Committee delays implementation dates for family leave program, keeps policy framework intact

The Economic Matters Committee voted to approve House Bill 102 as amended, which delays multiple implementation dates for the State’s family leave program and preserves the program’s overall statutory structure while directing the Department of Labor to complete regulations and actuarial work before contributions and benefits begin.

Under the amendment approved by the committee, the secretary of labor must adopt regulations by July 1, 2027, establishing an optional self-employed enrollment program and setting contribution amounts, benefit amounts and enrollment procedures. The amendment pushes contributions back 18 months: payroll withholding would begin Jan. 1, 2027 (moved from July of the earlier calendar year) and employer remittance would begin in April 2027. Weekly benefit payments were pushed back approximately 18 months as well, from a prior July 1, 2026 target to January 2028 in the amended timeline. The bill also defines an anchor date for wage and benefit calculations so that eligibility, benefit amount and maximum benefit are keyed to a single date (the earlier of when a claimant applies or when leave begins). Other conforming adjustments to reporting and notification deadlines were included in the amendment.

Committee members raised several substantive concerns during the hearing about the delay, program solvency, transparency of implementation costs, and how the program will be administered. One member noted that earlier benefit levels were set with an intent to index to inflation and warned that repeated delays will erode purchasing power; that member said they would vote for the bill despite those concerns to keep the program moving. The committee heard that previous actuarial and consultant reports exist and that an updated actuarial study is under contract and expected by the fall; staff said the study is needed to set an accurate contribution rate within statutory caps.

Department representatives and staff told the committee that the state has invested in program build-out to date (initial costs were funded in part by ARPA dollars and some general funds), and that general funds advanced to support initial work will be repaid from collections once contributions begin. Questions from members included requests for precise accounting of implementation expenditures to date and whether the program could be operated by private vendors as in other states; staff said other states vary in approach and that Maryland had made a policy decision to retain state control over benefit determinations rather than fully outsource that function.

The amendment package included a provision addressing employers with existing private plans: during the first year of transition, employers with qualifying private plans would not be required to contribute to the state fund; the committee considered and tacked on language clarifying escrow or reimbursement approaches so employers are not administratively burdened by returns. Members also discussed a small-employer consideration: firms with 14 or fewer employees are treated in the rate-setting, and the statute contemplates how those exemptions affect the pool.

Committee members asked for and were told they would receive updated actuarial reports and fiscal accounting before the next round of hearings. The committee voted to move the bill as amended.

Clarifying details from the hearing: contributions and employer withholding and remittance dates shifted by 18 months (with withholding beginning 01/01/2027 and benefit payments moved to January 2028), regulators must adopt rules by 07/01/2027, actuarial work is under contract and expected by fall, initial implementation costs used ARPA and general funds and are to be repaid from future collections, and the statute caps contribution rates while allowing the secretary to select a rate within those caps.

Committee members said follow-up briefings and turnkey actuarial materials are necessary for informed future votes.