HB1318: HB1318 Labor and industrial relations; actuarial study on state based paid family and medical leave insurance program; provide

26 LC 52 1013 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 industrial1 relations, so as to provide for an actuarial study on state based paid family and medical leave2 insurance program; to provide definitions; to provide requireme nts; to authorize the3 Department of Labor to contract with a qualified third-party actuary; to provide for contents4 of the actuarial study; to provide for the Department of Labor to work in conjunction with5 the Office of the State Treasurer; to provide for a deadline to complete the actuarial study;6 to provide for posting of the actuarial study on the department's website; to provide for rules7 and regulations; to provide for automatic repeal; to provide for related matters; to provide for8 legislative findings and legislative purpose; to provide for a contingent effective date; to9 repeal conflicting laws; and for other purposes.10 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:11 SECTION 1.12 (a) The General Assembly finds:13 (1) Thirteen states and the District of Columbia have enacted legislation for family and14 medical leave insurance programs, and ten states have enacted l egislation to create a15 voluntary paid leave option;16 H. B. 1318 - 1 - 26 LC 52 1013 (2) Family and medical insurance programs that include shared employee and employer17 contributions, flexibility for small businesses, and opt-in opportunities for entrepreneurs18 will attract and retain talent and remain competitive in an inc reasingly mobile national19 workforce;20 (3) This state's labor force participation rate has consistently lagged behind the national21 average, and multiple studies show that paid family and medical leave policies help22 workers connect to and remain connected to the labor force;23 (4) Paid family and medical leave provides a cost-effective framework that allows workers24 to maintain economic security by taking essential time needed to care for a new child, tend25 to a family member with a serious health condition, address the ir own serious health26 condition, and cope with exigencies from family members with ov erseas military27 deployment;28 (5) Most workers in this state do not have access to paid family and medical leave through29 their jobs, and the vast majority are not able to take family m edical leave without pay,30 resulting in job loss, healthcare, injury, and loss of $1.7 billion in wages annually;31 (6) The fastest growing age group in this state is the 65 years of age and older population,32 and this state has the ninth fastest-growing population of resi dents 60 years of age and33 older, which means caregiving demands will continue to rise, forcing more workers to exit34 the workforce to care for their aging family members with serious medical needs;35 (7) Access to paid family and medical leave supports maternal recovery and infant health36 by enabling timely medical care, serving as an important tool t o address this state's high37 maternal and infant mortality rates; and38 (8) This state is home to a robust community of small business owners who recognize that39 paid leave improves employee retention, morale, and productivity, yet lack the resources40 to provide this benefit on their own and require a shared solution to compete with larger41 businesses.42 H. B. 1318 - 2 - 26 LC 52 1013 (b) It is the intent of the General Assembly in enacting this chapter to conduct an actuarial43 study to evaluate the structure and parameters for a self-sustaining, cost-effective family and44 medical leave insurance program with shared employer and employee contributions.45 SECTION 2.46 Title 34 of the Official Code of Georgia Annotated, relating to labor and industrial relations,47 is amended by revising Chapter 11, which is designated as reserved, as follows:48 "CHAPTER 1149 34-11-1.50 As used in this chapter, the term:51 (1) 'Actuarial study' means the actuarial study provided for in Code Section 34-11-2.52 (2) 'Commissioner' means the Commissioner of Labor.53 (3) 'Department' means the Department of Labor.54 (4) 'Paid family and medical leave insurance program' or 'program' means a state based55 family and medical leave insurance program to provide wage repl acement for family56 caregiving and personal health issues.57 (5) 'Qualified third-party actuary' means an individual who is not employed by the state58 and who meets the qualification standards of the American Acade my of Actuaries.59 Reserved.60 34-11-2.61 (a) No later than October 1, 2026, the department shall contra ct for the services of a62 qualified third-party actuary to perform an actuarial study for a paid family and medical63 leave insurance program in this state, including, but not limit ed to, start-up costs of the64 program; costs for the state to administer the program; outreach and education costs; the65 H. B. 1318 - 3 - 26 LC 52 1013 premium contributions necessary to maintain the solvency of the program for a period of66 five to ten years; potential trends in claim experience over time; and total annual revenues,67 expenditures, and reserves.68 (b) Through the utilization of relevant data, including, but not limited to, data from other69 state paid family and medical leave insurance programs, short-term disability claims, and70 family and medical leave data from the federal government, and a review of the experience,71 structure, and policy design of other state paid family and med ical leave insurance72 programs, the actuarial study shall consider the following program parameters in relation73 to the premiums necessary to maintain solvency of the program:74 (1) The purposes for which paid family and medical leave can be used, including, but not75 limited to, bonding with a new child, caring for a child receiv ing care in a neonatal or76 pediatric intensive care unit, caring for a family member with a serious health condition,77 recovering from one's own