CONCORD — Gov. Chris Sununu said he’s offering a new and improved plan to encourage businesses and individuals to buy into a paid family leave program.
The two-term governor last spring vetoed a bill the Democrat-controlled Legislature had sent him for mandatory paid family and medical leave coverage.
In response at that time, Sununu came up with the outline of a plan with Vermont Gov. Phil Scott to have a voluntary leave offered to state workers in both states.
Sununu offered an original plan last February attached to his two-year state budget that Democratic budget writers stripped out in favor of their mandatory plan.
The version Sununu unveiled Wednesday will be considered during the 2020 legislative session.
State Sen. Jeb Bradley, R-Wolfeboro, will be the bill’s prime author.
“I support paid family leave and have a plan to get it done,” Sununu said. “Instead of government mandates that would impose an income tax, this is a truly voluntary, innovative plan that would deliver for New Hampshire families. I urge the Legislature to support this voluntary paid leave plan, because it’s the best shot at providing a paid leave plan that does not have administrative barriers or burdens, is available to all who want it, and is forced upon no one who does not.”
The Democratic proposal offered several ways to pay for the mandatory benefit, including a payroll tax charged to both workers and employers.
This is why Sununu dubbed it an income tax.
Sununu acknowledged Wednesday he made several key changes to this plan to make it more desirable to be sold on the insurance market for private employers and for individuals who want to buy it on their own.
The biggest change is Sununu gets rid of offering the benefit to workers who are out sick.
As drafted it’s available only to mothers who are caring for a child during the first month of birth, for someone caring for a sick relative or is needed at home because a family member has been deployed in the military overseas.
Sununu said the medical leave provision is not necessary because workers with health care insurance get short-term disability at work.
“Carriers indicated that 75% of costs associated with paid family medical leave are tied to the disability portion of the coverage. Since most New Hampshire employees have short term disability benefits, this was deemed to be duplicative coverage,” Sununu wrote in his plan.
Senate Majority Leader Dan Feltes, D-Concord, said the plan will not stand up to legislative scrutiny
“If Gov. Sununu seriously cared about working families, he wouldn’t have blocked Rep. Mary Stuart Gile’s paid leave bill, he wouldn’t have vetoed SB1 this year, and he wouldn’t invent more fake family and medical leave proposals,” said Feltes, a Democratic candidate for governor.
“Make no mistake, it’s a proposal written by and for the insurance lobby that shifts more taxpayer money to insurance companies, discriminates against New Hampshire’s small businesses, and discriminates against Granite State workers who need this coverage the most.”
The Campaign for a Family Friendly Economy that supports a mandatory law also panned Sununu’s idea.
“The governor’s proposal is fitting for this time of year. It’s a jack-o-lantern of a paid leave program, a hallowed-out shell presented with a smile but it won’t feed NH families,” said Amanda Sears, the campaign’s director.
“It’s designed to put on the shelf to catch attention.”
As crafted, those who were in this program would get up to six weeks of leave per year and the benefit paid would equal 60 percent of the average weekly wage.
Insurance Commissioner John Elias said Sununu altered his concept in response to industry concerns that arose from his earlier outline
“The New Hampshire Insurance Department feels that the Governor has addressed two very important concerns that were brought up by the legislators and the carriers,” said Commissioner John Elias. “This proposal decreases the impact of adverse selection in the individual opt in group, and it increases the subsidization of premium to make the benefit affordable for all employees.”
To encourage private employers to offer this benefit, Sununu proposed they receive a tax credit from the Business Enterprise Tax that equals 50 percent of the premiums they pay to provide the coverage.
As a way to keep the cost of premiums down, Sununu calls for the existing premium tax to be diverted to a stabilization fund.
For individuals buying this coverage it would cap their premium payments at no more than $5 a week.
The proposal also permits insurers to charge different rates for “experience” and “rating factors” which means those in jobs more likely to make greater use of these leave policies could be charged more for the coverage.
Bradley said the plan is financially sound.
“The voluntary paid family and medical leave program that I filed is a compromise plan that supports Granite State families and does not put taxpayers on the hook with an income tax,” Bradley said. “The compromise plan gives family members the flexibility to care for a loved one when they are needed most without interfering in the employer and employee relationship. I am pleased that Governor Sununu has led on this issue and that we have been able to build a model that works for New Hampshire.”