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Minnesota Republican legislators back private insurance-based paid family leave

GOP lawmakers said the plan would allow small businesses to find the best options for their needs, but critics said relying on private insurance could still leave many Minnesotans without coverage.

FSA Minnesota Capitol 2019
Lawmakers returned to the Minnesota State Capitol Jan. 8, 2019, for the reconvening of the Legislature. Michael Brun / Forum News Service
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ST. PAUL — Republican Minnesota lawmakers are pushing for a market and incentive-based plan for expanding paid family and medical leave to more employees across the state.

The proposal announced Monday, March 21, by Sen. Julia Coleman, R-Waconia, and Rep. Jordan Rasmusson, R-Fergus Falls, would allow insurers to provide leave plans to businesses, something the state does not currently allow. Coleman and Rasmusson said their plan would expand opportunities for small businesses to provide paid leave while avoiding higher taxes and administrative costs.

“Insurers would be able to put together products for businesses quickly and the plans don’t have to be one-size-fits-all with burdensome regulations and penalties,” Coleman told reporters at a Monday news conference. “It can be written with the workforce in mind and be done without setting up a huge new bureaucracy at the state government. It is the simplest and fastest way to increase the number of employees with access to paid family leave.”

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Senator Julia Coleman (R- Chanhassen)

In addition to allowing private insurers to offer leave plans, Coleman and Rasmusson’s proposal would provide businesses with 50 or fewer employees a tax credit of $3,000 for each employee who enrolls. In the proposal’s current form, that aid would be capped at $50 million statewide but could be expanded in the future. Coleman said the incentive is key since small businesses can't afford to create paid family leave plans of their own, putting them at a competitive disadvantage with large companies that don't need insurance-based plan options.

The GOP proposal comes after Democratic-Farmer-Labor Party lawmakers last month renewed their push for a plan that would create a state-funded family and medical benefits insurance program in Minnesota. In a Monday statement, Mendota Heights Rep. Ruth Richardson, who authored the DFL paid leave bill, said the GOP proposal would leave many workers out.

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“Their plan doesn’t provide a safety net for the employee in the event of a medical emergency, unexpected injury, or serious illness or pregnancy complication,” she said. “Furthermore, our current system disproportionally excludes low wage workers from this earned benefit, especially women and workers of color. The Senate’s bill does nothing to extend that financial safety net to those families.”

The DFL-backed program would offer up to 12 weeks of partially paid time off for pregnancy, serious health conditions, family care, leave when a family member is called for active military duty and safety leave for domestic abuse situations. Each Minnesotan would contribute about $3 per week, Forum News Service previously reported. The amount of pay a beneficiary receives would be based on a sliding scale.

At a Senate commerce committee Monday afternoon, opponents of the Republican leave proposal said the bill’s language would not guarantee insurers creating plans would have to provide medical leave. Debra Fitzpatrick with Children’s Defense Fund Minnesota said she was concerned the bill would not prevent insurers from denying leave coverage for those with preexisting conditions.

A Minneapolis small business owner Sarah Piepenburg told the committee the incentive would not provide enough for her business to offer paid family and medical leave, and said a private insurance-based plan would increase costs and harm accessibility for businesses and employers.

The commerce committee passed the bill along to the Senate Monday afternoon.

Alex Derosier covers Minnesota breaking news and state government for Forum News Service.
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