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