PAID FAMILY LEAVE/WAGE REPLACEMENT INSUR.

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SENATE BILL NO. 10

IN THE LEGISLATURE OF THE STATE OF ALASKA

THIRTY-FOURTH LEGISLATURE - FIRST SESSION

BY SENATOR DUNBAR

Introduced: 1/22/25
Referred: Labor and Commerce, Finance

A BILL

FOR AN ACT ENTITLED

"An Act relating to family leave wage replacement coverage." 1
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 2
* Section 1. AS 23.10 is amended by adding new sections to read: 3
Article 9. Alaska Paid Family Leave Plan. 4
Sec. 23.10.700. Plan procurement and requirements. (a) The commissioner 5
of labor and workforce developm ent and the commissioner of admi nistration shall 6
jointly procure a family leave insurance plan that meets the re quirements of 7
AS 23.10.700 - 23.10.790 and secures family leave wage replacement coverage for 8
(1) qualified state employees at no cost to the employees; 9
(2) enrolled employees of political subdivisions of the state and private 10
employers who have elected to participate in the plan under AS 23.10.720; and 11
(3) individuals who use the purchasing pool to enroll in the p lan under 12
AS 23.10.730. 13
(b) The procurement of the family leave insurance plan is gove rned by 14
AS 36.30 (State Procurement Code). 15
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(c) The Department of Labor and Workforce Development and the 1
Department of Administration sh all jointly evaluate responses t o the procurement and 2
shall contract with an insurer authorized under AS 21.09 to provide health or disability 3
insurance. The insurer shall file the rates and forms for a fam ily leave insurance plan 4
with the director of insurance for approval. 5
(d) The commissioner of labor and workforce development and th e 6
commissioner of administration sh all adopt and include in the p lan, for employees of 7
employers that elect to participate in the plan, 8
(1) the length and time of annual open enrollment periods; 9
(2) enrollment processes for plans with premiums paid 10
(A) entirely by an employer; 11
(B) partially by an employer; 12
(C) entirely by an employee; 13
(3) procedures for payroll deduc tion and premium payment for 14
participating employers with 50 or more employees. 15
(e) The commissioner of labor a nd workforce development and th e 16
commissioner of administration sh all adopt and include in the p lan, for employees 17
who enroll in the plan using the purchasing pool under AS 23.10.730, procedures 18
(1) that ensure timely transmission of enrollment and eligibil ity 19
information to the insurer; 20
(2) to collect premiums from enrolled employees and from emplo yers 21
with 50 or more employees; 22
(3) specifying how frequently premiums will be transmitted to the 23
insurer and how penalties for late payments will be calculated. 24
Sec. 23.10.710. Plan benefit and eligibility. (a) A family leave insurance plan 25
procured under AS 23.10.700 must p rovide a participating employ ee wage 26
replacement coverage that equals 100 percent of the employee's average weekly wage, 27
up to $3,000 each week. In this subsection, "average weekly wag e" means the average 28
wage the employee has earned each week over the shorter of 29
(1) the 52 weeks immediately preceding the period the employee takes 30
family leave; 31
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(2) the employee's entire current term of employment with the state, 1
political subdivision of the state, or private employer. 2
(b) A family leave insurance plan may not impose a minimum dur ation of 3
family leave for wage replacement coverage. The annual duration of family leave 4
wage replacement coverage under the plan is 5
(1) the entire period for which family leave is taken by a sta te 6
employee under AS 39.20.305 or 39.20.500; 7
(2) not less than six weeks of family leave for an enrolled em ployee of 8
a participating political subdivisi on of the state or of a part icipating private employer 9
or for an employee enrolled in a family leave insurance plan th rough the purchasing 10
pool. 11
(c) An enrolled employee is eligible for family leave wage rep lacement if the 12
employee has been 13
(1) enrolled for at least seven calendar days; and 14
(2) employed by the employer for at least 35 hours a week for at least 15
six consecutive months or for at least 17.5 hours a week for at least 12 consecutive 16
months immediately preceding the leave. 17
Sec. 23.10.720. Participation. (a) A political subdivision of the state or private 18
employer may elect to participat e in a plan procured under AS 2 3.10.700. A 19
participating political subdivision of the state or private emp loyer shall contract 20
directly with the insurer and may choose 21
(1) the duration under AS 23.10.710( b) for which the enrolled 22
employees of the political subdivision of the state or the private employer may receive 23
wage replacement coverage; and 24
(2) whether to provide coverage a t no cost to the enrolled emp loyee, 25
pay a portion of the employee's premium costs, or require the e mployee to cover the 26
