So far, employer interest raises pool-size questions
How is the New Hampshire Paid Family & Medical Leave program doing so far? It depends on who you talk to and what context it’s put in.
“Pretty remarkable,” summed up Richard Lavers, deputy commissioner of NH Employment Security, when asked about the start of the program, which is unlike any that has ever been tried before.
“It’s off to a pretty slow start,” said Amanda Sears, state director of the Campaign for a Family Friendly Economy.
Both could be right. According to the figures, released earlier in April, some 149 Granite State employers firms signed up for the voluntary program, representing 6,128 employees. The program will pay 60 percent of an employee’s wages if they take time off to care for a newborn, a loved one or themselves, if temporarily disabled for six weeks.
The companies should receive half of what they pay into the program in the form of tax credits. That’s if they pay into it at all, since the cost allocation between employee and employer is up to the company.
Some 60 percent of the employers that have signed up are paying the full freight.
Premiums may vary by company and the age and sex of the group as well as the amount of coverage provided. MetLife, administrator of the program, won’t release the amount of premiums paid so far, but when it filed rates last year it estimated that average costs (when you take into account tax credits) would be less than $5 a week per employee.
That $5 per week is the most that individuals working in companies that do not participate in the program have to pay if they sign up on their own. After a two-month open enrollment period, only 644 individuals have signed up.
The low cost is possible, because the state is offering the benefit to its 8,864 workers for free, though it will cost taxpayers $6.164 million over the next five years. MetLife agreed to price the benefit to private companies and individuals at the level it has with that larger pool in mind.
Pool-size concerns
So the question is: Is the start of the program “remarkable” or “slow”?
When you do the math, 149 employers is infinitely better than none. What is remarkable, at this early stage, Lavers said, is that the “program was created in a year, which includes completing a competitive procurement to select an insurance carrier, then completing a contract with MetLife as the winning bidder, then putting together and standing up a first-of-its-kind program. And to think we are already receiving and paying claims when it took other states three-plus years to stand up their mandatory, staterun programs.”
But 149 companies is a third of a percent of the 44,509 firms in the state. In other words, 99.7 percent of the state’s businesses have thus far refrained from participating, despite the modest rate and a generous tax break, and the efforts of another firm that is paying $1.9 million to market the program.
In terms of the private workforce, some 6,772 employees in total are covered. But there are 603,220 private non-farm employees in the state, according to current employment statistics. So those covered by the program through the law constitute 1.1 percent of the workforce. If you throw in state employees, the percentage goes up to 2.5 percent, or one out of 40.
The mandatory state programs that Lavers compared his program to — the kind adopted by 11 states, including Massachusetts — cover all employees.
New Hampshire passed such a program in 2019 — paid for by a payroll deduction — and it would have offered 12 weeks of benefits, rather than six, for about $5 a week. But Gov. Chris Sununu vetoed that bill, arguing that the payroll deduction was an “income tax.”
“Everybody would be covered in this state if the governor hadn’t vetoed it,” said Sears.
As it is, she said, “the vast majority of working people continue to not have access to paid leave when they need it. The government’s commitment to reinventing the wheel instead of investing in a system that has been proven, only resulted in a tiny percent of coverage in the workforce.”
One concern is whether the pool of those covered will be large enough for the program to be sustainable, a concern voiced by both liberal and conservative critics of the program. NH Business Review asked for claims and premiums data, but MetLife is not releasing any financial information until it is required to in an annual report.
The state did reveal that 65 percent of state and private claims have been for child care for a new baby or an adoption, 21 percent have been for nonwork-related injury or illness, and 14 percent was to provide care to a family member, either an ailing parent or sick spouse or child.
Individuals can’t make claims until their seven-month waiting period expires, but of that group 78 percent are female and 65 percent are under the age of 45, so there is a good chance that many are of child-bearing age and may envision making a claim in the future.
The state is offering the benefit to its 8,864 workers for free, though it will cost taxpayers $6.164 million over the next five years.
