Maryland’s Family and Medical Leave Insurance program, or FAMLI, will provide eligible employees with paid leave for qualifying family and health needs beginning in January 2028.
Contributions begin January 1, 2027. That puts registration, payroll setup and employee notices on the list well before benefits become available.
You may also have heard about a November 15 deadline for “private plans.” That applies to a particular alternative to Maryland’s State Plan, not to every employer’s next step. Let’s start with what those choices mean, then sort out the work that applies to your business.
Maryland’s November 4 employee-notice guidance gives employers another part of the preparation they can complete now.
First, confirm how FAMLI applies to your business
Employers with at least one employee working in Maryland generally must register with FAMLI, including small businesses.
There is an important distinction for someone who is both the owner and the sole employee. Maryland’s current employer guidance expressly includes an S corporation in that situation and says the owner/sole employee is not considered an employer for FAMLI registration purposes. This is a narrow distinction, not a general exemption for S corporations or businesses with additional employees. If it describes your situation, confirm the facts with FAMLI before deciding registration is unnecessary. The state plans to offer an optional self-employed pathway separately.
If your employees work across state lines, review where their work is localized rather than relying only on your office address or where they live. And if you work with a professional employer organization, confirm which registration arrangement applies to your business.
The State Plan and a private plan, in plain English
When a covered employer registers, it is automatically enrolled in the State Plan. Maryland runs that plan, collects the required contributions and pays approved benefits.
A private plan is an alternative that the employer chooses and the state must approve. One option is to purchase coverage from an insurance company, which then processes and pays employees’ claims. Some employers can qualify to fund and administer their own approved plan, called a self-insured plan.
Whichever private option an employer uses, it must provide at least the same benefits and level of service as the State Plan. Simply having paid time off or a disability policy does not automatically make it an approved FAMLI private plan.
You can meet FAMLI’s requirements through the State Plan. If that is your route, you do not need the private-plan Declaration of Intent discussed below. You still need to handle registration, payroll, notices and reporting.
If you are interested in private coverage, talk with your insurance professional about cost, coverage and administration before deciding. Private plans are not automatically cheaper, and an employer cannot charge employees more than the State Plan allows.
Why consider a private plan, and who might benefit?
The useful question is whether a particular plan offers enough value for your business and employees to justify the extra work.
For the business, there may be a cost advantage. Private plans set their own rates, which can vary between employers. A competitive quote may be worth comparing with your State Plan cost. Include the annual application fee, administrative costs and the time needed for approval, reporting and recordkeeping. A lower quoted rate alone does not establish a lower total cost, and a private plan can cost more than the State Plan.
For a business with an existing substantial paid-leave program, there may be a better fit with what it already provides. Maryland allows eligible employers to seek approval for a self-insured plan that meets every FAMLI requirement and demonstrates financial solvency. That can be worth exploring when the business already has the funding and administrative capacity to manage leave. Existing paid time off does not qualify automatically. A commercial plan is another option, with an insurance company processing and paying claims.
For employees, the potential advantage is more generous benefits or service. Every approved private plan must at least match the State Plan. A plan may offer more, but check the actual policy rather than assuming it does. Employees cannot be charged more than they would pay under the State Plan. An employer’s lower cost does not automatically mean a lower employee deduction.
Small employers should pay particular attention to the comparison. Under the State Plan, businesses with fewer than 15 employees are exempt from the employer contribution share. They still handle the employee share, but there may be little or no employer contribution expense for a private plan to reduce. Compare your own cost, not the full 0.9% rate, with the private quote. Employer-funded employee contributions and administrative expenses also matter.
There is no business size that automatically makes a private plan the better choice. It is most worth a closer look when a specific quote, benefit improvement or existing leave program offers a clear advantage, and the employer can handle the additional responsibilities. State Plan employers are not individually charged more because their employees use more benefits; ask how a private plan’s renewal pricing works before comparing long-term costs.
Maryland’s private-plan rules and contribution guidance
What the November 15 deadline actually covers
For employers pursuing a private plan, November 15, 2026 is the deadline to submit a Declaration of Intent, or DOI, if they want the 2027 exemption from sending contributions to the State Plan while their private-plan application is pending. Maryland calls this initial funding period the seeding period.
The declaration comes before the full private-plan application. Those applications are expected to open in summer 2027 and are due October 1, 2027 for employers using the DOI process.
Here is the practical sequence:
- Have an Authorized Officer register the employer. Your accountant or payroll provider cannot complete that initial registration for you as a third-party agent. Separate EINs require separate registrations and declarations.
- Discuss the plan with an insurance professional. A licensed insurance agent or another representative of an insurance company in Maryland must complete and sign the state’s Proof of Private Plan Consultation form.
