This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0721.IBS
DATE: 3/13/2023
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 721 Paid Family Leave Insurance
SPONSOR(S):Chaney
TIED BILLS: IDEN./SIM. BILLS: SB 670
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Fletcher Lloyd
2) Appropriations Committee
3) Commerce Committee
SUMMARY ANALYSIS
Currently, life insurers in the state are authorized to transact health insurance, disability income
insurance, excess coverage for health maintenance organizations and multiple-employer welfare
arrangements, but are not expressly authorized to issue paid family leave insurance.
Family leave guarantees originated with the Family Medical Leave Act of 1993 (FMLA), requiring
covered employers to provide eligible employees job-protected leave for qualifying family and medical
reasons. Covered employers under FMLA include private-sector employers who employ 50 or more
employees in 20 or more workweeks during a calendar year, all public agencies, and all educational
agencies. FMLA protects leave for the birth or adoption of a child, the serious health condition of an
employee, care for an employee’s family member who has a serious health condition, and reasons
related to a family member’s service in the military.
The bill creates a regulatory structure for production and sale of paid family leave insurance policies
by life insurers. Notably, the bill does not create a right to paid family leave benefits for employees not
otherwise eligible under FMLA, but rather gives their employers the option to offer, and authorizes life
insurers to transact, paid family leave insurance providing benefits covering certain lost wages.
Among other things, the bill:
revises the definition of “kinds of insurance” to include paid family leave insurance,
defines “paid family leave insurance”
specifies requirements under which family leave insurance benefits may be provided,
requires insurance policies to specify details and requirements for covered leave reasons,
specifies requirements for polices relating to benefit periods and waiting periods,
permits limitations, exclusions and reductions for eligibility, and
authorizes the Financial Services Commission to adopt rules.
While the bill does not have a fiscal impact on local governments, the bill does have an indeterminate,
but likely positive, fiscal impact on state government. The bill has a positive and negative fiscal impact
on the private sector.
The bill will take effect upon becoming a law. STORAGE NAME: h0721.IBS PAGE: 2
DATE: 3/13/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Florida’s Insurance Industry
The Florida Office of Insurance Regulation (OIR) regulates the insurance industry in the state. As
regulator, OIR is responsible for all activities in the state concerning insurers and other risk
bearing entities, including licensing, rates, policy forms, market conduct, claims, issuance of
certificates of authority, solvency, viatical settlements, premium financing, and administrative
supervision.
1
The OIR is housed within the Florida Department of Financial Services (DFS), and its funding is
appropriated by the Legislature from the Insurance Regulatory Trust Fund (IRTF).
2
The IRTF is
funded by insurance company licensing fees, premium tax, surplus lines tax, and fines that may
be levied for non-compliance with provisions of the Florida Insurance Code (Insurance Code).
3
Under Florida’s Insurance Code, a qualifying insurer is authorized to transact any one kind or
combination of insurance, including life, health, property, casualty, surety, marine, and title.
4
Among the types of authorized insurance, paid family leave insurance is not currently included.
Nonetheless, OIR has already approved paid family leave insurance products and such products
have been sold and marketed in the state as riders to disability income benefits for individuals out
on family and medical leave.
5
Paid Family Leave Insurance
The federal Family Medical Leave Act of 1993 (FMLA) requires covered employers to provide
eligible employees job-protected leave for qualifying family and medical reasons. Covered
employers under FMLA include private-sector employers who employ 50 or more employees in 20
or more workweeks during a calendar year, all public agencies, and all educational agencies.
FMLA protects leave for the birth or adoption of a child, the serious health condition of an
employee, care for an employee’s family member who has a serious health condition, and
reasons related to a family member’s service in the military.
In 2022, the National Council of Insurance Legislators (NCOIL) adopted the Paid Family Leave
Insurance Model Act (NCOIL Model Act).
