SB 10

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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
1  "An Act relating to family leave wage replacement coverage."
2  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
3   * Section 1. AS 23.10 is amended by adding new sections to read:
4Article 9. Alaska Paid Family Leave Plan.
5Sec. 23.10.700. Plan procurement and requirements. (a) The commissioner
6of labor and workforce development and the commissioner of administration shall
7jointly procure a family leave insurance plan that meets the requirements of
8AS 23.10.700 - 23.10.790 and secures family leave wage replacement coverage for
9(1) qualified state employees at no cost to the employees;
10(2) enrolled employees of political subdivisions of the state and private
11employers 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
13AS 23.10.730.
14(b)    The procurement of the family leave insurance plan is governed by
15AS 36.30 (State Procurement Code).
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1(c)      The Department of Labor and Workforce Development and the
2Department of Administration shall jointly evaluate responses to the procurement and
3shall contract with an insurer authorized under AS 21.09 to provide health or disability
4insurance. The insurer shall file the rates and forms for a family leave insurance plan
5with the director of insurance for approval.
6(d)      The commissioner of labor and workforce development and the
7commissioner of administration shall adopt and include in the plan, for employees of
8employers that elect to participate in the plan,
9(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
15participating employers with 50 or more employees.
16(e)      The commissioner of labor and workforce development and the
17commissioner of administration shall adopt and include in the plan, for employees
18who enroll in the plan using the purchasing pool under AS 23.10.730, procedures
19(1)   that ensure timely transmission of enrollment and eligibility
20information to the insurer;
21(2) to collect premiums from enrolled employees and from employers
22with 50 or more employees;
23(3) specifying how frequently premiums will be transmitted to the
24insurer and how penalties for late payments will be calculated.
25Sec. 23.10.710. Plan benefit and eligibility. (a) A family leave insurance plan
26procured under AS 23.10.700 must provide a participating employee wage
27replacement coverage that equals 100 percent of the employee's average weekly wage,
28up to $3,000 each week. In this subsection, "average weekly wage" means the average
29wage the employee has earned each week over the shorter of
30(1) the 52 weeks immediately preceding the period the employee takes
31family leave;
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1(2) the employee's entire current term of employment with the state,
2political subdivision of the state, or private employer.
3(b) A family leave insurance plan may not impose a minimum duration of
4family leave for wage replacement coverage. The annual duration of family leave
5wage replacement coverage under the plan is
6(1)   the entire period for which family leave is taken by a state
7employee under AS 39.20.305 or 39.20.500;
8(2) not less than six weeks of family leave for an enrolled employee of
9a participating political subdivision of the state or of a participating private employer
10or for an employee enrolled in a family leave insurance plan through the purchasing
11pool.
12(c) An enrolled employee is eligible for family leave wage replacement if the
13employee 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
16six consecutive months or for at least 17.5 hours a week for at least 12 consecutive
17months immediately preceding the leave.
18Sec. 23.10.720. Participation. (a) A political subdivision of the state or private
19employer may elect to participate in a plan procured under AS 23.10.700. A
20participating political subdivision of the state or private employer shall contract
21directly with the insurer and may choose
22(1)    the duration under AS 23.10.710(b) for which the enrolled
23employees of the political subdivision of the state or the private employer may receive
24wage replacement coverage; and
25(2) whether to provide coverage at no cost to the enrolled employee,
26pay a portion of the employee's premium costs, or require the employee to cover the
27entire premium.
28(b) An insurer may not charge a participating political subdivision or private
29employer a rate that is more than the rate paid by the state for state employee
30coverage. 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
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1employer may elect to enroll in the plan.
2(d) A participating political subdivision of the state or private employer shall
3pay premiums for an enrolled employee directly to the insurer. The employer may
4collect employee contributions, if any, by way of automatic payroll deductions.
5(e) A participating private employer that employs 50 or more employees
6(1) shall, during the time an employee is on family leave receiving
7wage replacement and paying the costs for maintaining health insurance coverage,
8maintain coverage under any group health plan at the level and under the conditions
9that coverage would have been provided if the employee had been employed
10continuously from the date the leave began to the date the employee returns from
11family leave;
12(2) shall, unless the employer's business circumstances have changed
13to make it impossible or unreasonable when a participating employee returns from
14family leave, restore the employee to
15(A) the position of employment held by the employee when the
16leave began; or
17(B) a substantially similar position with substantially similar
18benefits, pay, and other terms and conditions of employment;
19(3) may not discriminate or retaliate against an employee for taking
20family leave and receiving wage replacement benefits.
