2013 Maryland Code
INSURANCE
§ 14-106 - Premium tax exemption report -- In general

§14-106.

(a) It is the public policy of this State that the exemption from taxation for nonprofit health service plans under § 6-101(b)(1) of this article is granted so that funds which would otherwise be collected by the State and spent for a public purpose shall be used in a like manner and amount by the nonprofit health service plan.

(b) By March 1 of each year or a deadline otherwise imposed by the Commissioner for good cause, each nonprofit health service plan shall file with the Commissioner a premium tax exemption report that:

(1) is in a form approved by the Commissioner; and

(2) demonstrates that the plan has used funds equal to the value of the premium tax exemption provided to the plan under § 6-101(b) of this article, in a manner that serves the public interest in accordance with this section.

(c) A nonprofit health service plan may satisfy the public service requirement of this section by establishing that, to the extent the value of the nonprofit health service plan’s premium tax exemption under § 6-101(b) of this article exceeds the subsidy required under the Senior Prescription Drug Assistance Program established under Subtitle 5, Part II of this title, the plan has:

(1) increased access to, or the affordability of, one or more health care products or services by offering and selling health care products or services that are not required or provided for by law;

(2) provided financial or in-kind support for public health programs;

(3) employed underwriting standards in a manner that increases the availability of one or more health care services or products;

(4) employed pricing policies that enhance the affordability of health care services or products and result in a higher medical loss ratio than that established by a comparable for-profit health insurer; or

(5) served the public interest by any method or practice approved by the Commissioner.

(d) (1) Notwithstanding subsection (c) of this section, a nonprofit health service plan that is subject to this section and issues comprehensive health care benefits in the State shall:

(i) offer health care products in the individual market;

(ii) offer health care products in the small employer group market in accordance with Title 15, Subtitle 12 of this article;

(iii) subsidize the Senior Prescription Drug Assistance Program established under Subtitle 5, Part II of this title;

(iv) subsidize the Kidney Disease Program under Title 13, Subtitle 3 of the Health - General Article;

(v) support the costs of the Community Health Resources Commission under Title 19, Subtitle 21 of the Health - General Article, including:

1. operating grants to community health resources;

2. funding for a unified data information system;

3. the documented direct costs of fulfilling the statutory and regulatory duties of the Commission; and

4. the administrative costs of the Commission; and

(vi) subsidize the provision of mental health services to the uninsured under Title 10, Subtitle 2 of the Health - General Article.

(2) (i) Except as provided in subparagraph (ii) of this paragraph, the support provided under paragraph (1)(iv), (v), and (vi) of this subsection to the Kidney Disease Program, the Community Health Resources Commission, and the Department of Health and Mental Hygiene, respectively, shall be the value of the premium tax exemption less the subsidy required under this subsection for the Senior Prescription Drug Assistance Program.

(ii) The subsidy provided under this subsection to the Community Health Resources Commission may not be less than:

1. $3,000,000 for each of fiscal years 2012 and 2013; and

2. $8,000,000 for fiscal year 2014 and each fiscal year thereafter.

(3) For any year, the subsidy and funding required under this subsection by a nonprofit health service plan subject to this section may not exceed the value of the nonprofit health service plan’s premium tax exemption under § 6-101(b) of this article.

(e) The subsidy that a nonprofit health service plan is required to provide to the Senior Prescription Drug Assistance Program under subsection (d)(1)(iii) of this section may not exceed:

(1) for the period of January 1, 2006 through June 30, 2006, $8,000,000;

(2) for fiscal years 2008 through 2015, $14,000,000; and

(3) for any year, the value of the nonprofit health service plan’s premium tax exemption under § 6-101(b) of this article.

(f) (1) Subject to paragraph (2) of this subsection, each report filed with the Commissioner under subsection (b) of this section is a public record.

(2) In accordance with § 10-617(d) of the State Government Article, the Commissioner shall deny inspection of any part of a report filed under subsection (b) of this section that the Commissioner determines contains confidential commercial information or confidential financial information.

§ 14-106 - 1. Transfers of funds to certain nonprofit health service plans.

Beginning in fiscal year 2006, a nonprofit health service plan shall transfer funds in the amounts provided under § 14-106(d)(2) of this subtitle to:

(1) the Community Health Resources Commission Fund established under § 19-2201 of the Health - General Article to support the costs of the Community Health Resources Commission as provided in § 14-106(d)(1)(v) of this subtitle;

(2) the Department of Health and Mental Hygiene for the Kidney Disease Program under Title 13, Subtitle 3 of the Health - General Article; and

(3) the Department of Health and Mental Hygiene for the provision of mental health services to the uninsured under Title 10, Subtitle 2 of the Health - General Article.

§ 14-106 - 2. Transfer of excess surplus to Senior Prescription Drug Assistance Program

(a) Applicability of section. -- This section applies to a corporation that is:

(1) issued a certificate of authority as a nonprofit health service plan; and

(2) the sole member of a corporation issued a certificate of authority as a nonprofit health service plan.

(b) In general. -- Except as provided under subsection (c) of this section, beginning with the calendar year that starts on January 1, 2009, and each calendar year thereafter, a corporation subject to this section shall transfer $ 4,000,000 to the separate account for the Senior Prescription Drug Assistance Program within the Maryland Health Insurance Plan Fund established under § 14-504 of this title if the corporation has a surplus that exceeds 800% of the consolidated risk-based capital requirements applicable to the corporation based on the corporation's annual required statutory filing due March 1 of the most recent preceding calendar year for which:

(1) the corporation has filed an annual statement with the Administration; and

(2) the filing of the annual statement preceded the start of the calendar year for which payment is to be made.

(c) Exception. -- A corporation is not required to make the transfer under subsection (b) of this section if:

(1) the surplus of the corporation does not exceed 800% of the consolidated risk-based capital requirements applicable to the corporation in the most recent preceding calendar year for which:

(i) the corporation has filed an annual statement with the Administration; and

(ii) the filing of the annual statement preceded the start of the calendar year for which payment is to be made; or

(2) the federal government eliminates the coverage gap in the Medicare Part D prescription drug benefit.

(d) Notice of transfer. --

(1) On or before September 1 of each year, a corporation that is subject to this section shall notify the Senior Prescription Drug Assistance Program whether the corporation will transfer $ 4,000,000 to the Program under this section during the calendar year that starts on the immediately following January 1.

(2) The corporation's determination on the transfer of funds shall be based on the risk-based capital calculation that is due on March 1 of the same calendar year in which the corporation gives the notice required under paragraph (1) of this subsection.

(e) Transfer in quarterly installments. -- A corporation that is subject to this section shall pay the $ 4,000,000 to the Senior Prescription Drug Assistance Program in quarterly installments of $ 1,000,000, beginning not later than October 1 for the calendar year that starts on the immediately following January 1.

(f) Transfer in addition to subsidy. -- The transfer of funds that a corporation is required to make to the Senior Prescription Drug Assistance Program under subsection (b) of this section:

(1) is in addition to the subsidy that a nonprofit health service plan is required to provide to the Senior Prescription Drug Assistance Program under § 14-106(d)(1)(iii) of this subtitle; and

(2) is not subject to the limitation on the amount of the subsidy to the Senior Prescription Drug Assistance Program imposed by § 14-106(e) of this subtitle.