Looking for affordable health insurance for your employees? As an independent agency we’ll help you navigate the options to find Maryland small business health insurance from Baltimore to Southern MD!
We’ll talk about the Maryland Health Connection for Small Business and the Small Business Health Care Tax Credit, and offer alternative solutions.
In this guide, we’ll help you shop for small business health insurance in Maryland and show you how to get free assistance from a licensed broker.
Let BenZen assist you in finding the perfect health insurance coverage for your employees.
At BenZen, we make it easy to get your team covered without the hassle.
What’s Inside
What Are The Requirements For Small Business Health Insurance in Maryland?
The IRS and SBA have different criteria to define a small business, but when it comes to employee health insurance requirements it’s the Affordable Care Act (ACA) definition.
According to ACA, if you’re in business with less than 50 full-time employees you are not required to provide health insurance to your workers.
Most carriers will require 2 full-time employees to establish a group.
If you have part-time employees the IRS will make you include those workers in your calculations to make sure you are under the limit.
Companies with more than 50 are required to offer health insurance.
You probably know as a Maryland small business owner, offering employee health insurance has many advantages:
Group rates, accessibility to affordable healthcare, potential tax savings and happy employees to name a few!
Small Business Health Insurance Eligibility
Before you dive into small business health insurance in Maryland you’ll have to determine your eligibility:
- A principal business address in Maryland
- Federal employer identification number (EIN)
- Less than 50 full-time equivalent employees (FTEs)
- A minimum of 2 full-time employees participating
- Offer coverage to all full-time employees
Full-time employees work at least 30 hours per week.
The Difference Between On-Exchange & Off-Exchange
You can offer Maryland small business health insurance on-exchange or off-exchange.
Both types are qualified health plans under the Affordable Care Act, but they differ in how they are obtained and managed.
On-exchange plans are policies purchased through a health insurance marketplace, either federal or state. In this case, it’s the Maryland Health Connection.
Off-exchange plans are policies that are purchased directly from insurance companies or through licensed brokers outside of the state health insurance marketplace.
One big difference – off-exchange plans do not qualify for the Small Business Health Care Tax Credit.
However, off-exchange plans sometimes provide greater flexibility in terms of plan choices, prices, provider networks and convenience.
Also, it’s important to know both categories are mandated by the Affordable Care Act such as minimum essential coverage.
These protections include coverage for essential health benefits, prohibition of discrimination based on pre-existing conditions, and limits on out-of-pocket expenses.
Insurance companies offering off-exchange plans must also comply with these regulations to ensure that consumers receive comprehensive and affordable coverage.
Maryland Health Connection for Small Business
Maryland Health Connection (MHC) is the state’s health insurance marketplace for individual plans.
The business portal was specifically designed to streamline the process of obtaining Maryland small business health insurance for companies with less than 50 full-time employees.
BenZen specializes in MD small businesses with less than 10.
Small business owners can get free assistance from licensed and certified insurance brokers that have partnered with Maryland Health Connection.
You do not have to go through Maryland Health Connection for small group health insurance unless you want to claim the Small Business Health Care Tax Credit.
Note: Be sure to consult with your tax advisor
A broker can help you choose the right plans, educate your employees, help navigate the enrollment process and provide expert advice on selecting the best options for your team.
Do I Need to Enroll Through Maryland Health Connection?
No. You can avoid a few additional steps by setting up your small group directly with an insurance carrier through a broker.
For example, we can send you a free quote with just some basic information.
However, going through Maryland Health Connection for Small Business offers several advantages:
- Plans are certified by the state marketplace and cover essential health benefits
- Brokers are vetted, certified and contracted to assist at no additional charge
- Eligibility for the Small Business Health Care Tax Credit
Again, you can shop for small business health insurance off-exchange, but you won’t be able to claim the tax credit.
Be sure to consult with your tax advisor for more information.
As an authorized broker we are committed to making it easy to offer small business health insurance to more Marylanders.
Small Business Health Care Tax Credit
Small businesses in Maryland that provide health insurance coverage to employees may qualify for a tax credit from the IRS to help lower the cost of coverage.
