00 SENATE BILL NO. 10 01 "An Act relating to family leave wage replacement coverage." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03  * Section 1. AS 23.10 is amended by adding new sections to read: 04 Article 9. Alaska Paid Family Leave Plan.  05 Sec. 23.10.700. Plan procurement and requirements. (a) The commissioner 06 of labor and workforce development and the commissioner of administration shall 07 jointly procure a family leave insurance plan that meets the requirements of 08 AS 23.10.700 - 23.10.790 and secures family leave wage replacement coverage for 09 (1) qualified state employees at no cost to the employees; 10 (2) enrolled employees of political subdivisions of the state and private 11 employers who have elected to participate in the plan under AS 23.10.720; and 12 (3) individuals who use the purchasing pool to enroll in the plan under 13 AS 23.10.730. 14 (b) The procurement of the family leave insurance plan is governed by 15 AS 36.30 (State Procurement Code). 01 (c) The Department of Labor and Workforce Development and the 02 Department of Administration shall jointly evaluate responses to the procurement and 03 shall contract with an insurer authorized under AS 21.09 to provide health or disability 04 insurance. The insurer shall file the rates and forms for a family leave insurance plan 05 with the director of insurance for approval. 06 (d) The commissioner of labor and workforce development and the 07 commissioner of administration shall adopt and include in the plan, for employees of 08 employers that elect to participate in the plan, 09 (1) the length and time of annual open enrollment periods; 10 (2) enrollment processes for plans with premiums paid 11 (A) entirely by an employer; 12 (B) partially by an employer; 13 (C) entirely by an employee; 14 (3) procedures for payroll deduction and premium payment for 15 participating employers with 50 or more employees. 16 (e) The commissioner of labor and workforce development and the 17 commissioner of administration shall adopt and include in the plan, for employees 18 who enroll in the plan using the purchasing pool under AS 23.10.730, procedures 19 (1) that ensure timely transmission of enrollment and eligibility 20 information to the insurer; 21 (2) to collect premiums from enrolled employees and from employers 22 with 50 or more employees; 23 (3) specifying how frequently premiums will be transmitted to the 24 insurer and how penalties for late payments will be calculated. 25 Sec. 23.10.710. Plan benefit and eligibility. (a) A family leave insurance plan 26 procured under AS 23.10.700 must provide a participating employee wage 27 replacement coverage that equals 100 percent of the employee's average weekly wage, 28 up to $3,000 each week. In this subsection, "average weekly wage" means the average 29 wage the employee has earned each week over the shorter of 30 (1) the 52 weeks immediately preceding the period the employee takes 31 family leave; 01 (2) the employee's entire current term of employment with the state, 02 political subdivision of the state, or private employer. 03 (b) A family leave insurance plan may not impose a minimum duration of 04 family leave for wage replacement coverage. The annual duration of family leave 05 wage replacement coverage under the plan is 06 (1) the entire period for which family leave is taken by a state 07 employee under AS 39.20.305 or 39.20.500; 08 (2) not less than six weeks of family leave for an enrolled employee of 09 a participating political subdivision of the state or of a participating private employer 10 or for an employee enrolled in a family leave insurance plan through the purchasing 11 pool. 12 (c) An enrolled employee is eligible for family leave wage replacement if the 13 employee has been 14 (1) enrolled for at least seven calendar days; and 15 (2) employed by the employer for at least 35 hours a week for at least 16 six consecutive months or for at least 17.5 hours a week for at least 12 consecutive 17 months immediately preceding the leave. 18 Sec. 23.10.720. Participation. (a) A political subdivision of the state or private 19 employer may elect to participate in a plan procured under AS 23.10.700. A 20 participating political subdivision of the state or private employer shall contract 21 directly with the insurer and may choose 22 (1) the duration under AS 23.10.710(b) for which the enrolled 23 employees of the political subdivision of the state or the private employer may receive 24 wage replacement coverage; and 25 (2) whether to provide coverage at no cost to the enrolled employee, 26 pay a portion of the employee's premium costs, or require the employee to cover the 27 entire premium. 