During the campaign for New Hampshire governor in the fall, incumbent Republican Chris Sununu faced accusations that he was indifferent to the needs of working families because he had opposed a bill that would have established a Family and Medical Leave Insurance plan in the state.
Sununu’s opposition, which many observers said effectively killed the legislation without it even reaching his desk, was based on his concerns about the proposed program’s solvency. No other state had established a voluntary FMLI plan, and if not enough Granite State residents and businesses took advantage, the state would be stuck making up shortfalls out of the general fund.
The governor did make clear, though, that he supported the idea of an FMLI program, just not the mechanism contained within the 2018 bill. And on Wednesday, alongside Vermont Gov. Phil Scott, Sununu unveiled a two-state proposal that offers a leave program without risking that taxpayers might wind up covering the costs if the plan fails.
The “Twin State Voluntary Leave Plan,” if approved by both legislatures, would launch with the more than 18,000 state workers combined between the two states as the initial pool of beneficiaries. Because the states would pay the cost of the benefit for the state workers, the guaranteed initial size of the pool would make it attractive to insurance companies, Sununu said at Wednesday’s news conference, which in turn would allow those companies to offer reasonable rates to private businesses.
“The larger combined state employee risk pools help make the pricing much more predictable, much more stable within the two states,” Sununu said. “The larger risk pool increases the interest of private insurance carriers to bid for those opportunities. … There are advantages in having an insurance carrier rather than the state. ... When you bring the private sector in, that's always going to be a big win for any type of plan within government.”
Qualifying beneficiaries will be entitled to take up to six weeks of paid leave and would be paid 60 percent of their wage during that time period.
Scott, who had vetoed an FMLI bill in his state in 2018, noted that the voluntary nature of the Twin State plan keeps it from becoming a de facto tax on businesses.
“By wrapping this program around our combined state employees, we will be able to deliver a competitively priced option available for all businesses and their employees,” he said. “And we'll be able to do it without putting another mandate on businesses or adding to the tax burdens of our citizens. With this approach, we can balance the value of paid family leave with our citizens' and businesses' ability to pay.”
Sununu emphasized that the insurance company that manages the program will bear the risk – if for some reason the costs are greater than the income, the company will have to cover the difference, rather than taxpayers.
Democrats in New Hampshire were skeptical of the plan even before its details emerged, and New Hampshire Democratic Party Chairman Ray Buckley dismissed it outright on Wednesday as “nonspecific and unrealistic.”
“Governor Sununu’s announcement of an ill-thought-out and underdeveloped Paid Family and Medical Leave plan proves once more that Governor Sununu is only after a bright and shiny photo-op and has no real interest in doing his job,” Buckley said in a statement.
Buckley argued that Democratic leaders in the Legislature were already working to improve their 2018 proposal to accommodate Sununu’s concerns about that plan.
“Sununu’s unilateral memorandum is nothing but a desperate and useless attempt to make Granite Staters forget he thinks Paid Leave is a vacation,” Buckley said.
In a series of messages Wednesday on Twitter, Greg Moore, state director of the New Hampshire chapter of Americans for Prosperity, argued that Sununu’s plan was superior to the 2018 proposal in a number of ways.
“It’s truly voluntary,” Moore said of Sununu’s proposal. “Employers could choose to offer the plan or not offer it. If an employer doesn’t offer it, the employee can choose to join independently.”
Moore also noted that Sununu’s plan requires far less bureaucracy to manage than the government-run plan from 2018 would have, and it won’t hamper the short-term and long-term disability markets that already exist.
The 2018 FMLI plan in New Hampshire would have needed 43 new state employees to manage it, while the plan unveiled Wednesday requires only two, since the vast majority of the administrative work would be done by the private insurer.