21(f) A participating political subdivision of the state and a private employer that
22employs fewer than 50 employees may collect and transmit premiums directly to the
23insurer or to the purchasing pool premium account under AS 23.10.730(d). The
24employer may collect employee contributions, if any, by way of automatic payroll
25deductions.
26Sec. 23.10.730. Purchasing pool. (a) The family leave insurance plan
27purchasing pool is established as an account in the general fund. The insurer shall
28participate in the purchasing pool.
29(b) An employee of a political subdivision of the state or of a private employer
30that does not participate in a family leave insurance plan and does not offer a family
31leave insurance benefit that is at least equivalent to the coverage provided under
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1AS 23.10.710 may use the purchasing pool to enroll in a family leave insurance plan.
2(c) The pool may be experience rated. Coverage through the pool must include
3a seven-month waiting period, a one-week elimination period, and a 60-day annual
4open enrollment period as established by the commissioner in the procurement
5process. Premiums for purchasing pool coverage may not exceed $5 for each enrolled
6employee each week.
7(d) A political subdivision of the state or a private employer that employs 50
8or more employees shall collect premiums for an employee using the purchasing pool
9by way of automatic payroll deductions and transfer the premiums directly to the
10insurer. An employee of a political subdivision of the state or of a private employer
11that employs fewer than 50 employees may pay premiums directly to the purchasing
12pool.
13(e)   The commissioner of administration shall separately account for
14purchasing pool premium payments received by the department and for payment of
15premiums to an insurer participating in a family leave insurance plan in a purchasing
16pool premium account.
17Sec. 23.10.740. Purchasing pool premium stabilization account. (a) The
18commissioner of administration shall separately account for
19(1)   premium taxes imposed on family leave insurance premiums
20written 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
23purchasing pool.
24(b) The legislature may appropriate money from the account to the purchasing
25pool to ensure that the premiums charged to participants in the purchasing pool remain
26stable from year to year and do not exceed $5 for each enrolled employee each week.
27Sec. 23.10.750. Family leave insurance advisory board. (a) The family leave
28insurance advisory board is established in the Department of Administration to support
29the commissioner of administration with implementing and administering family leave
30insurance plans.
31(b) The advisory board is composed of seven members appointed by the
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1governor as follows:
2(1) three members who represent employers;
3(2) three members who represent employees;
4(3) one member, who shall serve as chair, who is qualified, through
5training and experience, to resolve problems of family leave insurance procurement,
6eligibility, benefit design, and program administration.
7(c) The advisory board shall meet at least quarterly.
8Sec. 23.10.760. Bargaining. Notwithstanding any provision of AS 23.40.070 -
923.40.260 to the contrary, if an agreement between an employer subject to
10AS 23.40.070 - 23.40.260 and an employee bargaining organization does not contain
11provisions at least as beneficial to the employee as the provisions provided by
12AS 23.10.700 - 23.10.790, the provisions of AS 23.10.700 - 23.10.790 apply.
13Sec. 23.10.770. Report and outreach. (a) The Department of Labor and
14Workforce Development, in conjunction with the Department of Administration, shall
15prepare and submit to the senate secretary and chief clerk of the house of
16representatives by January 15 of each year a report on family leave insurance plans.
17The Department of Labor and Workforce Development and the Department of
18Administration shall include in the report a description of progress in increasing the
19rate of family leave insurance coverage of employees in the state, and
20recommendations to further increase the rate of coverage.
21(b) The Department of Labor and Workforce Development, in conjunction
22with the Department of Administration, shall develop an outreach program to educate
23employers and employees about the potential benefits of participating in a family
24leave insurance plan, including benefit structures and qualifying for the family leave
25insurance tax credit under AS 43.20.075.
26Sec. 23.10.780. Regulations. The commissioner of labor and workforce
27development and the commissioner of administration may adopt regulations to
28implement AS 23.10.700 - 23.10.790.
