Private plans

All employers will have the option to enroll in a private plan instead of using the State Plan. Private plans must be approved by the FAMLI Division and must provide benefits and a claims experience that are the same as, or better than, those of the State Plan.

What is a private plan?

A private plan is a FAMLI Division-approved alternative to the State Plan. Employers who want to offer a private plan will be able to submit a Declaration of Intent (DOI) to the FAMLI Division in Fall 2026 to indicate their interest. Once a DOI is accepted, the employer will still be responsible for collecting contributions and saving them in an escrow account but will not be responsible for remitting contributions in 2027. The FAMLI Division will then begin accepting formal applications for private plans in 2027.

There are two types of private plans: commercial plans and self-insured plans. Employers can seek input from employees when selecting a plan, but this is not required by law.

Commercial plans

Commercial plans are purchased from an insurance company. The insurance company processes and pays employees’ claims. Any employer can purchase a commercial plan.

Self-insured plans

Self-insured plans are insured directly by the employer. The employer or a third-party will handle and pay employees’ claims.

To be eligible for a self-insured plan, you must meet one of these requirements:

• Have at least 50 employees, OR
• Have fewer than 50 employees but had a FAMLI-compliant plan in place by July 31, 2026

Reporting requirements for private plans

Employers using a private plan will still need to submit quarterly wage and hour reports to the FAMLI Division. Additionally, employers with private plans will also need to submit claims data every quarter.

Commitment and switching plans

There may be a financial penalty if an employer leaves their private plan to join the State Plan between January 1, 2028 and December 31, 2029. Employers who choose a private plan must remain in that plan for at least one year. After one year, employers can:

• Switch to a different private plan, or
• Join the State Plan

Approved plan changes take effect at the beginning of the next quarter. There can be no gap in coverage.

What will a private plan cost?

Private plan contribution rates

While the Maryland Department of Labor sets the contribution rate for the State Plan, private plans set their own rates. Private plans are not required to charge all employers the same rate.

Important: Employees cannot be charged more in a private plan than they would pay in the State Plan. The Maryland Insurance Administration (MIA) regulates insurance products to ensure compliance.

Application fees

Employers applying for a private plan will need to pay an annual application fee based on plan type and employer size.

Self-insured plan fee:

• $1,000 (all employer sizes)

Commercial plan fees (based on the number of employees localized in Maryland at the time of application):

• $100 for employers with 1-14 employees
• $250 for employers with 15-49 employees
• $500 for employers with 50-199 employees
• $600 for employers with 200-499 employees
• $750 for employers with 500-999 employees
• $1,000 for employers with 1,000 or more employees