the private plan and ensure coordination between leave plans and existing income protection (disability) benefits.

Employers are looking for a wide range of assistance. Hartford’s study found that 89% of employers would welcome help tracking all types of leave in one place, and 88% would like help with compliance with federal and state regulations. Importantly, employers are also looking for help educating employees about paid leave options and how to use them.

Employee expectations and concerns

The Hartford study also shows that 85% of U.S. workers believe paid time off helps companies attract and retain employees, and two-thirds say their employer provides a good work-life balance that allows them to take time off to care for their family.

However, one in three people feel there is a negative perception associated with taking time off. Concerns are higher among Gen Z workers, with 49% saying they fear workplace repercussions if they take time off, compared with 24% of Boomers.

“Employers need to create an environment where employees of all ages understand the leave benefits available to them and feel supported in taking time off to care for themselves or a family member,” Andrus said. “The more people see that their colleagues are supported during their leave and return to work, the more comfortable they will feel in using those benefits.”

Beyond culture, education is key to increasing employee awareness and utilization. Currently, only 26% of U.S. workers say they are very confident they would know how different types of leave work together if they needed to take time off. Again, brokers can provide valuable education, communication, and support to help employees understand their leave benefits, how state leave programs work with other income protection benefits offered by their employer, and how to apply.

The key role of brokers

Brokers can significantly increase the value of their clients by offering them enhanced support and services that address their administrative, educational and operational needs.

Hartford research shows that employers rank brokers among the top five sources they rely on to comply with federal, state and local leave laws. As trusted advisors, brokers are well-positioned to help their clients make informed decisions, simplify the experience and optimize paid leave programs.

Ann Clifford is a freelance writer who leverages her background in financial services marketing to create specialized content focused on employee benefits and small business topics.