29Sec. 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
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1(B) 18 years of age or older and incapable of self-care because
2of mental or physical disability;
3(2) "family leave" means leave taken
4(A)   because of pregnancy and the birth of a child of the
5employee or the placement of a child, other than the employee's stepchild, with
6the employee for adoption or foster care;
7(B) in order to care for the employee's child, spouse, or parent
8who has a serious health condition; in this subparagraph, "child" includes the
9employee'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
12contractor in the business of entering into contracts of insurance or of annuity that has
13contracted with the commissioner of labor and workforce development and the
14commissioner of administration under AS 23.10.700;
15(4) "parent" means a biological or adoptive parent, a parent-in-law, or
16a stepparent;
17(5) "serious health condition" means an illness, injury, impairment, or
18physical or mental condition that involves
19(A) inpatient care in a hospital, hospice, or residential health
20care facility; or
21(B) continuing treatment or continuing supervision by a health
22care provider;
23(6) "state" includes the executive, legislative, and judicial branches of
24state government, the University of Alaska, the Alaska Railroad Corporation, and
25public 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
28of absence may take family leave paid through the family leave insurance policy
29implemented under AS 23.10.700 - 23.10.790 because of a serious health condition
30for a total of 18 workweeks during any 24-month period. An otherwise qualified
31officer or employee may take family leave because of pregnancy and childbirth, [OR]
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1adoption, or foster care for a total of 18 workweeks within a 12-month period; the
2right to take leave for this reason expires on the date one year after the birth or
3placement of the child. The state may not require the employee to substitute
4accrued paid leave to which the employee is entitled [AN OFFICER OR
5EMPLOYEE TAKING LEAVE UNDER THIS SECTION SHALL USE ACCRUED
6PAID LEAVE UNTIL THE OFFICER OR EMPLOYEE HAS ONLY FIVE DAYS
7OF PAID LEAVE REMAINING. THE OFFICER OR EMPLOYEE MAY CHOOSE
8WHETHER TO RETAIN A BALANCE OF FIVE DAYS OF PAID LEAVE AND
9TAKE THE REMAINING LEAVE AS UNPAID LEAVE OR WHETHER TO
10EXHAUST THE PAID LEAVE BALANCE. AFTER REDUCING ACCRUED PAID
11LEAVE AS REQUIRED BY THIS SUBSECTION, THE OFFICER OR EMPLOYEE
12MAY TAKE LEAVE WITHOUT PAY FOR THE BALANCE OF THE FAMILY
13LEAVE]. If the employee is entitled to a longer period of time under AS 39.20.500,
14then 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
16the placement of a child, other than the employee's stepchild, with the employee for
17adoption or foster care; the department or agency may require that an employee using
18family 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
20a serious health condition; in this paragraph, "child" includes the employee's
21biological, 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
25employed by the employer for at least 35 hours a week for at least six consecutive
26months or for at least 17 1/2 hours a week for at least 12 consecutive months
27immediately preceding the leave. The leave for a state employee must [MAY] be
28[UNPAID] leave paid through family leave insurance policy implemented under
29AS 23.10.700 - 23.10.790. The leave for an employee of a political subdivision of
30the state may be unpaid leave. However, the political subdivision employee may
31choose to substitute accrued paid leave to which the employee is entitled. The
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1state or the political subdivision [. HOWEVER, THE EMPLOYEE MAY CHOOSE
2TO SUBSTITUTE, OR THE EMPLOYER] may not require the employee to
3substitute [,] accrued paid leave to which the employee is entitled. An employer shall
4permit an eligible employee to take family leave because of a serious health condition
5for a total of 18 workweeks during any 24-month period. An employer shall permit an
6eligible employee to take family leave because of pregnancy and childbirth, [OR]
7adoption, or foster care for a total of 18 workweeks within a 12-month period; the
8right to take leave for this reason expires on the date one year after the birth or
9placement of the child. If the employee is entitled to a longer period of time under (a)
10of this section, then the longer period applies. An eligible employee is entitled to take
11family leave
12(1) because of pregnancy and the birth of a child of the employee or
13the placement of a child, other than the employee's stepchild, with the employee for
14adoption or foster care; an employer may require that an employee using family leave
15under 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
17a serious health condition; in this paragraph, "child" includes the employee's
18biological, 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
22employer shall maintain coverage under any group health plan at the level and under
23the conditions that coverage would have been provided if the employee had been
24employed continuously from the date the leave began to the date the employee returns
25from leave under (e) of this section. [HOWEVER, THE EMPLOYER MAY
26REQUIRE THAT THE EMPLOYEE PAY ALL OR PART OF THE COSTS FOR
27MAINTAINING HEALTH INSURANCE COVERAGE DURING A PERIOD OF
28UNPAID 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
31EMPLOYER'S] small employment facility if the total number of employees employed
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1within 50 road miles of the small employment facility, including those employed at
2the facility, was fewer than 21 during the 20 consecutive workweeks in which the
3political subdivision of the state [EMPLOYER] employed at least 21 employees at
4all business facilities.
5  * Sec. 6. AS 43.20 is amended by adding a new section to read:
6Sec. 43.20.075. Family leave insurance tax credit. A taxpayer that pays for
7family leave insurance coverage for the taxpayer's employees under AS 23.10.720 is
8allowed a credit against the taxes due under this chapter for an amount equal to 50
9percent of the family leave insurance premium paid by the taxpayer for the year in
10which 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:
13TRANSITION. 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.
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