LITTLETON, N.H. — The governors of Vermont and New Hampshire announced a twin-state family leave plan that would offer benefits to 18,500 state employees and give private businesses the option to join in at a cost affordable to employees.
Last year, the Vermont legislature tried and failed to pass a paid family leave program. Gov. Phil Scott vetoed the bill because it required new taxes to pay for the time-off related work benefits.
But under the program introduced Wednesday at the Schilling Beer Co. in Littleton, Scott and New Hampshire Gov. Chris Sununu said the plan would be optional for private companies and require no new taxes on Vermonters. He added that the program would achieve many of the goals that Democrat and Progressive lawmakers put forth in the past legislative session.
“With this approach, we can balance the value of paid family leave with our citizens’ and businesses’ ability to pay,” he said. “In Vermont, striking this balance is crucial. As I said last week, our focus must remain on those we’re working for and what we’re working towards. Again, we have to face the economic realities that exist throughout Vermont.”
The expectation of the governors is that that the initial risk pool of 18,500 state employees in Vermont and New Hampshire will be large enough to obtain reasonable monthly rates with private insurers. Scott said the estimated cost to employees of private businesses who opt-in would be about “a buck a day.”
According to details revealed Wednesday, the program would provide employees 60 percent wage replacement for six weeks in situations including childbirth, adoption of a child, personal and family health emergencies. Additional scenarios would apply for military veterans on “covered active duty,” or to care for “a covered service-member with a serious injury or illness if the eligible employee is the service-member’s spouse, son, daughter, parent, or next of kin.”
Scott said offering an affordable paid leave program could help the state attract new Vermonters.
“And most importantly, a successful and affordable family leave program will help us attract young working-age people looking to start new families,” he said. “It will also help families and individuals cope with unexpected family illnesses.”
Gov. Sununu echoed the sentiment that the plan will offer competitive rates without pushing mandates.
“[We’re leveraging] the buying power of your base employee pool at a very low cost that provides the opportunity across the board for all the private sector employees, if they so choose to get on board,” he said.
“And remember, the money isn’t going to the government, it’s going to a private insurer, much like your health care does. It’s like a premium.”
On the Vermont side there are a little over 8,000 state employees who would receive the benefit at a cost of about $2.4 million. When New Hampshire’s 10,500 state employees are added, the cost becomes affordable for the states and for employees of private companies.
Which private insurance companies would run this program will be determined by a request for proposal process.
The “premiums” would vary for private sector participation depending on how many employees within a given company choose to opt in. Companies with more than 20 employees and 100 percent participation will get better rates than those with fewer than 20 employees and partial participation.
Jeff Cozzens, CEO, and co-founder of Schilling Beer, issued a statement explaining why he will support such a program for his employees.
“As a small business along the New Hampshire-Vermont border, roughly half of our employees live in Vermont and half live in New Hampshire,” he said “This proposal has the potential to help all of our employees.
“We are proud to host the governors today as they outline their joint vision for a family medical leave insurance program that speaks to our ultimate concern: the well-being and advancement of our staff and their families.”
Scott seemed to indicate that adopting the plan would require approval by both state legislatures.
“If we’re successful in each of our state legislatures, we can establish a model and standard for the rest of the country that meets the calls for a greater work/life balance which is really so important to each and every one of our businesses,” he said.
In New Hampshire, at least 16 insurance companies have expressed interest in administering the plan.
The question now is will Vermont’s liberal lawmakers embrace the two-state plan or instead try to force passage of last year’s paid family leave plan using their new supermajority in the Legislature.
House Speaker Mitzi Johnson, D-South Hero, has indicated skepticism that the pool of participants will be large enough using a voluntary opt-in system.