Today the Legislative Task Force on Paid Family and Medical Leave Insurance Premiums voted to recommend changes to the paid family and medical leave (PFML) program rate structure. At the end of last week’s meeting of the task force, it didn’t sound like members would be prepared to vote today. But they apparently had productive conversations since then, which resulted in a compromise Proposal F. (I described Proposals A through E here.) No fiscal analysis of Proposal F has been made available for the public.

Under current law, the regular premium rate may range from 0.1%–0.6%. On top of that, a solvency surcharge of 0.1%–0.6% must be added if the account balance gets too low. Thus, the maximum possible combined rate is currently 1.2%.

Proposal F would get rid of the solvency surcharge and just increase the maximum regular rate to 1.2%. To determine the rate, Proposal F (like Proposals C, D, and E) would take 140% of the prior year’s costs, subtract the account balance, and then divide by the prior year’s taxable wages.

Proposals C, D, and E would result in account balances that would cover more than three months of expenses, while Proposals A and B target a reserve of three months of expenses. Proposal F specifies that if the rate calculation is estimated to result in account balances that are higher than a three-month reserve, “the rate must be set at the minimum level necessary to maintain an annual end balance of at least that amount.”

Finally, like four of the five proposals discussed last week, Proposal F would seed a reserve for the PFML program with funds from the $350 million appropriated by the Legislature to cover any deficit in the family and medical leave insurance (FMLI) account at the end of the biennium. (According to staff at today’s meeting, the Employment Security Department currently estimates that the account balance will be -$44 million at the end of the biennium, so the reserves would be seeded with $306 million.)

The task force voted today to recommend Proposal F to the Legislature.