EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0632*
SENATE BILL 632
J5, C3 2lr1676
CF HB 709
By: Senators Hester, Feldman, and Benson
Introduced and read first time: February 3, 2022
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Maryland Health Benefit Exchange – Small Business and Nonprofit Health 2
Insurance Subsidies Program 3
FOR the purpose of establishing a Small Business and Nonprofit Health Insurance 4
Subsidies Program in the State to provide subsidies to small business and nonprofit 5
employers and their employees for the purchase of qualified health benefit plans on 6
the Maryland Health Benefit Exchange; and generally relating to the Maryland 7
Health Benefit Exchange and subsidies for small businesses and nonprofits. 8
BY repealing and reenacting, with amendments, 9
Article – Insurance 10
Section 31–107 11
Annotated Code of Maryland 12
(2017 Replacement Volume and 2021 Supplement) 13
BY adding to 14
Article – Insurance 15
Section 31–123 16
Annotated Code of Maryland 17
(2017 Replacement Volume and 2021 Supplement) 18
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
That the Laws of Maryland read as follows: 20
Article – Insurance 21
31–107. 22
(a) There is a Maryland Health Benefit Exchange Fund. 23
(b) (1) The purpose of the Fund is to: 24 2 SENATE BILL 632
(i) provide funding for the operation and administration of the 1
Exchange in carrying out the purposes of the Exchange under this subtitle; 2
(ii) provide funding for the establishment and operation of the State 3
Reinsurance Program authorized under this subtitle; 4
(iii) provide funding for the Medical Assistance Program and the 5
Senior Prescription Drug Assistance Program; 6
(iv) provide funding for the establishment and operation of Health 7
Equity Resource Communities under Title 20, Subtitle 14 of the Health – General Article; 8
[and] 9
(v) provide funding for the establishment and operation of the 10
State–Based Young Adult Health Insurance Subsidies Pilot Program authorized under this 11
subtitle; AND 12
(VI) PROVIDE FUNDING FOR THE ESTABLISHMENT AN D 13
OPERATION OF THE SMALL BUSINESS AND NONPROFIT HEALTH INSURANCE 14
SUBSIDIES PROGRAM AUTHORIZED UN DER THIS SUBTITLE . 15
(2) The operation and administration of the Exchange, the State 16
Reinsurance Program, [and] the State–Based Young Adult Health Insurance Subsidies 17
Pilot Program, AND THE SMALL BUSINESS AND NONPROFIT HEALTH INSURANCE 18
SUBSIDIES PROGRAM may include functions delegated by the Exchange to a third party 19
under law or by contract. 20
(c) The Exchange shall administer the Fund. 21
(d) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 22
the State Finance and Procurement Article. 23
(2) The State Treasurer shall hold the Fund separately, and the 24
Comptroller shall account for the Fund. 25
(e) The Fund consists of: 26
(1) any user fees or other assessments collected by the Exchange; 27
(2) all revenue deposited into the Fund that is received from the 28
distribution of the premium tax under § 6–103.2 of this article; 29
(3) income from investments made on behalf of the Fund; 30
(4) interest on deposits or investments of money in the Fund; 31 SENATE BILL 632 3
(5) money collected by the Board as a result of legal or other actions taken 1
by the Board on behalf of the Exchange or the Fund; 2
(6) money donated to the Fund; 3
(7) money awarded to the Fund through grants; 4
(8) any pass–through funds received from the federal government under a 5
waiver approved under § 1332 of the Affordable Care Act; 6
(9) any funds designated by the federal government to provide reinsurance 7
to carriers that offer individual health benefit plans in the State; 8
(10) any funds designated by the State to provide reinsurance to carriers 9
that offer individual health benefit plans in the State; 10
