by Marti Cardi, Esq. - Vice President, Product Compliance
July 06, 2021
New Hampshire has joined the PFML club but with a new kind of membership – a model we haven’t seen before in other states with statutory paid family and medical leave programs. Does the “Granite State Paid Family Leave Plan” represent the start of a new style of PFML programs, or is it just what you’d expect from a state whose official motto is “Live free or die?”
Too early to tell, but the New Hampshire bill has already broadened our thinking about insured paid family leave programs.
In summary, the law requires paid family leave for state employees and provides for voluntary opt-in by non-state employers and individual non-state employees. What’s different is that the state will contract with an insurance carrier to provide and administer the paid leave benefit. The anticipation is that with a large pool of state employees to insure, the carrier will be able to offer voluntary participation by non-state employers and employees that is realistic and affordable.
New Hampshire House Bill 2 can be found here. It’s long so search within the bill for “Granite State Paid Family Leave Plan” and you’ll find it near the end. The statute has lots of ambiguities and inconsistencies, and many details are left to the Commissioner of the New Hampshire Department of Administrative Services to determine. With that caveat, here’s what we think we know about the Plan from the statute and informal interpretations at this point. But stay tuned, there’s much more to come over the next few months!
Covered Employers and Employees
State employers/employees. The state will solicit bids from qualified insurance carriers to provide the paid leave benefit to state employees. [21-I:99.I.] It is not clear whether more than one carrier could be awarded a portion of the business. Best guess at this time is that it will all go to one carrier, but others may be able to provide the opt-in coverage to non-state employers and employees.
Non-state employers/employees. The selected carrier(s) must offer participation in the paid leave Plan to private employers, other non-state public employers, and employees whose employer does not opt in to the Plan. [21-I:100.] To participate, private employers must have more than 50 employees in New Hampshire. [21-I:100.II.] Covered employers can elect to provide FMLI coverage at no cost to employees OR on a full or partial employee contribution basis. [21-I:101.]
Individual employees can opt in to the Plan if:
- they work for a private employer with more than 50 employees that (1) does not opt in as an employer and (2) does not offer a company paid leave program with benefits at least equivalent to the state coverage. [21-I:100.III]; or
- they work for a private employer with fewer than 50 employees that does not offer a company paid leave program with benefits at least equivalent to the state coverage.
Family leave is available for reasons very similar to the FMLA: bonding with a new child, caring for a family member with a serious health condition, qualifying exigencies due to a family member’s foreign military deployment, and caring for an ill or injured servicemember. [21-I:99.II and 282-B:2.VI.]
Covered relationships for family leave include child, parent, grandparent (all broadly defined), and spouse or domestic partner.
Medical leave for an employee’s own serious health condition is not available to state employees. [21-I:99.II.] Private and non-state public employees covered through the purchasing pool can take medical leave for non-work-related medical conditions if their employer does not provide short-term disability insurance. [282-B:2.VI(e).]
Benefits are limited to 6 weeks of paid leave “with no minimum duration required.” [21-I:99.III(b).] The meaning of the quoted phrase is not clear: Does it refer to the ability to use, for example, only 1 or 2 weeks of leave, or does it mean that leave can be taken intermittently for up to a total of 6 weeks?
Wage replacement is 60% of an employee’s average weekly wage (AWW), capped at the Social Security taxable wage maximum.
Plan costs for state employees is funded by the state. Funding for all other participants will be through a purchasing pool paid into by employers and employees that opt into the Plan. Premiums for individuals in the pool cannot exceed $5 per subscriber per week.
Employers that have more than 50 employees and do no opt into the Plan must withhold payroll deductions for premiums from their employees who opt in individually. [282-B:3.II.] Employers with fewer than 50 employees do not have to take payroll deductions. [282-B:10.] Employees of such employers who choose to obtain coverage will contract directly with the carrier(s) awarded the business through the purchasing pool. [21-I:100.III.]
The statute provides an employer tax credit of 50 percent of the premium paid by a sponsoring employer for FMLI coverage offered to employees pursuant to the statute. [77-E:3-e.] It is not clear whether an employer that voluntarily provides paid family leave benefits outside of the Plan can also receive the tax credit.
The law does not specify eligibility requirements for state employees but does provide that the Commissioner shall establish a “tenure requirement” expressed in months of work. Once established, eligibility is portable if an employee changes jobs. [21-I:99.IV.(b).]
For non-state employees participating through the purchasing pool, the statute provides for “a 7-month waiting period, a one-week elimination period, and a 60-day annual open enrollment period.” [21-I:100.III.] Common interpretation is that the 7-month waiting period is how long an employee must wait before becoming eligible for coverage through the pool. However, there is no explanation of whether that means 7 months of employment in New Hampshire, 7 months of employment with the current employer, 7 months of paying premiums into the pool, or some other factor.
Employees of an organization (with 50 or more employees) that sponsors a Granite State Plan are entitled to restoration to the same or an equivalent position following leave; and to continued health insurance during leave, with employees continuing to pay their share of costs. [275:37-d]
The Commissioner must issue a request for proposals for FMLI coverage as described in the statute no later than March 31, 2022. The FMLI coverage must be in place for state government employees and available for purchase by other public and private employers with more than 50 employees and individuals by January 1, 2023. [21-I:108] This creates an extremely tight timeframe between issuance of the RFP, award of the contract, and implementation of the program from zero to payment-ready.
What We Don’t Know
The statute is pretty bare-bones compared to what we are used to seeing in other states, with little detail and few requirements at this point. The Commissioner is empowered to determine many details, including the base period for determining the AWW; tenure requirement (in months worked) for eligibility; what (if any) elimination period applies; minimum participation requirements; parameters for open enrollment; procedures for contributory/partial contributory/non-contributory Plans; and procedures for payroll deductions for employers with 50+ employees.
Matrix Can Help!
Stay tuned! As always, we will be watching the progress of this new law, reporting developments on this blog, and assessing how the Granite State Plan fits into PFML services already offered by Matrix and Reliance Standard. If you have any questions, contact us at email@example.com or through your Matrix or Reliance Standard sales or account manager.