Proposed family leave legislation on Senate hot seat

Monitor staff
Friday, April 06, 2018

It’s passed the House three times, vaulting over to the Senate last month with seeming bipartisan support. But as a proposed paid family and medical leave insurance program crossed into the Senate this week, one thing became quickly clear: Its trials are far from over.

At a Senate Finance Committee hearing on the bill Thursday, the legislation came up against a fresh wave of scrutiny, as members combed through projections and grilled supporters as to whether it can sustain itself.

The bill, House Bill 628, would create a state-administered insurance program to provide employees up to six weeks of paid leave, covering situations ranging from pregnancies to ill relatives. All private employers would be required to participate; employees would be automatically signed up but could choose to drop out. Those who did participate would be required to pay 0.67 percent of weekly wages.

But from the beginning, HB 628 has come up against skepticism from Republican lawmakers, ranging from its startup cost – estimated by the Department of Employment Security as $14.5 million – to its long-term viability.

Over a four-hour hearing Thursday, those questions persisted. Chief among them: how many people would sign up to pay into the program and how many of those would make use of the benefit.

Unlike the five states that currently run their own family leave programs, New Hampshire’s is not mandatory for employees. That makes it difficult to accurately project how well the Granite State’s proposal would perform, according to Rich Lavers, Deputy Commissioner for the Department of Employment Security.

“The department cannot state with any certainty as to what your participation rate is going to be,” said Lavers, whose department would be charged with creating and maintaining the program if it passes. “We cannot state with any certainty what your average (number of benefit weeks used by participants) is going to be, and we cannot state with any certainty what your takeup rate is going to be.”

Absent that information, Lavers continued, it is hard to say what adjustments might or might not be needed to make the program work. The department is officially neutral on the bill.

It was a point seized on by opponents. “When you’re talking about a brand new program that’s done differently from another state ... you’re basically throwing darts at a dartboard,” said Greg Moore, state director of Americans for Prosperity, which opposes the bill.

Moore argued the uncertainty raises the possibility that too few people pay in and those who do are people who know they’ll use the benefit – known by actuaries as “adverse selection.”

But proponents said the concerns are manufactured, pointing to projections they said demonstrated the program would remain viable at virtually any participation rate.

An analysis by the department suggested that even if as few as 10 percent of New Hampshire employees participated, the program would still have adequate funding. Those projections were made on the assumption of an 8.9 percent takeup rate, and based on a comprehensive study on the New Hampshire plan commissioned by the state Department of Labor last year.

Opponents raised another concern: Because the benefit is currently capped, but the employee contribution is a set 0.67 percent of their wage, high earners may have less incentive to pay in. For those making six figures, the capped benefit received might not be worth it, opponents argued. Fewer wealthier people paying in could mean fewer dollars in the program overall, some said.

Lavers said that scenario spells trouble in theory.

“When you lose your high-income earners, you’re losing a significant amount of revenue from the program,” he said.

But advocates said that the department’s analysis already excludes the top 15 percent of income earners, calling the critique overblown.

As it progresses through the Senate, the bill faces a potential challenge from another corner of the State House. Speaking after its passage in the House, Gov. Chris Sununu signaled strong reservations with the present version, appearing to lean toward an alternative that would work as a private insurance mandate.

It is unclear how the Finance Committee might act on the bill. But speaking Thursday, Sen. Dan Feltes, D-Concord, a member of the Committee and sponsor of the bill, argued that the proposal is backed up by the research, and he the urged his colleagues to support it.

“Fundamentally, what it’s all about is we value work, we value family, and we shouldn’t have to choose between work and family if at all possible,” he said.

(Ethan DeWitt can be reached at edewitt@cmonitor.com, or on Twitter at @edewittNH.)