Tax News Update    Email this document    Print this document  

August 4, 2021

New Hampshire law establishes a voluntary paid family and medical leave insurance program

HB 2 (§356), signed into law by Governor Sununu on June 25, 2021, allows for the creation of the Granite State Paid Family Leave Plan for the purpose of providing family medical leave insurance (FMLI) wage-replacement benefits under certain circumstances.

All New Hampshire employers may voluntarily opt into the program; however, employers with more than 50 employees that elect to participate are required to make premium contributions available to employees through payroll deduction. Employers of 50 or fewer employees may elect to offer payroll deduction and all employers may make FMLI available at no cost to employees or may partially subsidize the employees' cost.

Employees also may individually participate in the FMLI program.

Tax credit available to participating employers

Employers that choose to participate in the FMLI program will be entitled to a tax credit, allowed against FMLI premiums due, of 50% of the premium that the employer paid for FMLI coverage for the taxable period at issue.

FMLI benefits

Under the Granite State Paid Family Leave Plan, covered New Hampshire workers are eligible for a 60% wage replacement (on wages up to the Social Security wage base for the year) for up to six weeks per year for the following personal health or family reasons:

  • To care for a child or newborn within the first year of birth
  • To care for a newly adopted or foster children within the first year of adoption/foster care placement
  • To care for a spouse, child or parent with a serious health condition
  • To care for a spouse, child or parent who is in the military
  • For a personal serious health condition that is independent of employment, if the employer does not offer short-term disability insurance

Effective date

The law stipulates that, by October 1, 2022, FMLI coverage must in place for state government employees and available for purchase by other public and private employers with more than 50 employees and by individuals. The individual pool must be operational and available for use by individuals on a timetable that is sufficient to ensure that FMLI coverage is available for purchase by January 1, 2022.

Ernst & Young LLP insights

New Hampshire joins a growing list of states (California, Colorado, Connecticut, District of Columbia, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Washington) that have enacted legislation to establish a state insurance program for paid family and medical leave insurance.

For a recap of the paid family and medical leave insurance rates across the US, read our special report here.


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (


EY Payroll News Flash