Maryland Offers Health Plan Subsidy for Micro Firms

The state of Maryland has launched a new health insurance program targeted to businesses with two to nine full-time employees.

Through the initiative, an employer will receive a subsidy for the insurance in the form of lower premium payments. The business can then pass the savings along to employees in the form of lower payroll deductions for the health insurance.

"[Gov. Martin O'Malley] campaigned to help small businesses, which make up a disproportionate number of the uninsured in our state, said Nicole Stallings, chief of government relations and special projects at the Maryland Health Care Commission. "And we expect that this program would insure about 10,000 Marylanders." The 10,000 will move the state closer to its goal of insuring 100,000 Marylanders who are without insurance.

A handful of similar programs have launched in other states, but Maryland's program is unique because it allows a business to offer private coverage and offers "substantial subsidies with general availability guidelines," said Stallings.

The initiative allows a firm to have up to nine full-time employees at the time of initial application, but will allow a firm to remain enrolled with adjustments if the firm grows. "We certainly didn't want to discourage small businesses from growing," she said.

However, once a firm reaches 20 employees, it is no longer eligible for the program. A business must be in existence for at least 12 months and its average employee wage must be under $50,000 annually to qualify for program participation.

Program enrollment opens in September for policies that will take effect beginning in October. Stallings recommends that firms should enroll in this program right away, because it's capped at $15 million. If enough businesses qualify, the funding will run out. She expects about 1,500 firms will participate.

There are about 64,000 firms in the state with fewer than 10 employees, and about 37,000 of those firms do not offer insurance.

Stallings noted that Gov. O'Malley has said he intends the program will be ongoing, but she acknowledged that the state is facing budget constraints.

The Maryland Health Insurance Partnership is working with insurers Aetna, CareFirst, Conventry Health Care and United Health Care on the plan, which was crafted with input from Jonathan Gruber, a health economist who teaches at the Massachusetts Institute of Technology.

The state is hosting workshops to better explain the program, which became effective July 1. Locations and dates for the workshops have not been finalized. Full details, including how to apply, frequently asked questions and more information, are available here.

By Sharon McLoone |  July 3, 2008; 7:00 AM ET Tools and Tips
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