28 (b) An insurer may not charge a participating political subdivision or private 29 employer a rate that is more than the rate paid by the state for state employee 30 coverage. The rate must be expressed as a percentage of employee wages. 31 (c) An employee of a participating political subdivision of the state or private 01 employer may elect to enroll in the plan. 02 (d) A participating political subdivision of the state or private employer shall 03 pay premiums for an enrolled employee directly to the insurer. The employer may 04 collect employee contributions, if any, by way of automatic payroll deductions. 05 (e) A participating private employer that employs 50 or more employees 06 (1) shall, during the time an employee is on family leave receiving 07 wage replacement and paying the costs for maintaining health insurance coverage, 08 maintain coverage under any group health plan at the level and under the conditions 09 that coverage would have been provided if the employee had been employed 10 continuously from the date the leave began to the date the employee returns from 11 family leave; 12 (2) shall, unless the employer's business circumstances have changed 13 to make it impossible or unreasonable when a participating employee returns from 14 family leave, restore the employee to 15 (A) the position of employment held by the employee when the 16 leave began; or 17 (B) a substantially similar position with substantially similar 18 benefits, pay, and other terms and conditions of employment; 19 (3) may not discriminate or retaliate against an employee for taking 20 family leave and receiving wage replacement benefits. 21 (f) A participating political subdivision of the state and a private employer that 22 employs fewer than 50 employees may collect and transmit premiums directly to the 23 insurer or to the purchasing pool premium account under AS 23.10.730(d). The 24 employer may collect employee contributions, if any, by way of automatic payroll 25 deductions. 26 Sec. 23.10.730. Purchasing pool. (a) The family leave insurance plan 27 purchasing pool is established as an account in the general fund. The insurer shall 28 participate in the purchasing pool. 29 (b) An employee of a political subdivision of the state or of a private employer 30 that does not participate in a family leave insurance plan and does not offer a family 31 leave insurance benefit that is at least equivalent to the coverage provided under 01 AS 23.10.710 may use the purchasing pool to enroll in a family leave insurance plan. 02 (c) The pool may be experience rated. Coverage through the pool must include 03 a seven-month waiting period, a one-week elimination period, and a 60-day annual 04 open enrollment period as established by the commissioner in the procurement 05 process. Premiums for purchasing pool coverage may not exceed $5 for each enrolled 06 employee each week. 07 (d) A political subdivision of the state or a private employer that employs 50 08 or more employees shall collect premiums for an employee using the purchasing pool 09 by way of automatic payroll deductions and transfer the premiums directly to the 10 insurer. An employee of a political subdivision of the state or of a private employer 11 that employs fewer than 50 employees may pay premiums directly to the purchasing 12 pool. 13 (e) The commissioner of administration shall separately account for 14 purchasing pool premium payments received by the department and for payment of 15 premiums to an insurer participating in a family leave insurance plan in a purchasing 16 pool premium account. 17 Sec. 23.10.740. Purchasing pool premium stabilization account. (a) The 18 commissioner of administration shall separately account for 19 (1) premium taxes imposed on family leave insurance premiums 20 written by the insurer under AS 21.09.210; 21 (2) appropriations made for purchasing pool stabilization; and 22 (3) gifts, grants, and donations made for the purpose of stabilizing the 23 purchasing pool. 24 (b) The legislature may appropriate money from the account to the purchasing 25 pool to ensure that the premiums charged to participants in the purchasing pool remain 26 stable from year to year and do not exceed $5 for each enrolled employee each week. 27 Sec. 23.10.750. Family leave insurance advisory board. (a) The family leave 28 insurance advisory board is established in the Department of Administration to support 29 the commissioner of administration with implementing and administering family leave 30 insurance plans. 31 (b) The advisory board is composed of seven members appointed by the 01 governor as follows: 02 (1) three members who represent employers; 03 (2) three members who represent employees; 04 (3) one member, who shall serve as chair, who is qualified, through 05 training and experience, to resolve problems of family leave insurance procurement, 06 eligibility, benefit design, and program administration. 