Vermont will be joining its neighbor, New Hampshire, in implementing a voluntary paid family leave program as of July 1, 2024.  The program will be referred to as the Vermont Family and Medical Leave Insurance Plan (“VT-FMLI”). 

Similar to the New Hampshire model, Vermont will be contracting with an insurance company (The Hartford) to provide paid family and medical leave benefits on behalf of employers who purchase a policy.  The VT-FMLI model differs from the more prevalent state mandate structure by offering employers an optional approach to paid family and medical leave. 

The intent of this law is to leverage the purchasing power and economies of scale available to the state of Vermont to create an insured paid family and medical leave insurance benefit.  Vermont has chosen The Hartford as their leave administrator.  (New Hampshire is contracting with MetLife for its similar arrangement).

VT-FMLI will be anchored by the State employee workforce beginning July 1, 2023.  Beginning July 1, 2024, private employers and non-state public employers with two or more employees will be able to select from various VT-FMLI options to purchase a policy for their employees.  Beginning July 1, 2025, individual employees and self-employed workers can purchase individual coverage if not offered by their employers.  

Who does the new law apply to?

For private sector employers, VT-FMLI is optional. Private sector employers with two or more employees that wish to offer a VT-FMLI benefit can purchase a policy (as of July 1, 2024) through The Hartford.

Employees whose employers choose not to offer VT-FMLI coverage will still have the opportunity (as of July 1, 2025) to purchase coverage through the individual purchasing pool insured by The Hartford.

The law applies to all state employees (as of July 1, 2023) of the state of Vermont. 

What benefits are available to employees?

The VT-FMLI program will roll out to Vermont State employees in July 2023 by providing up to 60% of their average weekly wages capped at the Social Security Base Benefit Limit.  State employees will be able to take up to a combined six weeks of leave for:

• Birth, adoption, or placement of a foster child within one year of birth or placement;

• Caring for a spouse, child, or parent who has a serious health condition;

• The employee’s serious health condition; or

• Any qualifying military exigency.

There is a 7-calendar day waiting period for medical leave.   

Private sector employers will have the ability to select from a number of VT-FMLI plan design options that allow them to best support the needs of their employees and their business.  Details of the product offering options, including any optional features, have not yet been determined.  However, the options will include at least six combined weeks of paid leave for the reasons and at the rate listed above.   

More to come

This new VT-FMLI law has an aggressive implementation timeline, and details for private sector employers are still being released.  In the meantime, The Hartford has a webpage with additional information and FAQs.

Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship.  Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).