entire premium. 27
(b) An insurer may not charge a participating political subdiv ision or private 28
e m p l o y e r a r a t e t h a t i s m o r e t h a n t h e r a t e p a i d b y t h e s t a t e f or state employee 29
coverage. The rate must be expressed as a percentage of employee wages. 30
(c) An employee of a participating political subdivision of th e state or private 31
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employer may elect to enroll in the plan. 1
(d) A participating political s ubdivision of the state or priv ate employer shall 2
pay premiums for an enrolled employee directly to the insurer. The employer may 3
collect employee contributions, if any, by way of automatic payroll deductions. 4
(e) A participating private employer that employs 50 or more employees 5
(1) shall, during the time an employee is on family leave rece iving 6
wage replacement and paying the costs for maintaining health in surance coverage, 7
maintain coverage under any group health plan at the level and under the conditions 8
that coverage would have been provided if the employee had been employed 9
continuously from the date the leave began to the date the empl oyee returns from 10
family leave; 11
(2) shall, unless the employer's business circumstances have c hanged 12
to make it impossible or unreasonable when a participating empl oyee returns from 13
family leave, restore the employee to 14
(A) the position of employment held by the employee when the 15
leave began; or 16
(B) a substantially similar position with substantially simila r 17
benefits, pay, and other terms and conditions of employment; 18
(3) may not discriminate or retaliate against an employee for taking 19
family leave and receiving wage replacement benefits. 20
(f) A participating political subdivision of the state and a private employer that 21
employs fewer than 50 employees may collect and transmit premiu ms directly to the 22
insurer or to the purchasing pool premium account under AS 23.1 0.730(d). The 23
employer may collect employee contributions, if any, by way of automatic payroll 24
deductions. 25
Sec. 23.10.730. Purchasing pool. (a) The family leave insurance plan 26
purchasing pool is established as an account in the general fun d. The insurer shall 27
participate in the purchasing pool. 28
(b) An employee of a political subdivision of the state or of a private employer 29
that does not participate in a family leave insurance plan and does not offer a family 30
leave insurance benefit that is at least equivalent to the cove rage provided under 31
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AS 23.10.710 may use the purchasing pool to enroll in a family leave insurance plan. 1
(c) The pool may be experience rated. Coverage through the pool must include 2
a seven-month waiting period, a one-week elimination period, an d a 60-day annual 3
open enrollment period as established by the commissioner in th e procurement 4
process. Premiums for purchasing pool coverage may not exceed $ 5 for each enrolled 5
employee each week. 6
(d) A political subdivision of the state or a private employer that employs 50 7
or more employees shall collect premiums for an employee using the purchasing pool 8
by way of automatic payroll deductions and transfer the premium s directly to the 9
insurer. An employee of a political subdivision of the state or of a private employer 10
that employs fewer than 50 employees may pay premiums directly to the purchasing 11
pool. 12
(e) The commissioner of administration shall separately accoun t for 13
purchasing pool premium payments received by the department and f o r p ay me n t o f 14
premiums to an insurer participating in a family leave insuranc e plan in a purchasing 15
pool premium account. 16
Sec. 23.10.740. Purchasing pool prem ium stabilization account. (a) The 17
commissioner of administration shall separately account for 18
(1) premium taxes imposed on family leave insurance premiums 19
written by the insurer under AS 21.09.210; 20
(2) appropriations made for purchasing pool stabilization; and 21
(3) gifts, grants, and donations made for the purpose of stabi lizing the 22
purchasing pool. 23
(b) The legislature may appropriate money from the account to the purchasing 24
pool to ensure that the premiums charged to participants in the purchasing pool remain 25
stable from year to year and do not exceed $5 for each enrolled employee each week. 26
Sec. 23.10.750. Family leave insurance advisory board. (a) The family leave 27
insurance advisory board is established in the Department of Administration to support 28
the commissioner of administration with implementing and administering family leave 29
insurance plans. 30
(b) The advisory board is composed of seven members appointed by the 31
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governor as follows: 1
(1) three members who represent employers; 2
(2) three members who represent employees; 3
(3) one member, who shall serv e as chair, who is qualified, th rough 4
