Small business, big break

State's health insurance subsidy due to begin in October

August 26, 2008|By Hanah Cho | Hanah Cho,hanah.cho@baltsun.com

Adrienne Summers left a job this month to focus on running her floral shop full time in Frederick County. But the decision meant losing health insurance for her and her two children.

Seeking affordable options, Summers stumbled onto an attractive offer: A new state program that would help provide coverage for employees and their families at small businesses, like hers, that don't provide insurance.

Under the Health Insurance Partnership, a business that has fewer than nine full-time employees with an average wage below $50,000 is eligible for subsidies to cover up to 50 percent of premiums. Enrollment for the program - one of several health care measures enacted in the past year - begins next month for coverage that starts Oct. 1.

"It's something that would work for me," said Summers, of Jefferson, who employs one full-time and several part-time and seasonal workers. "I'm very concerned with health care, especially with children." The Maryland Health Care Commission, which administers the subsidy, is holding a series of meetings for small businesses around the state.

Dr. Rex Cowdry, the commission's executive director, expects the program to help up to 1,500 businesses in the first year. The state allocated $15 million for the first year, which is half of the $30 million first projected for implementation.

A surplus from the Maryland Health Insurance Plan, a state-sponsored program for Marylanders unable to obtain insurance, is paying for the subsidy.

Enrollment will be limited to stay within the program's budget, according to the state.

Small businesses may contact insurance agents and brokers to sign up for subsidy-eligible plans offered by CareFirst BlueCross BlueShield, Coventry Health Care, United HealthCare and Aetna.

The subsidy depends on type of coverage and annual average wage of the business. The subsidy is divided between employer and employee, based on their contributions.

The state, for example, would provide a subsidy of up to $5,000 for family coverage to a business that employs workers with an average salary of $25,000 or less. Nearly 800,000 residents, or 14 percent of the state's population, lack health insurance. Companies with fewer than 25 workers have 42 percent of the uninsured employees in Maryland, according to the Maryland Health Care Commission.

Health insurance is a huge concern for small businesses. Small-business owners surveyed this year by the National Federation for Independent Business ranked cost of health insurance as the No. 1 problem.

With costs increasing 84 percent since 2001, some owners have canceled their employee plans, and many new businesses never enroll in one, according to the trade group.

Penny Troutner, owner of Light Street Cycles in South Baltimore, tried once to offer group health insurance to her employees but could not keep up with the payments. Troutner, who has three full-time workers, including herself, plans to take advantage of the subsidy.

But some small-business owners like Janet Parker are upset at being excluded because they already have group health insurance.

Parker, who with a partner operates Paned Expressions Studio, a stained-glass business in Edgewood, says small businesses like hers are juggling rising health care costs, along with other prices.

"I think the legislature is penalizing small businesses that are doing their best to do the right thing for the employees," said Parker.

While sympathetic to such complaints, Cowdry says the state could not afford an initiative that offers a subsidy to all employers.

Learn more

Upcoming MHCC meetings for small businesses:

Today, 8:30 a.m. Celebrate Health & Wellness, 12803 Oak Hill Ave., Suite A, Hagerstown.

Today, 4 p.m. Prince George's County Economic Development Corp., 1100 Mercantile Lane, Largo.

Tomorrow, 9 a.m. Maryland Technology Development Center, 9700 Great Seneca Highway, Rockville.

Tomorrow, 6:30 p.m. Maryland Health Care Commission, 4160 Patterson Ave., Baltimore.

Thursday, 8 a.m. Southern Maryland Oil, 6355 Crain Highway, La Plata.

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