Colorado is a leader in family-supporting policies and one of 13 states with paid family and medical leave laws. As such, we are trailblazers for the future of employee benefits. The decisions you make for your company will set an example for others across the nation and could result in pivotal changes in how our country addresses work-life balance.

Almost two years into Colorado’s Family and Medical Leave Insurance (CO FAMLI) journey, Colorado companies find themselves at an important state of reassessment. Has your company’s CO FAMLI plan achieved the results you hoped?

Your answer likely depends on how the plan you chose aligns with your company’s overall strategy. CO FAMLI is a critical piece of integrating your business objectives with the wellbeing of your workforce, but every organization is different. You can select a private plan or remain with the state-administered program, but there certainly isn’t a one-size-fits-all solution. 

At MJ, we developed a CO FAMLI Impact Model to help formulate a holistic absent management strategy that is customized to each organization. This model helps you navigate the complexities of deciding which CO FAMLI plan approach best fits your goals, while considering all the factors that impact the cost of absence management. 

To unpack some of the early learnings of CO FAMLI, we gathered input from two employers — Noodles & Company, which opted to remain covered by the state plan, and the University of Colorado, which chose a private plan strategy. Both organizations worked with MJ to analyze data on their employee and administrative needs, resulting in both organizations creating highly customized and cost-efficient plans.

With favorable demographic risk and low incidence of employee leave, Noodles & Company initially seemed like an ideal candidate for a private plan. However, our impact model results revealed that a state plan would be the most cost-efficient option.

First, we looked at the company’s presence across the country. At first glance, one may think a private plan seems like the perfect solution to provide a uniform plan for all employees. When looking at the cost of administration, however, we found that coordinating a private plan to meet the diverse requirements of multiple states would be extremely complex. Second, we considered the company’s employee demographics. Our analysis showed the expected utilization of a family and medical care leave program for this population to be statistically lower. Given this, we initially assumed that private plans would offer lower costs due to anticipated low-utilization rates. Surprisingly, we found that private plan carriers were less willing to adjust their risk assumptions during the first year of the CO FAMLI program.

Jennilee Childs, Vice President of Human Resources at Noodles & Company explained that after hearing of the uncertainty around utilization and costs for their private plan, they felt confident in their choice to select the state plan. She noted, “So far, the experience has been smooth. The Colorado FAMLI program provides excellent resources and training, making it easy for our HR and payroll team to navigate. Plus, we’ve been able to seamlessly coordinate state benefits with our company-provided short-term disability plan. The state’s online tools, such as the estimated payment calculator and claims dashboard, have been incredibly helpful in ensuring our employees are paid accurately and on time.”

University of Colorado (CU) selected the lowest-cost option for its organization, which was to self-insure their own private plan, leveraging a robust in-house team and a third-party software solution.

Using MJ’s impact model, we studied CU’s employee demographics and historic leave incidence. With a limited number of out-of-state employees, the university wouldn’t need to worry about the complexities of finding a plan that covers the requirements of multiple states. And with more than 30,000 employees in Colorado, the cost of a state plan would have been substantial. In addition to better fitting CU’s needs, approved private plans were eligible for a refund of 2023 premiums paid to the state. The university used this refund to offset the costs of self-funded plan administration and leave payments to employees in 2024.

Reflecting on CU’s experience with the private plan, Lisa Landis, Associate Vice President of Employee Services at CU said, “While the cost of the CO FAMLI premiums was significant in making our decision to develop a private plan, the analysis by MJ also allowed us to look at employee experience. By self-insuring and self-administering this program, CU can manage an employee’s FAMLI leave, federal FMLA, short-term disability, and parental leave within the same department while utilizing the same required documentation for all leave programs. The project was complex, but I believe CU is in a great place to continue managing employee leave costs and compliance as well as providing a positive employee experience.” 

Private plan renewals across Colorado have generally been favorable, with most carriers maintaining current premiums for another one to three years.  That said, if your organization is not satisfied with how your CO FAMLI plan is being administered, you are permitted to change course. To learn more about your options, reach out to us at absence.mgmt@themjcos.com today and let us help put your future in focus.