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Maryland's new HEALTH INSURANCE PARTNERSHIP offers Maryland Businesses new and meaningful solutions by enabling to:
- provide an incentive for employers with 2-9 employees to offer health insurance for their employees;
- assist low and moderate income employees of these small employers in obtaining health insurance; and
- promote access to health care services and reward participating individuals for efforts to improve their health and/or manage chronic disease.
Please note: The program description on this web site contains details that are preliminary and subject to change. We will update as soon as possible. |
Introduction:
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Governor O'Malley proposed and signed into law a program to reduce the number of uninsured Marylanders. The Working Families & Small Business Health Coverage Act, approved during the Special Session of 2007 establishes the Health Insurance Partnership (HIP) for small employers not currently offering health insurance to their employees.
Under the PARTNERSHIP, a small business that has 2 to 9 full-time employees, has not offered health insurance to its employees during the previous 12 months, and meets wage and salary requirements established by the Commission , is eligible to receive a subsidy of up to 50% of the premium.
Family coverage can also be subsidized. Once enrolled in the Partnership, the business is likely to continue to be eligible for the subsidy in following years. |
These new development make it much easier for Small Businesses to offer their employees Quality Health Insurance from any Insurance Company that provides Group Insurance in Maryland
Pre requisites
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To receive the premium subsidy, the employer must establish a Section 125 premium conversion plan and must also purchase a wellness benefit as part of the health plan.
The subsidy goes both to the employer and to the employee. Enrollment will be capped to stay within the Partnership's approved annual budget. |
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ELIGIBILITY - At the time of initial application, the business must meet the following requirements:
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1. The business must employ at least 2 and no more than 9 full-time employees both at the time of initial application and on at least 50% of its working days during the past calendar quarter.
- Any individual who is not a temporary, seasonal, or substitute employee and works 30 hours or more per week count as full-time employees.
- Owners and partners working more than 30 hours per week at the business count as full-time employees.
2. The business has not offered insurance to its employees in the most recent 12 months.
3. The average wage of the full-time employees is below $50,000
Any full-time employee who obtains health insurance through an eligible small employer's plan may receive a subsidy toward the cost of employee-only coverage. A full-time employee seeking an additional subsidy for dependent coverage (spouse and/or children) must have a family income of less than $75,000.
Part-time, temporary, and seasonal employees do not qualify for a subsidy. |
SUBSIDY AMOUNT
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The subsidy per employee depends on the health insurance coverage chosen and the average annual wage for the business.
The premium subsidy is up to 50% of the premium for each participating employee.
Each year, the Commission will publish a premium schedule on the Commission's website showing the maximum subsidy amount for different types of coverage and different average annual wage amounts.
Any planned employer contribution to an employee's Health Savings Account is treated as an additional employer premium contribution in calculating the premium subsidy. |
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The table below illustrates the subsidy at selected average income levels.
Average
Wage |
Employee
Only |
Employee
+ Children |
Employee
+ Spouse |
Family |
| <$25,000 |
$2000 |
$3000 |
$4000 |
$5000 |
| $30,001 |
$1538 |
$2308 |
$3077 |
$3846 |
| $35,001 |
$1154 |
$1731 |
$2308 |
$2885 |
| $40,001 |
$769 |
$1154 |
$1538 |
$1923 |
| $45,001 |
$385 |
$577 |
$769 |
$962 |
| $50,001 |
$0 |
$0 |
$0 |
$0 |
The entire Subsidy Table may be found here.
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Calculate Your Subsidy
Use the Subsidy Calculator to calculate your adjusted average wage and your firm's subsidy. You will need to enter the wages of all full-time employes and the owner (30 hours or more). |
HOW TO APPLY
Step 1 - Contact your health insurance broker/agent
Employers should first select a health insurance broker/agent who will assist with the subsidy application process.
Step 2 - Complete the application
The employer will have to provide the required information in an application for health insurance plus additional information about the wages of each full-time employee.
Based on that information, the broker/agent will be able to calculate the total subsidy per employee for different health plans as well as the total cost to the employer after the subsidy is applied.
Step 3 - Select a health benefit plan
The employer and broker/agent will work together to select a small employer health benefit plan that includes a wellness benefit.
A wellness benefit must be included within the health plan in order for the plan to qualify for the subsidy.
Step 4 - Determine Employer Contribution
The employer will determine the employer contribution to the employees' premium. If the health plan includes a Health Savings Account, the employer also determines the amount of the employer contribution.
The total subsidy is divided between an employer and the employee based on the contribution each makes toward the cost of coverage.
Step 5 - Establish a Section 125 Plan.
The employer must establish a Section 125 plan within 60 days of enrollment in the Health Insurance Partnership Program.
A Section 125 payroll deduction plan can either be a premium only plan or a cafeteria plan. A Section 125 plan allows employee premium payments to be withheld from pay on a pre-tax basis, saving income and social security taxes for the employee and social security taxes for the employer. Please consult with a tax advisor about the tax advantages of a payroll deduction plan under Section 125 of the Internal Revenue Code.
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