The solution to bringing a viable Family Paid Medical Leave (PFML) program to New Hampshire has been an unsolved mystery for two decades, but a groundbreaking proposal by Governor Chris Sununu and legislator-backed PFML will soon be used in our state Make reality.
New Hampshire has a tradition of approaching political problems in innovative ways and avoiding problematic approaches by other states. This PFML program is no exception. Unfortunately, for some, the discussion about PFML 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 replacement 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; Problems arising from a family member’s military engagement or serious individual health.
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 nationwide, voluntary PFML product in the private market – does not currently exist in any other state. Since insurers are generally unable to set financially solid premiums due to uncertainty about the number of volunteers, most other states have made their PFML programs mandatory, imposed a new tax, and expanded the government to allow their state to do that Program can manage.
On the other hand, the New Hampshire approach gives our 10,000 or so government employees a PFML advantage. 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 government employees, 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.
The state is promoting a market for an affordable PFML program by investing in a PFML service for government employees through commercial insurance and requiring that all Granite Staters be provided with the same coverage.
In designing this plan, the state sought advice from industry experts, individuals and companies who understand how insurance products can be successful. More than ten insurers have shown interest in a competitive application to administer this program, a strong indication 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 so can pay the premiums at their own discretion: 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 receive a corporate tax credit, which acts as an incentive for the company to participate, 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, anyone, 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 that 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.
(Christopher Nicolopoulos is the commissioner for the New Hampshire Department of Insurance. He lives in Bow. DJ Bettencourt is the assistant commissioner for the New Hampshire Department of Insurance. He lives in Salem.)
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