The Leave That Was Built for Babies

California has paid family leave insurance for more than twenty years, and in the state fiscal year that ended this June it processed 336,952 claims. Of those, 288,385 were for bonding with a new child and 48,464 for caring for a seriously ill family member. Caregiving was 14.4 percent of the total, and it has sat between 14.4 and 15.5 percent in every one of the last six years. Washington shows the same shape: of 321,426 applications in its 2025 fiscal year, family bonding was 28 percent and family care 17.

That split is worth holding onto, because the people filing those care claims are not caring for children. Among California's care claims, 37 percent were for a parent and 30 percent for a spouse. The country has roughly 59 million family caregivers, providing care worth more than a trillion dollars a year by one estimate at an average of 27 hours a week, and the insurance built to help them is used overwhelmingly for something else.

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Where the Programs Are

Sixteen states and territories now run a paid family or temporary disability insurance program, and the newest are arriving now. Delaware began collecting contributions in January 2025 and opened claims this January. Maine begins paying benefits in May. Maryland is furthest out, with contributions scheduled for January 2027 and benefits for January 2028.

The terms vary more than the existence of a program does. New York pays 12 weeks at 67 percent of the average weekly wage, capped at 1,228.53 dollars, on an employee contribution of 0.432 percent. Massachusetts pays up to 12 weeks to a maximum of 1,230.39. Colorado pays 12 weeks to a maximum of 1,448 from July, on a premium of 0.88 percent split evenly between employer and worker. Washington raised its premium to 1.13 percent in January, from 0.92, and its average paid benefit runs around 1,045 a week.

California is the outlier that matters here. It pays up to 8 weeks of family leave rather than 12, to a maximum of 1,765 dollars. Delaware is narrower still: 6 weeks of caregiving leave within a 24-month period, against 12 weeks of bonding leave annually.

The Mechanics of a Benefit Most Claims Do Not Use

Three structural features explain why a program with these numbers produces so few care claims.

The first is that bonding leave has a date. A birth is scheduled, the leave planned months ahead, and the employer expects it. A parent's hospitalization is not scheduled, and the adult child managing it is improvising across a few days rather than applying for a benefit measured in weeks.

The second is that eligibility runs through employment, and the people doing the most caregiving often have the loosest attachment to it. Someone who has already cut back to part-time or left work to provide care has stepped outside the system that would have paid them for it.

The third is definitional, and the one most people get wrong.

Who Counts as Family

The programs disagree about who a person may take leave to care for. Massachusetts and Washington are broadest: both reach parents-in-law, grandparents and siblings, and Washington's definition since 2021 extends to chosen family, meaning any individual where the relationship creates an expectation of care. New York covers a spouse, domestic partner, child, parent, parent-in-law, grandparent and grandchild, but not siblings. Delaware covers only a child, spouse or parent, and names parents-in-law and siblings as relatives who do not qualify.

The federal unpaid baseline is narrower than any of them. Family and Medical Leave Act leave covers a spouse, child or parent, where parent means a biological, adoptive, step or foster parent or someone who stood in the place of one. A parent-in-law is not covered. Neither is a grandparent or a sibling.

What the Federal Floor Actually Reaches

The Act's coverage is thinner than its reputation. It applies to employers with 50 or more employees, and to an employee who has worked at least 12 months, logged at least 1,250 hours in the past year, and works at a site with at least 50 employees within 75 miles. The Labor Department's own survey puts the share of employees meeting all of it at 56 percent. Twenty-one percent fail only on hours or tenure and 15 percent only on worksite size. Seventy-six percent have heard of the law, and 56 percent believe it covers more reasons for leave than it does.

A benefit designed around a predictable event, administered through an employer, and defined by a relationship list that often stops at a parent is a poor fit for the caregiving crisis most households eventually face. Two things are worth checking before the crisis. How many weeks your state allows for caring for a family member rather than a new child, because those numbers differ in California and Delaware. And the relationship list, since the difference between a parent and a parent-in-law decides the claim in several states.

DISCLAIMER

The content in this email does not constitute an offer or solicitation to buy or sell any financial instrument. All commentary is general in nature and is not directed at any individual investor.

— John Stone