Optional Granite State Paid Family and Medical Leave Insurance (FMLI) Coming in 2023
By Karen Hooper | Published August 5, 2021
New Hampshire is joining the growing list of states implementing paid family leave laws. This is a unique law which offers a totally different optional approach to paid family and medical leave.
The intent of this law is to leverage the purchasing power and economies of scale available to the state of New Hampshire by contracting with an insurance carrier or carriers to create an insured paid family and medical leave insurance (FMLI) benefit. The state’s newly created FMLI Advisory Board has an aggressive timeline. It is tasked with creating an RFP to be distributed no later than March 31, 2022, with an anticipated effective date of January 1, 2023.
Who does the new law apply to?
It will be optional for private sector employers to offer FMLI benefits to employees.
Private sector employers with 50 or more employees that wish to offer a FMLI benefit can contract directly with the insurer(s) selected by the state.
Individuals who work for private sector employers with fewer than 50 employees, or for employers with 50 or more employees that choose not to offer FMLI coverage, will have the opportunity to contract indirectly with the winning bidder(s) through a purchasing pool.
Private sector employers with fewer than 50 employees can purchase coverage through a FMLI premium fund established by the state.
The law applies to all state employees of New Hampshire.
What benefits are available to employees?
Private sector employees will be able to take up to six weeks leave for:
Birth, adoption or placement of a foster child within one year of birth or placement
Caring for a spouse, child or parent who has a serious health condition, or
Any qualifying exigency
Individuals who opt in through the purchasing pool will be able to take up to 6 weeks of leave for their own serious health condition if it is not related to employment and their employer does not offer short term disability insurance.
Coverage through the purchasing pool for individuals may come with a 7-month waiting period, a one-week elimination period and a 60-day annual open enrollment period. Employees will receive up to 60% of average weekly wages capped at the social security maximum wage limit.
What are the employer/employee contribution requirements?
Employers are able to pass on to employees the full cost of the premium, split the premium with employees in any share structure, or cover the full premium as an employer contribution.
What are the employer requirements?
Employers will be required to payroll deduct and pay the FMLI premiums for any individuals who opt in.
Employers with 50 or more employees who sponsor a FMLI through the state are required to restore the employee to the same or equivalent positions, and they must also provide health benefits in the same manner as an active employee.
Employers are not required to provide job protection and provide health benefits to individuals who opt into the FMLI benefit by contracting indirectly with the insurer (as opposed to the employer offering the benefit).
Employers who opt into the state plan will receive a tax credit of 50% of the premium paid for the FMLI benefit.
More to come
This law has an aggressive timeline, and the text of the law is short on details. The FMLI Advisory Board will need to act quickly to define the benefit parameters, create an RFP, choose the winning bidders, and implement this new law’s rather unusual approach.
VP, Senior Compliance Manager
Karen Hooper, CEBS, CMS, Fellow, is a Vice President and Senior Compliance Manager working closely with the Lead Benefit Counsel in Newfront's Employee Benefits division. She works closely with internal staff and clients regarding compliance issues, providing information, education and training.