Chapter 03. Equivalent Private Insurance Plans
Regulation .01 Definitions.LinkCopy Citation
A.
In this chapter, the following terms have the meanings indicated.
B.
Terms Defined.
(1)
“Declaration of intent (DOI)” means a legally binding, signed attestation from an employer documenting the employer’s intent and commitment to provide an approved EPIP with an effective date of January 1, 2028.
(2)
“EPIP application” means an application submitted to the Division for approval of an EPIP in which the employer offers a private plan where the employer assumes all financial risk associated with the benefits and administration of the EPIP, whether it is administered by the employer or a third-party administrator.
(3)
“Good cause” means an extraordinary circumstance which a person of ordinary business prudence and intelligence would consider reasonable cause for an extension.
(4)
“Insurance producer” has the meaning as defined in Insurance Article, §1-101(u), Annotated Code of Maryland.
(5)
“Seeding period” means the time during which contributions will accrue before benefits are available, January 1, 2027—December 31, 2027.
(6)
“Utilization rate” means the anticipated number of approved claims in the State plan divided by the anticipated total number of workers in the State plan which shall be announced by the Division each November1 for the following calendar year based on the actuarial cost analysis performed in accordance with Labor and Employment Article, §8.3-601, Annotated Code of Maryland.
Regulation .02 General.LinkCopy Citation
A.
Except as explicitly provided in this chapter, the State is subject to the same EPIP requirements as all employers.
B.
An employer shall participate in the State plan until the Division-approved effective date of an EPIP.
Regulation .03 EPIP Requirements.LinkCopy Citation
A.
An EPIP shall cover all individuals employed by the employer who perform qualified employment.
B.
Benefits shall be paid to any employee who would be eligible for benefits under the State plan, had the employer chosen coverage under the State plan.
C.
All forms required to be completed by an employee or healthcare provider under an EPIP shall be forms prescribed by the Division in COMAR 09.42.01.03.
D.
An EPIP shall allow FAMLI benefits and leave to be taken for all purposes specified in the State plan.
E.
An EPIP shall allow a covered employee to take family leave or medical leave or qualified exigency leave in an application year for periods of time equal to or longer than the duration of leave provided under the State plan.
F.
An EPIP benefit calculation shall result in a weekly benefit that is equal to or greater than what the benefit would be if the employee received benefits from the State plan.
G.
If an employee has less than the requisite hours needed to make a benefit determination with their current employer, the current employer shall confirm the employee’s previously reported hours and benefit amount with the Division and shall account for the information from the Division to make the benefit determination.
H.
An EPIP shall allow leave to be taken in the same, or less restrictive, increments or nonconsecutive periods as provided under the State plan.
I.
An EPIP may not impose additional conditions, restrictions, or barriers on the use of leave beyond those explicitly authorized by the State plan and shall meet or exceed the rights, protections, and benefits provided under the State plan.
J.
The amount at which employee withholdings are made to an EPIP cannot exceed the amount the same employee would contribute under the State plan.
K.
An approved EPIP may not begin withholding until the policy effective date.
L.
Employee withholdings received or retained under an EPIP are not considered part of an employer’s assets for any purpose other than paying benefits or premiums under this subtitle.
M.
An EPIP shall establish claims processing procedures under COMAR 09.42.04.
N.
An EPIP shall establish reconsideration and appeal procedures under COMAR 09.42.05.
O.
An employer participating in an EPIP shall be subject to the notice requirements in Labor and Employment Article, §8.3-801, Annotated Code of Maryland.
P.
An employer participating in an EPIP shall use the written notices prescribed by the Division under COMAR 09.42.01.03.
Q.
All EPIP documents and communications shall be subject to the same accessibility, language access, and translation requirements as the Division.
R.
An employer shall ensure compliance with relevant federal and state laws regarding confidentiality of records.
S.
The Division, as a result of an appeal by a covered employee, may pay benefits from the State plan to a covered employee whom an EPIP was obligated to pay, if the Division determines both of the following:
(1)
Some benefits went unpaid; and
(2)
It is unlikely that the covered employee will otherwise be paid the benefits.
T.
An employer and/or EPIP administrator shall reimburse the State plan for the amounts and the Division may pursue all legal means to collect the amounts from the employer and/or EPIP administrator if the Division pays benefits from the State plan to a covered employee whom the EPIP was obligated to pay.
