Maryland’s Paid Family and Medical Leave Insurance (FAMLI) program—created under the Time to Care Act—will soon provide workers with paid, job-protected leave for major life events. With payroll contributions starting January 1, 2027, and benefits expected to begin in 2028, employers now face an important decision:
- Stick with the State Plan—or apply for a Private Plan?
What Is Maryland FAMLI?
FAMLI is a statewide insurance program covering nearly all Maryland employers and employees.
Key features:
- Up to 12 weeks of paid leave per year (up to 24 weeks in certain cases)
- Up to $1,000/week in benefits
- Covers:
- Bonding with a new child
- Serious personal health conditions
- Caring for family members
- Military-related needs
- Funded through payroll contributions shared by employers and employees
All employers with at least one Maryland employee must participate—either through the State Plan or an approved Private Plan.
Option 1: The State Plan
The State Plan is administered by the Maryland Department of Labor and is the default option.
How it works:
- Employers automatically enroll when registering with the state
- Employers send payroll contributions to the state fund
- The state processes claims and pays benefits
Option 2: Private Plans
Employers can opt out of the State Plan by offering an approved private plan (sometimes called an “Equivalent Plan” or EPIP).
- Commercial (Insured) Plan
- Purchased through an insurance carrier
- Carrier handles:
- Claims processing
- Benefit payments
- Easier to administer than self-insured
- Predictable costs
- Self-Insured Plan
- Employer funds and manages the program directly
- Employer (or third-party administrator) handles claims
- Maximum flexibility
- Potential cost savings over time
- Self-Insured Plan REQUIRES:
- Financial stability proof
- Administrative infrastructure
- At least 50 employees (with limited exceptions)
- Self-Insured Plan REQUIRES:
Key Private Plan Rules
- Private plans must provide benefits and protections that are equal to or better than the State Plan.
- Must be approved by Maryland’s FAMLI Division
- Must match or exceed state benefits
- Employers must apply (starting in 2027)
- Declaration of Intent due by November 15, 2026, if avoiding early state contributions
Timeline Employers Should Know
- Fall 2026 – Employer registration opens
- Sept 1–Nov 15, 2026 – Private plan Declaration of Intent window
- Jan 1, 2027 – Payroll contributions begin
- 2027 – Private plan applications submitted
- Jan 2028 – Benefits become available
State Plan vs. Private Plan: Side-by-Side
| Feature | State Plan | Private Plan |
| Administration | State-run | Employer or insurer |
| Claims handling | State | Carrier or employer |
| Flexibility | Low | High |
| Compliance risk | Low | Moderate |
| Cost control | Limited | Potentially better |
| Integration with existing benefits | Limited | Strong |
| Setup complexity | Minimal | High |
Action Steps for Employers
To prepare for FAMLI:
- Assess your current benefits
- Review parental leave, STD, PTO, and leave policies
- Evaluate plan options
- Compare State Plan vs. Private Plan costs and administration
- Plan for contributions
- Prepare payroll systems for 2027 deductions
- Watch key deadlines
- Consider submitting a Declaration of Intent in 2026 if pursuing a private plan
- Communicate early
- Begin educating employees about upcoming benefits
Final Thoughts
Maryland FAMLI introduces a major new benefit—and a strategic decision for employers.
- The State Plan offers simplicity and ease
- A Private Plan offers flexibility, integration, and potential cost advantages
The right choice depends on your organization’s size, resources, and long-term benefits strategy. Contact Connie Phillips Insurance today to discuss the best option for you.