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FAMLI - Private Plans

The last section of our FAMLI Act series will go over the most recently adopted rules regarding private plans. These rules only govern employees, employers and private plan administrators localized to Colorado.


Employers may comply with the FAMLI Act by providing a Division approved private plan that provides all of the same rights, protections and benefits provided to employees by the FAMLI Act. Approved private plans may be in the form of either self insurance or a policy obtained through an insurer approved by the state. Private plans must

  • Allow family and medical leave insurance benefits for all purposes included by FAMLI

  • Provide family and medical leave insurance benefits for the maximum number of weeks in a benefit year as provided by FAMLI

  • Provide a wage replacement rate of at least the amount required by FAMLI

  • Provide a maximum weekly benefit of at least the amount specified by FAMLI

  • Allow a covered individual to take intermittent or reduced leave schedule as authorized by FAMLI

  • Impose no additional conditions or restrictions on family and medical leave benefits or paid family and medical leave taken in connection therewith, beyond those authorized by the FAMLI Act

  • Allow any employee covered under the private plan who is eligible for family and medical leave benefits under the FAMLI Act to receive benefits and take paid leave under the private plan

  • Provide that the cost to employees by the private plan be no greater than the cost charged to employees under the state plan

  • Offer benefits to all covered individuals employed by the employer

  • Provide that an employee be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the employee's claim for benefits

  • Utilize the forms provided by the Division or utilize forms that are no more onerous than the forms provided by the Division in regards to forms that claimants and/or health care providers will be required to complete in relation to a claim for benefits

  • Determine whether an application for benefits is properly filed and must do so in a manner consistent with the FAMLI Divisions requirements for an application to be considered filed


Application Requirements


All private plans must be approved by the Division prior to implementation. Private plans in the form of an insurance policy issued by a state approved insurer must first be submitted to the Colorado Division of Insurance for approval.


To obtain approval of a private plan, an employer must submit a completed application to the Division including but not limited to:

  • Employer's Name, Business Address, Mailing Address, and EIN

  • Designated contact person with contact information

  • Copy of self-insured private plan or insurance policy form if provided by an insurer

  • An attestation by the employer that

*The employer understands, and the private plan satisfies, the requirements set forth in the FAMLI Act

*The forms used by employees and/or healthcare providers will be no more onerous than those used by the state plan

- These forms must be submitted to the Division at least 30 days prior to making them available to employees for usage


Approved plans must not take effect no earlier than 60 days after the date of application. The outcome of a private plan application is not subject to an appeal.


Application administration fees for private plans will be $500.00 through 2024. In addition to the initial administration fee, starting in the first calendar quarter of 2025, employers with an approved private plan must pay the Division an annual maintenance fee to cover amounts expended by the Division for costs arising out of the prior years's administration of private plans. Employers will be notified by the Division of the annual maintenance and due date.


Employers will remain liable for premiums on wages until the effective date of the approved private plan and to withhold the employees' share of premiums from wages paid until the effective date of the approved private plan.



Employer Self-Insured Private Plans


In addition to the requirements above, self-insured private plans must also provide :

  • A surety bond, issued by a surety bond company authorized to do business in Colorado, for an amount equal to one year of total premiums along with documentation supporting the calculation. The surety bond must be issued on a form prescribed by the Division and must include a statement that the bonding company must give 90 days notice of its intent to terminate liability. Replacement bonds do not require prior notice but the surety company and the employer must notify the Division no later than 14 days after its effective date.

  • An attestation that the employer has complied with the separate account requirements below

*Must establish and 1.) maintain a separate account into which all employee contributions are deposited and kept; and 2.) from which all benefits must be paid, and from which private plan administrative costs may be paid.



Private Plan Renewal Requirements

  • Private plan approval expires after 8 years from the date the plan went into effect

  • Renewal applications must be submitted at least 60 days before the expiration of their private plan approval

  • Expiration notices will be sent out at least 90 days before expiration

Beginning November 2024, and every November thereafter, employers with a private plan must submit an attestation to the Division that their contact information is accurate and their plan continues to satisfy the requirements of the FAMLI Act. Failure to do so may result in withdrawal of private plan approval.



Employee Notice Requirements

  • An employer must deliver to each of its employees a written notice of its election and approval by the Division to offer a private plan in lieu of participating in the state plan no later than 30 days before the effective date of the approved plan.

