EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1439*
HOUSE BILL 1439
J5 5lr1878
CF SB 760
By: Delegates Qi, Crosby, Bagnall, Cardin, Fair, D. Jones, Taveras, Wims,
Woorman, and Wu
Introduced and read first time: February 7, 2025
Assigned to: Health and Government Operations and Economic Matters
A BILL ENTITLED
AN ACT concerning 1
Better Small Business Employee Benefit Act of 2025 2
FOR the purpose of exempting from certain requirements relating to offering health benefit 3
plans to small employers in the State health benefit plans issued through a 4
professional employer organization, coemployer, or other organization located in the 5
State; and generally relating to health benefit plans issued through professional 6
employer organizations, coemployers, and other organizations that engage in 7
employee leasing. 8
BY repealing and reenacting, without amendments, 9
Article – Insurance 10
Section 15–1201(a) and (i)(1) and 31–101(a) 11
Annotated Code of Maryland 12
(2017 Replacement Volume and 2024 Supplement) 13
BY repealing and reenacting, with amendments, 14
Article – Insurance 15
Section 15–1201(i)(2), 15–1202(b), 15–1204.1, and 31–101(aa) 16
Annotated Code of Maryland 17
(2017 Replacement Volume and 2024 Supplement) 18
BY adding to 19
Article – Insurance 20
Section 15–1201(r–1) 21
Annotated Code of Maryland 22
(2017 Replacement Volume and 2024 Supplement) 23
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 24
That the Laws of Maryland read as follows: 25
2 HOUSE BILL 1439
Article – Insurance 1
15–1201. 2
(a) In this subtitle the following words have the meanings indicated. 3
(i) (1) “Health benefit plan” means: 4
(i) a policy or certificate for hospital or medical benefits issued by 5
an insurer; 6
(ii) a nonprofit health service plan contract; or 7
(iii) a health maintenance organization subscriber or group master 8
contract. 9
(2) “Health benefit plan” includes a policy or certificate for hospital or 10
medical benefits that covers residents of this State who are eligible employees and that is 11
issued through[: 12
(i)] a multiple employer trust or association located in this State or 13
another state[; or 14
(ii) a professional employer organization, coemployer, or other 15
organization located in this State or another state that engages in employee leasing]. 16
(R–1) (1) “PROFESSIONAL EMPLOYER ORGANIZATION” MEANS A BUSINESS 17
ENTITY THAT ENTERS I NTO A CONTRACTUAL AGREEMEN T WITH ANOTHER BUSINESS 18
ENTITY UNDER WHICH EMPLOYER RESPONSIBILITIES ARE ALLOCATED BETWEEN 19
THE BUSINESS ENTIT IES FOR ALL OR AT LEAST HALF OF THE WORKSITE EMPLOYEES 20
OF THE SECOND BUSINESS ENTITY . 21
(2) “PROFESSIONAL EMPLOYER ORGANIZATION ” DOES NOT INCLUDE 22
A BUSINESS ENTITY TH AT: 23
(I) RECRUITS AND HIRES I TS OWN EMPLOYEES ; 24
(II) FINDS OTHER ORGANIZA TIONS THAT NEED THE SERVICES 25
OF ITS EMPLOYEES; 26
(III) ASSIGNS EMPLOYEES TO CLIENTS ON A TEMP ORARY BASIS 27
TO SUPPORT OR SUPPLE MENT THE CLIENT ’S WORKFORCE IN SPECI AL 28
CIRCUMSTANCES SUCH A S EMPLOYEE ABSENCES , TEMPORARY SKILL SHOR TAGES, 29
AND SEASONAL WORKLOADS ; AND 30
HOUSE BILL 1439 3
(IV) CUSTOMARILY ATTEMPTS TO REASSIGN THE EMPLOYEES TO 1
OTHER CLIENTS WHEN T HE EMPLOYEES FINISH EACH ASSIGNME NT. 2
15–1202. 3
(b) This subtitle applies to any health benefit plan offered by an association, [a 4
professional employer organization, or any other entity,] including a plan issued under the 5
laws of another state, if the health benefit plan covers eligible employees of one or more 6
small employers and meets the requirements of subsection (a) of this section. 7
15–1204.1. 8
(a) (1) This section applies to a carrier with respect to any health benefit plan 9
that: 10
[(1)] (I) is not a grandfathered health plan, as defined in § 1251 of the 11
Affordable Care Act; and 12
[(2)] (II) is issued, delivered, or renewed in the State on or after January 13
1, 2014. 14
(2) THIS SECTION DOES NOT APPLY WITH RESPECT TO A HEALTH 15
BENEFIT PLAN ISSUED THROUGH A PROFESSION AL EMPLOYER ORGANIZA TION. 16
(b) (1) Except as provided in this subsection and § 31–110(f) of this article, a 17
