We are now a little over a month into the operation of Minnesota’s new Paid Family and Medical Leave (PFML) scheme. How is it going?
In mid-January, CBS News reported on the first round of payments being made under the scheme. It noted that:
Since the program started on Jan. 1, the state says it has received more than 25,000 applications so far. A determination has been made on more than 10,000 of those applications, with approximately two-thirds receiving approval.
So that was approximately 6,600 approvals as of January 12, or 550 a day (6,600 / 12). Over a year, that comes to 200,750 (550 x 365). CBS News also noted that:
The department says it expects to approve around 130,000 claims from Minnesotans this year.
So, in mid-January we were running at a rate 54% higher than forecast. What might this mean for the program?
In October 2023 — after the program had been passed into law — Milliman, a “worldwide provider of actuarial and related products and services,” conducted an actuarial analysis at the request of the state government. The key equation is:
1) Expected Benefit Payments = Expected Number of Claims x Expected Claim Duration x Assumed Average Weekly Benefit Amount
Milliman’s analysis gives us two of these numbers, leaving us with:
2) $1,313,234,843 = 200,750 x Expected Claim Duration x Assumed Average Weekly Benefit Amount
CBS News told us in mid-January that “The [Department of Employment and Economic Development, DEED, which administers the scheme] reports the average approved leave duration is just under nine weeks” and that “The average payment is $1,153 this week.” If we plug these into the equation, we get:
3) $1,313,234,843 = 200,750 x 9 x $1,153
And that doesn’t add up. With the numbers given by CBS News, the equation becomes:
4) $2,083,182,750 = 200,750 x 9 x $1,153
“Expected Benefit Payments,” the total amount of money paid out by Minnesota’s PFML scheme in 2026, rises by 56% — or $509 million — to over $2 billion. Is there money in the fund to cover this?
Questions for DEED
I expected a surge of applications when the scheme launched and a higher daily rate of approvals because people can take time off in 2026 for events, such as having a child, which occurred in 2025. As a result, I held off writing this until more information became available: If there had been the announcement reported by CBS News, surely there would be more.
There haven’t been. As far as I can tell, DEED’s mid-January update is the most recent we have. And this matters: To come in at forecast, the daily rate of approvals after January 12 would have to drop by 37% to 345: Is this likely? Let us hope so.
Hopefully DEED will shed more light on this soon. If they do not, it is, no doubt, something our local newshounds will be all over.
