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Maryland bill would help small businesses afford health insurance for their employees

“The gap in health care coverage disproportionately and systematically hurts minority-owned businesses,” Sen. Katie Fry Hester, D-Carroll and Howard said. “It is our duty as a General Assembly to reduce these disparities.” (The Daily Record/File Photo)

Public health advocates are pushing for a bill that would provide up to $45 million in subsidies each year for Maryland’s small businesses and nonprofits to provide their employees with health insurance. 

SB632, which is sponsored by Sen. Katie Fry Hester, D-Carroll and Howard, aims to establish a Small Business and Nonprofit Health Insurance Subsidies Program to be administered by the Maryland Health Benefits Exchange.

The funds for program would ideally come from the federal government, according to Vincent DeMarco, president of the Maryland Citizens’ Health Initiative and a supporter of the bill. The bill would also allow MHBE to use up to $3 million on outreach to small businesses that might benefit from the program.

The measure, which was presented to the Senate Finance Committee on Wednesday, is being endorsed by the county executives of Howard, Montgomery, Prince George’s, Harford, Frederick, Baltimore and Anne Arundel counties and by Baltimore Mayor Brandon Scott, as well as by the Maryland Association of Chambers of Commerce Executives.

“Hundreds of small businesses would benefit from this bill by allowing owners to offer health plans to their employees, which would then build loyalty between the worker and the business owner while also increasing the number of covered lives and expanding the reach of our great Maryland Health Benefits Exchange,” said Rick Weldon, president and CEO of the Frederick County Chamber of Commerce and vice president of the Maryland Association of Chamber of Commerce Executives. 

According to Hester, small businesses and nonprofits struggle to bargain as effectively with insurance carriers and providers as larger companies do, leaving them with fewer and lower-quality options. The senator also noted that Maryland has the highest rate of minority-owned small businesses per capita in the nation, meaning that this problem has a significant impact on minority business owners. 

“The gap in health care coverage disproportionately and systematically hurts minority-owned businesses,” she said. “It is our duty as a General Assembly to reduce these disparities.” 

Similar legislation, which authorized up to $15 million annually to be spent on health insurance subsidies for small employers, was passed in Maryland in 2007. That legislation, which limited eligibility to only businesses with fewer than 10 employees who did not already offer health coverage, was eventually rolled back with the implementation of the Affordable Care Act, DeMarco said.

One lobbyist did not feel that the program was fleshed out enough to move forward. Bryson F. Popham, a lawyer and lobbyist representing the Maryland Association of Health Underwriters, advocated for an amendment that would create a study on small business health insurance subsidies, rather than create the program.

This would allow lawmakers and MHBE to examine the exchange’s role in the group insurance market, he said. Currently, MHBE deals primarily with individual health insurance. 

“The bill is just not ready for prime time yet,” he said. 

He also suggested that the legislation could be altered to apply only to businesses and nonprofits with fewer than 10 employees, making the bill’s scope more manageable and keeping subsidies available to the businesses that need them most. The current iteration of the bill qualifies employers with fewer than 25 employees for subsidies. 

“There is a role for the exchange in the group insurance market — it’s what we call ‘micro-groups’ … these are people who do have trouble getting insurance,” he said. “That is where you ought to focus this. While I applaud the desire of this GA to continue its policy of enhancing and increasing the number of insured (people) in the state … this bill just needs a lot more work.” 

Michele Eberle, the executive director of MHBE, which has not officially taken a stance on the bill, told legislators she agrees that insurance needs to be more accessible to small groups. 

“The program has merit. I believe the sponsors for the program left it broad enough that it could be designed to meet the needs of where the gaps are with the state,” she said.  

She also added that, if the bill passed, MHBE would work with stakeholders to shape and implement the program regardless of whether a study was formally required through legislation. 

“The exchange always does that work up front,” she said. “That’s just how we operate.”