Paid Family Leave Insurance in North Carolina Would Improve Family Health and Economic Outcomes, Study Suggests

March 13, 2019

DURHAM, N.C. – A paid family and medical leave insurance program in North Carolina would reduce infant mortality, nursing home costs and use of government assistance, according to a new report from the Center for Child and Family Policy at Duke University.

Paid family leave insurance (PFLI) is a type of paid family leave that is publicly provided and operates statewide. PFLI programs allow employees—and sometimes employers—to pay an insurance premium and gain access to a fund from which they can draw for qualified leave purposes.

The programs aim to help workers balance both work and family, and are already established in California, New Jersey, New York and Rhode Island. Programs also are starting up in Massachusetts, Washington State and Washington, D.C. Statewide programs help workers who can’t afford to take advantage of the federal Family Medical Leave Act of 1993 (FMLA), which requires employers to provide leave but does not require them to pay employees during their time off. In North Carolina, 64 percent of eligible working people cannot afford to take unpaid medical leave.

In the report, “Paid Family Leave in North Carolina: An Analysis of Costs and Benefits,” researchers model the costs, benefits and feasibility of two policy proposals for instituting a PFLI program in North Carolina.

“We analyzed two policy options to help North Carolinians see what different types of paid family leave programs might look like,” said Anna Gassman-Pines, a professor in the Duke Sanford School of Public Policy and an associate director of the Center for Child and Family Policy. “The proposals vary in the length of leave and the dollar amount of the leave benefit.”

The proposals are based on existing policies in other states and recommendations from the bipartisan American Enterprise Institute (AEI)-Brookings Institution Project on Paid Family Leave.

Proposal A offers an eight-week paid leave with 55 percent wage replacement, while Proposal B offers a 12-week paid leave with 80 percent wage replacement. Proposal A includes a weekly benefit cap of $486, which is lower than other state-enacted policies and lower than the AEI-Brookings recommendation (about $600). Proposal B includes a weekly benefit cap of $875.

In both proposals, funding for the PFLI program would come only from employees and would allow employees paying into the fund to take leave for their own health, a new child, or taking care of an ill family member.

Proposal A Proposal B
Maximum Duration of Leave 8 weeks 12 weeks
Amount of Benefit 55% of wages up to max 80% of wages up to max
Maximum Weekly Benefit $486 $875
Wages on which premium is paid Up to $25,292 Up to $45,526
Waiting Period One week No waiting period
Eligibility Worked at least 80 hours in the last year

At least $1,560 total earnings in the last year

Worked at least 80 hours in the last year

At least $1,560 total earnings in the last year

 

In evaluating the proposals’ effects on families and society, researchers estimated that both options would reduce infant mortality, low birthweight, nursing home costs and the use of state government assistance through Temporary Assistance for Needy Families (TANF). Under proposal B, researchers project 26 infant lives in North Carolina would be saved each year.

“The effect of PFLI on infant mortality is of particular significance for North Carolina, which has one of the highest infant mortality rates in the country,” said co-author Elizabeth Oltmans Ananat.

“Saving 26 infant lives would represent a three percent decline in infant mortality, reducing the North Carolina infant mortality rate to 7.1 per 1,000, from its current 7.3 per 1,000.”  Ananat is a Sanford School professor and a fellow with the Center for Child and Family Policy.

“Given the growing elderly population in North Carolina, we also looked at the potential effect of PFLI on nursing home usage and costs,” said Gassman-Pines.

Researchers estimated 205 individuals would be kept out of nursing home care each year, cutting costs by between $16.7 million and $18.6 million, depending on the room type occupied.

Previous studies have shown that PFLI reduces the likelihood that families will use TANF. In this report, researchers estimate a PFLI program would reduce the number of individuals receiving TANF by 956, saving $451,232 to $780,096 in North Carolina’s TANF costs annually.

For more information and findings from the study, access the full report here.

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