A Framework for Maryland's FAMLI State or Private Plan
If you employ even one person in Maryland, registering with FAMLI enrolls your business in the State Plan automatically. A private plan is still an option, but employers who want to skip remitting 2027 contributions while they apply must file a Declaration of Intent by November 15, 2026.
Choosing between the Maryland FAMLI state plan and a private plan comes down to three questions. What will each cost a business your size, and how much reporting and escrow work will each add? And what does it take to commit to a private plan, or to leave one later? Start with what a private plan changes, because the answers look very different for a team of 10 than for a team of 60.
Which FAMLI Plan Does Your Business Get by Default?
Registration puts your business in the State Plan automatically, and only an approved private plan moves you out. Because any employer with at least one Maryland employee must register with FAMLI, the State Plan applies to you whether or not you've made a choice.
Contributions begin January 1, 2027, at 0.9% of wages up to the Social Security cap. You can withhold up to 0.45% from your employees' pay and cover the rest yourself. If you have fewer than 15 employees, you remit half the rate and can withhold all of it from staff. Count every employee when you check that number, in Maryland and in other states alike. Since the full half comes out of employee pay, the State Plan can cost a small employer nothing out of pocket.
The Declaration of Intent window runs September 1 to November 15, 2026. November 15 is a Sunday, so treat Friday, November 13 as the practical deadline.
A Declaration of Intent lets you hold your 2027 contributions in escrow while a private plan application is pending. Before you file one, you'll want to know what a private plan changes.
What Does a Private FAMLI Plan Change?
A private plan replaces the State Plan for every Maryland employee under your EIN. Each plan sets its own rates, though your employees can't pay more than the State Plan rate. The Maryland Department of Labor allows a private plan to charge employers more than the State Plan would, so price is where the comparison starts.
Fully Insured Commercial Plans
Any employer can buy a commercial plan, whatever its size, and each insurer sets its own rates. The application fee is annual and follows the number of employees localized in Maryland. MD Labor's shorthand test is whether you pay Maryland unemployment insurance on the employee. Fees start at $100 for 1 to 14 employees and $250 for 15 to 49. They reach $1,000 at 1,000 or more.
A Declaration of Intent also requires a consultation with a licensed insurance agent or another insurer representative, who signs the state's proof form. That form notes that agents may receive commissions from insurers. We administer benefits plans but don't broker them, so we have no plan to sell you. You'll still need that consultation for a Declaration of Intent.
Self-Insured Plans and the 50-Employee Line
Self-insurance means funding the benefits yourself, and Maryland reserves it for employers with 50 or more employees. An exception covered smaller employers with a compliant plan in place by July 31, 2026, though that date has now passed. The application fee is a flat $1,000. With both routes on the table, you can start weighing them.
How Should You Weigh the Two Plans?
Take the three questions in order, beginning with what each plan would cost a business your size.
Cost Exposure at Your Headcount
The State Plan charges 0.9% of wages for 2027, and the Department of Labor's contributions FAQ spells out who carries it. With fewer than 15 employees, you remit half the rate and can pass all of it to your staff. At 15 or more, you can withhold up to 0.45% and pay the remainder yourself.
Your State Plan cost doesn't rise with how often employees file claims, although a private plan may be structured differently. Private rates vary, and commercial plans don't go on sale until summer 2027, so any quote you get this fall is illustrative and not binding. Ask for one based on your payroll anyway, and add the annual application fee.
Reporting and Escrow Duties
Whichever plan you choose, every employer files quarterly wage and hour reports starting in April 2027. A private plan adds quarterly claims data and five years of recordkeeping, and FAMLI can terminate a plan that falls out of compliance.
Escrow applies only if you file a Declaration of Intent, and where the money ends up depends on what happens to your application.
An approved commercial plan returns the employee share to employees.
An approved self-insured plan may use the escrow to seed its fund.
A denied application, or a move to the State Plan, leaves the escrow owed to the State.
Commitment and Exit Costs
The Department of Labor expects private plan employers to stay at least one year. Approved changes take effect at the start of the next quarter, with no gap in coverage.
The heavier exposure falls on employers who filed a Declaration of Intent. They must offer the private plan to every Maryland employee from January 2028, and applications are due October 1, 2027. If FAMLI approves no plan before January 2028, the state's consultation form says they owe all unpaid employer and employee contributions plus interest and penalties.
Leaving later has a price for those same employers. A move to the State Plan in 2028 means repaying contributions back to January 1, 2027, plus interest, while a move in 2029 means repaying half. The state adds that additional financial penalties may apply. Whether those terms are manageable depends a great deal on how big your business is.
Which Plan Fits a Business Your Size?
Under 15 employees, the State Plan can carry no employer cost. Between 15 and 49, commercial plans are the main private route, and self-insurance opens at 50.
Business sizeState PlanPrivate plan routeWhat to weighUnder 15 employeesHalf of the 0.9% rate, which you can withhold from staffCommercial plans (self-insurance only under a narrow exception)An illustrative quote against a State Plan cost that can already be zero15 to 49 employeesFull 0.9% remitted, with up to 0.45% withheld from staffCommercial plans (self-insurance only under a narrow exception)Rate, claims reporting, and the one-year expectation50 or more employeesFull 0.9% remitted, with up to 0.45% withheld from staffCommercial or self-insuredThe $1,000 self-insured fee plus funding the benefits yourselfMultistate employersOwed only on Maryland-localized positionsMust cover Maryland-localized employeesWho counts as localized before you price anything
Multistate employers keep two separate headcounts. Every employee counts toward the 15-employee line, in every state, though independent contractors don't. For contributions and eligibility, only Maryland-localized positions count. An out-of-state remote worker for a Maryland employer isn't covered, while a Maryland remote worker for an out-of-state employer is.
MD Labor's private plans FAQ counts only Maryland-localized employees toward the 50-employee self-insurance line. Sorting out which employees count where is the kind of multistate payroll and compliance work we do with distributed teams. Once you know where you land, the rest comes down to a calendar.
What Has to Happen Before November 15?
Your Authorized Officer has to file a Declaration of Intent between September 1 and November 15, 2026. A signed consultation form from an insurance agent or insurer representative goes with it. These steps take you from the default to a decision.
Count your employees twice, once across every state and once for Maryland-localized positions only.
Answer the three questions with real numbers, including an illustrative quote if you're leaning private.
Meet with a licensed insurance agent or another insurer representative, who signs the Proof of Private Plan Consultation.
Have your Authorized Officer file a Declaration of Intent for each EIN by Friday, November 13.
Mark the calendar for January 1, 2027 (contributions begin), April 30, 2027 (first quarterly payment for State Plan employers), and October 1, 2027 (private plan applications due).
If the State Plan fits, skip the Declaration of Intent and register with FAMLI as required. The dates are fixed, while the fit is a judgment call that depends on your numbers.
Make the Choice Before the Window Closes
Maryland made the State Plan the default, and whether it fits depends on your headcount. An employer under 15 can owe nothing out of pocket, while a larger team weighs the State Plan against a commercial plan's annual fee, claims reporting, and one-year expectation. Self-insurance joins the options at 50 or more. A Declaration of Intent adds escrow and repayment terms that stay with you until FAMLI approves a plan. Run your own numbers before you decide.
People Operations Partners (POP) isn't a law firm. How these rules apply to you depends on your headcount and circumstances. Confirm the details with POP or qualified counsel before you file. The window closes November 15, and talking through your situation with POP starts with a free call.
