Title 17. Special Provisions -- State and Local Subdivisions — Subtitle 8. Responsible Payment of Employee Health Care Expenses
Statutes in effect as of October 1, 2026.
Md. Code Ann., State Fin. & Proc. § 17-801 (2026)
Title 17. Special Provisions -- State and Local Subdivisions
Subtitle 8. Responsible Payment of Employee Health Care Expenses
§ 17–801LinkCopy Citation
(a)
In this subtitle the following words have the meanings indicated.
(b)
“Aggregate employee health care expenses” means all employee health care expenses paid by a responsible bidder or subcontractor.
(c)
(1)
“Aggregate Social Security wages” means all wages paid by a responsible bidder or subcontractor to an employee for the period of time in which the wages are paid.
(2)
“Aggregate Social Security wages” does not include wages that are above the federal Social Security contribution and benefit base.
(d)
“Employee” means an individual who is employed by a responsible bidder, contractor, or subcontractor to work on or at the site of a State–funded construction project.
(e)
(1)
“Employee health care expenses” means any costs for health care services that are paid by a responsible bidder or subcontractor to an employee, unless the employee has coverage under another plan.
(2)
“Employee health care expenses” includes:
(i)
contributions made on behalf of an employee to provide credible health care coverage in the form of any group policy, contract, or program that is written or administered by a disability insurer, health care service plan, fraternal benefits society, self–insured employer plan, or any other entity, in this State or elsewhere, that arranges or provides medical, hospital, and surgical coverage not designated to supplement other private or governmental plans;
(ii)
contributions made on behalf of an employee to a health savings account as defined under § 223 of the Internal Revenue Code or to any other account having a substantially equivalent purpose or effect without regard to whether the contributions qualify for a tax deduction or are excludable from employee income;
(iii)
reimbursements to an employee for expenses incurred in the purchase of health care services;
(iv)
payments to a third party for the purpose of providing health care services for an employee;
(v)
payments under a collective bargaining agreement for the purpose of providing health care services for an employee; and
(vi)
costs incurred in the direct delivery of health care services to an employee.
(f)
“Health care services” means medical care, services, or goods that:
(1)
qualify as a tax deductible expense under § 213 of the Internal Revenue Code; or
(2)
have a substantially equivalent purpose to medical care, services, or goods that qualify as a tax deductible expense under § 213 of the Internal Revenue Code.
(g)
“Subcontractor” means a person:
(1)
listed on a responsive bid to provide construction services under a portion of a contract with the State; or
(2)
added to a contract with the State after the contract is awarded in order to provide construction services under a portion of the contract.
Md. Code Ann., State Fin. & Proc. § 17-802 (2026)
Title 17. Special Provisions -- State and Local Subdivisions
Subtitle 8. Responsible Payment of Employee Health Care Expenses
§ 17–802LinkCopy Citation
(a)
Subject to subsection (b) of this section, the Board shall adopt regulations that require all bidders, contractors, and subcontractors to pay employee health care expenses as required by this subtitle.
(b)
This subtitle does not apply to:
(1)
a minority business enterprise, as defined under Title 14, Subtitle 3 of this article; or
(2)
a small business with 30 or fewer employees.
Md. Code Ann., State Fin. & Proc. § 17-803 (2026)
Title 17. Special Provisions -- State and Local Subdivisions
Subtitle 8. Responsible Payment of Employee Health Care Expenses
§ 17–803LinkCopy Citation
(a)
By regulation, the Department of General Services and the Department of Transportation shall establish procedures for each bidder, contractor, or subcontractor that performs work on a State–funded construction project to certify that the bidder, contractor, or subcontractor pays employee health care expenses in accordance with subsection (b) of this section.
(b)
(1)
Except as provided in paragraph (2) of this subsection, a bidder, contractor, or subcontractor shall demonstrate the payment of employee health care expenses by submitting certification or a valid contract to the Department of General Services or the Department of Transportation evidencing that, with respect to the employees who will work on or at the site of the project:
(i)
the bidder, contractor, or subcontractor pays aggregate employee health care expenses of at least 5% of the aggregate Social Security wages paid by the bidder, contractor, or subcontractor; or
(ii)
the bidder, contractor, or subcontractor pays 50% or more of the required premium necessary to obtain coverage by a credible health care insurance plan.
(2)
Before July 1, 2021, a bidder, contractor, or subcontractor may demonstrate payment of employee health care expenses by submitting certification or a valid contract to the Department of General Services or the Department of Transportation evidencing, with respect to the employees who will work on or at the site of the project, that:
(i)
under a contract with a credible health care insurance plan or through a collective bargaining agreement, the bidder, contractor, or subcontractor pays some portion of employee health care expenses; and
(ii)
the bidder, contractor, or subcontractor will meet the requirements of paragraph (1) of this subsection on renewal of the contract or collective bargaining agreement.
(c)
The Department of General Services and the Department of Transportation shall collaborate with the Maryland Department of Labor to develop the form required for certification under subsection (b) of this section.
(d)
A procurement officer may require a responsible bidder or subcontractor to submit records to the procurement officer that are sufficient to support the certification that the bidder or subcontractor submitted in accordance with subsection (b) of this section.
(e)
If a responsible bidder that is awarded a contract to work on a State–funded construction project fails to submit records required under this section within a reasonable period of time, the procurement officer may void the contract.
Md. Code Ann., State Fin. & Proc. § 17-804 (2026)
Title 17. Special Provisions -- State and Local Subdivisions
Subtitle 8. Responsible Payment of Employee Health Care Expenses
§ 17–804LinkCopy Citation
(a)
A person or an entity may not provide false information under this subtitle.
(b)
A person who violates subsection (a) of this section shall be subject to a civil penalty of not less than $2,500 and not exceeding $25,000 for each violation.
(c)
An action for a civil penalty under this section may be brought by:
(1)
the unit that awarded the contract, in its own name;
(2)
the Attorney General, in the name of the State; or
(3)
a State’s Attorney, in the name of the State.