Three years after Gov. Phil Scott first signed a contract with state employees that would provide them with paid family and medical leave and anchor a voluntary program for other employers in Vermont, the Republican governor has announced that his administration has found an insurer to make good on the deal.
Administered by Connecticut-based insurance company The Hartford, the program will reimburse up to 60% of a person’s wages for at least six weeks while they take time off to deal with a health condition, care for a sick family member or look after a newborn or newly adopted child.
In a press conference announcing the launch at his ceremonial Statehouse office on Tuesday, Scott called the contract a “win-win-win.”
“Because of this partnership with a seasoned vendor, we’re able to build this program more efficiently and quickly than if we had to do it from scratch,” he said. “It presents a unique opportunity for Vermont businesses to set themselves apart from other states — hopefully allowing them to attract more of the workers they desperately need.”
Scott blamed the pandemic for the delay in the program’s rollout, and said insurers initially had been less willing to bid on the state’s contract during a period of uncertainty. He noted he’d been asked several times over the years by the media whether the plan was dead.
“I kept saying ‘we’re working on it,’ and we have been working on it. So the timing is right, we were able to get some interest in bidding on this. And the climate is right as well,” Scott said.
A small but growing number of Republican-led states are exploring or enacting opt-in paid leave plans as an alternative to the payroll-tax-funded mandatory plans now in place in 11 blue states across the country. In New Hampshire, GOP Gov. Chris Sununu signed a contract with the insurer MetLife this summer to move forward with a similar plan to Vermont’s.
Vermont’s paid family and medical leave policy is set to roll out in three phases. Benefits will start for state employees beginning July 1, 2023. A year later, the program will be extended to private and public employers with two or more employees. And in 2025, employers with just one employee, as well as individual workers and self-employed Vermonters, will be able to join.
About 8,000 state workers, including state troopers, are covered by the policy, which will cost Vermont an estimated $2 million a year, according to administration officials.
Scott and Democrats in the Legislature have butted heads for years about how to enact paid leave in Vermont. Democrats and advocates have long argued a mandatory program is necessary to ensure a sufficiently large risk pool to provide robust benefits to the workers that need them the most.
But the Republican has balked at the payroll tax pitched to make a universal and more ambitious plan work, and twice — in 2018 and 2020 — vetoed bills that would have created a mandatory program.
As an alternative, Scott had in 2019 pitched a voluntary program, alongside New Hampshire’s Sununu, that would have used a state-funded benefit for state employees across both states to anchor an opt-in insurance pool that private employers could also join if they wanted.
Lawmakers rejected Scott’s idea in 2019, but the governor used the bargaining process to ink a deal with the Vermont State Employees’ Association later that year to set a Vermont-specific plan in motion anyway.
VSEA executive director Steve Howard said in an interview that while the union had seen “no downside” to agreeing to this paid leave plan for its own members, it remains in favor of a mandatory program as pitched by lawmakers in prior years.
“We actually think a more robust plan for everybody is preferable,” Howard said.
Lawmakers must greenlight the appropriation necessary to let the voluntary plan move forward, but they are not expected to use the power of the purse to scuttle the deal brokered between the union and the administration. That doesn’t mean some Democrats don’t plan to revive a push for a more expansive, mandatory program in the upcoming legislative session.
In press interviews and speeches since the midterm elections, which delivered to Democrats a historic supermajority in the lower chamber, House Speaker Jill Krowinski, D-Burlington, has repeatedly named paid family and medical leave as a top priority.
And just hours before Scott was set to hold his press conference, Krowinski and Lt. Gov. Molly Gray, a Democrat, announced that they would hold a joint summit later this week on paid leave and child care. Both released statements after Scott’s event arguing his plan was inadequate.
Krowinski said that “at first glance, it does not meet the needs of Vermonters in this moment.” In a particularly blistering press release, Gray called Scott’s plan, which guarantees only six weeks off for new families, “regressive and arcane” and counter to “best medical advice.” The 60% wage reimbursement, she added, was “naïve to the economic realities of working families.”
But Democrats do not appear united on paid leave. Sen. Phil Baruth, D/P-Chittenden, who is slated to become the next leader of the Vermont Senate, told VTDigger in an interview Monday afternoon he had doubts about the wisdom of pushing for a robust paid leave program in the upcoming session, at the same time as Democrats are planning to tackle a dramatic expansion in publicly funded child care.
“One of the big things that I worry about is overreach, and overreach can take many forms,” he said. “One of them is the idea that we would be able to simultaneously legislate, build out and pay for two very, very large expansions of our social safety net at one time, because we’re in a time where Vermonters are getting hit by inflation and other high costs.”