New Hampshire family leave proposal falls short over worries about fiscal solvency

By Dave Lemery | Watchdog.org

On a party-line vote, a bill that would’ve created a Family and Medical Leave Insurance program in New Hampshire failed to gain the support of the state Senate, putting its future in doubt.

The proposal, which passed the state House of Representatives on a narrow 171-162 vote in March, would have established a unique mechanism in the United States. While four states currently operate FMLI programs, in those cases worker participation is mandatory. The New Hampshire program, on the other hand, would be voluntary, and that’s where the concern from the Republican majority in the Senate was focused – the fact that no other state has attempted a voluntary program.

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New Hampshire Statehouse in Concord

Under the program, New Hampshire workers would have to contribute 0.67 percent of their weekly wages to take part. When taking advantage, workers would get up to six weeks off of work and be paid at 60 percent of their typical wage or 85 percent of the average weekly wage in the state, whichever is lower.

The program has an opt-out provision, and any employee who doesn’t opt out would automatically be included. Employees can opt out at the time of hiring, or on Jan. 1 of each year, and they would have to get their opt-out form notarized, a provision that was criticized during House debate in February.

While the paycheck deductions are intended to cover the claims paid out, there would also be a cost to the state’s Department of Employment Security to start up and administer the program. The department estimated that by the time the program could be fully operational in 2022, it would have added 43 new staffers at an annual cost of $4.2 million in salaries and benefits, plus a $2 million expense annually to an outside IT vendor.

After hearing a number of Democratic senators provide details, in some cases very emotionally wrenching, of New Hampshire citizens who had been struggling with the competing priorities of family health crises and the need to maintain employment, Sen. Bob Giuda, R-Warren, said during floor debate last week that while he understood and shared their desire to help their fellow state residents, the economics of the bill just didn’t line up.

Giuda said that he had worked with the Department of Employment Security to try to model how the program might work, based on the historical example of the Affordable Care Act’s failure to hit predicted targets. What they found was that it would not be solvent.

“Nobody in this room … believes that caring for our families in times of crisis is a bad thing,” Giuda said. “But I would equally submit that no one in this room thinks we should do it irresponsibly. … [The bill] puts the state at risk for a $160 million program and would do a more severe injustice to those who depended upon it should it fail.”

He said that he was working with the department and the state’s Commissioner of Insurance, Roger Sevigny, to get information from private insurance companies and try to reshape the bill so that it would make sense fiscally.

Sen. Donna Soucy, D-Manchester, replied that plenty of information had already been collected and that she was confident the program would be solvent as it was designed.

“I think the study has been done, and I think the House did a very thorough job not just on this piece of legislation but on preceding pieces of legislation trying to work through a system that would be voluntary, that would address issues like competition for short-term disability, that would provide a funding mechanism, that wouldn’t be dependent on government subsidy,” she said.

While some Republican senators indicated they support the idea of an FMLI program, just not the one proposed, Sen. Andy Sanborn, R-Bedford, argued that businesses, families and communities across the state were already doing great work in supporting individuals dealing with medical crises.

“I can tell you that people do step up, employers do step up, families do step up,” Sanborn said. “In my company … I offer unlimited vacation time, I offer unlimited sick time, because we have a cohesive unit and I am so incredibly proud of that, that my management team, my co-workers have been there for our employees.”

Sanborn also noted that the four states that have family and medical leave insurance programs are California, New Jersey, New York and Rhode Island, states that differ in many ways from New Hampshire.

“I’m not sure I look at those states as a model of economic and financial capability,” he said.

The motion to refer the bill for “interim study” was approved on a vote of 14-10. The bill could return to the Senate with amendments designed to win majority approval for passage, or it could just quietly be allowed to expire at the end of this year’s session.

Image courtesy of Public domain
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