Dueling family leave plans leave local lawmakers split along party lines

March 06-- Mar. 6--With Democrats prioritizing paid family leave legislation within their new majorities in the House and Senate, Republicans are holding the line behind Gov. Chris Sununu's counter plan, setting up a potential showdown that could ultimately be decided by a veto override vote.

The essential difference between the plans, which both describe themselves as voluntary, is whether they are opt in or opt out, which could significantly affect the size of the risk pool and affordability.

That, in turn, affects the scale of the benefits that would be offered.

The Democrats' plan, Senate Bill 1, would start out with a risk pool of qualifying employees paying a 0.5 percent payroll tax into an insurance program. Participating workers would then be able to take up to 12 weeks off after the birth of a child or to care for a sick loved one. The House Labor Committee voted to support the program, 12-7, today.

The program would be administered by the Department of Labor Security.

The payroll tax, which employees could opt out of, would either be taken out of their weekly earnings or covered by their employer.

Firms with at least 50 employees would have staff either pay the payroll tax or cover it themselves for those who don't opt out. Workers at smaller companies would have options ranging from purchasing their own plan to paying the payroll tax into the state's unemployment insurance program, which they could draw from to take leave for qualifying circumstances after paying in for six months.

The pay received during the employee's time off would be 60 percent of his or her average wage during the highest-earning quarter of the year. Personal illness and adopting a child would also be qualifying circumstances for paid leave under the bill.

The Republican plan, which debuted in a joint press conference in January between Sununu and Vermont Republican Gov. Phil Scott, would let businesses opt in to an insurance program administered by a private provider and funded by a partnership between New Hampshire and Vermont.

Such a joint operation would be unprecedented for paid family leave and would involve insurance companies bidding to administer the program among a risk pool of qualifying employees between the two states.

Under Sununu's and Scott's plan, employees whose businesses choose not to opt in would have the option of purchasing their own coverage through the insurer who presents the states with the winning bid.

The governors have said that under their plan, costs for state employees on leave would be covered by the Vermont and New Hampshire state governments instead of a payroll tax. Private sector businesses would pay different rates, depending on the size of the business.

Enrollees would be eligible for six weeks of time off with 60 percent pay for the birth of a child or to care for a family member with a serious medical condition.

The roughly 18,500 state employees combined in New Hampshire and Vermont would be able to opt in right away.

The Republican plan comes as an alternative to 2018 Democratic paid family leave plans in both states that were central to many midterm campaigns.

New Hampshire Democrats have largely criticized the Sununu-Scott plan as too lax on businesses for there to be enough benefits, while Granite State Republicans warn that the Democrats' plan is a de facto income tax.

"In the public view, it sounds wonderful," state Rep. Jim Fedolfi, R-Hillsboro, whose district also includes Antrim and Windsor, said of the Democrats' plan. "It's something we'd all love to have, 12 weeks off, you know. Personally, I don't like either plan."

Fedolfi said his main qualm with family leave, in general, is that it is too expensive and not something business owners want in a growing economy that he attributed to Sununu and Republican policies over the past few years.

However, the second-term legislator said that between the plans, Sununu's is less burdensome on businesses and less prone to abuse.

SB 1 is "so subject to abuse. What constitutes the need to stay home and take care of somebody?" Fedolfi said. "It's not delineated. Is it someone who's dying? Is it someone who needs special care because they had a stroke? Is it someone that needs care because they have a hangnail?"

The bill defines a "serious health condition" as the following:

"... any illness covered by the federal Family and Medical Leave Act including treatment for addiction as prescribed by a treating clinician, consistent with American Society of Addiction Medicine criteria, as well as treatment for a mental health condition, consistent with American Psychiatric Association criteria."

State Sen. Jay V. Kahn, D-Keene, criticized Sununu's plan for being vague and not considerate enough of employees.

"This is trying to empower employees, and to think that we're going to drive down the cost of family medical leave through a voluntary plan is just very unlikely," Kahn told The Sentinel last Wednesday.

What Sununu is offering through employers, Kahn said, is something they can already do on their own by establishing an internal family leave policy.

Fedolfi suggested employees take out personal loans instead of their employer paying for leave, while his House colleague, state Rep. Daniel Eaton, D-Stoddard, argued that larger Granite State businesses are getting off the hook.

"In the state of New Hampshire, there's a dirty little secret," Eaton said in an interview Monday evening. "And that dirty little secret is that the large corporations ... don't pay a living wage, to anyone, and they use government to subsidize their payroll."

One local Republican offered a different perspective in critiquing the Democrats' plan.

State Rep. John Hunt, R-Rindge -- who sits on the House commerce committee, where a House version of the bill, HB 712, was debated last week -- said the Democrats' payroll tax could put a heavier burden on part-time employees, who would not be able to qualify for as many benefits.

A part-time employee would still be able to qualify, according to Senate Majority Leader Dan Feltes, D-Concord.

Under SB 1, any employee would be eligible for leave after paying the payroll tax on $7,540 in wages, equivalent to 1,040 hours -- or six months of full-time work -- at the minimum wage. They would be guaranteed a minimum payout of $125 per week, with a maximum of 85 percent of the average weekly wage in New Hampshire.

For Hunt, the Democrats' using what he described as an Obamacare-type insurance model for their plan inherently leaves someone on the hook -- at least in the incentive structure -- to pay into the program but not receive benefits, to make it more affordable for everyone else.

"The point of insurance -- what makes insurance is we hope you never make a claim," Hunt said in an interview Monday evening. "... That keeps the price down. If everybody makes a claim, like health insurance, than the premium goes through the roof, alright?

"This is the fundamental problem with this legislation: Who (are) the ones who will be paying in and won't use it? Because we need people who don't use it."

Feltes reiterated that anyone can opt out of the payroll tax if they don't like the program and that part-time employees, along with those at smaller firms, have more options than workers would under Sununu's plan. But Eaton went a step further.

"It's a non-issue that my friends across the aisle are trying to make into an issue because they lost the election, and they keep claiming it's an income tax," the 15-term Democrat said.

Hunt, meanwhile, said he worries there is not enough of an appetite among Democrats for a compromise between the two plans. In his view, by pushing the bill so quickly now with their majorities, the Democrats are looking for a showdown with Sununu that could be solved only with a two-thirds veto override in both chambers, rather than seeking common ground.

"The Democrats say, 'Hey, we've got the votes now. You always had the votes, you always got your way. Now we're gonna get our way, and we'll see what happens.'"

Jake Lahut can be reached at 352-1234, extension 1435, or jlahut@keenesentinel.com. You can follow him on Twitter @JakeLahut.

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