By: HUB's Absence Management Team

Tennessee becomes the latest state to allow private employers to elect to offer an insured Paid Family Medical leave benefit via their disability carrier as a rider to their Short-Term Disability Policy or a separate policy via the carrier.

Tennessee Paid Family Leave Insurance Act

On March 31, 2023, Tennessee’s Governor signed into law Senate Bill 0454 which authorizes insurance carriers that are licensed to do business in Tennessee to offer Family Leave Insurance. This does not mandate Paid Family Leave for employers but allows them to provide a benefit if they choose similar to short-term or long-term disability.

The law allows carriers to write Family and Medical Leave as an amendment or rider to an employer’s current group disability policy (STD or LTD), a separate group insurance policy or included as part of a group disability income policy. Carriers are allowed to develop their own plan offerings, subject to approval from the Tennessee Insurance Commissioner. Carriers who elect to provide this coverage will be able to do so starting January 1, 2024. This means that the state will not have a tradition Paid Family Leave offering and there will be no standard for carriers to follow.

Next Steps

At the moment employers only need to be aware that this may be an option in the future. While the law is in effect, no carriers to date have submitted plans for approval and we suspect it will be a while before it is offered. The Tennessee benefit is similar to what Virginia passed and carriers have been slow to enter that market as well.

HUB’s Workforce Absence Management Team will continue to monitor this and provide updates as needed.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s specific circumstances. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your organization’s particular needs.