Maryland’s Family and Medical Leave Insurance (FAMLI) program goes live with benefits in 2028, but the critical decision-making period for employers happens in 2026 and 2027. For those considering a private plan, the process introduces a unique step: collecting contributions and holding them in escrow before final plan approval. Understanding what’s required — and what isn’t — can help employers and brokers avoid unnecessary complexity.
Employers with at least one Maryland employee must register with the FAMLI division at paidleave.maryland.gov in fall 2026 and will automatically be enrolled in the state plan unless they take action to pursue a private plan. A private plan, either commercial or self-insured, must provide benefits that are at least as generous as the state plan.
1. Key decision point: declaration of intent (DOI)
To keep the private plan option open, employers must submit a DOI between September 1 and November 15, 2026.
This step is easy to underestimate, but it has real downstream implications:
Submit DOI → You can move forward with the private plan application process and follow the escrow process in 2027.
Miss DOI → You default into the state plan contribution and remittance process for 2027.
If still uncertain about whether to choose a private plan, filing a DOI leaves the window open to choose either type of plan.
2. 2027 contributions: collect now, decide later
Beginning January 1, 2027, employers must start collecting FAMLI contributions based on the state rate (currently 0.9%, generally split between employer and employee).
Here’s where Maryland’s contribution process diverges from other paid leave states: If a DOI has been accepted, employers do not send contributions to the state in 2027. Instead, they must hold all contributions in escrow while their private plan is finalized.
3. Escrow outcomes: where the money goes
What happens to escrowed contributions depends entirely on the final plan outcome:
Self-insured private plan approved: Funds can be used to pay program benefits.
Commercial (fully insured) plan approved: Employee contributions must be returned to employees. Refunds for any terminated employees should be remitted to the state.
Private plan denied or employer defaults to state plan: Contributions must be remitted to the state.
4. Choosing a plan type: different responsibilities
Employers pursuing private plans will need to decide between two FAMLI division-approved models:
Commercial private plan: Purchased through an insurance carrier, which handles claims and administration. This is typically the more streamlined option from an employer’s workload perspective.
Self-insured private plan: The employer (or partner) administers claims and assumes financial responsibility.
The right choice often comes down to how much risk and administration an employer is willing to take on.
Employer checklist: if you’re pursuing a private plan
Fall 2026 (decision and filing)
Register with Maryland FAMLI.
Evaluate state plan versus private plan strategy.
Submit declaration of intent between September 1 and November 15, 2026.
Late 2026 (operational setup)
Configure payroll to calculate and withhold contributions starting January 1, 2027.
Establish a compliant escrow process or account.
Align internally with finance, payroll, and tax teams.
Notify employees that contributions will begin January 1, 2027, at least one pay period in advance of contributions starting.
2027 (execution year)
Begin collecting contributions and hold all funds in escrow (no state remittance when pursuing a private plan).
Work with a carrier or prepare self-insured documentation for plan application.
Monitor state guidance and application timeframes.
Notify employees of upcoming benefits six months prior to the effective date.
Post-approval (still in 2027)
Self-insured: allocate escrow funds toward benefit payments.
Fully insured: coordinate return of employee contributions.
Denied or switching to state plan: remit escrowed funds to Maryland.
Ongoing
Prepare for quarterly wage and hour reporting beginning in 2027.
Communicate clearly with employees about contributions and upcoming benefits.
Bottom line
Maryland’s private plan pathway offers flexibility, but it’s not passive. The DOI deadline, escrow funding mechanics, and plan selection all require proactive coordination across payroll, finance, and benefits teams.
If 2026 is the decision year, 2027 is the execution year. Employers that plan early, especially around DOI timing and escrow setup, will have far more control over their program choices when benefits go live in 2028.