If you’re a business owner in the First State, you’ve likely spent the last few months (or years) hearing whispers about the "Healthy Delaware Families Act." Well, the future is officially here. As of January 1, 2026, the Delaware Paid Family and Medical Leave (PFML) program is fully operational, and benefits are being paid out to eligible employees across the state.
At Total Benefit Solutions Inc, we’ve been fielding calls daily from small business owners who are somewhere between confused and concerned. I get it. Managing a business is hard enough without having to navigate new state mandates, payroll deductions, and employee leave requirements.
But here’s the good news: This doesn't have to be a headache. In fact, if you play your cards right, this can be a great tool for retention. Let’s break down exactly what you need to know to stay compliant and, more importantly, how we can help you optimize this for your bottom line.
What is the Healthy Delaware Families Act?
Essentially, Delaware joined a growing list of states that require a state-level insurance program to provide employees with paid time off for major life events. This includes things like bonding with a new child, caring for a family member with a serious health condition, or dealing with one’s own serious medical issue.
The program is funded through small payroll contributions, similar to how unemployment insurance or Social Security works. However, unlike some other states, Delaware has very specific rules based on how many people you employ. This is where most of the confusion starts.
The Magic Numbers: 10 vs. 25 Employees
In the world of Delaware PFML, your "count" matters. The state looks at your employee head count to determine which parts of the law apply to you. Here is the simple version of how those thresholds work:
1 to 9 Employees
If you have fewer than 10 employees, you are technically exempt from the mandatory requirements. You don't have to participate in the state program. However, you can choose to "opt-in" voluntarily. Some small shops do this because it allows them to offer a benefit that helps them compete with larger corporations for talent. Just keep in mind that if you voluntarily provide these benefits, you generally have to cover the premium cost yourself, you can't pass that cost onto the employees.
10 to 24 Employees
This is the middle ground. If you fall into this bracket, you are required to provide Parental Leave only. This covers bonding with a child after birth, adoption, or foster placement. You are not required to provide medical or family caregiving leave, though you can certainly choose to add those if you want to be the "cool boss."
25 or More Employees
If you have 25 or more employees, the full weight of the law applies to you. You must provide the complete suite of benefits: Parental Leave, Medical Leave (for the employee's own health), and Family Caregiving Leave (to care for a sick loved one).
Let’s Talk Money: The $900 Weekly Cap
One of the most frequent questions I get at Total Benefit Solutions Inc is: "How much do I actually have to pay these people while they’re out?"
The state program provides a wage replacement of 80% of the employee’s average weekly wage. However, there is a ceiling. The maximum benefit is capped at $900 per week for 2026.
For your high earners, this $900 might be a significant pay cut. This is a crucial detail because it opens up a conversation about "gap" coverage or supplemental insurance that we can help you coordinate. If you want to ensure your top managers are fully protected, relying solely on the state plan might not be enough.
How much does this cost?
For 2026, the contribution rates are relatively low, but they do add up. Generally, the state rate is around 0.8% of wages for the full program (for those with 25+ employees) and about 0.32% for those only doing parental leave.
The law allows employers to split the cost with employees. You can require your team to pay up to 50% of the premium through payroll deductions. Of course, you can also choose to pay the whole thing yourself as a benefit to your staff.
The Strategy: State Plan vs. Private Plan
Here is where my team and I really earn our keep. You aren't necessarily stuck with the state's "one-size-fits-all" plan. Delaware allows for "Private Plan Exemptions."
If you can prove that you are providing a private insurance plan (or a self-funded plan) that is at least as good as the state program, you can opt out of the state system. Why would you want to do this? There are three big reasons:
- Cost Savings: In many cases, especially for companies with a healthy workforce, we can find private insurance products that actually cost less than the state’s 0.8% tax.
- Better Coverage: You might want to offer more than the $900 weekly cap to keep your employees happy. A private plan gives you the flexibility to customize those limits.
- Easier Coordination: If you already have Short-Term Disability (STD) or Long-Term Disability (LTD) plans in place, trying to coordinate those with a state-run agency can be a logistical nightmare. By using a private carrier for your PFML, you can often "bundle" everything together, making the claims process much smoother for your HR person (which might just be you!).
At Total Benefit Solutions Inc, we specialize in comparing these options. We look at your current census, your existing benefits, and your budget to see if a private plan makes more sense than the state pool. You can learn more about how we approach these strategies on our about page.
Important Updates: HB 128 and PTO
There’s a recent change you need to be aware of. Originally, many employers thought they could force employees to use up all their vacation time or sick leave (PTO) before the state benefits kicked in.
A 2025 legislative update (House Bill 128) changed that. You can no longer require employees to exhaust their PTO first. However, you and the employee can mutually agree to "top off" their state benefit using PTO. For example, if the state is paying them 80% of their salary, they could use 20% of a PTO day to get to a full 100% check. This is something you’ll want to update in your employee handbook immediately.
How Total Benefit Solutions Inc Can Help
Navigating Delaware's Paid Leave doesn't have to be a solo mission. We act as the intermediary between you, the state, and private carriers. Here is how we help:
- Audit Your Size: We’ll help you confirm exactly which tier you fall into so you aren't paying for coverage you don't legally need.
- Market Analysis: We’ll shop the private insurance market to see if we can find a better rate than the state mandate.
- Coordination of Benefits: We ensure your PFML, STD, and LTD all work together without overlapping or creating gaps.
- Compliance Support: We help you understand the payroll deduction rules and reporting requirements.
If you haven't reviewed your leave policy since the start of 2026, you are likely overdue for a check-up. The state program is now live, and the Department of Labor is starting to look closely at compliance.
Don't Wait for a Claim to Happen
The worst time to figure out how Delaware Paid Leave works is when your lead supervisor walks into your office to tell you they need 12 weeks off for a family emergency. By then, the clock is already ticking.
Let’s get ahead of it. Whether you have 10 employees or 100, we can help you navigate these waters and potentially save you a significant amount of money in the process.
Ready to see if a private plan is right for your business?
Visit us at www.totalbenefits.net to learn more about our services, or give us a call directly. We’ve been helping businesses in the Delaware Valley for years, and we’re ready to help you too.
Total Benefit Solutions Inc
(215) 355-2121
Contact Us Online
#DelawareSmallBusiness #EmployeeBenefits #PFML #HealthyDelawareFamiliesAct #TotalBenefitSolutions #HRCompliance #SmallBizTips #HealthInsurance
Disclaimer: This blog post is for informational purposes only and does not constitute legal or tax advice. Please consult with a legal professional or a qualified benefits broker at Total Benefit Solutions Inc for specific guidance regarding your business.