Insurance is like the mechanics of the professional world: you have to work with them, but you don’t really know what they do, and can you trust them? So, of course, when we say we’re using insurance for social good and to transform workplaces, there’s often hesitation and confusion. We get it!
Paid Parental Leave (PPL) Insurance is the new kid on the block and paid parental leave hasn’t been available to everyone, but we’re on a mission to change that. To get you up to speed (and answer “how can you insure paid parental leave?”), we’re going to break down what exactly PPL insurance is, how it works, and why our pioneering program can help you and your company get ahead of the competition.
PPL insurance covers the salary expenses of paid parental leave. Our insurance-based program is a first in the nation. We are leveraging insurance to minimize employer risk, provide financial security for working parents who go on leave, and meaningfully transform workplaces.
Here’s what you need to know:
So what does this look like? Let’s get technical for a moment.
Unlike most wage replacement programs, such as Paid Family Leave (PFL) and Short Term Disability (STD) policies, PPL insurance does not have an “elimination period” (the period between the qualifying event - birth, adoption or foster placement - and the first payment). This means that PPL insurance helps cover that limbo week that’s usually at the employer’s expense OR employees have to take it unpaid unless they use Paid Time Off (PTO).
To help see how it all fits together, below is a helpful visual of how Parento interacts with existing programs.
In this example, the employee is giving birth in California and is eligible for State Disability Insurance (SDI) and PFL. In addition to the state plans, the company also supplements with a STD policy - which is common for companies who have employees in multiple states (or states without mandated plans).
Back to the visual: Parento (in yellow) fills in the elimination period (waiting period in week one) and tops off the employee’s payments up to the company’s PPL insurance policy. In this case, this employee is topped up to 100% salary. Without Parento, you can see that the employee would take the first week unpaid and would have very limited income replacement options for the duration of the leave.
PPL insurance works like any other insurance claim! Similar to medical, dental, and vision insurance, Parento’s program operates on a claims reimbursement basis. Paid parental leave claims (coinciding with a parental leave) are submitted by the employer to trigger the insurance policy.
After the policy is in place, here’s what that claims process looks like for employers in three easy steps:
Under Parento, when the employee takes leave - according to the policy - the employee remains on payroll and the company is reimbursed for that salary expense based on the policy. Because the employee remains on payroll, there is no interruption in pay for employees and no need for an additional W-2 at the end of the year. This also provides no risk of benefit clawback for employers.
PPL insurance anchors the Parento program, but the claims process is managed by our Leave Concierge. Our team and Portal tracks the leave start and end dates, collects employee’s benefit confirmation letters, helps coordinate with state benefit programs and short-term disability, and takes care of complicated payroll calculations alongside any eligible offsets.
Here’s what that looks like to see when Leave Concierge steps in and takes that workload off of HR’s plate.
This proactive wraparound support from Leave Concierge takes a significant amount of weight off of HR’s plate - especially when the average leave takes 25 hours to manage from start to finish. Parento’s white-glove approach removes the risk of non-compliance and paperwork hold-ups or delays. Below is an example of the payroll calculations provided by our Leave Concierge team. As you can see, we break out all programs and policies the employee may be eligible for, and calculate the employer’s contribution, based on their PPL policy.
Plus with personalized parent coaching, 95% of employees are guided back to work full-time. Learn more about the Power of Parent Experience.
At the moment, Paid Family Leave (PFL) programs are only active in nine states and the District of Columbia. This limitation in coverage creates inequities across the country for working parents if employers rely solely on the small number of state-mandated PFL programs.
We aren’t close enough to federal paid parental leave, so Parento is helping employers bridge that gap in coverage.
We work with employers nationwide to calculate their contributions and make sure their policy covers everyone equitably.
In fact, this is one of the top reasons employers love our program.
This visual is a helpful side-by-side comparison of Parento against self-funded PPL and state PFL programs. By insuring PPL, employers can pool their risk and eliminate the uncertainty of affording for and budgeting for upcoming parental leaves. Now they have a set annual premium through Parento and a line item they can budget for, even eliminating the need for additional parental leave administration software.
Insurance has not been an industry that has experienced recent innovations, but by creating a new product and leveraging insurance for social good, we can solve the parental leave crisis in the United States.
Parento is an ideal program for employers because the PPL insurance is just one component of a comprehensive solution, helping companies tap into that triple bottom line.
In today’s modern world, the bottom line isn’t driven by profit alone. For the greatest ROI, companies should be looking to maximize profits, people, and the planet.
That’s why we say we’re leveraging insurance for social good, helping companies future-proof their workplace with a comprehensive wraparound program. Our suite of solutions is designed to work for every employer, in every industry, in every state, and for every working parent. We are excited to continue pioneering new solutions that transform workplaces and working parenthood.
