By Chris Nicolopoulos and Dj Bettencourt
The solution to bringing a viable family paid medical vacation program to New Hampshire has been an unsolved mystery for two decades, but a groundbreaking proposal by Governor Chris Sununu and backed by the legislature will soon make it a reality in our state.
New Hampshire has a tradition of approaching political problems in innovative ways and avoiding problematic approaches by other states. This family paid medical leave program is no exception.
Unfortunately, for some, the discussion about paid family vacations has become very partisan. At New Hampshire Insurance, however, we know that most Granite Staters are excited about this new program and eager to see the details. We’d like to take a moment to provide this backdrop.
In terms of benefit, the plan provides 60% wage compensation for up to six weeks per year and can be used for a variety of events with no minimum duration, including: caring for a newborn; Caring for a spouse, child, or parent in serious health; Questions arising from the military operation of a family member; or a serious health condition of the person.
In its structure, it is a voluntary opt-in program for both companies and individuals who do not have access through their employer.
While it will be generally available for those who wish, it won’t be mandatory for those who don’t.
Therefore, neither an income tax nor a compulsory, automatic wage deduction is required.
This unique approach – a statewide, private market, voluntary paid medical family leave – does not currently exist in any other state. Since insurers are generally unable to set financially sound premiums due to uncertainty about the number of volunteers, most other states have made their programs compulsory, levied a new tax, and expanded the government to allow their state to implement the program can manage.
The New Hampshire Approach, on the other hand, offers our 10,000 or so government employees a paid family medical leave benefit. These employees serve as a basic risk pool which is then managed by a commercial insurer.
If an insurer knows the minimum number of lives insured – in this case 10,000 civil servants – it is able to set financially sound premiums. The insurer is then required to make the program available to companies and individuals who wish to volunteer.
By investing in a paid medical family vacation benefit for government employees through commercial insurance and requiring all Granite Staters to have the same coverage, the state is promoting a market for an affordable paid family vacation program.
In designing this plan, the state sought advice from industry experts, individuals and companies who understand how insurance products can be successful. More than 10 insurers have shown interest in a competitive application to administer this program – a strong sign of its feasibility.
In the unlikely event that the program does not meet expectations, the insurer bears all financial risks and protects taxpayers from adverse effects.
Other notable aspects of the plan are:
– Companies of all sizes can participate. Those who choose to do this have a choice of how the premiums are paid: they can pay the full costs, let the employees bear the full costs or share the costs with their employees. The agreement is completely free from what they agree to with their employees.
– If a company chooses to participate in the program, it may be eligible for a corporate tax credit, which acts as an incentive for company participation, thereby expanding and diversifying its risk pool. Ultimately, this will lower premiums and help companies struggling to attract and retain workers – a win for employers and employees.
– Regardless of whether a company chooses to participate, any person, regardless of their employment status, can independently access this program to ensure that access to the program is universal.
– The premiums for the individual opt-in group are stabilized by a premium stabilization reserve fund, which is financed from the existing insurance premium tax. This mechanism ensures that the premiums for individuals are $ 5 or less per pay week as required in the plan.
With this program, New Hampshire has shown yet again how innovative approaches to policy issues can provide viable solutions.
As a government agency, we have an obligation to ensure that every law passed by the legislature and governor is successfully implemented.
We face this task with dedication and enthusiasm.
Chris Nicolopoulos of Bow is the Commissioner for the New Hampshire Department of Insurance. Salem’s DJ Bettencourt is the Assistant Commissioner for the New Hampshire Department of Insurance.
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