07 (c) The advisory board shall meet at least quarterly. 08 Sec. 23.10.760. Bargaining. Notwithstanding any provision of AS 23.40.070 - 09 23.40.260 to the contrary, if an agreement between an employer subject to 10 AS 23.40.070 - 23.40.260 and an employee bargaining organization does not contain 11 provisions at least as beneficial to the employee as the provisions provided by 12 AS 23.10.700 - 23.10.790, the provisions of AS 23.10.700 - 23.10.790 apply. 13 Sec. 23.10.770. Report and outreach. (a) The Department of Labor and 14 Workforce Development, in conjunction with the Department of Administration, shall 15 prepare and submit to the senate secretary and chief clerk of the house of 16 representatives by January 15 of each year a report on family leave insurance plans. 17 The Department of Labor and Workforce Development and the Department of 18 Administration shall include in the report a description of progress in increasing the 19 rate of family leave insurance coverage of employees in the state, and 20 recommendations to further increase the rate of coverage. 21 (b) The Department of Labor and Workforce Development, in conjunction 22 with the Department of Administration, shall develop an outreach program to educate 23 employers and employees about the potential benefits of participating in a family 24 leave insurance plan, including benefit structures and qualifying for the family leave 25 insurance tax credit under AS 43.20.075. 26 Sec. 23.10.780. Regulations. The commissioner of labor and workforce 27 development and the commissioner of administration may adopt regulations to 28 implement AS 23.10.700 - 23.10.790. 29 Sec. 23.10.790. Definitions. In AS 23.10.700 - 23.10.790, 30 (1) "child" means an individual who is 31 (A) under 18 years of age; or 01 (B) 18 years of age or older and incapable of self-care because 02 of mental or physical disability; 03 (2) "family leave" means leave taken 04 (A) because of pregnancy and the birth of a child of the 05 employee or the placement of a child, other than the employee's stepchild, with 06 the employee for adoption or foster care; 07 (B) in order to care for the employee's child, spouse, or parent 08 who has a serious health condition; in this subparagraph, "child" includes the 09 employee's biological, adopted, or foster child, stepchild, or legal ward; and 10 (C) because of the employee's own serious health condition; 11 (3) "insurer" means a person engaged as indemnitor, surety, or 12 contractor in the business of entering into contracts of insurance or of annuity that has 13 contracted with the commissioner of labor and workforce development and the 14 commissioner of administration under AS 23.10.700; 15 (4) "parent" means a biological or adoptive parent, a parent-in-law, or 16 a stepparent; 17 (5) "serious health condition" means an illness, injury, impairment, or 18 physical or mental condition that involves 19 (A) inpatient care in a hospital, hospice, or residential health 20 care facility; or 21 (B) continuing treatment or continuing supervision by a health 22 care provider; 23 (6) "state" includes the executive, legislative, and judicial branches of 24 state government, the University of Alaska, the Alaska Railroad Corporation, and 25 public corporations and authorities established by law. 26  * Sec. 2. AS 39.20.305(a) is amended to read: 27 (a) An officer or employee of the state who is otherwise qualified to take leave 28 of absence may take family leave paid through the family leave insurance policy  29 implemented under AS 23.10.700 - 23.10.790 because of a serious health condition 30 for a total of 18 workweeks during any 24-month period. An otherwise qualified 31 officer or employee may take family leave because of pregnancy and childbirth, [OR] 01 adoption, or foster care for a total of 18 workweeks within a 12-month period; the 02 right to take leave for this reason expires on the date one year after the birth or 03 placement of the child. The state may not require the employee to substitute  04 accrued paid leave to which the employee is entitled [AN OFFICER OR 05 EMPLOYEE TAKING LEAVE UNDER THIS SECTION SHALL USE ACCRUED 06 PAID LEAVE UNTIL THE OFFICER OR EMPLOYEE HAS ONLY FIVE DAYS 07 OF PAID LEAVE REMAINING. THE OFFICER OR EMPLOYEE MAY CHOOSE 08 WHETHER TO RETAIN A BALANCE OF FIVE DAYS OF PAID LEAVE AND 09 TAKE THE REMAINING LEAVE AS UNPAID LEAVE OR WHETHER TO 10 EXHAUST THE PAID LEAVE BALANCE. AFTER REDUCING ACCRUED PAID 11 LEAVE AS REQUIRED BY THIS SUBSECTION, THE OFFICER OR EMPLOYEE 12 MAY TAKE LEAVE WITHOUT PAY FOR THE BALANCE OF THE FAMILY 13 LEAVE]. If the employee is entitled to a longer period of time under AS 39.20.500, 14 then the longer period applies. An eligible employee is entitled to take family leave 15 (1) because of pregnancy and the birth of a child of the employee or 16 the placement of a child, other than the employee's stepchild, with the employee for 17 adoption or foster care; the department or agency may require that an employee using 18 family leave under this paragraph take the leave in a single block of time; 19 (2) in order to care for the employee's child, spouse, or parent who has 20 a serious health condition; in this paragraph, "child" includes the employee's 21 biological, adopted, or foster child, stepchild, or legal ward; and 22 (3) because of the employee's own serious health condition. 