By: Kevin O’Toole
In the spring of 2022, the Maryland Legislature passed the Time to Care Act which established Maryland’s Family and Medical Leave Insurance (FAMLI) Program. While employees are not able to begin receiving benefits from this program until July 1st, 2026, there are essential decisions that Maryland employers will need to make early this year that will impact budgets for 2025 and beyond.
What is MD Paid Family and Medical Leave? The basics.
What is Maryland Paid Family Medical Leave?
Maryland Family and Medical Leave Insurance (FAMLI) is a state-mandated program that ensures eligible Maryland workers can take up to 12 weeks off from work to care for themselves or a family member and still receive up to $1000 a week in income.
Employees are eligible to begin receiving PFML benefits starting July 1, 2026.
Are all employers required to offer PFML benefits?
To comply with Maryland law, any person or entity that employs at least one person in Maryland must offer PFML benefits.
What employees are eligible?
An eligible employee is defined as someone who has worked at least 680 hours in the state of Maryland over the four most recent quarters immediately prior to the leave start date. This definition of employee includes part-time and seasonal workers. Employees do not have to work 680 hours for the same company to qualify as long as they have met the 680 hours criteria in Maryland over the prior four quarters.
What are the qualifying leave reasons?
Under MD PFML, an employee can take up to 12 weeks of PFML leave for the following reasons:
- Own medical care
- Care of a Qualified Family Member
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- Qualified Family Members include spouse, child, parent, parent-in-law, sibling or stepsibling, grandparent, grandparent-in-law, grandchild, and domestic partner.
- Bonding with a new child
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- NOTE: An additional 12 weeks of benefits for bonding are available to an employee with a serious health condition in the same benefit period in which they have a child.
- Care of a service member
- Military qualifying exigency
How will this program be funded? What options are available to employers?
Employers have multiple options for complying with the FAMLI regulation. First, there will be a state program administered by the Maryland Department of Labor’s new FAMLI Division. Under the state program, both employers and employees will begin pre-funding the program on July 1st, 2025, to build up reserves for when the program’s benefits go live 12 months later.
While the state program serves a valuable role in this new system, particularly for smaller employers, employers should consider alternative options that could be more cost-effective ways to comply with the mandate. Employers can offer a private plan to meet the FAMLI regulations.
The private plan option allows employers to fund this benefit through either a commercial insurance plan offered by an insurance carrier or by self-funding the plan. Employers adopting private plan options can achieve significant cost savings compared to the state plan because 1. There is no pre-funding requirement, and 2.) the contribution rate can be lower than the state plan’s rate. 3. In some cases, additional administrative and compliance support is available.
To learn more about FAMLI, or for assistance in determining which funding mechanism is best for your business, please reach out to our Paid Family and Medical Leave experts at MDFAMLI@tribridgepartners.com or visit www.tribridgepartners.com/mdfamli and register for our upcoming webinar
Important Dates for FAMLI
- February 5, 2025: 10:00am TriBridge Partners Family and Medical Leave Insurance (FAMLI) Information and Updates Webinar Register now: https://bit.ly/4a6eerX
- May 1,2025 – May 30, 2025: Declaration of Intent (DOI) submission period for July 1, 2025 contribution exemptions. All employers intending to opt out of the state-administered program will need to submit a DOI by 5/30/2025.
- July 1, 2025: Contribution deductions begin for state plan participants and those without an approved DOI. The contribution exemption effective date for employers is with an approved DOI.
- July 1, 2026: Program goes live, and benefits become payable.