training and experience, to resolve problems of family leave in surance procurement, 5
eligibility, benefit design, and program administration. 6
(c) The advisory board shall meet at least quarterly. 7
Sec. 23.10.760. Bargaining. Notwithstanding any provision of AS 23.40.070 - 8
23.40.260 to the contrary, if an agreement between an employer subject to 9
AS 23.40.070 - 23.40.260 and an employee bargaining organizatio n does not contain 10
provisions at least as beneficial to the employee as the provis ions provided by 11
AS 23.10.700 - 23.10.790, the provisions of AS 23.10.700 - 23.10.790 apply. 12
Sec. 23.10.770. Report and outreach. ( a ) T h e D e p a r t m e n t o f L a b o r a n d 13
Workforce Development, in conjunction with the Department of Ad ministration, shall 14
prepare and submit to the senate secretary and chief clerk of t he house of 15
representatives by January 15 of each year a report on family l eave insurance plans. 16
The Department of Labor and Workfo rce Development and the Depar tment of 17
Administration shall include in the report a description of pro gress in increasing the 18
rate of family leave insurance coverage of employees in the sta te, and 19
recommendations to further increase the rate of coverage. 20
(b) The Department of Labor and Workforce Development, in conj unction 21
with the Department of Administr ation, shall develop an outreac h program to educate 22
employers and employees about the potential benefits of partici pating in a family 23
leave insurance plan, including benefit structures and qualifyi ng for the family leave 24
insurance tax credit under AS 43.20.075. 25
Sec. 23.10.780. Regulations. The commissioner of labor and workforce 26
development and the commissioner of administration may adopt re gulations to 27
implement AS 23.10.700 - 23.10.790. 28
Sec. 23.10.790. Definitions. In AS 23.10.700 - 23.10.790, 29
(1) "child" means an individual who is 30
(A) under 18 years of age; or 31
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(B) 18 years of age or older and incapable of self-care becaus e 1
of mental or physical disability; 2
(2) "family leave" means leave taken 3
(A) because of pregnancy and the birth of a child of the 4
employee or the placement of a child, other than the employee's stepchild, with 5
the employee for adoption or foster care; 6
(B) in order to care for the employee's child, spouse, or pare nt 7
who has a serious health condition; in this subparagraph, "chil d" includes the 8
employee's biological, adopted, or foster child, stepchild, or legal ward; and 9
(C) because of the employee's own serious health condition; 10
( 3 ) " i n s u r e r " m e a n s a p e r s o n e n g a g e d a s i n d e m n i t o r , s u r e t y , o r 11
contractor in the business of ent ering into contracts of insurance or of annuity that has 12
contracted with the commissioner of labor and workforce develop ment and the 13
commissioner of administration under AS 23.10.700; 14
(4) "parent" means a biological or adoptive parent, a parent-i n-law, or 15
a stepparent; 16
(5) "serious health condition" means an illness, injury, impai rment, or 17
physical or mental condition that involves 18
(A) inpatient care in a hospita l, hospice, or residential heal th 19
care facility; or 20
(B) continuing treatment or continuing supervision by a health 21
care provider; 22
(6) "state" includes the executive, legislative, and judicial branches of 23
state government, the University of Alaska, the Alaska Railroad Corporation, and 24
public corporations and authorities established by law. 25
* Sec. 2. AS 39.20.305(a) is amended to read: 26
(a) An officer or employee of the state who is otherwise qualified to take leave 27
of absence may take family leave pa id t hr o ug h t he fa m ily leave insurance policy 28
implemented under AS 23.10.700 - 23.10.790 because of a serious health condition 29
for a total of 18 workweeks during any 24-month period. An othe rwise qualified 30
officer or employee may take family leave because of pregnancy and childbirth, [OR] 31
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adoption, or foster care for a total of 18 workweeks within a 12-month period; the 1
right to take leave for this reason expires on the date one yea r after the birth or 2
placement of the child. The state may not require the employee to substitute 3
accrued paid leave to which the employee is entitled [AN OFFICER OR 4
EMPLOYEE TAKING LEAVE UNDER THIS SECTION SHALL USE ACCRUED 5
PAID LEAVE UNTIL THE OFFICER OR EMPLOYEE HAS ONLY FIVE DAYS 6
OF PAID LEAVE REMAINING. THE OFFICER OR EMPLOYEE MAY CHOOSE 7
WHETHER TO RETAIN A BALANCE OF FIVE DAYS OF PAID LEAVE AND 8
TAKE THE REMAINING LEAVE AS UNPAID LEAVE OR WHETHER TO 9
EXHAUST THE PAID LEAVE BALANCE. AFTER REDUCING ACCRUED PAID 10
LEAVE AS REQUIRED BY THIS SUBSECTION, THE OFFICER OR EMPLOYEE 11
MAY TAKE LEAVE WITHOUT PAY FOR THE BALANCE OF THE FAMILY 12
LEAVE]. If the employee is entitled to a longer period of time under AS 39.20.500, 13
then the longer period applies. An eligible employee is entitled to take family leave 14