6
The Model Act created a new product of life insurance,
known as paid family leave insurance, under which any insurer licensed to transact life insurance
1
Florida Office of Insurance Regulation, Organization and Operation, https://floir.com/about-us/organization-and-
operation#:~:text=The%20Florida%20Office%20of%20Insurance,settlements%2C%20premium%20financing%2C%20and
%20administrative (last visited Mar. 10, 2023). See also s. 624.308, F.S., and R. 69O, et seq., F.A.C.
2
Florida Office of Insurance Regulation, Organization and Operation, https://floir.com/about-us/organization-and-
operation#:~:text=The%20Florida%20Office%20of%20Insurance,settlements%2C%20premium%20financing%2C%20and
%20administrative (last visited Mar. 10, 2023).
3
Id. Chapters 624-632, 634, 635, 636, 641, 642, 648, and 651 constitute the Florida Insurance Code. See also s. 624.01,
F.S.
4
Ss. 624.406(1), and 624.6011, F.S.
5
Email from Stephen Marante, Deputy Director of Government Affairs, Office of Insurance Regulation, Re: Family Leave
Insurance (Feb. 17, 2023).
6
National Council of Insurance Legislators, Paid Family Leave Insurance Model Act (Adopted on Nov. 19, 2022). STORAGE NAME: h0721.IBS PAGE: 3
DATE: 3/13/2023
or disability income insurance business could be authorized to issue policies covering benefits for
employees unable to work due to circumstances eligible for FMLA protection.
Some states provide a program using either a social insurance policy design that funds benefits
through pooled payroll taxes on employees and/or employers, or private insurance to fund the
programs.
7
Programs available in these states are the result of legislation either making such
programs mandatory or voluntary.
8
States currently offering paid family leave insurance benefits
through private insurers are New York (mandatory), New Hampshire (voluntary), and Virginia
(voluntary).
9
Effect of the Bill
The bill creates a regulatory structure for production and sale of paid family leave insurance
policies both as a stand-alone product, as a group insurance policy, and as a rider to a group
disability income policy. Notably, the bill does not create a right to paid family leave benefits for
employees not otherwise eligible under FMLA, but rather gives their employers the option to offer,
and authorizes life insurers to transact, paid family leave insurance benefits.
The bill includes paid family leave insurance as a type of insurance product with life, health,
property, casualty, surety, marine, and title insurance products. The bill defines paid family leave
insurance as insurance issued to an employer to pay for a percentage or portion of the
employee’s income loss due to:
The birth of a child or adoption of a child by the employee;
Placement of a foster child with the employee;
Care of an employee’s family member who has a serious health condition; or
Circumstances arising out of the fact the employee’s family member is a servicemember on
active duty or has been notified of an impending call or order to active duty.
Defined Terms
The bill defines the following terms as follows:
“Child” is someone who is:
o Under 18 years of age, or 18 years of age or older and incapable of self-care
because of a mental or physical disability; and
o A biological, adopted, or foster son or daughter; a stepson or stepdaughter; a legal
ward; or a son or daughter of a person to whom the employee stands in loco
parentis.
“Family leave” is any leave taken by an employee for work for any of the reasons specified
in the newly created s. 627.445(4), F.S. (as more particularly described below).
“Family member” includes a child, spouse, or parent, or other person defined as a family
member in the policy.
“Health care provider” means any physician, hospital, or other institution, organization, or
person that furnishes health care services and is licensed or otherwise authorized to
practice in this state.
“Parent” means a biological, foster, or adoptive parent; a stepparent; a legal guardian; or
other person who stood in loco parentis to the employee when the employee was a child
“Serious health condition” means an illness, injury, impairment, or physical or mental
condition, including transplantation preparation and recovery from surgery related to an
7
Department of Financial Services, Agency Analysis of SB 670, p. 1 (Feb. 27, 2023).
8
Id.
9
Id. STORAGE NAME: h0721.IBS PAGE: 4
DATE: 3/13/2023
organ or tissue donation, which involves inpatient care in a hospital, hospice, or residential
health care facility; continuing treatment; or continuing supervision by a health care
provider as defined in the policy.
