One year after the New Hampshire Legislature added a paid family and medical leave program to the state budget, the state found a partner to launch the plans.
Officials with the Administrative Services Department and the Employment Security Department have selected MetLife, a national insurance company, to set up and administer the new schemes. Wednesday, the New Hampshire Executive Council cleared the final hurdle for the program, approving the $6.16 million Contract. The program is expected to launch in January.
State officials bill the program — which uses a voluntary, opt-in structure — as a tool to New Hampshire companies to recruit workers and compete with other states by offering a new attractive advantage.
“The PFML Plan is the nation’s first voluntary plan that uses state purchasing power and tax expenditure authority to provide cost-effective PFML insurance to NH employers and employees of all sizes,” wrote Charlie Arlinghauscommissioner of the Administrative Services Departmentand Georges Copadiscommissioner of the Employment Security Departmentin a joint letter to the board.
“In short, paid family and medical leave can dramatically improve employee lives and business outcomes,” they added.
The new contract represents the next phase of a policy that has been a flashpoint in the state for more than four years. Democratic gubernatorial candidates Molly Kelly and Dan Feltes each has made paid family leave a centerpiece of its campaigns against the government. Chris Sununua Republican.
Democrats preferred to make the program mandatory for all state employees to create a larger risk pool and lower premiums; Sununu opposed the mandatory approach, arguing that companies and employees should be able to refuse to pay premiums. The current program, adopted by Republicansdoes not require private sector participation.
A state Republicans also criticized the program. In April, the Republican-led House passed a bill to repeal the program, a year after it voted to create it in the budget. The Senate then rejected the repeal. Fiscal conservatives have raised concerns about creating an ongoing program.
On Wednesday, the board approved the contract unanimously and without discussion.
What is covered and how it works
Under the contract, MetLife will receive the money over the next five years to implement a paid vacation program that automatically covers all of the state’s 10,000 employees. This program will serve as a core risk pool to allow the insurer to create plans to provide paid family leave insurance to private businesses and employees, state officials said.
Funding for the program comes from the general state fund. The state will create a “premium stabilization trust fund” to reduce these costs.
The benefit will pay 60% of an employee’s salary for up to six weeks, according to the department. It will cover events such as the birth of a child, serious health problems of the employee or a family member, the adoption or custody of a new child and the deployment abroad in the armed forces.
“The state, I think, has a wonderful partner in MetLife,” said DJ Bettencourtdeputy commissioner of the New Hampshire Department of Insurance, who helped oversee the program. “It’s a big, well-known company. They’re familiar with these types of programs, and they’ll have the people and the resources to make it a success.”
The program comes in different forms for public and private sector employees. State employees will receive the benefit without having to negotiate it in their contract, a process that has proven difficult in recent years. But unlike paid family and medical leave plans for private sector employees, plans for state employees will not include coverage for the employee’s own health conditions. State employees already get personal health coverage through paid sick leave, which is negotiated in their contracts.
In the coming months, MetLife is also responsible for developing plans for private sector employees. Under the state program, companies can choose to participate, and those that do will be reimbursed 50% of their costs in the form of a tax credit on their business taxes.
Plans will differ depending on whether employers are “large”, consisting of 50 or more employees, or small.
Large employers will have the ability to customize how plans are paid and what benefits they offer through direct contracts with MetLife, depending on the state. They can adjust the duration of coverage – up to 12 weeks – and the percentage of salary offered to furloughed employees. And they can determine whether the cost of the bonus will be shared with the employee, paid by the company, or paid entirely by the employee.
Small businesses will contribute directly to the Premium Stabilization Trust Fund.
Meanwhile, employees whose workplaces do not participate in the new program – or the self-employed – will be able to enroll individually and also contribute a premium to the fund. These premiums are capped at $5 per week.
MetLifea New York, is best known as the largest life insurance company in the country. His most relevant area of expertise for from New Hampshire program is with short-term disability insurance, Bettencourt said.
The state chose the insurance company out of two bids in total; the other bidder did not meet “the minimum requirements for acceptance,” Arlinghaus said.
Wednesday the executive counsel also approved a $1.94 million contract to market the paid family leave program and conduct research through 2025. This contract was awarded to Mason Marketing in Penfield, New York.
Once the contracts are approved, this outreach effort will be needed to get companies on board with the program and have plans in place by January, Bettencourt said.
“I think you’re going to see over the next seven months or so, whatever’s left in the year, a lot of promotion,” Bettencourt said. “A lot of work from MetLife and the marketing company to publicize the program. »
Bettencourt said the new program could help level the playing field for New Hampshire businesses.
“The large employers of the southern third are in competition with Boston“, he said. “And many of those (Massachusetts) companies offer either a very generous paid vacation plan or a state-run program Massachusetts as well. So that gives them the opportunity to compete with that market.”
Advise Joe Kenneya Wakefield Republican, said he supported the program despite concerns about the financial viability of some members of his party.
New Hampshire “is small enough and nimble enough to undertake a kind of quasi-pilot program to see where a program like this could go,” he said. “We’ll see how it goes. We hold on to the good stuff and let the bad stuff go.”
This story was originally published by the New Hampshire Bulletin.