Background
Employers are permitted to implement an equivalent plan in lieu of the state administered PLO benefits. An equivalent plan is a plan that:
● Has the same or more benefits than Paid Leave Oregon
● Covers all employees
● Can’t deduct more from employees’ contributions than Paid Leave Oregon
● Is approved by the Oregon Employment Department
For those equivalent plans that are approved, employers must apply with the Oregon Employment Department (OED) annually for the first 3 years.
Which employers are required to apply for re-approval? Employers with a PLO equivalent plan must apply for re-approval. These are plans that are employer-administered or fully insured.
What must employers do if they have a PLO equivalent plan? Follow the appropriate steps to renew their equivalent plan.
The state has not posted official guidance on the process but verbal guidance from a recent industry call with the Oregon Employment Department (OED) gives us a clear idea of the process.
The renewal application is due 30 days prior to the PLO anniversary date.
For employers that started their equivalent plan on 9/3/23 when PLO began, the first re-approval will be based on a 9/3/24 anniversary date. The OED realizes that the 9/3 anniversary does not align with the calendar quarter, and they are adjusting this starting in 2025.
Going forward, starting in 2025, the re-approval anniversary date will be 10/1/25.
What if an employer’s anniversary was written to align with its Life or Disability policy year? The OED re-approval is required after 12 months even if your equivalent plan policy was written to match up with an existing life or disability policy.
For example, plans with a 1/1/25 policy renewal would need to file with the OED for re-approval on 9/3/24, but they could still receive a rate change effective on the 1/1 renewal. Prior guidance from the state indicates a carrier rate change would not be considered a substantive change if it is only an increased cost to the employer.
Important Dates
July 2, 2024: Employers will receive notification via their Frances on-line portal that they must file for re-approval within the next 30 days. There is an “Apply for Reapproval of your Equivalent Plan” section in Frances. This is visible in Frances now but is not active.
Employers should set up email alerts in Frances. This will generate an email when there are alerts in the Frances system, but employers will still need to login to Frances to view the alert.
Note: Employers without email alerts enabled will receive a re-approval letter in the mail.
August 3, 2024: This is the deadline for submitting for re-approval for plans with a 9/3/24 anniversary date.
IMPORTANT: If the re-approval application is not submitted by the deadline, the OED will cancel the equivalent plan and the employer will be required to participate in the state plan.
What is needed to apply for re-approval of the PLO equivalent plan?
The re-approval process will be similar to the original equivalent plan process. There is an online questionnaire and employers will need to load a copy of the plan document that will be in-force on 9/3/24.
IMA will be working with the equivalent plan carriers to ensure that its clients have access to the current plan document for the re-approval process.
Employers will need to pay a $150 application fee if they are renewing without substantive changes and a $250 application fee if making substantive changes.
Note: A carrier change is considered a substantive change.
Summary
Employers with a PLO equivalent plan should log into their Frances portal on July 2, 2024 to take appropriate steps to renew the plan. If the deadline is missed, the OED will cancel the equivalent plan and the employer will be required to participate in the state plan.
Bolton will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.
