Skepticism greets NH leave program
Businesses appear reluctant to take part so far
At a recent gathering of human resources professionals in Manchester, the 100 or so attendees were asked if they had signed up for the state’s new Paid Family and Medical Leave Program. Only one hand went up: Josh Robinson’s.
“There is almost zero interest,” said Robinson, president of Checkmate Workforce Management Solutions in Concord.
While a few other firms besides Robinson’s have signed on or are about to, there’s nothing more beyond interest — at least so far. It’s hard to judge how much more, because as the program approaches its second month, the state has yet to release any figures on how many companies or individuals have joined. Nor have they revealed, much less focused on, the companies that already had.
Unlike the surge that crashed computer systems after the introduction of the Affordable Care Act marketplace a decade ago, the rollout of the state’s new voluntary program — the first of its kind in the nation — has been quiet and slow. And that’s the way it is likely to be going forward, said Charlie Arlinghaus, commissioner of the NH Department of Administration, one of the three state agencies that oversees the contract.
“It’s going to be a slow adoption of a program over three years,” he said. “I wouldn’t expect numbers in January. They’d be meaningless.”
He said there might be statistics provided in February, but they would be very preliminary. While withholding rather than touting the number of companies and people participating in the program, it does reinforce what many brokers have noted: very few are rushing to sign up.
“If they don’t talk about their numbers, that means things are pretty dismal,” said Ray White, owner of Cornerstone Benefits in Bedford.
“That’s silly,” said Arlinghaus. “This is just the first few weeks of a three-year-long ramp-up.”
The Granite State Paid Family Leave Program, listed by Gov. Chris Sununu as one of his key accomplishments during his inaugural address earlier this month, was passed as part of the 2021 budget. It was rolled out by the state on Dec. 1, 2022, for companies, which can sign up at any time. Individuals were not allowed to join until Jan. 1, and they have until March 2 to sign up, or they will have to wait until next year.
Unlike mandatory universal programs in other states — usually funded via a payroll surcharge on all workers — New Hampshire’s program is completely voluntary and subsidized by taxpayers. It will piggyback on the pool of more than 10,000 state employees who were automatically signed on to the program, which will be administered by Metropolitan Life, the only company to provide a qualified bid to the state after it issued a request for proposals. (Met Life referred all questions to Arlinghaus.)
Granite State businesses can sign on to the program, which provides at least six weeks of leave at 60 percent of wages for workers who need time off to take care of a family member or themselves. Businesses that participate will receive half of what they pay through a business enterprise tax credit. With that subsidy, the price averages $13.84 per month per employee.
Averages don’t paint a complete picture because other factors have to be taken into consideration, such as age, location of the business, gender of the participants or whether it is augmenting or replacing the company’s disability policy. But the average does seem in the ballpark.
“It is relatively inexpensive,” said Robinson, who said the cost for his 15 employees is roughly $2,000 to supplement its current disability wage replacement policy. And that’s without the tax break.
Robinson doesn’t just want to provide the benefit to his employees, but wants to “try the program out.” As an “early adopter, we could spread the news,” he said. “It puts us in a good place, as we will be one of the only ones with any experience.”
‘Kind of a no-brainer’
Resilient Buildings Group, an energy-conscious construction consultant in Concord, has the same number of workers as Robinson’s company and also has a disability policy in place. It was quoted a $2,554 annual premium for the six-week policy, and $3,010 for a 12-week family leave plan. The six-week version comes out to $14 an employee a month, or $7 with the tax break.
“I expected it to be twice as much as that,” said President Dana Nute.
“It is pretty cheap,” echoed Val Zanchuk, owner of Graphicast, which employs 25 people in Jaffrey. After a 40 percent discount — since it too has a disability policy — his policy would cost about $3,000 a year, or $10 a month per employee, and $5 if you include the tax break.
“I think it’s very reasonable. It’s kind of a no-brainer,” Zanchuk said.
Yet during a recent call of the Business & Industry Association’s Human Resources, Health Care and Workforce Development Committee, Zanchuk said participants were reluctant or skeptical about the program and none were yet participating.
He himself hadn’t signed on the dotted line yet, since he still had trouble getting some answers, but his company decided to move ahead. The biggest need it would fill is allowing people to take time off to care for an aging parent, he said. In the past, workers cobbled together vacation and sick leave or they took an unpaid leave of absence. “But I hate to have someone thinking about how they are not caring for someone while they are running a machine. That raises a safety concern.”
Most companies are taking a wait-and-see attitude, according to Andrea Chatfield, an attorney with Sheehan Phinney who is chair of the Government Relations and Legislative committee for the Human Resources State Council of New Hampshire. She too said she has only seen a few clients sign on to the program.
“There has been some interest. We have done several webinars. But there are lot of questions. I still haven’t heard a lot of people dipping their toes in the water, actually getting quotes. It’s because it’s a new policy. Why would I do something I don’t have to do? So give it a few years, see how it rolls.”
Dan Cronin, president of CGI Business Solutions, the state’s largest benefits broker, agreed. “There is very little interest, at least in our book of business.”
Granite Group Benefits, another large broker, said it only has one client with over 100 employees that’s participating so far.
Without numbers, it is even harder to know how many individuals will sign up. Workers can sign up on their own for a maximum of $5 a month (subsidized by the insurance premium tax that Met Life must pay, rather than the general fund). Unlike a group policy, the benefits don’t kick in for seven months, to avoid workers signing up just before they need it. There is only a 60-day window to sign up each year, and only for those working for businesses that are not participating.
White, who mainly serves the individual market, has had very few inquiries about the state paid family leave program and doesn’t want to have anything to do with them. He simply refers them to the state website.
“I don’t want to be a lab rat,” said White. “This may work and it may fail, but I don’t want to put a lot of time into it and not make any money. I’m a wait-andsee guy.”
On the whole, the state’s family leave program isn’t being well received by the broker community, he said. For one, it’s a matter of timing. The open enrollment window overlaps with so many others, including the Affordable Care Act and Medicare.
“Every broker is out of their mind this time of year.
The last thing we need is a new product with no guarantee that it is going to work,” said White.
Company executives are also busy. David Greer, CEO of Wire Belt Company of America, thinks the program has some “nice advantages, though I don’t want to be taken advantage of” by employees filing claims for leave when they don’t really need it.” But he is in the middle of moving his company from Londonderry to Bedford and tripling the square footage.
“This is not high up on our list of priorities at the moment,” he said.
One common observation is that there has not been a lot of publicity about the program, despite one state official’s promise of a publicity blitz. The state did sign a $1.9 million five-year contract with Mason Marketing, a Connecticut-based firm. Arlinghaus, however, said that the contract is just “to assist and advise on some aspects of marketing.”
He listed what was done so far: developing a website; social media posting and advertising; search engine optimization; emails to brokers; some monthly webinars; and personal visits to the BIA and various chambers of commerce, as well as advertising on NH Public Radio, the Union Leader and the Hippo, and a possible television commercial in February. There has been no advertising in any state business publication or local publications throughout the state or on commercial radio.
Arlinghaus did not break out what or how much has been spent by Mason, or the state, and on what. He noted that Met Life might also do some promotion of its own product, thought they are not required to.
“I don’t think they did a great job promoting it,” said Michelle Veasey, executive director of NH Businesses for Social Responsibility. “They didn’t approach us. We just got the standard letter that all businesses were getting.”