You should be able to set thsi up with a promotion. You shouldn't need a 3rd party add-on.
Our blog article here shows how to setup a promotion for shipping. In this blog we talk about a 50% off shipping for UPS Ground only, but you could set it up for 100% if you wanted. I think you may want to select "Discount Shipping Only" after checking "Discount Shipping".
If you are running into issues setting up your shipping discount you may want to check that you have the AppConfigs for ShowGiftRegistryButtons and AllowMultipleShippingAddressPerOrder set to FALSE. If they are true, set them to false to work in the promotions editor and then set them back to true when you rae done.
I think that UPS Ground is only available for the lower 48 states. If that is true, you wouldn't need to do anything more than setup your discount limited to UPS Ground, but if you needed to further restrict the states you could enable the shipping state requirement and put in a comma separated list of states.
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