Regulation .04 Job Protection and Retaliation.LinkCopy Citation
Participation in an EPIP does not negate employer obligations with respect to job protection and retaliation under Labor and Employment Article, §§8.3-706, 801(b)(2)(v), and 904, Annotated Code of Maryland.
Regulation .05 Employer Application Process.LinkCopy Citation
A.
The paid family and medical leave benefits offered to employees of the State pursuant to State Personnel and Pensions Article, §9–1001, et seq. Annotated Code of Maryland, are approved as an EPIP and no application by the State to the Division is required.
B.
To obtain approval of an EPIP, an employer shall first submit a completed EPIP application to the Division.
C.
The Division shall mandate the EPIP application form.
D.
An EPIP application may be submitted at any time.
E.
EPIP Application Review Process.
(1)
The Division will review complete EPIP applications as they are received.
(2)
Employers will be notified of deficiencies in EPIP applications.
(3)
Deficiencies must be cured within 30 days of the date of the notification.
(4)
If deficiencies are not cured within 30 days, the EPIP application may be denied.
F.
EPIP Application Fees.
(1)
For a commercially insured EPIP the application fees shall be as follows:
(a)
$100 for an employer with 1—14 employees performing qualified employment at the time the EPIP application is submitted.
(b)
$250 for an employer with 15—49 employees performing qualified employment at the time the EPIP application is submitted.
(c)
$500 for an employer with 50—199 employees performing qualified employment at the time the EPIP application is submitted.
(d)
$600 for an employer with 200—499 employees performing qualified employment at the time the EPIP application is submitted.
(e)
$750 for an employer with 500—999 employees performing qualified employment at the time the EPIP application is submitted.
(f)
$1,000 for an employer with 1000 or more employees performing qualified employment at the time the EPIP application is submitted.
(2)
For a self-insured EPIP the application fee is $1,000.
G.
An approved EPIP application becomes effective, and the employer is released from its contributions obligation on the first day of the calendar quarter following the date of approval by the Division of its EPIP application.
H.
An employer’s EPIP approval and release from contributions obligation expires 1 year after the effective date in §G of this regulation, and if a complete application has been timely filed and approval is pending after expiration, the Division may extend the previous approval.
I.
EPIPs shall make benefits available to all covered employees.
J.
An employer shall submit an EPIP application annually at least 90 days before the employer’s current EPIP approval expires.
K.
Special Requirements for a Self-Insured EPIP.
(1)
Any employer with 50 or more employees may apply for a self-insured EPIP.
(2)
Proof of Solvency.
(a)
An employer desiring to establish a self-insured EPIP shall provide proof of assured funds as demonstrated by obtaining a surety bond issued by a surety company certified by the United States Treasury Department Bureau of the Fiscal Service and authorized to do business in the State.
(b)
The surety bond shall be conditioned that the employer shall:
(i)
Comply with all State laws and regulations governing the EPIP; and
(ii)
Fulfill all obligations to pay employee claims.
(c)
A surety bond shall be issued in amount equal to 1 year of expected future benefits as determined by the product of the number of employees rounded up to the nearest 50 multiplied by 12 weeks multiplied by the utilization rate multiplied by the maximum weekly benefit amount.
(d)
A surety bond shall be issued on a form prescribed by the Division.
(e)
A surety bond shall include a statement that the bonding company shall give 90 days notice in writing of its intent to terminate coverage to both the principal and the Division, except that if the bonding company is terminating liability because it is issuing a replacement bond, it may do so without providing prior notice.
(f)
If a replacement bond is issued, the surety company and the employer shall notify the Division no later than 14 days after its effective date.
(g)
A surety bond shall continue for 3 years after the later of the date on which:
(i)
The bond is canceled; or
(ii)
The EPIP is terminated.
(h)
The liability of the surety:
(i)
Shall be continuous;
(ii)
May not be aggregated or cumulative, whether the bond is renewed, continued, replaced, or modified;
(iii)
May not be determined by adding together the penal sum of the bond, or any part of the penal sum of the bond, in existence at any two or more points in time;
(iv)
Shall be considered to be one continuous obligation, regardless of increases or decreases in the penal sum of the bond;
(v)
May not be affected by the insolvency or bankruptcy of the employer, any misrepresentation, breach of warranty, failure to pay a premium, any other act or omission of the employer, or the termination of the employer’s EPIP; and
(vi)
May not require an administrative enforcement action by the Division as a prerequisite to liability.
