This from Governor Sununu’s “Policy Director”:
“Voluntary,” “financially solvent” – sounds just like private insurance, which begs the question: If it is possible to have a “Paid Family Leave plan” that is “voluntary” and “financially solvent,” then why isn’t such a product already available to employees through private insurers?
Because “Paid Family Leave” covers situations that are not insurable in the way that death or disability or property damage are typically insurable events.
For example, life insurance is not “financially solvent” where the policyholder intends to take his or her life, or where death is otherwise imminent. Life insurance excludes benefits for suicides that occur within a specified time period. Without such an exclusion, someone with the intention of committing suicide would be able to purchase a policy and leave his or her beneficiaries a sum far in excess of the cost of the premium. Likewise, life insurance does not cover someone with a terminal illness unless the person survives for a specified time period.
Another example is that automobile insurance does not cover repairs to one’s car caused by one’s decision to save money by not having maintenance performed on the car. Like life insurance, it covers situations that the policyholder normally would seek to avoid, such as a collision.
“Paid Family Leave,” in contrast, covers situations where the employee can plan for and cause the leave. For example, knee replacement surgery and pregnancy.
Under the “Paid Family Leave” passed by the House, employees would have been able to opt out of and back into the program on an annual basis. Once an employee had participated for six months, he or she would have become eligible for six weeks of leave.
So if this bill had become law, an employee would have been able to schedule a knee replacement surgery for July, 2019 and opt into the program in January, 2019 in order to qualify for leave. In this example, the employee would have only paid .67 percent (.0067) of his wages or not even a day’s worth of wages before taking leave. Then, in January, 2020, the employee could opt back out. See the problem?
Another example is pregnancy. The employee elects not to participate in the program until she decides to go off birth-control and try to start a family, and then opts-in. Once the baby is born and she has taken her leave, she opts back out at the next opportunity. Same problem.
Obviously, taxpayers would have had to make up the shortfalls. Indeed, under the House bill the State could have raised the rate on participating employees without that employee being able to opt out until the next opt out period.
Apparently Sununu’s plan involves using private insurance:
I assume that “with costs covered by the State” means with a deduction from the state-employee’s pay.
The deduction would have to be agreed to by state-employees’ unions. Presumably, there would be no opt out for individual employees because otherwise the scheme would not be financially solvent (as explained above).
In other words, the scheme apparently would be “voluntary” in that the union does not have to agree to participate. But if the union does agree, it would not be voluntary for individual employees.
Whether “the state employee policy would provide a baseline for other private insurers to base their own plans,” there still is the problem that the scheme is not “financially solvent” if it is voluntary, not mandatory, for private workers. Presumably, the insurer would contract directly with the employer, and the employee would not have the ability to opt out. There would be an automatic deduction for “PFL.” So, again, voluntary only in the sense that the employer is not required to participate. But if the employer does, not voluntary for individual employees.
In other words, and to cut to the chase, just as there is no free healthcare or free college tuition, there is no free version of “Paid Family Leave.” Somebody has to pay for it. Either “Paid Family Leave” is mandatory or the State -that means the taxpayers- pays the inevitable shortfalls generated by a voluntary program.
Sununu by offering his own Paid Family Leave plan has accepted the Democrats’ premise that it is the role of government to provide -albeit indirectly as opposed to directly- Paid Family Leave.
I think that Sununu and his advisors believe they are negating a potential issue a Democrat gubernatorial challenger could use in 2020.
The problem is that Sununu is the titular head of the Republican Party in New Hampshire and he is defining Republicanism in New Hampshire as same-but-less.
What’s wrong with same-but-less? Well from 1952 to 1995 Republicans in the United States House of Representatives practiced same-but-less. They were in the minority all those years.
To be clear, I am not wearing rose-colored glasses. I know New Hampshire is not Alabama or Mississippi. But shouldn’t we be trying to move the State incrementally to the Right, not further to the Left?
