Minnesota Paid Leave: Exploring Plan Alternatives

As we approach January 1, 2026, Minnesota’s new Paid Leave program is set to bring significant changes to the workplace for employers across the state. While the state-sponsored plan is one option, employers may find that the private plan options, known as equivalent plans, better suit their company’s needs. Understanding whether an equivalent plan is the right fit requires a clear look at the benefits, requirements, and compliance steps businesses need to navigate.

Defining Minnesota Paid Leave

Minnesota Paid Leave is a state-mandated benefit that offers eligible employees partial wage replacement for qualifying medical and family reasons. This program will be funded by premiums paid by both employers and employees, covering nearly all private and public employers in the state. For more information, watch our Paid Leave webinar and read our blog that addresses frequently asked questions about Paid Leave.

Advantages of Equivalent Plans

No state premium payments

Direct benefit payments

Flexibility

Requirements for Equivalent Plans

Plans must meet the following.

A minimum of 12 weeks of medical leave and/or family leave, depending on the type of plan
Coverage for the same qualifying reasons, including medical conditions, bonding with a child, care for a family member, military-related leave, and safety leave
Eligibility requirements that cannot be stricter than those of the state-run plan
Premiums charged to employees cannot exceed what they would pay under the state plan
Employees covered under the state-run plan must also be covered under the equivalent plan
Job protections that are at least equal to those provided by the state-run plan
Allow intermittent leave or reduced schedules
Not impose any additional restrictions or conditions beyond those in the state plan
Coverage that continues for 26 weeks after employee separation or until they start a new job
Continue benefits for former employees on approved leave

Requesting an Equivalent Plan Substitution

Employers who want to move forward with an alternative plan need to request an Equivalent Plan Substitution. First, make sure the Paid Leave Administrator and one or more accounts with Unemployment Insurance (UI) are set up. Visit Minnesota’s Employer accounts page for more information.

Once the accounts are set up, work with your North Risk Partners Employee Benefits Advisor to explore pre-approved plan options.

Then gather the following information.

Plan details, including the policy number, plan number, insurance carrier, and coverage effective dates (must cover one full year from the start of a quarter)
For self-insured plans: documentation must include coverage effective dates for the full year and plan details demonstrating comparability to the state program
Payment for applicable fees, depending on employer size and payment method

Sign in to the Paid Leave Administrator Account, follow the prompts, and submit the request

For more information on submitting requests as a multiple-entity employer, visit Minnesota's Equivalent Plans for Paid Leave webpage, scroll to the bottom, and find the expandable section.

Next Steps After Approval

Employee Notice Requirements

Employers with approved equivalent plans must provide written notice to employees within 30 days of the employee’s start date, or 30 days before collecting premiums, whichever is later.

The notice must include:

Confirmation that the plan offers all rights, protections, and benefits under the state-run program
Details such as the effective date of the plan, wage replacement benefits, leave, and employment protection benefits
Eligibility and premium contribution processes
Appeal rights and claim procedures

Employer Recordkeeping

Employers must securely maintain records related to an employee's equivalent plan benefits and provide copies of relevant claim information within 10 business days of an employee's request, at no cost to the employee.

Choosing the Best Path Forward

For some employers, equivalent plans could offer potential cost savings, faster processing of leave requests and benefit payments, and more control over the leave administration process.

However, equivalent plans come with strict compliance obligations. Employers must carefully weigh the benefits against the administrative responsibilities. If you’re considering this option, now is the time to start planning.

If you have questions about Minnesota Paid Leave, please contact your North Risk Partners advisor. Don’t have an advisor? No problem. We’ll help you find one.

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This provides general information and does not constitute legal advice. The laws and regulations change frequently, which means the information provided herein may be outdated.