The Green Mountain State Unveils Its Voluntary Paid Family and Medical Leave Insurance Plan

While most people were wrapped up in the inevitable hustle and bustle of the holidays, Vermont Governor Phil Scott announced the Nation’s second voluntary paid family and medical leave program, the Vermont Paid Family and Medical Leave Insurance Plan (VT FMLI). Initially part of a failed joint proposal with New Hampshire – the Twin State Voluntary Leave Plan – the VT FMLI largely mirrors New Hampshire’s Granite State Paid Family Leave Plan by establishing a State insurance program in which private employers and individuals may voluntarily participate.

Key Dates and Benefits

The VT FMLI is being rolled out in three phases. Under Phase 1, coverage will begin for State employees on July 1, 2023.  Benefits for Phase 1 employees will include up to six weeks of leave in a 12-month period, during which the employee will receive up to 60% of their average weekly wages, subject to the Social Security base benefit limit. The timing of the wage replacement payments varies depending on the reason for leave.

On July 1, 2024, Phase 2 will extend coverage to other public and private employers with two or more employees. Phase 2 employers will be able to select from several plan options that allow them to tailor their VT FMLI benefits to their business and employees’ specific needs.  The details on these “options” remain undetermined. To date, only the basic benefits have been determined, and will include six combined weeks of paid leave in a 12-month period for qualifying reasons, and benefits payable for at least 60% of an employee’s average weekly wages, subject to the Social Security base benefit limit.

Finally, on July 1, 2025, Phase 3 will extend coverage to individuals who work for employers that do not offer VT FMLI, individuals who are self-employed, and employers with one employee.  

Qualifying Events

Workers enrolled in a VT FMLI plan are eligible to use wage replacement benefits for the following life events:

1. The birth of a child and to care for a newborn child during the first year after birth;
2. An employee’s adoption of a child or placement from foster care within the first year of initial placement;
3. Caring for the employee’s spouse, child, stepchild, foster child, ward who lives with the employee, parent, or the parent of the employee’s spouse;
4. Any qualifying exigency where the employee’s spouse, child, or parent is a covered military member on “covered active duty”;
5. To care for a covered service member with a serious injury or illness, if the employee is the service member’s spouse, child, parent, or next of kin; and
6. A serious health condition that makes the employee unable to perform the essential functions of their job.

Purchasing VT FMLI

All VT FMLI plans are available for purchase through the State’s insurer partner, The Hartford. Private employers with two or more employees may select and purchase different VT FMLI plan designs, while private employers with one employee may purchase VT FMLI through the individual purchasing pool.

What Vermont Employers Should Do Now

Given that the VT FMLI is being phased in, private employers in Vermont have time to consider if and how they want to participate in the VT FMLI program. Until then, employers should continue to monitor the State and The Hartford’s website for further guidance and details.