(11) any funds designated by the State to provide State–based health 11
insurance subsidies to young adults in the State; 12
(12) ANY FEDERAL FUNDS AV AILABLE TO PROVIDE H EALTH 13
INSURANCE SUBSIDIES TO QUALIFIED SMALL B USINESS AND NONPROFIT 14
EMPLOYERS AND THEIR EMPLOYEES IN THE STATE, INCLUDING FUNDS FROM THE 15
FEDERAL AMERICAN RESCUE PLAN OF 2021; 16
[(12)] (13) any federal funds received in accordance with § 31–121 of this 17
subtitle for the administration of small business tax credits; and 18
[(13)] (14) any other money from any other source accepted for the benefit 19
of the Fund. 20
(f) (1) The Fund may be used only: 21
(i) 1. for the operation and administration of the Exchange in 22
carrying out the purposes authorized under this subtitle; 23
2. for the establishment and operation of the State 24
Reinsurance Program; and 25
3. for appropriations to the Health Equity Resource 26
Community Reserve Fund under § 20–1407 of the Health – General Article; 27
(ii) in fiscal years 2021 and 2022, for the Medical Assistance 28
Program within the Medical Care Programs Administration of the Maryland Department 29
of Health; 30
4 SENATE BILL 632
(iii) in fiscal year 2022, for the Senior Prescription Drug Assistance 1
Program established under Title 15, Subtitle 10 of the Health – General Article; [and] 2
(iv) for the establishment and operation of the State–Based Young 3
Adult Health Insurance Subsidies Pilot Program; AND 4
(V) FOR THE ESTABLISHMEN T AND OPERATION OF T HE SMALL 5
BUSINESS AND NONPROFIT HEALTH INSURANCE SUBSIDIES PROGRAM. 6
(2) In each of fiscal years 2023 through 2025, the Governor shall: 7
(i) transfer $15,000,000 to the Health Equity Resource Community 8
Reserve Fund; and 9
(ii) include the funds transferred in accordance with item (i) of this 10
paragraph in the annual budget bill as an appropriation to the Health Equity Resource 11
Community Reserve Fund under § 20–1407 of the Health – General Article. 12
(g) (1) The Board shall maintain separate accounts within the Fund for 13
Exchange operations, for the State Reinsurance Program, [and] for the State–Based Young 14
Adult Health Insurance Subsidies Pilot Program, AND FOR THE SMALL BUSINESS AND 15
NONPROFIT HEALTH INSURANCE SUBSIDIES PROGRAM. 16
(2) Accounts within the Fund shall contain the money that is intended to 17
support the purpose for which each account is designated. 18
(3) Funds received from the distribution of the premium tax under § 19
6–103.2 of this article shall be placed in the account for Exchange operations and may be 20
used only for the purpose of funding the operation and administration of the Exchange. 21
(4) The following funds may be used only for the purposes of funding the 22
State Reinsurance Program: 23
(i) any pass–through funds received from the federal government 24
under a waiver approved under § 1332 of the Affordable Care Act to provide reinsurance to 25
carriers that offer individual health benefit plans in the State; 26
(ii) any funds designated by the federal government to provide 27
reinsurance to carriers that offer individual health benefit plans in the State; and 28
(iii) any funds designated by the State to provide reinsurance to 29
carriers that offer individual health benefit plans in the State. 30
(h) (1) Expenditures from the Fund for the purposes authorized by this 31
subtitle may be made only: 32
SENATE BILL 632 5
(i) with an appropriation from the Fund approved by the General 1
Assembly in the State budget; or 2
(ii) by the budget amendment procedure provided for in Title 7, 3
Subtitle 2 of the State Finance and Procurement Article. 4
(2) Notwithstanding § 7–304 of the State Finance and Procurement Article, 5
if the amount of the distribution from the premium tax under § 6–103.2 of this article 6
exceeds in any State fiscal year the actual expenditures incurred for the operation and 7
