EXECUTIVE SUMMARY
The United States’ failure to establish a national approach to guaranteeing that people have access to paid family and medical leave (PFML) means that people’s experiences vary by what their employers choose to offer, leaving tens of millions of working people in the United States without access to paid parental, family caregiving, or personal medical leave at their jobs.
Some states have recognized and sought to address this national gap for working families. First, over the last two decades, 14 jurisdictionsCalifornia, Colorado, Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island and Washington. have created – and many more have considered – comprehensive paid leave programs that apply nearly universally to all people working in private sector jobs in the state.
More recently, other states have taken a different approach. These states have positioned paid leave as an optional resource that employers and/or individual workers should be able to choose to purchase and, in some cases, have created incentives for them to do so. They have experimented with various market-based efforts to expand paid leave access without employer mandates or tax increases. As of the end of 2025, these policy approaches follow one of two basic models:
- Public-private partnership model: A state contracts with a private insurer to offer a standardized, opt-in paid leave product to employers and potentially individuals. Two states – New Hampshire and Vermont – have followed this approach.
- Voluntary insurance sale model: A private insurance company sells a paid leave product to an employer, with some limited state regulation but without standardized pricing or coverage. In eight states – Alabama, Arkansas, Florida, Kentucky, South Carolina, Tennessee, Texas, and Viriginia – lawmakers have passed laws authorizing the insurance commission to approve the sale of PFML products. In other states, insurers have used existing authorizations for the approval of other insurance products to ask for permission to sell PFML insurance policies.
As legislators in more states consider options to increase workers’ access to paid family and medical leave, understanding the strengths and limitations of market-based paid leave – and how coverage compares to universal, comprehensive programs – is essential. This report explores how these two market-based models at the state level have been adopted and implemented. Examining aspects of the models such as program design and flexibility, as well as insurer, employer, and worker participation, this report assesses the extent to which these approaches are increasing workers’ access to paid leave, how accessible and navigable they are for employers, and how transparent and accountable they are for evaluation.
Based on the available data, we find that public-private partnership models cover a small share of the workforce that may stall or decrease over time. The limited available evidence also suggests a real risk of adverse selection undermining the sustainability of this model. States that have authorized the sale of private insurance and private insurers themselves provide minimal information and lack transparency. There is little evidence of significant employer uptake of policies under this model, and insurance industry stakeholders do not expect this approach, absent a mandate for coverage, to generate widespread employer purchase of policies. We conclude that these approaches are ineffective at meaningfully expanding the number of workers with access to paid leave and the number of employers who decide to purchase or provide paid leave, and create risks of increasing labor market inequities.
