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Why is Massachusetts’ Decision to Expand PFML Policy Revolutionary?
A significant number of freelancers fear the financial consequences of getting sick, needing time with a new baby, or having to care for a loved one. Typically, the response from people who do not work within the gig economy has been to “just get a regular job” (which, quality of life and autonomy issues aside, can often end up not being much better than freelancing with respect to paid sick and family leave) or to opt for a private solution like purchasing disability insurance. After all, Social Security disability income is not an option for temporary disabilities (12 months or less).

First, the cost can simply not be feasible for newer freelancers or those whose earnings are not very high. Similar to dental and vision insurance, buying a disability plan on your own often costs more and covers less than employer-sponsored plans. There is no real “average cost” for premiums because it depends on your chief profession, where you live, and your specific needs such as chronic illness, pregnancy, or a child who is prone to illness. The closest estimate available is that it is predominantly income-based, about 1-3% of your annual income. Since freelance writers can have major fluctuations in their earnings, estimates are harder to obtain. You can end up paying a higher premium in a bad year if you enrolled during a good year. A writer making $50,000 would effectively pay $500-1,500 a year, this expense could be harder to justify if your income is half of that.

The other major problem is that short-term disability insurance is incredibly difficult to navigate. The paperwork involved is labyrinthine and your payout could be based on prior and potential earnings, or solely on an actuarial table based on what you enter as your self-employment occupation. Writers aren’t even listed on this page of common A, B, C, and D ratings for private short-term disability insurance. A medical exam is also required for underwriting the policy, similar to how it’s done for life insurance. Institutional biases could be at play where women are forced to pay more even if they don’t want children, as well as weight stigma, medical conditions, and other factors that could cause your premium to skyrocket.

Most of all, private disability insurance can end up falling short of your needs in addition to benefits being difficult to access. If you’re paying premiums and have bills due while you’re too sick to work, but the payout doesn’t arrive until 90 days later, how does that help?
Then the plan may only cover serious illnesses exceeding a month, while a two-week bout of the flu or bronchitis can be equally devastating. Getting proof that you were incredibly ill can also be hard to obtain if you can’t afford a doctor visit. Better yet, pregnant subscribers are often expected to have this coverage in place before conception, and I don’t think any reasonable person wants an insurance adjuster in their bedroom to help prove this timing.

Similarly to health insurance, short-term disability insurance is onerous and difficult to administer through a private company. The biggest and best risk pool is to just to make it a public program where all are recovered regardless of income and family size.

Only five states currently have short-term disability programs:
California
Hawaii
New Jersey
New York
Rhode island
The eligibility for these programs varies and it is often difficult or impossible for self-employed people to participate. Solopreneur writers and content creators who operate as small businesses may essentially have to declare themselves employees in order to receive any benefit, and often just bear the risk of lost income while sick or taking up caregiving responsibilities. Similarly to private policies, you may also need to be enrolled in the program long before the accident, sickness, or pregnancy occurs.

Massachusetts’ action was revolutionary because in expanding the risk pool to the self-employed, it not only provides an invaluable benefit regardless of profession but also even makes the load lighter for employers and employees contributing to the family leave fund. No intrusive medical exams are required in order to enroll since it is solely romania cell phone number list income-based. Almost like it’s one big GoFundMe!

How Does Massachusetts’ PFML Policy Work?
To get down to brass tacks, Massachusetts residents need to enroll in the program via voluntary opt-in through MassTaxConnect. but must be making contributions to the PFML fund for a minimum timeframe before any benefits can be claimed. You must pay in at least two calendar quarters (six months) of the preceding four quarters (full year) with at least $4,700 in earnings during the most recent four quarters before applying for benefits.

You are also mandated to stay enrolled for a minimum of three years. Earnings reports must be submitted to the state quarterly to pay 0.75% of your earnings. For instance, if you averaged $3,500 a month in earnings the last quarter, you’d report $10,500 on your quarterly report and pay $78.75 in PFML contribution. If your earnings were $5,000 a month, you’d pay $112.50 for the quarter and $450 for the year, which is far lower than private disability insurance.

While the policy doesn’t offer immediate relief, private disability insurance doesn’t either. However, access to benefits has far simpler terms. There is also the option to declare yourself your own employee to get full PFML contributions and benefits, but you don’t actually have to do this if you don’t want to take out worker’s compensation insurance, start a payroll account, and deal with the additional administrative burden just to pay and insure yourself.

You can be and stay independent on a 1099 basis, or working with private clients, and be covered so long as you enroll on time, maintain your enrollment for at leat three years, and make your earnings reports and contributions on time.