carrier may not offer health benefit plans to small employers in the State unless the carrier 18
also offers qualified health plans, as defined in § 31–101 of this article, in the Small 19
Business Health Options Program of the Maryland Health Benefit Exchange in compliance 20
with the requirements of Title 31 of this article. 21
(2) A carrier is exempt from the requirement in paragraph (1) of this 22
subsection if: 23
(i) the reported total aggregate annual earned premium from all 24
health benefit plans offered to small employers in the State for the carrier and any other 25
carriers in the same insurance holding company system, as defined in § 7–101 of this 26
article, is less than $20,000,000; 27
(ii) the Commissioner determines that the carrier complies with the 28
procedures established under paragraph (3) of this subsection; and 29
(iii) when the carrier ceases to meet the requirements for the 30
exemption, the carrier provides to the Commissioner immediate notice and its plan for 31
complying with the requirement in paragraph (1) of this subsection. 32
4 HOUSE BILL 1439
(3) The Commissioner shall establish procedures for a carrier to submit 1
evidence each year that the carrier meets the requirements necessary to qualify for an 2
exemption under paragraph (2) of this subsection. 3
(4) Notwithstanding the exemption provided in paragraph (2) of this 4
subsection, the Commissioner, in consultation with the Maryland Health Benefit 5
Exchange: 6
(i) may assess the impact of the exemption provided in paragraph 7
(2) of this subsection and, based on that assessment, alter the limit on the amount of annual 8
premiums that may not be exceeded to qualify for the exemption; and 9
(ii) shall make any change in the exemption requirement by 10
regulation. 11
31–101. 12
(a) In this subtitle the following words have the meanings indicated. 13
(aa) (1) “Small employer” means an employer that, during the preceding 14
calendar year, employed an average of not more than 50 employees. 15
(2) For purposes of this subsection: 16
(i) all persons treated as a single employer under § 414(b), (c), or (o) 17
of the Internal Revenue Code shall be treated as a single employer; 18
(ii) an employer and any predecessor employer shall be treated as a 19
single employer; 20
(iii) the number of employees of an employer shall be determined by 21
adding: 22
1. the number of full–time employees; and 23
2. the number of full–time equivalent employees, which shall 24
be calculated for a particular month by dividing the aggregate number of hours of service 25
of employees who are not full–time employees for the month by 120; 26
(iv) if an employer was not in existence throughout the preceding 27
calendar year, the determination of whether the employer is a small employer shall be 28
based on the average number of employees that the employer is reasonably expected to 29
employ on business days in the current calendar year; 30
(v) an employer that makes enrollment in qualified health plans 31
available to its employees through the SHOP Exchange, and would cease to be a small 32
employer by reason of an increase in the number of its employees, shall continue to be 33 HOUSE BILL 1439 5
treated as a small employer for purposes of this subtitle as long as it continuously makes 1
enrollment through the SHOP Exchange available to its employees; and 2
(vi) [to the extent permitted by federal law, an entity that leases 3
employees from a professional employer organization, coemployer, or other organization 4
engaged in employee leasing and that otherwise meets the description in this section shall 5
be treated as a small employer] A WELFARE BENEFIT PL AN OFFERED TO A WORK SITE 6
EMPLOYEE OF A PROFESSIONAL EM PLOYER ORGANIZATION SHALL BE TREATED AS 7
A SINGLE EMPLOYER WE LFARE BENEFIT PLAN . 8
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 9
policies, contracts, and health benefit plans issued, delivered, or renewed in the State on or 10
after January 1, 2026. 11
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 12
January 1, 2026. 13