What happened?

On February 6, 2025, the Minnesota Paid Leave Program released guidance for Equivalent Plans for Paid Leave.

Overview:

Employers can comply with Minnesota’s Paid Leave Law by using self-insured plans or plans from an insurance carrier, referred to as “Equivalent Plans.” These plans must offer the same or more comprehensive coverage than the state program. Requirement details:

• Equivalent Plans: These can be self-insured or purchased from an insurance carrier. They must meet or exceed the coverage provided by the state plan.

• Application Process: Employers can apply for an equivalent plan exemption starting in spring 2025. Approved plans exempt employers from paying state premiums but require quarterly wage detail reports and employee notifications.

• Coverage Requirements: Equivalent plans must cover all employees, match or exceed state plan benefits, and cannot impose additional restrictions. They must provide coverage for 26 weeks after an employee’s separation or until they find new employment.

• Family and Medical Leave: Plans can cover both types of leave or just one. They must meet specific conditions, such as covering serious health conditions, pregnancy-related medical care, and family care needs.

• Employee Costs: Premiums for equivalent plans cannot exceed what employees would pay under the state plan.
  
• Job Protections: Equivalent plans must offer the same job protections as the state plan, including leave time and payment rates.

• Implementation Timeline: Employers must choose one of three options to comply:
  • Pay into the state-run insurance account.
  • Apply to administer a private Paid Leave Plan.
  • Purchase a qualifying Paid Leave Plan from a third-party insurance carrier.

“Please mark the effective date on your calendar as a reminder to be fully prepared and ready to ensure compliance with applicable laws and regulations.”

Source References

• MN Equivalent plans for paid leave
• MN PFML – Checklist for Substitution of a Private Plan  

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