  • For an employee whose start date is less than 30 days before the effective date, the notice must be delivered to the employee immediately upon hire.

  • The written notice may be delivered electronically, in person, or vial mail.

  • An employer must also post a notice containing the same information in a conspicuous and accessible place in each establishment where employees are employed. If an employer has no physical workplace, or an employee works remotely, the employer may satisfy this requirement by sending notice via email or through a conspicuous posting in a web-based or app-based platform that the employee regularly uses.

  • The contents of the notice required can be found HERE (5.9)


Record Keeping


Employer

  • Employers must keep and maintain, for a minimum of 6 years, records on any premium contributions it collected from employees


Private Plan Administrators

  • Plan Administrators must keep and maintain documentation of the following for a minimum of 6 years:

* Applications for benefits

* Benefits paid including payment dates and amounts

* Adverse determinations of benefits applications

* Internal appeals received and the outcome

* Documents, including wage data, containing information upon which benefit determinations were based



Private Plan Reporting Requirements

  • For the first 3 years of an approved private plan, the plan administrator must, on a quarterly basis, submit to the Division a 'private plan administration summary' of the previous quarter

  • This must be submitted no later than the last day of the month immediately following the end of the calendar quarter addressed by the summary

  • After a plan has been effective for 3 years, the 'private plan adminstration summary' will be due annually due on January 30th of each year

  • The requirements for a 'private plan administration summary' can be found HERE (5.12-3)



Changes to a Private Plan

  • Employers must notify the Division, in writing, of any material change to an approved private plan within 60 days before the changes take effect

  • Employers may not make a material change without first obtaining Division approval and providing at least 30 days notice to its employees

  • Division reviews of material changes may impact an employer's annual maintenance fee

  • Changes to an approved plan does NOT extend the duration of its approval



Termination of Approved Private Plans

  • If an employer's employees become covered by the state plan because the employer's private plan was voluntary or involuntary terminated, the employer must remain covered by the state plan for a period of at least 3 years

  • If an employer returns to a private plan before the end of the 3 year required period, the employer will be responsible for paying the state the amount of premiums it would have been required to remit through the remainder of the three year period.


Voluntary Termination of Approved Plans

  • Employers may terminate an approved plan by notifying the Division, in writing, at least 30 days before the voluntary termination's effective date

  • Employers must also notify employees of the voluntary termination no later than 30 days before the termination's effective date

  • Employer is required to provide coverage through the termination date and failure to do so will result in a fine equal the employer & employee's total premium amount for a year, divided by 365, not to exceed $500.00


Involuntary Termination of Approved Plans

  • If the Division withdraws an approval for a private plan due to failure to comply with FAMLI regulations, nonpayment of maintenance fees or other reason, the Division will issue a 'Notice of Withdrawal of Private Plan Approval' to the employer and private plan administrator with an effective date of 14 days after the date of the notice.

  • The employer may appeal the withdrawal before the effective date using an appeal form that will become available on the Division's website.


Employer Obligations After Termination of Private Plan Approval

  • Within seven (7) days of the effective date of a voluntary or involuntary termination of private plan approval, the employer must notify all Colorado employees of the termination, notify all Colorado employees that they are under the state plan as a result of the termination, and deliver to all Colorado employees the information contained in the Division created program notice under 'Section 8-13.3-511 - Notice'


Approved Private Plans Effective on or Before January 1, 2024

  • Employers must apply to the Division for a private plan exemption by October 31, 2023 to an ensure an effective date of January 1, 2024

  • If an employer remits premiums in 2023 and later obtains an approved private plan effective before January 1, 2024, the employer may apply for reimbursement for the amount of premiums paid in 2023 minus the required plan administration fee (if not already paid). The Division will issue reimbursement within 90 days

* If an employer is reimbursed for premiums collected in 2023, the employer must reimburse its employees for any premium collected, unless the terms of the approved plan allow the employer to collect premiums from employees in 2023.


That concludes our 5 part series on the Colorado FAMLI Act. More information on private plans can be found HERE. We hope you found this useful and strongly encourage you to examine how each part of these regulations affect your business. We would be happy to help answer any of your questions or concerns, please feel free to contact us.





This is for educational / informational purposes only (Disclaimer) It is your responsibility to verify any and all information provided.

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