Leave Insurance Program Would Pay Benefits

Summary#

SB-1213 would create a new law, the Family and Medical Leave Insurance Act. It would establish a state-run insurance program, administered by the Department of Labor and Economic Opportunity, to pay benefits during qualifying family leave; its stated goal is to provide family leave and insurance benefits to eligible people.

  • Eligible employees could take leave for reasons including a new child, their own or a family member’s serious health condition, military-related needs, safety needs after violence, bereavement, and certain emergencies. The maximum would phase in: 5 weeks, then 10, then 12 weeks in a benefit year.
  • The state would generally pay 100% of a person’s average weekly wage, up to two-thirds of Michigan’s state average weekly wage.
  • Employers would have to contribute to a new state fund, give employees notices, restore employees to their jobs after leave, and avoid interference or retaliation.
  • Employers could seek approval for a private plan, but it would have to provide at least the same rights, protections, and benefits as the state plan.
  • Self-employed people could opt in for at least 3 years and would pay both the employee and employer contributions.

What it means for you#

  • Employees: You could qualify if you have at least $3,000 in wages subject to contributions in the relevant period, or if you opted in as self-employed, and you are working or recently separated from a job. The bill excludes federal employees and railroad employees. Eligible leave can be intermittent, and benefits are prorated; benefits are not paid for less than 8 hours of leave in a work week.
  • Employees taking leave: Your employer would have to restore you to your former job or an equivalent one, and continue your health benefits if you keep paying your share. You would not generally have to use up other paid time off first. Leave that also qualifies under the federal Family and Medical Leave Act would run at the same time.
  • Employers: You would have to remit contributions quarterly, provide notices, and protect workers from retaliation. Employers with 25 or more employees would remit the full contribution; those with fewer than 25 would remit half. Either could deduct up to half of the required contribution from employee wages.
  • Self-employed people: You could elect coverage and receive benefits if eligible, but would pay both shares of contributions and generally remain covered for at least 3 years.
  • People taking bereavement leave: Benefits would be limited to 10 days for each death and 15 days total in a benefit year.

Money#

No publicly available information.

  • The bill requires employer and employee contributions, but does not set a specific rate. The director would set rates to fund benefits and administration.
  • Employers could deduct up to half of the contribution from employee wages. Employers with fewer than 25 employees would remit half the contribution; the state would pay required employer contributions for certain providers of Medicaid-funded home- and community-based services.
  • The Legislature must appropriate enough to cover administration before payroll contributions begin. If it does not, the bill says contributions must increase to fund benefit payments.
  • The bill creates a state fund for benefits and administration. It does not provide an overall cost estimate in the supplied material.

What is unclear#

  • The director would set the contribution start date, no more than 2 years after the act takes effect. The leave limits would then phase in, but the bill does not give calendar dates.
  • The contribution rate, program costs, and number of people likely to qualify are not stated.
  • The bill leaves some terms open, including what counts as a relationship equivalent to a familial relationship and what other emergency-related reasons may qualify under future rules.
  • The department must create claim procedures and rules, but many details would be set later. The bill does set some claim windows, certification rules, and hearing rights.
  • The bill is at the introduced stage and is not law. Whether it will pass is uncertain.

Case for#

  • The bill appears intended to let people take time away from work for serious health needs, caregiving, a new child, safety, bereavement, or specified emergencies without losing all wage income.
  • A shared insurance fund could spread benefit costs across employers and workers rather than requiring each employer to fund the full benefit directly.
  • Job restoration and anti-retaliation rules could protect employees who use the leave.
  • The contribution rate would be adjusted over time based on benefit payments, administration costs, and fund assets.

Case against#

  • Contributions would add costs for employers and, where employers deduct a share, reduce employees’ take-home wages.
  • The bill sets no contribution rate or cost estimate, so workers and employers cannot tell from the supplied material how much they would pay.
  • Important rules and procedures would be developed after passage, leaving uncertainty about how claims and some qualifying reasons would be handled.
  • The state would be responsible for operating the program and processing claims, but the bill does not provide a staffing or implementation cost estimate.