Maine hearing pits department against businesses over private pooled PFML plans
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Summary
A joint Labor Committee hearing on LD 2018 heard the Department of Labor argue that private pooled employer trusts are not authorized under Maine's PFML law and could destabilize the public risk pool; businesses countered that the statute does not expressly prohibit pooling and warned that retroactive restrictions would punish employers who relied on existing approvals.
Representative Christy Matheson presented LD 2018 on behalf of the Maine Department of Labor, saying the measure clarifies that private group trusts or pooled employer risk‑sharing arrangements that lack state insurance oversight are not permitted under Maine's Paid Family Medical Leave (PFML) law. Matheson said the state plan, built around a single public risk pool, was adopted to ensure stability and protections for thousands of workers and that new, unregulated pooling would undermine that design.
Luke Monahan, director of the Bureau of Paid Family Medical Leave, told the committee the PFML statute created a state trust fund and explicitly authorized only two private alternatives: a fully insured commercial plan or an individually self‑insured employer plan. Monahan said private group trusts were not contemplated in the commission work, were not discussed in rulemaking, and that the Department has interpreted the statute as not authorizing pooled trusts. He added that allowing multiple risk pools reduces pool size and increases long‑run costs, potentially shifting burden to small businesses.
Business groups, manufacturers and individual employers testified in force against LD 2018. Amanda Johnson of the Maine State Chamber of Commerce and other witnesses said self‑insurance with surety bonds already is a lawful compliance path under Title 26 and that LD 2018 would add new restrictions without evidence of benefit shortfalls or fund insolvency. Several owners and trade representatives said employers invested time and money to comply under existing guidance and that retroactive application would be unfair.
Insurance expert Joe Edwards, a former state insurance superintendent, told the committee many of the arrangements DOL called "group trusts" were in practice individually approved self‑insurance filings supported by surety bonds, and that the department's concern about a shared administrative vendor or bulk bond purchaser did not necessarily create a regulated "trust" that the Bureau of Insurance would need to supervise. Edwards said the statute contains two requirements for individual self‑insurance—DOL approval and a surety bond—and argued those are sufficient to protect benefit delivery.
Monahan and others acknowledged there is one employer currently in litigation over their plan and that the Department held but did not revoke other pending applications while the legal matter proceeds. Monahan urged study and possible statutory or regulatory changes rather than a last‑minute policy shift that could destabilize the program before benefits begin on May 1, 2026.
The hearing produced no vote. Lawmakers requested additional materials for the work session, including statutory references cited by the Department, actuarial studies, and information from the Bureau of Insurance and third‑party administrators. The committee closed the LD 2018 public hearing after hearing pro and con testimony.