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. 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.

All employers, regardless of plan type, must submit quarterly wage and hour reports starting in April 2027.

How to apply for a private plan

Employers who want to offer a private plan can submit a Declaration of Intent (DOI) to the FAMLI Division in Fall 2026. The FAMLI Division will begin accepting formal applications for private plans in 2027.

What you need to do after your DOI is accepted

Once your DOI is accepted, you’ll collect contributions starting in January 2027 but won’t remit them to the State. Instead, you must hold all contributions in an escrow account. You can collect contributions from your employees or self-fund the escrow account. (Note: There is a statutory exception to this requirement for certain governmental employers.)

What happens to the escrow funds

What happens to the money in your escrow account depends on your final plan status:

If you’re approved for a self-insured private plan: You can use the escrowed contributions to fund a separate account used solely for FAMLI benefits.

If you’re approved for a commercial private plan: You must return any employee contributions to your employees.

If your application is denied or you choose the State Plan: You must remit the escrowed contributions to the State.

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 agent) handles and pays employees’ claims.

Who can self-insure

Employers with 50 or more employees localized in Maryland can apply for a self-insured private plan.

There is one exception: Employers with fewer than 50 employees can apply for a self-insured plan if they already have their own FAMLI-compliant plan in place by July 31, 2026.

What you’ll need to apply

To be eligible for a self-insured plan, you must submit:

• A completed application
• Your family and medical leave insurance policy that meets or exceeds the State Plan benefits
• Proof of solvency (as demonstrated by a surety bond)

If you submit a Declaration of Intent to be self-insured before the formal application becomes available, you must also meet with an insurance provider to discuss available commercial private plans and obtain their signature.

Employee contributions for self-insured plans

If you have an approved self-insured plan, you can withhold contributions from employees, but you’re not required to. If you choose to withhold contributions from employees:

You cannot withhold more than the employee contribution rate under the State Plan

You must maintain FAMLI-related funds in a separate account used solely for FAMLI benefits

Reporting requirements for private plans

Employers using a private plan must still submit quarterly wage and hour reports and claims data to the FAMLI Division. While all employers submit quarterly wage and hour reports, reporting claims data is an additional requirement for employers who choose to enroll in a private plan.

All employees reported under your EIN must be enrolled in the same plan. You cannot offer different plans to different groups of employees—whichever plan you choose must cover all employees.

Commitment and switching plans

Employers who choose a private plan must stay in that plan for at least one year. After one year, you can apply to switch to a different private plan or join the State Plan. You can also leave the State Plan and join a private plan as long as the change does not result in a lapse in coverage.

Note: If you leave your private plan to join the State Plan you should be aware of the following requirements:

Joining between January 1, 2028 and December 31, 2028: Employers will owe contributions dating back to January 1, 2027, plus interest, and must begin collecting contributions going forward. Additional financial penalties may apply.

Joining between January 1, 2029 and December 31, 2029: Employers will owe half of the contributions due since January 1, 2027, plus interest, and must begin collecting contributions going forward. Additional financial penalties may apply.

The timing of your transition will determine the amount of back contributions owed.

When you switch plans, employees can access benefits immediately—there is no waiting period. All approved plan changes take effect at the beginning of the next quarter, and there can be no gap in coverage.

What will a private plan cost?

Private plan contribution rates

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

Important: Private plans can charge employers more than the State Plan rate. However, you cannot withhold more from your employees than they would pay under the State Plan. For example, if the State Plan contribution rate is 0.9%, you cannot withhold more than 0.45% (50% of 0.9%) of an employee’s wages, even if your private plan charges you a higher rate. 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