HB 1318: Labor and industrial relations; actuarial study on state based paid family and medical leave insurance program; provide

House Bill 1318

By: Representative Carpenter of the 4th

A BILL TO BE ENTITLED

AN ACT

To amend Title 34 of the Official Code of Georgia Annotated, relating to labor and industrial relations, so as to provide for an actuarial study on state based paid family and medical leave insurance program; to provide definitions; to provide requirements; to authorize the Department of Labor to contract with a qualified third-party actuary; to provide for contents of the actuarial study; to provide for the Department of Labor to work in conjunction with the Office of the State Treasurer; to provide for a deadline to complete the actuarial study; to provide for posting of the actuarial study on the department's website; to provide for rules and regulations; to provide for automatic repeal; to provide for related matters; to provide for legislative findings and legislative purpose; to provide for a contingent effective date; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

(a) The General Assembly finds:

(1) Thirteen states and the District of Columbia have enacted legislation for family and medical leave insurance programs, and ten states have enacted legislation to create a voluntary paid leave option;

(2) Family and medical insurance programs that include shared employee and employer contributions, flexibility for small businesses, and opt-in opportunities for entrepreneurs will attract and retain talent and remain competitive in an increasingly mobile national workforce;

(3) This state's labor force participation rate has consistently lagged behind the national average, and multiple studies show that paid family and medical leave policies help workers connect to and remain connected to the labor force;

(4) Paid family and medical leave provides a cost-effective framework that allows workers to maintain economic security by taking essential time needed to care for a new child, tend to a family member with a serious health condition, address their own serious health condition, and cope with exigencies from family members with overseas military deployment;

(5) Most workers in this state do not have access to paid family and medical leave through their jobs, and the vast majority are not able to take family medical leave without pay, resulting in job loss, healthcare, injury, and loss of $1.7 billion in wages annually;

(6) The fastest growing age group in this state is the 65 years of age and older population, and this state has the ninth fastest-growing population of residents 60 years of age and older, which means caregiving demands will continue to rise, forcing more workers to exit the workforce to care for their aging family members with serious medical needs;

(7) Access to paid family and medical leave supports maternal recovery and infant health by enabling timely medical care, serving as an important tool to address this state's high maternal and infant mortality rates; and

(8) This state is home to a robust community of small business owners who recognize that paid leave improves employee retention, morale, and productivity, yet lack the resources to provide this benefit on their own and require a shared solution to compete with larger businesses.

(b) It is the intent of the General Assembly in enacting this chapter to conduct an actuarial study to evaluate the structure and parameters for a self-sustaining, cost-effective family and medical leave insurance program with shared employer and employee contributions.

SECTION 2.

Title 34 of the Official Code of Georgia Annotated, relating to labor and industrial relations, is amended by revising Chapter 11, which is designated as reserved, as follows: "CHAPTER 11

34-11-1.

As used in this chapter, the term:

(1) 'Actuarial study' means the actuarial study provided for in Code Section 34-11-2.

(2) 'Commissioner' means the Commissioner of Labor.

(3) 'Department' means the Department of Labor.

(4) 'Paid family and medical leave insurance program' or 'program' means a state based family and medical leave insurance program to provide wage replacement for family caregiving and personal health issues.

(5) 'Qualified third-party actuary' means an individual who is not employed by the state and who meets the qualification standards of the American Academy of Actuaries. Reserved.

34-11-2.

(a) No later than October 1, 2026, the department shall contract for the services of a qualified third-party actuary to perform an actuarial study for a paid family and medical leave insurance program in this state, including, but not limited to, start-up costs of the program; costs for the state to administer the program; outreach and education costs; the premium contributions necessary to maintain the solvency of the program for a period of five to ten years; potential trends in claim experience over time; and total annual revenues, expenditures, and reserves.

