2013 Maryland Code
INSURANCE
§ 15-409 - Continuation coverage for involuntarily terminated employees


MD Ins Code § 15-409 (2013) What's This?

§15-409.

(a) (1) In this section the following words have the meanings indicated.

(2) (i) “Change in status” means the termination of the insured’s employment other than for cause.

(ii) “Change in status” includes:

1. involuntary termination of the insured’s employment other than for cause; and

2. voluntary termination of the insured’s employment by the insured employee.

(3) “Group contract” means:

(i) an insurance contract or policy that is issued or delivered in the State to the employer of the insured by an insurer or nonprofit health service plan and that provides group hospital, medical, or surgical benefits to the employees of the employer on an expense-incurred basis; or

(ii) a contract between the employer of an insured and a health maintenance organization certified under Title 19, Subtitle 7 of the Health - General Article that provides group hospital, medical, or surgical benefits to the employees of the employer.

(4) “Insured” means an employee who is a resident of the State and covered under a current or predecessor group contract with the same employer for at least 3 months before the change in status.

(b) (1) Each group contract in force on the date of the change in status shall provide continuation coverage in accordance with this section.

(2) Subject to subsection (c) of this section, if continuation coverage is elected by or on behalf of an insured, the group contract shall provide continuation coverage to the insured after a change in status.

(c) Continuation coverage that is elected by or on behalf of the insured under the group contract shall begin on the date of the change in status and end on the earliest of the following:

(1) 18 months after the date of the change in status;

(2) the date on which the insured fails to make timely payment of an amount required under subsection (d)(2) of this section;

(3) the date on which the insured becomes eligible for hospital, medical, or surgical benefits under an insured or self-insured group health benefit program or plan, other than the group contract, that is written on an expense-incurred basis or is with a health maintenance organization;

(4) the date on which the insured becomes entitled to benefits under Title XVIII of the Social Security Act;

(5) the date on which the insured accepts hospital, medical, or surgical coverage under a nongroup contract or policy that is written on an expense-incurred basis or is with a health maintenance organization;

(6) the date on which the insured elects to terminate coverage under the group contract; or

(7) the date on which the employer ceases to provide benefits to its employees under a group contract.

(d) Continuation coverage under this section shall:

(1) be provided without evidence of insurability or additional waiting periods;

(2) require the insured to pay to the employer an amount that does not exceed:

(i) the sum of the employer contribution and any contribution that the insured would have been required to pay if there had not been a change in status; and

(ii) a reasonable administrative fee that is subject to review and approval by the Commissioner;

(3) allow the payment of the amount specified in item (2) of this subsection in monthly installments if the insured elects to do so;

(4) be identical to the coverage offered under the group contract to similarly situated individuals for whom there has not been a change in status; and

(5) be available to the spouse and dependent children of the insured if:

(i) the group contract provides benefits for spouses and dependent children; and

(ii) the insured’s spouse and dependent children were covered under the group contract before the change in status.

(e) (1) To elect continuation coverage provided under this section, an insured or authorized representative shall submit a signed election notification form to the insured’s employer during the election period.

(2) The election period for continuation coverage under this section begins on the date of the change in status and ends at least 45 days after that date.

(3) Within 14 days after receipt of a request for an election notification form, the employer shall deliver or send by first-class mail the election notification form to the insured or authorized representative.

(f) Each certificate issued to an insured under a group contract shall include a statement, in a manner and form approved by the Commissioner, that advises the insured of the following:

(1) the availability of continuation coverage under this section;

(2) a summary of the eligibility for and duration of the continuation coverage; and

(3) the procedure for making an election to receive continuation coverage if a change in status occurs.

(g) The Commissioner shall:

(1) publish at least annually in the Maryland Register and in a newspaper of general circulation in each county notice that describes the continuation coverage required under this section;

(2) prescribe by regulation the form and content of the election notification form; and

(3) make election notification forms available to each employer whose employees are covered by a group contract.

(h) Notice of the availability of continuation coverage under this section shall be provided by:

(1) the employer; and

(2) the Secretary of Labor, Licensing, and Regulation as specified in § 8-805(c) of the Labor and Employment Article.

(i) An employer that fails to provide notice or an election notification form under this section is not liable to the insured or any other covered individual for benefits that otherwise would have been payable or for other damages that result from the failure to provide the notice or form.

(j) An employer that terminates continuation coverage after notice or nonpayment of an amount required under subsection (d)(2) of this section by the insured or other covered individual, or an insurer that terminates continuation coverage after notice by the employer, is not liable to the insured or other covered individual for benefits that otherwise would have been payable under this section if the termination:

(1) is made in good faith;

(2) is reasonable under the circumstances; and

(3) is not the result of a mutual or material mistake of fact.

(k) This section does not affect or limit the right of an insured to conversion privileges under a group contract.

§ 15-409 - 1. Continuation coverage for involuntarily terminated employees -- Small employers.

(a) Definitions. --

(1) In this section the following words have the meanings indicated.

(2) "Act" means the federal American Recovery and Reinvestment Act of 2009 (P.L. 111-5).

(3) "Carrier" means:

(i) an insurer;

(ii) a nonprofit health service plan; or

(iii) a health maintenance organization.

(4) "Small employer" has the meaning stated in § 15-1201 of this title.

(b) Applicability of section. -- This section applies to a carrier that issues health benefit plans to small employers in accordance with Subtitle 12 of this title.

(c) In general. -- A carrier shall allow an extended election period for continuation coverage under § 15-409 of this subtitle if the individual:

(1) was involuntarily terminated from employment by a small employer between September 1, 2008, and February 16, 2009, inclusive, as described in § 3001(a)(3)(C) of the Act;

(2) is an assistance eligible individual, as defined in § 3001(a)(3) of the Act, or would be an assistance eligible individual if an election of continuation coverage under § 15-409 of this subtitle was in effect on the date of enactment of the Act; and

(3) was eligible for continuation coverage under § 15-409 of this subtitle at the time of the individual's termination of employment.

(d) Duration of extended election period. -- The extended election period provided under this section shall continue until 60 days after provision of the notification required by § 3001(a)(7)(C) of the Act if the notification describes the extended election period required under this section.

(e) Beginning and ending of continuation coverage period. -- Any continuation coverage elected by an individual during an extended election period under this section:

(1) shall begin during the first period of coverage beginning on or after the individual's election of continuation coverage; and

(2) may not extend beyond the period of continuation coverage that would have been required under § 15-409 of this subtitle if the coverage had been elected as required under that section.

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