serious health condition, addressing medical and nonmedical78 needs arising from domestic violence and sexual assault, and addressing military family79 and caregiving needs related to a family member's deployment;80 (2) Coverage of all public, private, and nonprofit sector employees in this state within81 the scope of the paid family and medical leave insurance program's rights and protections,82 including a breakdown of required coverage of employees of the state and political83 subdivisions thereof;84 (3) Coverage of self-employed workers, at the option of the worker, within the scope of85 the paid family and medical leave insurance program's rights and protections;86 (4) Coverage of workers who have worked a minimum of 1,250 hours with an employer87 during the previous 12 month period or earned at least 500 times the state minimum wage88 from work in this state during the worker's base period or alternative base period;89 (5) Utilization of an inclusive family definition to afford workers the right to take paid90 family and medical leave to care for immediate members of the f amily, regardless of91 legal or biological relation;92 H. B. 1318 - 4 - 26 LC 52 1013 (6) Use of a social insurance model for the paid family and me dical leave insurance93 program wherein workers and employers share the premium costs o f the program at a94 contribution rate of 50 percent from the employer and 50 percent from the employee and95 include options to:96 (A) Exempt employers with 15 or fewer employees or exempt employers with ten or97 fewer employees from contributing to the program while still including their employees98 within the scope of the program's coverage;99 (B) Exempt self-employed workers who opt into the program from contributing the100 employer portion of premium costs to the program; and101 (C) Limit premium contributions to wages not exceeding the contribution and benefit102 base limit established annually by the federal Social Security Administration for103 purposes of the federal old-age, survivors, and disability insu rance program limits104 pursuant to 42 U.S.C. Section 430;105 (7) A wage replacement rate that equals 90 percent of the worker's average weekly wage106 for the portion of their wages equal to or less than 50 percent of the state average weekly107 wage and 66 percent of the portion of the worker's average week ly wage above 50108 percent of the state average weekly wage;109 (8) Inclusion of an equitable maximum weekly benefit rate that adjusts annually based110 on the state average weekly wage and ensures that workers can afford to take paid family111 and medical leave;112 (9) A maximum leave duration not below 12 weeks of leave per y ear and a separate113 leave duration for an additional 12 weeks for a covered individ ual who has a child114 receiving inpatient care in a neonatal or pediatric intensive care unit;115 (10) A right to reinstatement for all employees upon returning from a period of paid116 family and medical leave and its effect on program usage; and117 (11) Based on available information provided by the state and in partnership with state118 agencies, the estimated administrative costs to the state for i mplementing and119 H. B. 1318 - 5 - 26 LC 52 1013 administering the paid family and medical leave insurance program, including, but not120 limited to, costs associated with outreach, education, enforcement, and data collection.121 34-11-3.122 (a) The qualified third-party actuary shall model and compare the costs, including, but not123 limited to, the premium rates necessary to achieve solvency, of at least two different paid124 family and medical leave insurance program models based on the policy parameters125 detailed in Code Section 34-11-2. Beyond the initial startup y ears in which benefits are126 paid out, the reserves accounted for pursuant to Code Section 3 4-11-2 shall be127 approximately 135 percent of the benefits paid during the previ ous fiscal year plus an128 amount equal to 100 percent of the cost of administration of the payment of such benefits129 during the previous fiscal year, less the amount of net assets remaining with the paid family130 and medical leave insurance programs at the end of the previous fiscal year.131 (b) The qualified third-party actuary shall utilize data that is relevant to this state, such as132 workforce and demographic data about the state population, as may be required to perform133 the actuarial study.134 (c) The qualified third-party actuary shall presume that premiums shall be collected for a135 period of one year prior to the beginning of benefit payments.136 (d) The actuarial study shall be completed in accordance with the relevant Actuarial137 Standards of Practice promulgated by the Actuarial Standards Board.138 (e) The department and the Office of State Treasurer shall work in conjunction with other139 state agencies to ensure the actuarial study is effectively completed.140 34-11-4.141 (a) No later than January 15, 2027, the actuarial study shall be completed and shared with142 the Governor, President of the Senate, Speaker of the House of Representatives, the143 H. B. 1318 - 6 - 26 LC 52 1013 Commissioner, and the chairpersons of the House Committee on Industry and Labor and144 the Senate Insurance and Labor Committee.145 (b) No later than February 15, 2027, the Commissioner shall publish the actuarial study146 on the department's website in a prominent location.147 34-11-5.148 The Commissioner shall promulgate rules and regulations to effectuate the provisions of149 this chapter.150 34-11-6.151 This chapter shall stand repealed and reserved on June 30, 2027."152 SECTION 3.153 This Act shall become effective only upon the effective date of an appropriation of funds for154 purposes of this Act as expressed in a line item making specific reference to full funding of155 this Act in an appropriations Act enacted by the General Assembly.156 SECTION 4.157 All laws and parts of laws in conflict with this Act are repealed.158 H. B. 1318 - 7 -