23  * Sec. 3. AS 39.20.500(b) is amended to read: 24 (b) An employee is eligible to take family leave if the employee has been 25 employed by the employer for at least 35 hours a week for at least six consecutive 26 months or for at least 17 1/2 hours a week for at least 12 consecutive months 27 immediately preceding the leave. The leave for a state employee must [MAY] be 28 [UNPAID] leave paid through family leave insurance policy implemented under  29 AS 23.10.700 - 23.10.790. The leave for an employee of a political subdivision of  30 the state may be unpaid leave. However, the political subdivision employee may  31 choose to substitute accrued paid leave to which the employee is entitled. The  01 state or the political subdivision [. HOWEVER, THE EMPLOYEE MAY CHOOSE 02 TO SUBSTITUTE, OR THE EMPLOYER] may not require the employee to 03 substitute [,] accrued paid leave to which the employee is entitled. An employer shall 04 permit an eligible employee to take family leave because of a serious health condition 05 for a total of 18 workweeks during any 24-month period. An employer shall permit an 06 eligible employee to take family leave because of pregnancy and childbirth, [OR] 07 adoption, or foster care for a total of 18 workweeks within a 12-month period; the 08 right to take leave for this reason expires on the date one year after the birth or 09 placement of the child. If the employee is entitled to a longer period of time under (a) 10 of this section, then the longer period applies. An eligible employee is entitled to take 11 family leave 12 (1) because of pregnancy and the birth of a child of the employee or 13 the placement of a child, other than the employee's stepchild, with the employee for 14 adoption or foster care; an employer may require that an employee using family leave 15 under this paragraph take the leave in a single block of time; 16 (2) in order to care for the employee's child, spouse, or parent who has 17 a serious health condition; in this paragraph, "child" includes the employee's 18 biological, adopted, or foster child, stepchild, or legal ward; and 19 (3) because of the employee's own serious health condition. 20  * Sec. 4. AS 39.20.500(d) is amended to read: 21 (d) During the time that an employee is on leave under this section, the 22 employer shall maintain coverage under any group health plan at the level and under 23 the conditions that coverage would have been provided if the employee had been 24 employed continuously from the date the leave began to the date the employee returns 25 from leave under (e) of this section. [HOWEVER, THE EMPLOYER MAY 26 REQUIRE THAT THE EMPLOYEE PAY ALL OR PART OF THE COSTS FOR 27 MAINTAINING HEALTH INSURANCE COVERAGE DURING A PERIOD OF 28 UNPAID LEAVE.] 29  * Sec. 5. AS 39.20.500(f) is amended to read: 30 (f) This section does not apply to a political subdivision of the state's [AN 31 EMPLOYER'S] small employment facility if the total number of employees employed 01 within 50 road miles of the small employment facility, including those employed at 02 the facility, was fewer than 21 during the 20 consecutive workweeks in which the 03 political subdivision of the state [EMPLOYER] employed at least 21 employees at 04 all business facilities. 05  * Sec. 6. AS 43.20 is amended by adding a new section to read: 06 Sec. 43.20.075. Family leave insurance tax credit. A taxpayer that pays for 07 family leave insurance coverage for the taxpayer's employees under AS 23.10.720 is 08 allowed a credit against the taxes due under this chapter for an amount equal to 50 09 percent of the family leave insurance premium paid by the taxpayer for the year in 10 which the premium is paid. 11  * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 TRANSITION. The procurement for family leave insurance coverage, described in 14 sec. 1 of this Act, shall be issued not later than March 31, 2026. A family leave insurance plan 15 shall be in place for state government employees and available for purchase by political 16 subdivisions of the state and private employers with more than 50 employees by January 1, 17 2027. The purchasing pool shall be operational and coverage available for purchase not later 18 than January 1, 2027.