Maryland health care regulators are planning to increase the size of businesses that will be eligible for a new health insurance subsidy that will become available in October.
The $15 million small business premium subsidy, created during last fall’s special legislative session, will open up this fall to firms with between two and nine employees. It will work in concert with private insurance companies, and pay between $100 and $5,000 worth of workers’ annual health insurance costs depending on how much they make and what type of insurance they have.
It will not cover more than half of an annual premium, and is not open to businesses that already offer or recently offered employee health insurance plans.
Regulations developed by the Maryland Health Care Commission to put the program in place would allow companies that grow past the nine-employee threshold to maintain their subsidy until they reach 20 workers. The rules still have to be approved by a panel of lawmakers, but some in the business community say the policy will remove what was initially seen as a disincentive for growth.
“The last thing you want to do is put into place a penalty for a business that wants to grow,†said Ellen Valentino, Maryland director of the National Federation of Independent Business. She said she is pleased with the state’s handling of the subsidy program.
The regulations also divide the subsidy among businesses based on the average salaries of their employees. Businesses that typically pay less than $25,000 annually are eligible for the most money, while the subsidy is not available to employers paying more than $75,000.
Nicole Stallings, government relations chief for the health care commission, said the subsidy is expected to cover 10,000 workers at 1,500 businesses. She said the commission built flexibility into the number of employees that the subsidy would cover in order to provide businesses with stability in the program.
“We didn’t want to discourage growth and success,†she said.
The commission last week met with a collection of business groups, including the NFIB, the Maryland Chamber of Commerce and other trade organizations to make plans to recruit businesses to take part in the subsidy program. Enrollment is expected to begin in September.
The commission is expecting strong interest in the subsidy, though some business groups have expressed reservations about whether businesspeople can depend on the state to continue paying for the program. Maryland has enough money to keep the subsidy running through fiscal 2009, but lawmakers will have to decide next year how much to put aside for 2010.
Ronald Wineholt, the chamber’s vice president of government affairs, said the state has done a good job putting the program in place, but its future cannot be too certain until November, after voters decide whether to allow slot machines in Maryland — they are expected to bring in over $1 billion by fiscal 2013. The chamber has been a vocal supporter of slot machines
“I think they’re going to do everything they can to keep this subsidy here for the foreseeable future,†he said. “Then again, if slots fail, then all bets are off.â€
The subsidy was already on the chopping block once this year. Lawmakers, facing revenue shortfalls linked to a slowing economy, cut the subsidy from an original $30 million. Some General Assembly budget leaders said they would wait to gauge interest in the program before boosting its funding.
Stallings, of the commission, said she expects the program to remain in place, and hopes businesses buy into it.
“All we can tell them is that [Gov. Martin O’Malley] campaigned on doing something for small businesses, and did it with the help of the General Assembly,†she said. Stallings said she hopes businesses will believe in that commitment.
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