Ch. 279                                    1996 LAWS OF MARYLAND

(2)     "Small employer" includes:

(i) If the requirements of paragraph (1)(i)1 and 2 of this subsection
are satisfied, a local government body of:

1.       A charter county established under Article 25A of the Code;

2.       A code county established under Article 25B of the Code;

3.       A board of county commissioners established or operating
under Article 25 of the Code; and

4.       A municipal corporation established or operating under
Article 23A of the Code; and

(ii) A nonprofit organization, which has been determined by the
Internal Revenue Service to be exempt from taxation under § 501(c)(3), (4), or (6) of the
Internal Revenue Code, with at least one eligible employee.

(3)     (i) A carrier may not impose a minimum participation requirement
for a small employer that is greater than 75 percent of eligible employees of the small
employer.

(ii) In applying minimum participation requirements with respect to a
small employer to determine whether the applicable percentage of participation is met, a
carrier may not consider eligible employees or dependents that have coverage under a
public or private health insurance plan or other health benefit arrangement, including
Medicare, Medicaid, and CHAMPUS, that provides benefits similar to or exceeding the
benefits provided under the comprehensive standard benefit plan.

(4)     If the federal Employee Retirement Income Security Act is amended to
exclude employee groups under a specific size, notwithstanding paragraph (1)(i) of this
subsection, this subtitle shall apply to any employee group size that is excluded from that
federal Act.

(5)     In determining the number of eligible employees who meet the
requirements under paragraph (1)(i) of this subsection, companies which are affiliated
companies or which are eligible to file a consolidated federal income tax return shall be
considered one employer.

(6)     In determining the number of eligible employees who meet the
requirements under paragraph (1)(i) of this subsection, an employee may not be counted
who:

(i) Is otherwise covered under a public or private health insurance
plan or other health benefit arrangement; or

(ii) Is a part-time employee.

(7)     Notwithstanding the provisions of paragraph (1)(i) of this subsection, in
otherwise satisfying the requirements of paragraph (1)(i) of this subsection, a small

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