Indiana would offer optional family leave insurance to workers

Indiana's insurance department would set up and run an optional family leave insurance program. Workers who join could choose their benefit amount and how many weeks it lasts. Employers exempt from the federal family leave law could also participate. The department would have to set benefit eligibility rules that include at least the federal rules for qualifying for family or medical leave. The department would have to set up the program by January 1, 2027.

The department would put contributions into a fund that pays benefits and program costs. Workers who join would have to contribute through paycheck deductions. Employers could cover some or all of each worker's contribution. The department would have to set contribution rates at least once a year high enough to cover benefits and reasonable program costs.

Eligible employers could claim a tax deduction equal to twice their contributions to the program fund. A business qualifies if most of its employees work in Indiana and it has fewer than 50 employees on each working day during at least 20 workweeks this year or last year. The employer would need to join the program and pay some or all of an employee's contribution. The deduction would apply to tax years beginning after December 31, 2026.