Hello, I am Sarah Hipp and welcome to our mini session on Paid Family and Medical Leave. This is one in our series of state overviews, and today we will be focusing on Colorado.
Paid family and medical leave programs allow eligible employees to take paid time away from work when they experience certain qualifying life events.
Colorado’s state mandated program began paying benefits on January 1, 2024.
Under the Colorado program, which is abbreviated F-A-M-L-I or FAMLI for short, workers can receive up to 12 weeks of paid time, with an additional 4 weeks being available if there are complications related to pregnancy or childbirth. This additional time is extended to birth parents only.
So now let’s look at all the different qualifying events under Colorado’s program.
First, we have medical leave for the employee’s own serious health condition. To qualify for medical leave, the employee must provide a medical certification completed by a treating physician.
In additional to medical leave, Colorado allows employees to take family leave for 4 different types of situations.
First, there is bonding leave that is available to new parents. Bonding leave would be available to both birth and non-birth parents, as well as parents who are welcoming a new child through adoption of foster care placement. With bonding leave, all time must be taken within the first 12 months following birth or placement.
Next, we have care for a family member. This type of leave follows the same requirements as medical leave, but it is for the employee’s covered family member rather than the employee themselves.
The 3rd type of family leave is for a qualifying military exigency. These would be situations in which the employee has a family member that is called to active duty and the employee needs leave to take care of things like:
addressing needs that arise for short notice deployment
attending military events, like programs or ceremonies
certain childcare activities like appointments or arranging transportation – but not necessarily daily, routine childcare
making legal arrangements or attending counseling
and finally, the employee could take up to 15 calendar days of leave to spend with the military member during a temporary rest and recuperation leave
And finally, Colorado includes safe leave, which can be taken to address needs related to domestic violence, sexual assault, or stalking.
Colorado’s program applies to all employers and employees operating in the state of Colorado, even if the business only employs one employee in the state. This means that even if an employer is located in a different state, if they employ even just one person who works in Colorado, then they are subject to the FAMLI law. Owners and sole proprietors are not required to participate, but they do have the option to elect coverage if they so choose.
Local governments are impacted a little differently than private businesses. Local governments can participate in in the FAMLI program, but also have the ability to opt-out of coverage. This would be done through a vote by the local government’s governing body.
Now that we’ve established the basis for covered employers and employees, there is another element when it comes to the eligibility for benefits when filing a claim. Colorado looks at wages as the basis for benefit eligibility, and employees need to have earned at least $2,500 dollars in wages in the state over the year prior to taking leave. I often get asked about part-time or seasonal employees and how PFML applies to those workers, and with this earnings threshold many workers could be eligible for the paid leave benefits, even if they are not full-time.
Colorado does have a separate eligibility review for the job protection element of the FAMLI program. Workers need to have been employed with the current employer for at least 180 days in order for the job protection to apply.
Colorado, like many states, uses a tiered benefit calculation. There is a maximum benefit of $1,324 for claims beginning in 2025, and this maximum amount is evaluated and updated every year.
The first tier for the benefit calculation provides 90% wage replacement for earnings up to 50% of the state average weekly wage. So, if employees earn less than that threshold, they will see a full 90% replacement for their wages.
As we get into higher earners whose weekly income is greater than that 50% of the state average weekly wage, the remaining wages are replaced at a 50% rate.
There are so many different types of leave and income replacement programs available, so one question that does come up often is around the coordination of benefits when it come to the Colorado FAMLI program.
Colorado has been clear that the FAMLI benefits are separate from workers' compensation and unemployment; so, the paid leave program will not run concurrently with either of those benefits and employees cannot receive the FAMLI benefits for any period of time in which they are receiving worker’s compensation or employment.
If an employee and employer mutually agree, then employees can use any employer-provided paid time, such as vacation or PTO, to supplement the FAMLI payments. One thing to point out is that employees should be capped at their average weekly wage when these benefits are coordinated. The FAMLI benefits will be the primary payer, and then the employer-provided leave would supplement those payments to make the employee whole.
Similarly, disability or other types of paid leave programs can also run concurrently with the FAMLI benefits and used to supplement. Again, the FAMLI benefits would be primary and then any offsetting would be determined by the terms of the disability or other paid leave policy.
Finally, if the leave take under FAMLI also qualifies under FMLA, then those programs would run concurrently. While FMLA is unpaid, there is a job protection element under the Colorado program for those employees who have been employed for at least 180 days.
When we start talking about coordinating different types of benefit programs, it can get very confusing, so I thought it might help to look at a few examples.
The first one here we have is for family leave with John who is taking time for bonding with his new child. John’s employer also has an internal paid leave policy that pays 100% salary for 6 weeks. You can see here on the graph that the Colorado state program will be the first payor, and then the company benefit would supplement John’s pay during those first 6 weeks up to his full salary. After the company leave ends, John may want to use his own employer-provided PTO to continue supplementing the FAMLI benefits, or else he would receive only the FAMLI benefits at a percentage of his regular income.
In the next example we have a medical leave for Maria, and in her case, there is a short-term disability policy at play. The Colorado state program will again be the primary payer. Maria’s short term disability policy has offset language for the state benefits, so if her benefit amount is $1,500 for the disability plan, that would be reduced by the amount paid through FAMLI, so the payout would be $175.79. Finally, since the combination of the Colorado FAMLI and the STD is still below Maria’s regular earnings, she can then choose to use her PTO to get to the 100% of salary, otherwise she would only receive the combined $1,500 through STD and FAMLI.
We know that the state paid leave landscape is rapidly growing and Mutual of Omaha is here to support our clients.
Mutual of Omaha does offer a private plan option for Colorado paid family and medical leave. Our private plan solution ensures compliance and ease of administration.
From a claims perspective, we take a proactive approach to obtaining necessary information for decisions so that employees experience faster adjudication and benefit payment. We also have online claim status reporting to keep employers up to date.
For clients that also have existing Short-term disability policies, Mutual of Omaha will coordinate the benefit payments and information cross-product. This helps streamline the employee experience like we reviewed on the prior slide.
Finally, Mutual of Omaha does have dedicated teams and PFML resources that are here to support clients with questions and when issues arise.
Thank you all for taking the time to join me today to discuss Colorado paid family and medical leave. We hope this session was helpful and Mutual of Omaha is dedicated to keeping customers informed as they navigate state paid family and medical leave.