(1) because of pregnancy and the birth of a child of the emplo yee or 15
the placement of a child, other than the employee's stepchild, with the employee for 16
adoption or foster care; the department or agency may require that an employee using 17
family leave under this paragraph take the leave in a single block of time; 18
(2) in order to care for the employee's child, spouse, or parent who has 19
a serious health condition; in this paragraph, "child" includes t h e e m p l o y e e ' s 20
biological, adopted, or foster child, stepchild, or legal ward; and 21
(3) because of the employee's own serious health condition. 22
* Sec. 3. AS 39.20.500(b) is amended to read: 23
(b) An employee is eligible to take family leave if the employ ee has been 24
employed by the employer for at least 35 hours a week for at le ast six consecutive 25
months or for at least 17 1/2 hours a week for at least 12 cons ecutive months 26
immediately preceding the leave. The leave for a state employee must [ M A Y ] b e 27
[UNPAID] leave paid through family leave insurance policy implemented under 28
AS 23.10.700 - 23.10.790. The leave for an employee of a politi cal subdivision of 29
the state may be unpaid leave. However, the political subdivisi on employee may 30
choose to substitute accrued paid leave to which the employee i s entitled. The 31
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state or the political subdivision [. HOWEVER, THE EMPLOYEE MAY CHOOSE 1
TO SUBSTITUTE, OR THE EMPLOYER] may not r e q u i r e t h e e m p l o y e e t o 2
substitute [,] accrued paid leave to which the employee is enti tled. An employer shall 3
permit an eligible employee to take family leave because of a s erious health condition 4
for a total of 18 workweeks during any 24-month period. An empl oyer shall permit an 5
eligible employee to take family leave because of pregnancy and childbirth , [ O R ] 6
adoption, or foster care for a total of 18 workweeks within a 12-month period; the 7
right to take leave for this reason expires on the date one yea r after the birth or 8
placement of the child. If the employee is entitled to a longer period of time under (a) 9
of this section, then the longer p eriod applies. An eligible em ployee is entitled to take 10
family leave 11
(1) because of pregnancy and the birth of a child of the emplo yee or 12
the placement of a child, other than the employee's stepchild, with the employee for 13
adoption or foster care; an employer may require that an employee using family leave 14
under this paragraph take the leave in a single block of time; 15
(2) in order to care for the employee's child, spouse, or parent who has 16
a serious health condition; in this paragraph, "child" includes t h e e m p l o y e e ' s 17
biological, adopted, or foster child, stepchild, or legal ward; and 18
(3) because of the employee's own serious health condition. 19
* Sec. 4. AS 39.20.500(d) is amended to read: 20
(d) During the time that an employee is on leave under this se ction, the 21
employer shall maintain coverage under any group health plan at the level and under 22
the conditions that coverage woul d have been provided if the em ployee had been 23
employed continuously from the date the leave began to the date the employee returns 24
from leave under (e) of this sec tion. [HOWEVER, THE EMPLOYER MA Y 25
REQUIRE THAT THE EMPLOYEE PAY ALL OR PART OF THE COSTS FOR 26
MAINTAINING HEALTH INSURANCE COVERAGE DURING A PERIOD OF 27
UNPAID LEAVE.] 28
* Sec. 5. AS 39.20.500(f) is amended to read: 29
(f) This section does not apply to a political subdivision of the state's [AN 30
EMPLOYER'S] small employment facility if the total number of employees employed 31
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within 50 road miles of the small employment facility, includin g those employed at 1
the facility, was fewer than 21 during the 20 consecutive workw eeks in which the 2
political subdivision of the state [EMPLOYER] employed at least 21 employees at 3
all business facilities. 4
* Sec. 6. AS 43.20 is amended by adding a new section to read: 5
Sec. 43.20.075. Family leave insurance tax credit. A taxpayer that pays for 6
family leave insurance coverage for the taxpayer's employees un der AS 23.10.720 is 7
allowed a credit against the ta xes due under this chapter for a n amount equal to 50 8
percent of the family leave insurance premium paid by the taxpa yer for the year in 9
which the premium is paid. 10
* Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 11
read: 12
TRANSITION. The procurement for family leave insurance coverage , described in 13
sec. 1 of this Act, shall be issued not later than March 31, 2026. A family leave insurance plan 14
shall be in place for state government employees and available for purchase by political 15
subdivisions of the state and priv ate employers with more than 50 employees by January 1, 16
2027. The purchasing pool shall be operational and coverage ava ilable for purchase not later 17
than January 1, 2027. 18