Accident and health or life insurance carriers licensed in Arkansas can issue family leave insurance policies with the governor’s Feb. 17 signing of Senate Bill No. 111. The policy can cover family leave benefits for the birth, adoption, or placement of the employee’s child, the care of a family member with a serious health condition, or qualifying exigency leave related to the active military duty of an employee’s family member.
Family leave insurance can either be written as an amendment or rider to a group disability income insurance policy, a separate group insurance policy, or included in a group disability income insurance policy. This new law allows insurance carriers to develop their own insured family and medical leave (IFML) plan offerings, subject to regulation by the Arkansas Insurance Department.
Arkansas is the latest state to allow the private market to provide voluntary IFML benefits, following the path blazed by Virginia, New Hampshire, and Vermont. The Arkansas bill utilizes the approach taken by Virginia in opening its insurance market for private IFML products, in contrast to New Hampshire and Vermont, which paired their private market offerings with the provision of paid family leave benefits to state employees. This is a marked departure from the traditional model of mandating paid leave coverage primarily through a state-administered system, such as those in Washington, Massachusetts, and Connecticut.
Several legislatures are in session, so FINEOS is closely watching the activity in these states where paid family and medical leave bills continue to progress:
- Illinois: This bill follows the traditional mandate model and would require the Department of Employment Security to establish and administer a Family and Medical Leave Insurance Program that would provide family and medical leave insurance benefits to eligible employees starting January 2025.
- Maine: After conducting a comprehensive study, the Commission to Develop a Paid Family and Medical Leave Benefits Program submitted its final report in December with recommendations on how to design a program that would start paying benefits starting January 2025. A full bill has not been introduced yet, but should it adhere to the Commission’s recommendations, it would look like the traditional mandate model.
- Minnesota: Minnesota has indicated that paid family and medical leave is a priority, with two bills proposing both the voluntary and the traditional mandate model. The governor has expressed support for the traditional model in his proposed budget; if passed, the bill would require the Department of Employment and Economic Development to establish and administer a Family and Medical Benefit Insurance Program that would provide family and medical leave insurance benefits to eligible employees starting July 2025.
- New Mexico: This bill follows the traditional mandate model and would require the Workforce Solutions Department to provide leave compensation to eligible employees starting January 2026.
One thing is clear — with the paid leave movement gaining steam, states aren’t taking a one-size-fits-all approach and instead are exploring different models to provide paid leave to employees.
FINEOS makes life and leave easier. Carriers that use the FINEOS Platform, a purpose-built SaaS employee benefits platform, can quickly meet new product opportunities like IFML in the market and provide important benefits to employees worldwide. Contact us today.