Private Plan Rules Under FAMLI Have Been Finalized

Ashley Graves, Law Clerk

The Colorado Division of Family and Medical Leave Insurance (“Division”) has finalized its rules governing employers’ use of private plans, which can be found here: https://inl1e0.p3cdn2.secureserver.net/wp-content/uploads/FAMLI-Private-Plan-Final-Rules-Nov-2022.pdf.  The Colorado Chamber of Commerce recently highlighted important changes between the Division’s proposed rules and the final rules, reflecting many employers’ concerns about costs and fees, employer obligations to the state-run FAMLI program when a private plan is terminated voluntarily, how long the Division’s approval of a private plan may last before it must be renewed, Division reviews of changes to previously-approved private plans, and other material issues. 

 These changes, as summarized by the Chamber of Commerce, include:[1]

  · Section 5.4: The administrative fee is reduced from $1,200 to $500.

· Section 5.5: There is now no additional administrative fee when a supplemental application is received within one year of an initial application for private plan approval being rejected by the Division.

· Section 5.7: The approval period for a private plan has been extended from 2 years to 8 years.  Importantly, this provision requires an employer to submit an attestation to the Division confirming contact information, and that the private plan continues to satisfy FAMLI requirements, every year.

· Section 5.13: The period for the Division to review a plan modification has been extended from 14 days to 60 days.  Additionally, the terms “in-depth” and “minimal” have been revised to “material” and the section then defines the term.  This revised Section also eliminates the fee associated with an employer moving from a private plan to a state-run FAMLI plan.

· Section 5.14: An employer terminating a private plan now must pay for the plan through the plan’s voluntary termination effective date, instead of paying one year’s worth of premiums to the Division. Employers may still be fined for any gaps in coverage for its employees.

· Section 5.16: Removes the language requiring employers to pay for one year’s worth of premiums in the event the Division withdraws approval of a private plan, and includes an opportunity to appeal the Division’s decision if the Division withdraws approval of a private plan.

· Section 5.19: Further describes a claimant’s ability to appeal private plan decisions and determinations—either through the private plan administrator or directly to the Division.

· Section 5.20: Provides for Judicial Review or a court determination to decide whether a private plan administrator owes additional payments to a covered individual, and assesses fines for each day a private plan fails to pay amounts owed after a set due date.

 Key Takeaways

In addition to the above-mentioned revisions to the rules governing private plans, employers are still obligated to comply with the established rules: namely, that any private or self-insured plans provide the same, or greater, benefits than the state-run FAMLI program.  Employer obligations if electing to utilize a private plan in order to satisfy paid family and medical leave requirements under the FAMLI statute and regulations are stated in greater detail in our September 22, 2022, blog article titled “Colorado Department of Labor and Employment Releases Proposed Rules Regarding Paid Family and Medical Leave Insurance Act Private Plan Options.”  Campbell Litigation is happy to assist employers in navigating these changes.

[1]https://cochamber.com/2022/11/10/colorado-chamber-joins-downtown-denver-partnership-as-an-advocacy-partner-for-a-safer-city/