To be eligible for the Small Business Health Care Tax Credit, your business must:
- Enroll through Maryland Health Connection for Small Business (SHOP)
- Have less than 25 full-time employees
- Pay an average salary of less than $56,000 (as of this writing)
- Contribute at least 50% toward employee premiums
Eligibility for the Small Business Health Care Tax Credit is determined by the IRS.
You may apply for the credit only after being deemed eligible to purchase a plan through Maryland Health Connection’s Small Business Marketplace.
The tax credit may be claimed for any two consecutive years. At the end of the year, when you file your business taxes, you will fill out IRS Form 8941 to claim the tax credit.
The IRS will have the final say on how much your small business may receive.
Note: Be sure to consult with your tax advisor
Calculating Full-Time Employees (FTE)
Ensuring that your employees are eligible for your small business’s health insurance benefits is an essential step.
Here’s how you can determine eligibility at Healthcare.gov using the FTE Calculator:
1. Define Full-Time Employees: In Maryland, a full-time employee is generally someone who works at least 30 hours per week. It’s essential to establish these criteria upfront to identify those employees who qualify for healthcare benefits.
2. Calculate Full-Time Equivalent Employees: If you have a combination of full-time and part-time employees, you’ll need to calculate full-time equivalent (FTE) employees. This calculation considers the total number of hours worked by part-time employees and adds them to the count of full-time employees.
3. Meet Minimum Participation Requirements: To participate in SHOP, your business must have at least one full-time employee (excluding the owner) who meets the 30-hour-per-week criteria.
If your business meets this requirement, you are eligible to offer health insurance coverage to your employees.
By following these steps and making use of Maryland Health Connection, you can streamline the process of securing healthcare benefits for your small business while ensuring that you meet the eligibility requirements for your employees.
This will enable you to provide valuable health coverage to your workforce, enhancing their well-being and the overall appeal of your business.
What’s the Best Small Business Health Insurance in Maryland?
Choosing the best small business health insurance in Maryland depends on a few factors such as the size and location of your company, budget, employee health and personal preference.
- Different Needs: Some businesses prioritize comprehensive coverage for employees, even if it means slightly higher premiums. Others might be more budget-focused, seeking the most affordable option.
- Employee Demographics: The age and health of your employees can impact plan selection. Younger, healthier employees might need a less comprehensive plan compared to an older workforce with potentially higher healthcare needs.
- Plan Details: Beyond provider names, individual plans within each company vary significantly. Factors like network coverage, deductibles, copays, and out-of-pocket maximums all influence the overall value.
Your options for small business health insurance in Maryland include names like CareFirst, Kaiser Permanente, UnitedHealthcare, and Aetna.
Each provider offers different plans with varying levels of coverage, costs, and network options.
Consulting with an insurance broker can help you compare plans & benefits to streamline the process and find the most suitable option for your company.
Note: Effective April 2025, Aetna is exiting the small group market for new fully insured plans in Maryland.
Best Maryland Health Insurance (Network)
Look at plans offered by UnitedHealthcare, arguably the largest healthcare provider in the country.
They’re known for having extensive networks of doctors and hospitals, ensuring your employees have access to a wide range of healthcare providers in and out of the state.
Winner: UnitedHealthcare
Best Maryland Health Insurance (Price)
Industry affects price. I generated a sample quote for an auto body shop (SIC 7532) with 5 employees and calculated the average rate for a Gold Plan:
| Insurance Carrier | Monthly Premium |
|---|---|
| Aetna | $625 |
| Kaiser Permamene | $575 |
| UnitedHealthcare | $650 |
Aetna is one of our most popular plans.
They offer competitive premiums for small group plans with comprehensive coverage and are widely accepted by healthcare providers throughout the state.
Winner: Aetna
Best Maryland Health Insurance (Overall)
Kaiser Permanente consistently ranks high for customer service according to JD Power and a 5-star rating from the National Committee for Quality Assurance.
They’re known for their emphasis on patient experience and integrated care systems.
Winner: Kaiser Permanente
This list is just a starting point. Consult with a broker and get quotes to compare things like premiums, deductibles, copays, and out-of-pocket maximums.