(i)
The Division may review the bond annually to ensure that the amount corresponds with the benefit projections and the employer:
(i)
Shall provide the Division with any documentation necessary to review the bond amount;
(ii)
Shall increase the bond amount if the Division determines an increase is necessary; and
(iii)
May decrease the bond amount if the Division determines that the bond amount exceeds the projected benefits.
(j)
A claim against the bond may be filed with the surety by the Division:
(i)
Under COMAR 09.42.03.03(T);
(ii)
To cover any outstanding contributions due to the Division; or
(iii)
For fees and penalties owed to the Division.
(3)
Separate Account.
(a)
If an employer who is approved to self-insure to provide FAMLI benefits withholds from employees, the employer shall establish and maintain a separate account:
(i)
Into which all employee contributions are deposited and kept; and
(ii)
From which only benefits shall be paid.
(b)
Funds collected from employee withholdings shall be:
(i)
Held separately from all other employer funds; and
(ii)
Separately accounted for.
(c)
Account records shall be made available for audits by the Division.
(d)
The separate fund does not represent the extent of liability of the employer.
(4)
Any employer may apply to the Division for a waiver of the surety bond requirement based on its capitalization and existing bondedness under Labor and Employment Article, §8.3-705(b)(2), Annotated Code of Maryland.
(5)
An employer with fewer than 50 employees may apply for a self-insured EPIP only if it provides a benefits package:
(a)
To all of the employer's covered employees;
(b)
That meets or exceeds the rights, protections, and benefits provided to a covered employee under Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland; and
(c)
That was in effect on or before July 31, 2026 and has remained continually in effect until the date of application.
Regulation .06 Oversight of EPIPs by the Division.LinkCopy Citation
A.
The Division may, at any time at its sole discretion, initiate a review of an EPIP to determine whether the EPIP is compliant with Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland or this subtitle.
B.
On initiation of a review by the Division, within 30 days of a request from the Division, the EPIP administrator and the employer shall provide all information and documentation requested.
C.
The Division may extend the 30 day deadline under §B of this regulation once upon request from the EPIP administrator and/or the employer.
D.
The Division shall ensure compliance with relevant federal and State laws regarding confidentiality of records.
E.
Failure by an employer to cooperate with a Division review of an EPIP may result in the Division’s termination of the employer’s EPIP approval.
Regulation .07 Record Keeping Requirements.LinkCopy Citation
A.
An EPIP administrator or employer shall collect and maintain documentation of all of the following for a minimum of 5 years:
(1)
Applications for benefits;
(2)
Benefits paid, including payment dates and amounts;
(3)
The outcome of internal initial applications for benefits;
(4)
Internal reconsideration requests received;
(5)
The outcome of internal reconsiderations;
(6)
Documents, including wage data or other evidence, containing the information on which benefits determinations and reconsiderations were based; and
(7)
Withholdings received from employees.
B.
Within 30 days of the Division’s written request, an EPIP administrator or an employer with an approved EPIP shall provide any documentation either is obligated to maintain.
C.
If the employer or EPIP administrator requests an extension and provides good cause for the extension, the Division may extend the 30-day deadline.
D.
If the employer or EPIP administrator does not provide the requested documentation by the deadline, the Division may terminate its approval of the EPIP.
Regulation .08 Additional Reporting Requirements for Employers who Have Selected an EPIP.LinkCopy Citation
A.
While an employer may authorize EPIP administrators to report on their behalf, the employer shall be responsible for the accuracy of the data and subject to any adverse actions related to inaccurate, late, or incomplete reporting.
B.
All reported data shall represent totals for each approved EPIP.
C.
Quarterly claims level and employer level data reports to the Division shall be submitted on or before the last day of the month immediately following the close of the previous quarter via an electronic template provided by the Division.
D.
Failure to submit timely and complete reports may result in the involuntary termination of the EPIP by the Division.
E.
An employer with an approved EPIP shall report wage and hour data quarterly in the same manner as an employer in the State plan.
F.
The Division may extend the deadline under §C of this regulation once upon request from the employer.
