Republican Gov. Chris Sununu was heavily favored to win his first re-election campaign in 2018 and he did, soundly defeating the longshot candidacy of Democrat Molly Kelly of Harrisville, then a state senator. The high point in Kelly’s campaign came in her first television ads, which featured everyday Granite Staters criticizing Sununu for opposing paid family and medical leave legislation floated by Democrats in the State House—legislation he eventually vetoed.
At a gubernatorial campaign forum on young children, Sununu said the Democrats’ plan would, in effect, allow every worker to take an additional “four to six weeks of vacation.”
“Sununu calls paid family medical leave a vacation” became the Democratic rallying cry. The theme of Kelly’s ad—that time off from work to care for a sick family member is no vacation—struck a chord with some voters. It wasn’t enough to move the needle on Kelly’s candidacy, but the lesson was not lost on the young governor. When the 2020 election rolled around, Democratic challenger State Sen. Dan Feltes was again making paid family leave a central part of the party playbook, and Sununu was proposing an alternative of his own.
Today, with Sununu sounding a lot like a presidential candidate, Family Medical Leave Insurance (FMLI) has been neutralized as a political negative for the governor as his version of the benefit takes effect.
Democrats wanted a benefit similar to Massachusetts and California, where the state takes a deduction from paychecks to fund universal paid family leave for all workers. Sununu and like-minded Republicans called that an income tax and came up with a plan of their own.
Public-Private Partnership
The public-private partnership that emerged has the state paying a private insurance company to provide FMLI coverage for the 10,000 unionized state employees. That will allow the state to extend the program to any employer or individual who wants to also participate. The $6 million contract between the state and MetLife covers state workers for five years, at a cost of $1.2 million annually, subject to renewal.
“There was huge political pressure for some sort of paid family leave program,” says Drew Cline, president of the Josiah Bartlett Center for Public Policy, a NH-based free-market think tank.
“Democrats were running hard on this, and Sununu just outflanked them. He said, ‘Sure, we’ll do paid family leave, but we’ll do it voluntarily.’ I know our friends on the far left don’t see it as a win-win. But that’s what happens in a compromise. I think it was politically a really savvy move to do it this way.”
Coverage for all state employees gives MetLife a large enough pool to start while the plan is opened to the state’s entire workforce. The program was open for enrollment as of late December.
It covers up to 60% of wages while the insured individual takes up to six weeks off for a personal health condition, care of a sick family member or maternity leave.
Every employer who participates will be eligible for a credit on Business Enterprise Taxes equal to 50% of the premiums they pay. State officials say they could not estimate the loss of revenue from business taxes until they start to see tax returns from participating businesses.
“There’s money in the budget for this and it does cost taxpayers, but it is, relatively speaking, pretty small,” says Cline. “If your goal is to take this off the table as a political issue and as a workforce issue, you’ve essentially done that for relatively low cost.”
Open to Individuals
The self-employed or those working for a company that does not participate in the program can join with premiums capped at $5 per week. Participating business owners can pay the entire premium and offer the coverage as a fully funded benefit or split the cost with employees, some of whom can choose not to participate. Individuals choosing not to participate in the employer program would not have access to the individual pool, says D.J. Bettencourt, deputy insurance commissioner and former policy director for Sununu.
Bettencourt has been the governor’s point-man on this initiative from the beginning. He says approximately 120 businesses have already signed up, with 5,400 employees now covered.
Premiums for businesses vary according to a variety of risk factors, and currently range from $18 to $69 per employee, with a weighted average of $34 a month. Another 600 individuals have signed up on their own, with an average premium per pay week of $4.85.
“In only three to three-and-a-half months, between individuals and businesses, there are 6,000 Granite Staters who have coverage they wouldn’t have without this program,” says Bettencourt. “I consider that, at this early stage, to be a considerable success.”
Bettencourt says he is encouraged by the sign-ups so far, even though they represent a tiny fraction of the available pool. The program launched in late December, by which time most businesses had locked in their benefit programs for the upcoming year. The next two years will tell the story.
“We’ve been able to set up this program in a different way than anyone else,” Bettencourt says. “It is allowing our employers to compete for workforce with the likes of Massachusetts in the way that doesn’t burden taxpayers, which I think is a huge benefit.”
Bettencourt challenges the notion that Sununu’s motivation in pursuing the program was political. “I would strongly push back on that,” he says. “I had my first serious meeting with the governor about paid family leave in the summer of 2017. That was half a year into his first term.”
Opposition on Both Sides
Sununu has taken fire from Democrats, left-leaning organizations and from his own party. “It’s worth remembering that everyone in New Hampshire would have access to paid time off to care for themselves or a family member by now had Gov. Sununu not vetoed comprehensive paid leave insurance programs proven to work well in every other state where they’ve been implemented,” says Amanda Sears, director of the Campaign for a Family Friendly Economy.
The plan was also opposed by a portion of the Republican caucus in the House, which recently tried unsuccessfully to have it repealed. “There is still a segment of our caucus that is adamantly opposed and very upset that this was put through against the wishes of Republican leadership in the House,” says Rep. Len Turcotte, R-Strafford, who filed the repeal bill. “We saw nothing good coming out of this. Just another embedded social program that in the end will give some people FMLI on the back of the taxpayers.”
David Juvet, senior vice president of public policy at the Business and Industry Association, the statewide chamber of commerce, sees the outcome as a compromise: “It was more than what some conservative members of the legislature wanted to see, but it was far less than what advocates for full paid family leave wanted to see.”
He says most BIA members are taking a wait-and-see approach. “I think there are more questions than there is participation,” he says. “The program is still very early on, and my sense from members I’ve talked to is there seems to be some birthing pains. But there is still a lot of interest in learning more, because the benefit package is something prospective employees look at very closely.”
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