5 Steps to Get Maryland Small Business Health Insurance
If you intend to go through Maryland Health Connection to get small business health insurance follow these steps:
Step 1. Create An Account
The first step is to create an account for your business. You can do this at Maryland Health Connection for Small Business:
Be prepared to provide necessary information about your business, including your Employer Identification Number (EIN).
Step 2. Connect With A Broker
Many small business owners find it helpful to work with a licensed insurance broker to help guide them through the process at no additional cost.
A broker can help you understand the available plans, educate your employees, help navigate the enrollment process and provide expert advice on selecting the best options for your team!
- Plan Selection
- Benefits Consultation
- Enrollment
- Administration
Brokers that partner with Maryland Health Connection do not charge any fees or commissions and are available every step of the way.
My team specializes in Maryland small business health insurance for 2-50 employees. If you’d like to get started contact us!
Step 3. Compare Plans
In Maryland, you’ll find qualified ACA health plans from four major carriers:
- Aetna
- Carefirst
- Kaiser Permamente
- UnitedHealthcare
Use the online tools to compare these plans, assessing factors like coverage, deductibles, and premiums.
Estimate the potential costs for your business based on your selected contribution level and determine the percentage of the premium you want to contribute to your employees’ coverage.
While you’re not required to cover the entire cost, contributions make your business a more attractive place to work.
The typical contribution is 50% for employees and is the minimum required to receive the tax credit.
Step 4. Enroll Your Small Business
Once you receive your eligibility notice it’s up to you how to proceed. You can manage the process yourself or have an agent or broker assist.
Once you decide on an insurance carrier you’ll receive a proposal. Choose how to offer coverage:
Employer Choice: You select one insurance company that offers coverage through the SHOP, and employees may choose any SHOP plan across any metal level that the insurance company offers.
Employee Choice: You select one metal level of coverage, and employees may choose any SHOP plan across all the insurance companies that offer plans at that metal level.
Step 5. Enroll Your Employees
After selecting your health plan, you’ll finalize the group creation with the carrier or work with your broker to enroll employees.
Maryland Health Connection makes it relatively straightforward to add employees, provide them with access to the selected plans, and manage the administrative aspects of your health benefits.
Other Health Insurance Options for Small Businesses in Maryland
While SHOP plans offer a valuable platform for small employers to explore health insurance plans, they represent just one avenue for securing coverage.
Understanding the full spectrum of options is crucial for making informed decisions that align with the unique needs of your business and employees.
Off-Exchange Health Plans
An alternative to SHOP plans, off-exchange plans allow small employers to enroll directly with an insurance company.
These plans still adhere to the Affordable Care Act’s Essential Health Benefits (EHB) requirements, ensuring comprehensive coverage.
However, unlike SHOP plans, off-exchange options are not certified by state marketplaces and you won’t be eligible for the Health Care Tax Credit.
Individual Coverage Health Reimbursement Arrangements (ICHRAs)
ICHRAs offer a flexible approach to employee health benefits. Employers contribute funds to a dedicated account that employees can use to purchase individual health insurance plans on the marketplace.
These contributions are tax-advantaged for both the employer and employee. ICHRAs provide greater choice and control for employees while potentially offering cost savings for employers.
Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)
Designed specifically for small businesses with fewer than 50 full-time equivalent employees, QSEHRAs function similarly to ICHRAs.
Employers contribute funds to reimburse employees for individual health insurance premiums and qualified medical expenses. To ensure affordability, the IRS imposes annual contribution limits.
It’s essential to consult with a qualified tax advisor or insurance professional to determine the most suitable health insurance option for your small business.
Budget, employee demographics, and specific healthcare needs will influence the best choice.
Get Free Assistance!
Navigating Maryland small business health insurance is a lot easier when you have the right information and resources at your disposal.
Providing benefits to your employees not only helps them lead healthier lives but also strengthens your business.
If you’re a small business owner, take advantage of the free resources at Maryland Health Connection:
- Calculate Full-Time Employees (FTE)
- Get a Preliminary Quote
- Connect with a Licensed Certified Broker
Start an estimate, determine your contributions, and enroll in a plan that meets your unique needs and the needs of your employees.
If you have any questions contact us or book a free 15-minute consultation.