Regulation .09 EPIP Termination Rules.LinkCopy Citation
A.
Voluntary. Provided an employer has joined the State plan or has an approved application for a different EPIP:
(1)
The employer may voluntarily terminate enrollment in an EPIP provided the employer has been enrolled in the EPIP for at least 1 year.
(2)
The employer shall provide the requisite notice to the Division of the voluntary termination no later than 30 days before the termination’s effective date.
(3)
The employer shall provide the requisite notice to employees prescribed by COMAR 09.42.01.03 of the voluntary termination no later than 30 days before the termination’s effective date.
(4)
The employer shall continue the approved EPIP’s coverage through the termination’s effective date.
(5)
The voluntary termination shall become effective on the first date of the calendar quarter following the expiration of the 30 day period.
B.
Involuntary. An employer’s EPIP enrollment may be terminated by the Division when the Division determines that terms or conditions of the plan have been repeatedly or egregiously violated in a manner that necessitates termination.
(1)
Causes for plan termination may include:
(a)
Failure to pay benefits in the amount and duration required by Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland and this subtitle;
(b)
Failure to make timely benefit determinations or reconsiderations;
(c)
Failure to pay benefits in the amount and duration required by the EPIP, where the EPIP provides benefits in a greater amount or duration than is required by Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland and this subtitle;
(d)
Failure to pay benefits within the timeframes and in the manner specified by Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland and this subtitle;
(e)
Failure to maintain an adequate surety bond in accordance with this subtitle;
(f)
Failure to comply with Regulation .03(L) of this chapter;
(g)
Failure to submit reports or comply with other compliance requirements as required by Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland or this subtitle;
(h)
Failure to otherwise comply with Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland or this subtitle;
(i)
Failure to notify the Division that their plan has been cancelled by their carrier; or
(j)
Failure to notify the Division that the product is no longer offered by their carrier.
(2)
If the Division withdraws approval of an employer’s EPIP, the Division shall issue to the employer and the EPIP administrator a notice of involuntary termination of EPIP approval with an effective date 14 days after the date of the notice.
(3)
An employer may request a review under COMAR 09.42.05 of the withdrawal of EPIP approval before its effective date by filing with the Division.
(4)
Involuntary terminations shall result in the establishment of past-due mandatory contribution debt in the amount that would have been owed to the State plan had the employer been in the State plan for a period of 1 year prior to the date of the notice of termination of EPIP approval.
(5)
Involuntary terminations may result in civil penalties against an employer, including but not limited to execution on and collection of any bond amount.
(6)
An employer shall provide the requisite notice to employees prescribed by COMAR 09.42.01.03 of the involuntary termination no later than 5 days after the termination’s effective date.
C.
Termination Generally.
(1)
Continuation of Benefits.
(a)
An EPIP shall pay or continue to pay benefits under the terms of the EPIP to an employee who filed a valid claim for benefits under the EPIP before the effective date of termination until the total amount of the benefit claim is paid, the duration of approved leave ends, or the application year ends, whichever occurs first.
(b)
If the employer or EPIP administrator does not pay the benefits, the employee may seek relief with the Division under COMAR 09.42.05.
(2)
Within 60 days after the effective date of the termination of an EPIP, the employer shall send to the Division all reporting requirement information on benefit claims paid and amounts of contributions collected or owing from the date of the last report provided to the Division under the EPIP reporting requirements to the date of termination.
(3)
Outstanding Contributions.
(a)
On receipt of the report specified in §C(2) of this regulation, the Division will provide an invoice of the contribution amounts due, if any.
(b)
The contribution amount due shall be calculated based on any contributions withheld from employees’ wages that remain in the possession of the employer on the effective date of the EPIP termination, minus an amount equal to the amount of any benefits due to be paid as required under §C(1) of this regulation or any premium due to a carrier for commercially insured EPIPs.
(c)
Once all required benefits are paid under §C(1) of this regulation, the employer shall send to the Division the final report on any additional benefit claims paid or administrative expenses incurred after the date of the last report provided under §C(2) of this regulation within 5 business days.
(d)
The Division will provide an invoice of any additional contribution amounts due.
(4)
Any employer whose EPIP approval has been terminated, either voluntarily or involuntarily, shall be immediately enrolled in the State plan, with contribution obligations going back to the most recent quarter start date, unless and until the employer is approved for a new EPIP.
