One year in, NH says paid family leave program is stable and growing

For years, Concord, New Hampshire had a less-than-ideal policy for new mothers who were city employees: short-term disability insurance. After giving birth, the moms could use their six to eight weeks of annual disability leave for recovery and newborn bonding.

New fathers were less lucky. Short-term disability covers pregnancy but not paternal bonding; dads who wanted to spend crucial time with their babies would need to use vacation time or take unpaid leave.

Then came New Hampshire’s statewide paid family leave program. The city was an early adopter to the program, which allows six weeks of leave for newborn bonding for beneficiaries of any gender.

Now, new dads can more easily split their early parenting responsibilities, says Jennifer Johnston, the city’s human resources director.

“It enhances the other partner because they’re getting more support at home,” Johnston said in an interview. “And theoretically, they’re able to return to their work sooner.”

In Concord, the new leave benefit has become a piece of the city’s employee recruitment strategy. And it’s part of what state officials are calling a success story. The program, which was passed by Republicans after a hard-fought effort by state Democrats to create a universal, mandatory program in the state, began accepting new members in late 2022.

Officials with the Insurance Department say the sign-ups so far are encouraging, that the risk pool is stable, and that premiums have stayed steady and below their cap.

“I think that the program has accomplished the goals that the governor and those of us who designed the program have set out to achieve,” said Insurance Department Commissioner D.J. Bettencourt in an interview. “And that was to make a paid family leave benefit available universally, which this program is; to ensure that the coverage is affordable, which it is – both for individuals and, we have found, for businesses as well; and to ensure that the program is solvent and works and functions appropriately.”

But the first year’s numbers also reveal another reality: Despite hopes that increased access to paid family and medical leave could help encourage new fathers to take paternal leave, the majority of those who are voluntarily buying and using the benefit are women.

The program, overseen by the state but administered by the insurer MetLife, allows beneficiaries six weeks of leave per year to cover a number of scenarios, including their own serious health condition, the serious health condition of a family member, bonding with a child who was recently born or adopted, bonding with a new foster child, caring for a military service member, or any “qualifying need from military deployment or service.”

Beneficiaries receive 60 percent of their usual pay for those six weeks. Private employers can choose to customize the plans to make them more generous – for instance, by increasing the number of weeks available up to 12 weeks or raising the salary reimbursement rate – and pay higher premiums with MetLife. People who do not get the benefit from work can choose to enroll in the default six week plans as individuals, at a rate guaranteed by the state as not exceeding $5 per week. And state employees automatically get the six week plans.

As of January 2024, 20,293 New Hampshire workers are signed on, according to the Department of Employment Security. About half of them – 10,173 – are receiving the insurance through their employer, whether as a benefit entirely covered by their job or as a service where employees pay the premiums. Among the other half, 8,226 beneficiaries are receiving it automatically as state employees, and an additional 1,394 recipients have bought the plans as individuals.

Around $1.8 million has been paid out by MetLife so far, at an average of $4,700 in wage replacement per claim, according to the department.

So far, the way the insurance has been used depends on who is choosing to pay for it. Among those who get the insurance through their employers, 57 percent are using the benefits for child bonding.

But among the 1,394 people choosing to pay for the plans themselves, 79 percent are using their benefits for child bonding. Seventy-five percent of those people are women. And 68 percent are under 45 years old.

The numbers suggest that men are less likely to buy paid family and medical leave insurance as individuals, and that those who receive the insurance through work are more likely to spend it on sick leave or other conditions.

The program’s first year follows years of debate over how – and if – it should be implemented.

When Gov. Chris Sununu and Republican lawmakers pushed for the voluntary paid family leave plan, Democrats and some advocacy organizations were skeptical it could stay solvent as designed. Affordable insurance typically depends on large risk pools to spread the cost of the claims paid out.

Democrats, like former gubernatorial candidates Dan Feltes and Molly Kelly, and the late Concord Rep. Mary Stuart Gile, favored a universal approach that would ensure the pool was broad by requiring that all private employers purchase the insurance. Sununu and other Republicans rebuffed that approach, arguing it would create an effective income tax by allowing employers to choose to pass the weekly costs directly onto their employees. Instead, Sununu’s voluntary approach sought to create a stable risk pool by automatically signing up all state employees for the plan, which the state pays about $1.6 million per year to do, and then encouraging employers to sign on voluntarily.

Today, Bettencourt says that method has paid off so far. In total, 245 employers have purchased policies, and the Insurance Department is hoping more will join. Because the program launched in winter, December 2022, it began at a disadvantage; most employers had already made their benefits decisions in the fall, Bettencourt said. But by fall 2023, businesses that missed out the first year signed on, he said.

The early trends toward younger and female participants in the individual market could indicate a phenomenon known as “adverse selection,” in which insurance policies are bought primarily by people who believe they are going to use it soon. In any insurance policy, that can lead to a less stable risk pool and higher premiums. But Bettencourt said that because the group of participants who signed on as individuals is much smaller than the private employer and state employee group, any adverse selection in the individual group has been outweighed by the other groups.

That, of course, could change if more people begin making claims in the coming years. But Bettencourt and Deputy Commissioner Keith Nyhan said they are not concerned.

“As the program exists today, it is very stable,” Bettencourt said. “And we believe that as it grows, it will get even better and more robust.”

In Concord, Johnston says the program has unlocked new levels of flexibility for employees and their families. New mothers can still use short-term disability leave – which pays out at 100 percent of the salary – after their pregnancies, but can now supplement it with more leave for parental bonding. New fathers can split that time. And the policy can allow new parents to continue working on a part-time basis while using the leave to supplement the non-working days.

The city has so far seen 42 employees receive claims under the policy; the majority of those claims have been for bonding, Johnston said. But some employees have been able to use the benefit to add on to short-term disability insurance for long-term, intermittent illnesses such as leukemia, she said.

The leave is coming at a crucial time, Johnston said: Concord is working to recruit employees, and the COVID-19 pandemic has changed potential hires’ expectations around the work-life balance.

“It definitely has helped retain people in that first year, which is when you see the most turnover usually,” she said. “And this is a day one benefit.”

This story was originally published by the New Hampshire Bulletin.

This article originally appeared on Portsmouth Herald: One year in, NH says paid family leave program is stable and growing