- Submit the declaration and signed form through the employer’s FAMLI account. The Authorized Officer handles this step. Incomplete, unsigned, unreadable or separately submitted forms will not be accepted.
- Keep the confirmation and watch for the decision. Maryland says it will notify the Authorized Officer of the outcome within 15 business days. A submission confirmation is not the same as an accepted declaration.
Before submitting, understand the commitment. Maryland’s escrow guidance says the DOI is legally binding and cannot be revoked once submitted. Review the plan costs, administrative responsibilities and escrow requirements with your advisers first.
The November deadline concerns this seeding-period exemption. Employers can also move from the State Plan to an approved private plan later, subject to the state’s rules and no gap in coverage.
Private-plan requirements and consultation form
The escrow money still needs a place in your budget
An accepted DOI changes where the required contributions go while the private-plan application is pending. Employers generally must fund an escrow account with the amount that otherwise would have gone to the State Plan. There is a limited statutory exception for certain governmental employers.
The account must be strictly separate from other money. Work with your financial institution to set it up; FAMLI does not administer it for you.
Maryland’s guidance also sets different deposit timing for the two shares:
- Employee amounts withheld must go into escrow immediately after each pay period.
- Required employer contributions must be deposited by the quarterly due date. The first is April 30, 2027.
The escrow amount is based on the State Plan contribution requirements, even if an insurance company quotes a lower premium. An employer may choose to fund the required amount itself instead of withholding from employees.
Keep employee-level records of the money going in. If a commercial private plan is approved, employee contributions must be returned to the employees, along with their share of any interest. Approved self-insured plans have different options for using the funds.
If an employer fails to apply by October 1, 2027, or its application is denied, the state can require the past-due contributions plus applicable interest or penalties. Employers cannot make up a shortfall by retroactively withholding extra amounts from employees. That is a good reason to sort out the accounting before the first payroll.
Maryland’s DOI escrow guidance
What the contribution can look like on a paycheck
For 2027, the State Plan’s total contribution rate is 0.9% of covered wages, up to the Social Security wage cap. Employers may withhold no more than 0.45% from employees.
For a simple example, take $2,000 of covered wages for a pay period, assuming the employee remains below the annual wage cap:
- The maximum employee withholding is $9.
- For an employer with 15 or more employees, the employer’s required share is another $9.
- An employer with fewer than 15 employees is exempt from the employer share, but still must remit the employee share or fund it on the employee’s behalf.
The small-employer count includes employees inside and outside Maryland under the same EIN. It is not limited to the people working at your Maryland location. During 2027, the state determines eligibility for the small-employer rate each quarter.
If you choose to pay some or all of the employee share, coordinate the payroll and tax treatment before making the change. Private-plan pricing can also differ from the State Plan, while the limit on what you can charge employees still applies.
Contribution rates and small-employer rules
Complete the employee notice to match your payroll
The November 4 guidance requires written notice one pay period before the January 2027 deductions begin. Employers covering the entire employee share must also provide notice. The withholding-notice requirement also applies when an employee is hired.
Download the state’s 2026 Required Employee Notice Template. In the “Employer to Complete” box, enter the percentage your business will withhold from employees. It cannot exceed 0.45%. If the business will cover the full contribution, enter 0%.
Each employee must receive the notice in writing. Maryland allows delivery by methods such as print, email, mail or an employee portal designed to provide individual notices. An employee signature is recommended, but not required. Keep a record of what you provided and when.
Use the state’s instructions carefully when customizing the template. Employers are responsible for their changes, so a heavily rewritten notice may need its own compliance review.
A separate benefits-and-rights notice must be provided to current employees by July 1, 2027. Maryland will issue a 2027 template for that requirement. Put that date on your calendar as well.
Employee-notice instructions, issued November 4, 2026
Give each piece an owner
Before the year-end rush, confirm who will handle registration, the insurance discussion if applicable, payroll configuration, employee notices, and quarterly reporting. Employers using private plans still have wage-and-hour reporting responsibilities.
The first quarterly wage-and-hour report and State Plan payment cover January through March 2027 and are due April 30, 2027. An accepted DOI changes the payment destination, but the reporting work still needs to happen.
I would rather have the payroll settings, the employee notice and the bookkeeping agree in advance than discover three different answers when someone asks about their January paycheck.
If you’d like help reviewing the payroll and bookkeeping pieces, get in touch with us at Century. Work with your insurance professional on the plan choice and seek employment-law guidance when you need advice about legal obligations or leave policies.
This article reflects Maryland guidance checked November 5, 2026 and provides general information. Your business’s circumstances may require a separate review.
