Proposed Revisions to the Responsible Payment of Employee Health Care Expenses Act

I previously wrote here about a recent Maryland law that requires bidders, contractors and subcontractors on state projects to pay certain employee health care expenses.  It appears that the Maryland General Assembly is considering limiting the application of the law.  A recent bill, found here, would (a) eliminate the minority business exemption, (b) exempt businesses employing 50 or fewer people and which did not exceed an average of $7,000,000 in gross sales for the past three years, and also (c) would exempt state jobs valued at less than $500,000.  The bill would also add the Maryland Stadium Authority and the University System of Maryland as entities to which certification is to be made, and would extend the reduced requirements for those entities to July 1, 2021.

The current law requires bidders, contractors, or subcontractors with more than thirty employees and whose employees work on or at the site of a State-funded construction project to provide proof that they pay certain health care related expenses for those employees who work on or at the State site.  Employers can either pay

            (a) aggregate health care expenses of at least 5% of their employees’ aggregate social security wages, or

            (b) 50% or more of their employees’ health care premiums.

Minority business enterprises are currently exempt from the Act.  The new law does contain a phase-in period.  Before July 1, 2020 (and proposed until July 1, 2021 for MSA and UM, as noted above), businesses can certify that under an existing health care plan or collective bargaining agreement, the employer pays some portion of employee health care expenses, and that, upon renewal, it will meet the more stringent standards.