administration of the Exchange, funds in the Exchange operations account from the 8
premium tax that remain unspent at the end of the State fiscal year shall revert to the 9
General Fund of the State. 10
(3) If operating expenses of the Exchange may be charged to either State 11
or non–State fund sources, the non–State funds shall be charged before State funds are 12
charged. 13
(i) (1) The State Treasurer shall invest the money of the Fund in the same 14
manner as other State money may be invested. 15
(2) Any investment earnings of the Fund shall be credited to the Fund. 16
(3) Except as provided in subsection (h)(2) of this section, no part of the 17
Fund may revert or be credited to the General Fund or any special fund of the State. 18
(j) A debt or an obligation of the Fund is not a debt of the State or a pledge of 19
credit of the State. 20
31–123. 21
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 22
INDICATED. 23
(2) “PROGRAM” MEANS THE SMALL BUSINESS AND NONPROFIT 24
HEALTH INSURANCE SUBSIDIES PROGRAM. 25
(3) (I) “QUALIFIED EMPLOYER ” MEANS AN EMPLOYER W ITH 26
FEWER THAN 25 FULL–TIME EQUIVALENT EMPL OYEES. 27
(II) “QUALIFIED EMPLOYER ” INCLUDES A NONPROFIT 28
ORGANIZATION EMPLOYE R WITH FEWER THAN 25 FULL–TIME EQUIVALENT 29
EMPLOYEES. 30
(B) THE EXCHANGE, IN CONSULTATION WITH THE COMMISSIONER AND AS 31
APPROVED BY THE BOARD, SHALL ESTABLISH AND IMPLEMENT A SMALL BUSINESS 32 6 SENATE BILL 632
AND NONPROFIT HEALTH INSURANCE SUBSIDIES PROGRAM TO PROVIDE 1
SUBSIDIES TO QUALIFI ED EMPLOYERS AND THE IR EMPLOYEES FOR THE PURCHASE 2
OF QUALIFIED HEALTH BENEFIT PLANS ON THE EXCHANGE. 3
(C) THE PROGRAM REQUIRED UNDE R THIS SECTION SHALL BE DESIGNED 4
TO REDUCE THE AMOUNT THAT QUALIFIED EMPLO YERS AND THEIR EMPLO YEES PAY 5
FOR QUALIFIED HEALTH BENEFIT PLANS ON THE EXCHANGE. 6
(D) FOR CALEND AR YEARS 2024 THROUGH 2028, THE EXCHANGE, IN 7
CONSULTATION WITH TH E COMMISSIONER AND AS A PPROVED BY THE BOARD, 8
SHALL ESTABLISH SUBS IDY ELIGIBILITY AND PAYMENT PARAMETERS F OR THE 9
PROGRAM. 10
(E) SUBJECT TO AVAILABLE FUNDS, IN EACH OF FISCAL YE ARS 2023 11
THROUGH 2029, THE EXCHANGE MAY DESIGNAT E FUNDS FROM THE FUND TO BE 12
USED FOR THE PROGRAM SO THAT FOR C ALENDAR YEARS 2024 THROUGH 2028 NOT 13
MORE THAN: 14
(1) $45,000,000 IN ANNUAL SUBSIDIES MAY BE PROVIDED TO 15
QUALIFIED EMPLOYERS AND THEIR EMPLOYEES WHO MEET THE SUB SIDY 16
ELIGIBILITY AND PAYM ENT PARAMETERS ESTAB LISHED UNDER SUBSECT ION (D) OF 17
THIS SECTION; AND 18
(2) $3,000,000 MAY BE SPENT IN SMAL L BUSINESS OUTREACH 19
ACTIVITIES FOR THE P URPOSE OF EDUCATING QUALIFIED EMPLOYERS ABOUT THE 20
PROGRAM. 21
(F) ON OR BEFORE JANUARY 1, 2023, THE EXCHANGE SHALL ADOPT 22
REGULATIONS CARRYING OUT THIS SECTION . 23
(G) (1) THE EXCHANGE SHALL TRACK ON A MONTHLY BASIS 24
EXPENDITURES ON SUBS IDIES PROVIDED UNDER THE PROGRAM, INCLUDING: 25
(I) THE AVERAGE NUMBER O F QUALIFIED EMPLOYER S AND 26
THEIR EMPLOYEES RECEIVING SU BSIDIES UNDER THE PROGRAM; AND 27
(II) THE AVERAGE SUBSIDY AMOUNT RECEIVED BY Q UALIFIED 28
EMPLOYERS AND THEIR EMPLOYEES UNDER THE PROGRAM. 29
(2) THE INFORMATION TRACK ED BY THE EXCHANGE UNDER 30
PARAGRAPH (1) OF THIS SUBSECTION S HALL BE: 31
(I) POSTED ON THE WEBSIT E OF THE EXCHANGE; 32 SENATE BILL 632 7
(II) INCLUDED IN THE ANNU AL REPORT REQUIRED U NDER § 1
31–119(D) OF THIS SUBTITLE; AND 2
(III) ON OR BEFORE DECEMBER 1, 2028, REPORTED TO THE 3
SENATE FINANCE COMMITTEE AND THE HOUSE HEALTH AND GOVERNMENT 4
OPERATIONS COMMITTEE, IN ACCORDANCE WITH § 2–1257 OF THE STATE 5
GOVERNMENT ARTICLE. 6
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 7
October 1, 2022. It shall remain effective for a period of 7 years and, at the end of September 8
30, 2029, this Act, with no further action required by the General Assembly, shall be 9
abrogated and of no further force and effect. 10