D.
To the extent that any of the regulations in this section conflict with the Temporary Provisions applicable to EPIP termination in Regulation .10 of this chapter, the provisions in Regulation .10 of this chapter control.
Regulation .10 Temporary Provisions.LinkCopy Citation
A.
Declaration of Intent to Obtain Approval of EPIP.
(1)
During the submission period announced by the Secretary, any employer who intends to enroll in an EPIP may submit a DOI, signed by the employer, acknowledging, attesting, and agreeing to certain requirements, including but not limited to:
(a)
The employer intends to provide an EPIP to all its employees that meets or exceeds all the requirements of Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland and this subtitle.
(b)
The employer met with an insurance producer or carrier about available commercially insured EPIPs.
(c)
A signature from the insurance producer or carrier acknowledging the meeting in §A(1)(b) of this regulation.
(d)
Except as provided in Ch. 363, Section 2, Acts of (2025), beginning on the effective date of a DOI and continuing until the Division has approved the EPIP application, the employer shall collect and hold all contributions from both the employer and employees that would otherwise be due to the State plan in an escrow account, provided that:
(i)
The employer collects employee contributions via payroll deduction or makes contributions on behalf of the employee;
(ii)
Employee contributions are withheld during the pay period for which they are being collected; and
(iii)
Employee contributions are not retroactively collected.
(e)
If, after the submission of a DOI, an EPIP is approved, the employer shall return employee contributions held in escrow to the employees from whom they were withheld, or if the EPIP approved is a self-insured EPIP the contributions held in escrow may be used to seed the separately accounted self-insured EPIP fund.
(f)
If a former employee cannot be located, the employee’s contributions shall be remitted to the State plan.
(g)
The employer shall submit an EPIP application no later than the date announced by the Secretary.
(h)
If, after the submission of a DOI, the employer is not approved for an EPIP before the date announced by the Secretary, the employer is liable for remitting to the State plan an amount equal to the sum of all unpaid employer and employee contribution payments due for the periods contributions were not made plus any interest and penalties for late payment.
(i)
If necessary, the funds held in escrow under §A(1)(d) of this regulation shall be used to remit payment under §A(1)(h) of this regulation.
(2)
The Division shall approve or deny a DOI within 15 business days of submittal.
(3)
An approved DOI becomes effective on the first day of the calendar quarter following the date of approval by the Division.
(4)
The Division may terminate a DOI for:
(a)
Misuse of employee contributions by the employer;
(b)
Failure to hold funds in escrow as required;
(c)
Failure to adhere to applicable FAMLI program requirements;
(d)
Excessive withholding of contributions from the pay of employees beyond the amount that would have been withheld under the State plan;
(e)
Failure to respond timely to a reasonable request from the Division for information about the EPIP or DOI;
(f)
Failure to submit quarterly wage and hour reports;
(g)
Failure to submit an EPIP application; or
(h)
Denial by the Division of an EPIP application.
(5)
All DOIs expire December 31, 2027.
B.
DOI and Contributions.
C.
Initial EPIP Enrollment.
(1)
If an employer is approved to be exempt from contributions to the State plan via a DOI and their subsequent EPIP application is approved, the employer shall remain in an EPIP for a minimum of 4 calendar quarters.
(2)
Failure to complete the initial EPIP enrollment shall result in the employer’s automatic enrollment in the State plan and remittance to the Division an amount equal to the total contributions that would have been paid to the State plan beginning January 1, 2027 minus any contributions made to the State plan prior to approval of the EPIP plus any interest and penalties for late payment.
(3)
If an employer whose DOI was approved enters into an EPIP and the EPIP is terminated before December 31, 2028, either by the employer or the Division, the employer shall remit to the Division the contributions and interest from which they were exempted as a result of the DOI.
(4)
If an employer whose DOI was approved enters into an EPIP and the EPIP is terminated before December 31, 2029, either by the employer or the Division, the employer is responsible for half the contributions and interest from which they were exempted as a result of the DOI.
Chapter annotations
Authority: Labor and Employment Article, §§8.3-101, 403, 503, and 705, Annotated Code of Maryland
History: Effective date: March 30, 2026 (53:6 Md. R. 290)