FAMLI premiums begin January 1, 2023. Employers must be prepared to have payroll deductions ready to go by the beginning of the year. Employers who fail to deduct allowable employee premiums for a wage period can NOT deduct this amount from a future paycheck for a different pay period. Be prepared!
Who is required to pay premiums beginning January 1, 2023?
All Colorado employees and employers unless exempt
Who is exempt from paying FAMLI premiums?
Nonparticipating local governments and employees
Employers with an approved private plan
Employers with 9 or fewer employees are exempt from the employer portion of the premium but must still remit the employee portion of the premium (50% of premium)
How will premiums be collected?
All premiums will be collected through the 'MyFAMLI+ Employer' online system (similar to unemployment)
Open registration has not begun but will before the end of the year
All employers, unless exempt, must register with the 'MyFAMLI+ Employer' online system by January 1, 2023 or when they become an 'employer', whichever is later
Self-employed individuals must register and submit premiums in 'MyFAMLI+ Employer' if they opt into coverage.
Local government employees whose employer opts out of FAMLI will have to register with 'MyFAMLI+ Employer' and pay their premiums IF their employer does not withhold premiums for them. Local governments CAN collect premiums for enrolled employees and submit to 'MyFAMLI+ Employer' if they choose even though they have opted out of the FAMLI program, but they are NOT REQUIRED.
*Local governments that have declined participation in the FAMLI program but who have agreed to withhold and remit the employee share of the premiums for employees who have elected coverage will be provided a quarterly list of employees who have elected coverage.
Premiums must be paid not less than quarterly and will be due no later than the last day of the month immediately following the end of the calendar quarter for which the premiums accrued.
How are premiums determined?
From January 1, 2023 through December 31st, 2024, premiums will amount to nine-tenths of one percent of wages per employee (0.45% employee premium) + (0.45% employer premium, unless exempt)
* Employers with 9 or fewer employees, self-employed individuals and local government employees whose employer opted out of FAMLI will only be responsible for the employee portion of the premium (0.45% of wages up to wage cap through 12/31/2024)
Premiums will be paid on wages up to the Federal Social Security Wage Cap which is set at $160,200 for earnings in 2023
The FAMLI Division has set up a premium calculator online HERE
The Division will notify employers and individual persons who elected coverage of their expected premium on the first business day of the calendar month the premium is due to be paid (either electronically or postal mail)
What is considered 'wages' under FAMLI?
Salary or hourly wages and other compensation (including board, lodging, payments in kind and/or other compensation for services performed by employees
Commissions, payments on a piecework basis, or bonuses earned
Tips / Gratuities and Service Charges when an employer is considered to have significant control over the amount and distribution (i.e. when they are collected by the employer and then redistributed to employees). Tips that are received during employment that are made known to the employer through a written statement furnished by the employee will be considered wages.
What is exempt from 'wages' in the calculation of FAMLI premiums?
Per-diem or mileage reimbursements
Amounts of payments made by the employer on behalf of the employee into other insurance or annuity accounts not associated with FAMLI including
* Short / Long term disability
* Medical / Hospital expenses in connection with illness or accident disability
* Earning from investments, dividends, rent from rental property except if earned through a business owned or operated by claimant
* Severance pay
Determining employer size for premium exemptions beginning January 1, 2023
FAMLI Division will determine the size of all employers by reviewing the number of employees reported for the first calendar quarter. Employers that report 10 or more employees will be required to pay the employer share of the premium for ALL calendar quarters in 2023.
Employer size will be calculated annually by counting the number of employees during the preceding calendar year
You can find FAMLI premium information in much more detail HERE.
The next post in this series will cover benefits. Hopefully you have found the postings informative and helpful and as always reach out the Complete Benefit Solutions team with any questions or concerns. firstname.lastname@example.org
*This post is for educational / informational purposes only (Disclaimer) It is your responsibility to verify any and all information provided.