By Chris Nicolopoulos and D.j. Bettencourt
The solution to bringing a viable Paid Family Medical Leave program to New Hampshire has been an unsolved puzzle for two decades, but a trailblazing proposal crafted by Gov. Chris Sununu and supported by the Legislature will soon make it a reality in our state.
New Hampshire has a tradition of tackling policy issues in innovative ways, avoiding other states’ problematic approaches. This Paid Family Medical Leave program is no exception.
Unfortunately, for some, the discussion over paid family leave has become very partisan. However, we at the New Hampshire Insurance Department know most Granite Staters are excited about this new program and eager to learn the details. We want to take a moment to provide that background.
As for the benefit, the plan will provide 60% wage replacement for up to six weeks per year and can be used for a variety of events with no minimum duration including: care of a newborn child; caring for a spouse, child or parent with a serious health condition; issues arising from a family member’s military deployment; or a serious health condition of the individual.
In terms of its structure, this is a voluntary, opt-in program for both businesses and individuals who don’t have access through their employer.
While it will be universally accessible for those who desire it, it will not be mandatory for those who do not.
Therefore, it does not require an income tax or a mandatory, automatic payroll deduction.
This unique approach — a statewide, private market, voluntary Paid Family Medical Leave product — does not currently exist in any other state. Because insurers are typically unable to establish financially sound premiums due to uncertainty about the number of voluntary participants, most other states have made their programs mandatory, imposing a new tax and expanding government to allow for their state to administer the program.
New Hampshire’s approach, on the other hand, provides our approximately 10,000 state employees with a Paid Family Medical Leave benefit. Those employees will serve as the foundational risk pool, which will then be administered by a commercial insurer.
Once an insurer knows the minimum number of covered lives – in this case, 10,000 state employees – it has the ability to establish financially sound premiums. The insurer is then required to make the program available to businesses and individuals who wish to voluntarily participate.
By investing in a Paid Family Medical Leave benefit for state employees through commercial insurance and requiring that the same coverage be made available to all Granite Staters, the state is fostering a market for an affordable paid family leave program.
The state solicited guidance from industry experts in shaping this plan, individuals and entities who understand how to make insurance products successful. More than 10 insurers have shown interest in competitively bidding to administer this program – a strong sign of its viability.
In the unlikely event that the program does not meet expectations, the insurer will bear all financial risk, shielding taxpayers from any negative impact.
Other notable aspects of the plan include:
— Businesses of all sizes can participate. Those choosing to do so will have discretion as to how the premiums are paid: they can pay the full cost, have employees pay the full cost, or split the cost with their employees. The arrangement is entirely up to whatever they agree upon with their employees.
— If a business chooses to participate in the program, it may be eligible for a business enterprise tax credit, which will serve as an incentive for business participation, thereby expanding and diversifying the risk pool. Ultimately, this will reduce premiums and help businesses struggling to attract and retain workers – a win for employers and employees.
— Whether or not a business chooses to participate, any individual, regardless of employment status, will be able to access this program on their own, ensuring that access to the program is universal.
— Premiums for the individual opt-in group will be stabilized by a Premium Stabilization Reserve Fund financed by the existing Insurance Premium Tax. This mechanism will ensure premiums for individuals are $5 or less per pay week, as required under the plan.
With this program, New Hampshire has once again shown how innovative approaches to policy issues can provide viable solutions.
As a state agency, we have an obligation to ensure that any law passed by the Legislature and governor is implemented successfully.
We are committed to fulfilling that duty with dedication and enthusiasm.
Chris Nicolopoulos of Bow is the commissioner of the New Hampshire Department of Insurance. D.J. Bettencourt of Salem is the deputy commissioner of the New Hampshire Department of Insurance.