Family with new born baby

Over the past few years, many states across the country have proposed (and a handful have passed) legislation to create state-mandated paid family and medical leave programs, providing eligible employees with job protection and paid benefits for qualifying leaves of absence. Recently, however, a new trend is popping up in legislation all over the country: changing the state insurance code to allow licensed insurers to offer paid leave insurance.

In 2022, Virginia’s legislature passed House Bill 1156, which established private family leave insurance as a class of insurance. The bill describes “family leave insurance” as an insurance policy issued to an employer related to a benefit program to pay for a portion of employees’ income loss due to taking leave for specified family-related reasons. Under the new law, family leave insurance may be added to an existing group disability income policy as an amendment or rider or written as a separate group insurance policy purchased by an employer. This law became effective July 1, 2022.​

More recently, in 2023, Arkansas enacted Senate Bill 111. This bill allows an insurer that is licensed to transact accident and health or life insurance business in the state to issue an insurance policy covering the risk of family leave. The bill creates a new line of insurance, known as “family leave insurance.”  This line of insurance would cover an insurance policy issued to an employer related to benefit programs that provide employees with wage replacement due to an employee taking leave for the following reasons:

(1) the birth of the employee’s child or adoption of a child by the employee;

(2) the placement of a foster child in the home of the employee;

(3) the care of the employee’s family member who has a serious health condition; or

(4) circumstances arising because the employee’s family member, who is a service member, is on active duty or has been notified of an impending call or order to active duty.

Family leave insurance may be written as an amendment or rider to a group disability income insurance policy, as a separate group insurance policy, or included in a group disability income insurance policy. This law will go into effect June 8, 2023 (90 days after sine die adjournment).

Other states have proposed similar legislation, including Florida, Minnesota, Texas, and Tennessee. This paid leave insurance trend is paving the way for the private insurance sector to develop new products that will make paid leave available to more workers. Only time will tell if this will be a unique situation in a handful of jurisdictions, or if other states will follow suit.

What ReedGroup Is Doing

ReedGroup, an Alight company, continuously tracks and analyzes current and pending leave and accommodation legislation to determine potential impacts to our customers. Further, ReedGroup specializes in offering state and federal leave of absence solutions, including insured company plans like Short-Term Disability, Long-Term Disability, and certain paid family/medical leave offerings. If you’re looking for assistance managing leaves of absence, disability benefits, or accommodations or to ensure compliance across your organization, ReedGroup has solutions for you. Review our offerings here.


Information provided on this blog is intended for general educational use. It is not intended to provide legal advice. ReedGroup does not provide legal services. Consult an attorney for legal advice on this or any other topic.

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