Requirements and Specifications for the Policy
The bill provides family leave insurance may be written as an amendment or a rider to a group
disability income policy, included in a group disability income policy, or written as a separate group
insurance policy purchased by an employer. The bill also provides the policy must specify:
Details and requirements with regard to each of the covered family leave reasons;
The length of family leave insurance benefits available for each covered family leave
reason, which may not be less than 2 weeks during a period of 52 consecutive calendar
weeks;
Whether there is an unpaid waiting period, and if so, the terms and conditions of the unpaid
waiting period;
The amount of benefits that will be paid for covered family reasons;
Definition of the wages or other income upon which the amount of family leave insurance
benefits will be issued; and
Whether the family leave insurance benefits are subject to offsets for wages or other
income received or for which the insured may be eligible, and if so, all such wages or
income that may be set off and the circumstances under which it may be offset.
Permissible Limitations, Exclusions and Reductions for Eligibility
The bill allows eligibility for family leave insurance benefits to be limited, excluded, or reduced, but
requires any such limitation, exclusion, or reduction be specified in the policy. Permissible
limitations, exclusions, and reductions under the bill include, but are not limited to, any period of
leave:
Wherein the required notice and medical certification as prescribed in the policy has not
been provided;
Related to a serious health condition or other harm to a family member caused by the willful
intention of the employee;
During which the employee performed work for remuneration or profit;
For which the employee is eligible to receive from his or her employer, or from a fund to
which the employer has contributed, remuneration or maintenance;
In which the employee is eligible to receive benefits under any other statutory program or
employer-sponsored program, including, but not limited to, unemployment insurance
benefits, workers’ compensation benefits, statutory disability benefits, statutory paid leave
benefits, or any paid time off or employer’s paid leave policy;
Commencing before the employee becomes eligible for family leave insurance benefits
under the policy; or
Where more than one person seeks family leave insurance for the same family member.
The bill provides family leave insurance benefits provided under the newly created statute be paid
periodically and promptly, except as to a contested period of leave and subject to any of the
limitations, exclusions, or reductions explained above. The bill also provides rates for policies or
riders providing paid family leave insurance benefits must meet Florida’s rate making standard, to
wit, they must not be inadequate, excessive, or unfairly discriminatory.
10
B. SECTION DIRECTORY:
10
S. 627.062, F.S. STORAGE NAME: h0721.IBS PAGE: 5
DATE: 3/13/2023
Section 1. Provides a short title, “Florida Paid Family Leave Insurance Act.”
Section 2. Amends s. 624.6011, F.S., relating to combinations of insuring powers, one insurer.
Section 3. Amends s., 624.6011, F.S., relating to “kinds of Insurance” defined.
Section 4. Creates s. 624.6086, F.S., relating to “paid family leave insurance” defined.
Section 5. Creates s. 627.445, F.S., relating to paid family leave insurance.
Section 6. Provides the bill shall become effective upon becoming a law.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The bill has an indeterminate, but likely positive, fiscal impact on state government. The
state may see increased premium tax revenues to the extent that a paid family leave
insurance market develops.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNM ENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Employees eligible to receive family leave insurance benefits can receive compensation they
would not have otherwise received while unable to work due to eligible parental leave or their
own or their family member’s serious health condition or military service. Although the paid
family leave insurance is optional for private employers not otherwise covered under FMLA,
the insurance policy would be funded by the employer and/or the employee.
D. FISCAL COMMENTS:
The bill has an indeterminate impact on state government and none on local governments. The
bill has a fiscal impact on the private sector, specifically, a positive fiscal impact for eligible
employees and a negative fiscal impact for employers and employees due to premiums
funding the policies, but may see greater employee satisfaction and productivity. They may
also be more competitive in hiring quality employees. STORAGE NAME: h0721.IBS PAGE: 6
DATE: 3/13/2023
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill authorizes the Financial Services Commission to adopt rules to administer the Paid
Family Leave Income Replacement Act, s. 627.445, F.S.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES