Introduction: The Expanding Paid Family and Medical Leave Landscape
Paid Family and Medical Leave (PFML) programs continue to expand across the United States, creating both opportunity and complexity for employers and the brokers who advise them. By 2028, PFML programs are projected to be active or pending in approximately 18 states and jurisdictions. Each of these has its own rules, timelines, and benefit structures.
For brokers, this evolving regulatory environment raises an important question:
Should employers remain in state-run PFML programs, or consider a private PFML plan alternative?
While state programs provide a standardized path to compliance, private PFML plans, which are offered by carriers such as Arch Insurance, may present an alternative approach for greater flexibility in plan design, administration, cost, and service delivery.
This article is designed to help brokers evaluate both options and support more informed client conversations.
Table of Contents
State Plans vs. Private Plans: A Side-by-Side Comparison
Where Private PFML Plans May Create Value for Employers
Multi-State Complexity: A Growing Broker Opportunity
Leveling Benefits Across States: Creating Consistency in a Fragmented Landscape
When to Recommend a Private Plan
Key Considerations Before Making the Switch
Conclusion: Turning Compliance into Strategy
What Is a Private PFML Plan?
A private PFML plan is an employer-sponsored program that replaces participation in a state-run PFML program. These plans may be fully insured through an insurance carrier or self-funded and administered internally or with a third-party administrator. The option to enroll in a private plan may vary by state.
To be approved, a private plan must meet or exceed the benefits required under the applicable state law. In practical terms, this means:
- Employers can “opt out” of the state program.
- Private plans must demonstrate equivalency (or enhancement) of benefits.
- The private plan assumes responsibility for claims administration and payment.
For brokers, private PFML plans introduce an additional advisory pathway that may strengthen client relationship with deeper conversations leading to an enhanced benefits strategy.
State Plans vs. Private Plans: A Side-by-Side Comparison
To help their clients make informed decisions, brokers should understand how state-administered PFML programs compare to private plan alternatives. The table below lays out some key differences.
| Category | State PFML Plans | Arch Insurance’s Private PFML plans |
| Plan Design & Flexibility | Standardized benefits defined by state legislation | Customizable plan design aligned to employer needs and workforce demographics[1] |
| Claims Administration | Managed by state agencies; processing times vary by jurisdiction | Claims administration focuses on the timeliness of claim decisions and customer service. |
| Claims Speed | Timelines vary and may be extended depending on state volume | Approximately 93% of claims processed within five days after complete documentation[2] |
| Pricing Structure | Set by the state using broad population averages | Cases are individually underwritten based on industry and census demographics; pre-funding efficiencies may be available |
| Reporting & Analytics | Limited or variable employer access to reporting | Real-time reporting tools and on-demand claim and FICA withholding data |
| Service Model | Centralized call centers serving all employers | Customer service teams familiar with employer-specific needs |
Broker Insight
While state plans offer a consistent compliance pathway, private PFML plans may provide employers with enhanced control over plan design, cost structure, and overall leave experience.
[1] Not available in all states.
[2] Based on internal Arch Insurance data.
Where Private PFML Plans May Create Value for Employers
Private PFML plans may not be the right fit for every employer. However, in many situations, they may provide meaningful advantages.
1. Employers Seeking Greater Control
Private PFML plans allow employers to:
- Adjust plan features (within regulatory requirements);
- Define service expectations; and
- Integrate PFML with broader benefits strategies.
This level of control may be particularly relevant for organizations with established benefits philosophies.
2. Employers Focused on Employee Experience
The claims process is often the most visible component of a leave program.
Faster processing timelines, flexible submission options, and more personalized support may contribute to shorter disruptions for employees, reduced administrative follow-up, and improved overall experience.
3. Employers with Data and Reporting Needs
Access to detailed reporting can support workforce planning, leave trend analysis, and cost management. For employers seeking deeper insight into absence patterns, private plans may offer enhanced visibility compared to some state programs.
4. Employers Evaluating Cost Structure
Although outcomes vary, private PFML plans may:
- Reflect workforce demographics more accurately;
- Offer different funding approaches; and/or
Provide a cost alternative to the state program.
Multi-State Complexity: A Growing Broker Opportunity
As PFML expands, multi-state employers are increasingly faced with:
- Varying contribution structures;
- Different benefit levels; and
- Distinct administrative requirements.
These differences may create inconsistent employee experiences across locations.
For example, a multi-state employer with employees in New York, New Jersey, and Connecticut may face significantly different statutory benefits across jurisdictions. A private plan strategy could help align all three benefit programs with one carrier, thereby streamlining program administration and improving the employee experience across the workforce.
Leveling Benefits Across States: Creating Consistency in a Fragmented Landscape
One of the lesser discussed but strategic advantages of working with a private insurance carrier is the opportunity to offer enhanced benefits as another means of leveling benefits across a multi-state workforce.
As PFML programs continue to expand, statutory benefits may vary significantly by state, including:
- Weekly benefit maximums,
- Duration of leave,
- Covered conditions, and
- Waiting periods and eligibility rules.
These differences may create inconsistent employee experiences within the same organization.
When benefits are leveled, it means they are designed to provide consistent income replacement, or in some cases leave durations, regardless of the state program.
Private PFML plans may support this strategy by allowing employers to:
- Offer enhanced weekly benefit maximums
- Offer extended leave durations; and/or
- Align total income replacement across jurisdictions, where allowed by state regulations
Importantly, any private plan used for statutory compliance must still meet or exceed state-required benefits.
Example: Aligning Benefits Across States
Consider a multi-state employer with employees in New York and Illinois:
- A New York employee receives New York Disability Benefits Law (DBL) payments
- An Illinois employee, in a non-statutory state, does not receive equivalent mandated benefits
Without coordination, this may result in uneven benefits across the workforce.
Most insured short term disability (STD) plans have language to support offsetting the STD benefit with any state mandated benefits. This allows for consistent benefits for all employees regardless of work state, as illustrated below. Employers with self-funded STD plans in some cases may need to review and update their SPDs to ensure similar benefit coordination.
| Benefit Component | NY Employee | IL Employee |
| State-Mandated Benefit | $170/week (DBL) | $0 |
| Employer STD Benefit | $1,000/week | $1,000/week |
| Offset Applied | -$170 | $0 |
| Total Weekly Benefit | $1,000 | $1,000 |
This approach allows the employer to deliver a consistent benefit outcome, while still incorporating required state programs.
Why This Matters for Employers
Leveling benefits may help employers:
- Provide a more equitable employee experience;
- Simplify communication around leave benefits;
- Reduce confusion among employees in different jurisdictions; and
Maintain alignment with broader compensation and benefits strategies
Why This Matters for Brokers
For brokers, this may be a key opportunity to discuss PFML strategy with clients.
Leveling strategies may help differentiate your consulting approach; open discussions around integrating PFML with existing STD or leave programs; and strengthen relationships with clients who have a multi-state workforce.
Private PFML plans may not only help employers meet state requirements, they may also support a more consistent and coordinated approach to employee benefits across states.
When to Recommend a Private Plan
For brokers, identifying the right scenarios is critical.
Private PFML plans may be worth exploring when clients:
- Want to explore a more cost-effective solution than state plans
- Operate in multiple states
- Already offer short-term disability or paid leave programs
- Seek enhanced employee experience
- Want more visibility into leave data
- Are evaluating long-term cost optimization
Key Considerations Before Making the Switch
Before recommending a private plan, brokers should guide clients through several important considerations:
1. State Approval Requirements
Private plans must:
- Meet or exceed statutory benefits;
- Be submitted and approved by the state; and
- Follow state-specific opt-out timelines.
2. Administrative Responsibility
Depending on structure, claims may be handled by a carrier or by a third-party administrator/self-insured model.
3. Implementation Timing
Some states require advance approval before state plan exemption and coordination with state plan pre-funding contribution periods.
4. Coordination with Existing Benefits
Private PFML plans may be coordinated with:
- Short-term disability programs, and/or
- Employer-sponsored leave benefits.
Coordination rules vary based on state regulations and are designed to manage benefits overlap and maintain consistency across programs.
Conclusion: Turning Compliance into Strategy
As PFML requirements continue to expand, brokers have an opportunity to strengthen client relationship with deeper conversations.
State-run programs provide a structured and standardized option. However, private PFML plans offer an alternative path which may allow for greater flexibility in cost, plan design, reporting, and overall program management.
For brokers, the value lies not simply in recommending one option over another, but in helping clients evaluate which approach aligns most closely with their workforce, operational goals, and long-term benefits strategy.
Private PFML plans are not a one-size-fits-all solution, but they may be a valuable option for many employers navigating today’s evolving leave landscape.
Arch Insurance works with brokers to evaluate private plan opportunities, guide the exemption process, and offer service solutions that align with client needs.
To learn more about how private PFML plans may fit into your clients’ strategy, connect with an Arch Insurance PFML specialist at dbl@archinsurance.com.