(b) Through the utilization of relevant data, including, but not limited to, data from other state paid family and medical leave insurance programs, short-term disability claims, and family and medical leave data from the federal government, and a review of the experience, structure, and policy design of other state paid family and medical leave insurance programs, the actuarial study shall consider the following program parameters in relation to the premiums necessary to maintain solvency of the program:

(1) The purposes for which paid family and medical leave can be used, including, but not limited to, bonding with a new child, caring for a child receiving care in a neonatal or pediatric intensive care unit, caring for a family member with a serious health condition, recovering from one's own serious health condition, addressing medical and nonmedical needs arising from domestic violence and sexual assault, and addressing military family and caregiving needs related to a family member's deployment;

(2) Coverage of all public, private, and nonprofit sector employees in this state within the scope of the paid family and medical leave insurance program's rights and protections, including a breakdown of required coverage of employees of the state and political subdivisions thereof;

(3) Coverage of self-employed workers, at the option of the worker, within the scope of the paid family and medical leave insurance program's rights and protections;

(4) Coverage of workers who have worked a minimum of 1,250 hours with an employer during the previous 12 month period or earned at least 500 times the state minimum wage from work in this state during the worker's base period or alternative base period;

(5) Utilization of an inclusive family definition to afford workers the right to take paid family and medical leave to care for immediate members of the family, regardless of legal or biological relation;

(6) Use of a social insurance model for the paid family and medical leave insurance program wherein workers and employers share the premium costs of the program at a contribution rate of 50 percent from the employer and 50 percent from the employee and include options to:

(A) Exempt employers with 15 or fewer employees or exempt employers with ten or fewer employees from contributing to the program while still including their employees within the scope of the program's coverage;

(B) Exempt self-employed workers who opt into the program from contributing the employer portion of premium costs to the program; and

(C) Limit premium contributions to wages not exceeding the contribution and benefit base limit established annually by the federal Social Security Administration for purposes of the federal old-age, survivors, and disability insurance program limits pursuant to 42 U.S.C. Section 430;

(7) A wage replacement rate that equals 90 percent of the worker's average weekly wage for the portion of their wages equal to or less than 50 percent of the state average weekly wage and 66 percent of the portion of the worker's average weekly wage above 50 percent of the state average weekly wage;

(8) Inclusion of an equitable maximum weekly benefit rate that adjusts annually based on the state average weekly wage and ensures that workers can afford to take paid family and medical leave;

(9) A maximum leave duration not below 12 weeks of leave per year and a separate leave duration for an additional 12 weeks for a covered individual who has a child receiving inpatient care in a neonatal or pediatric intensive care unit;

(10) A right to reinstatement for all employees upon returning from a period of paid family and medical leave and its effect on program usage; and

(11) Based on available information provided by the state and in partnership with state agencies, the estimated administrative costs to the state for implementing and administering the paid family and medical leave insurance program, including, but not limited to, costs associated with outreach, education, enforcement, and data collection.

34-11-3.

(a) The qualified third-party actuary shall model and compare the costs, including, but not limited to, the premium rates necessary to achieve solvency, of at least two different paid family and medical leave insurance program models based on the policy parameters detailed in Code Section 34-11-2. Beyond the initial startup years in which benefits are paid out, the reserves accounted for pursuant to Code Section 34-11-2 shall be approximately 135 percent of the benefits paid during the previous fiscal year plus an amount equal to 100 percent of the cost of administration of the payment of such benefits during the previous fiscal year, less the amount of net assets remaining with the paid family and medical leave insurance programs at the end of the previous fiscal year.

(b) The qualified third-party actuary shall utilize data that is relevant to this state, such as workforce and demographic data about the state population, as may be required to perform the actuarial study.

(c) The qualified third-party actuary shall presume that premiums shall be collected for a period of one year prior to the beginning of benefit payments.

(d) The actuarial study shall be completed in accordance with the relevant Actuarial Standards of Practice promulgated by the Actuarial Standards Board.

(e) The department and the Office of State Treasurer shall work in conjunction with other state agencies to ensure the actuarial study is effectively completed.

34-11-4.

(a) No later than January 15, 2027, the actuarial study shall be completed and shared with the Governor, President of the Senate, Speaker of the House of Representatives, the Commissioner, and the chairpersons of the House Committee on Industry and Labor and the Senate Insurance and Labor Committee.

(b) No later than February 15, 2027, the Commissioner shall publish the actuarial study on the department's website in a prominent location.

34-11-5.

The Commissioner shall promulgate rules and regulations to effectuate the provisions of this chapter.

34-11-6.

This chapter shall stand repealed and reserved on June 30, 2027."

SECTION 3.

This Act shall become effective only upon the effective date of an appropriation of funds for purposes of this Act as expressed in a line item making specific reference to full funding of this Act in an appropriations Act enacted by the General Assembly.

SECTION 4.

All laws and parts of laws in conflict with this Act are repealed.