2026 Updates to the Colorado FAMLI Program

The Colorado Paid Family and Medical Leave Insurance (FAMLI) Act went into effect in January 2024 and brought about significant changes and advantages for Colorado employees to manage their employment amidst significant medical situations. 

(See our previous blogs: “The Colorado FAMLI Act – What Employers & Employees Need to Know” and “Colorado FAMLI Act: Common Questions & Answers” for more information on the FAMLI Act.)

2026 brought a few updates to the program:

Expanded Neonatal Care

As of January 1, 2026, the FAMLI Program now provides an additional 12 weeks of paid leave for employees with newborns in a Neonatal Intensive Care Unit (NICU), totaling up to 24 weeks of paid leave. 

If the birthing parent also experiences pregnancy or childbirth complications, they may still qualify for an extra four weeks, bringing the potential total to 28 weeks.

Additionally, NICU leave can be taken intermittently and is available for the duration that the infant remains in inpatient care.

Premium Rate Changes

FAMLI premium rates will decrease from 0.9% to 0.88% of employee wages, which is evenly split between the employee and employer at 0.44% each. The current wage cap is $184,500, which aligns with the 2026 Social Security wage base, for a maximum weekly benefit of $1,381.45.

Delayed Tax Implementation

Though the Internal Revenue Service (IRS) previously suggested that FAMLI medical leave benefits would be treated as taxable third-party sick pay requiring a FICA/FUTA withholding, the most recent guidance (IRS Notice 2026-6) grants a one-year extension of the current non-taxed status. 

Implementation of updated federal tax reporting requirements is now delayed until January 1, 2027.

Employer Compliance Requirements & Mandatory Notice

Employers are required to post and distribute the updated 2026 FAMLI Program Notice, which includes the new NICU leave provisions. 

All Colorado employers (including those with private plans) were required to update their annual total employee headcount in the My FAMLI+ Employer portal by February 28, 2026. Additionally, employers using private plans must ensure their policies are updated to include the 12-week NICU benefit to maintain “equivalence” with the state plan.

Hackstaff, Snow, Atkinson & Griess has the expertise to help companies of all sizes navigate the complexities of employment law, which includes state and federal regulatory compliance.

Learn more about our Employment Law practice and contact us for a consultation.