# Insurance (GIN)

## Title 14. Entities That Act as Health Insurers

### Subtitle 6. Discount Medical Plan Organizations and Discount Drug Plan Organizations

#### Section 14-601

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

(b)

  (1) "Discount drug plan" means a business arrangement or contract in which a person, in exchange for fees, dues, charges, or other financial consideration paid by or on behalf of a plan member, provides the right to receive discounts on specified pharmaceutical supplies, prescription drugs, or medical equipment and supplies from specified providers.

  (2) "Discount drug plan" does not include:

    (i) a business arrangement or contract in which the fees, dues, charges, and other financial consideration paid by or on behalf of a plan member consist only of:

      (1) a payment made directly to a provider as a dispensing or transactional fee in connection with the purchase of pharmaceutical supplies, prescription drugs, or medical equipment and supplies that are subject to a discount; or

      (2) an administrative or processing fee paid by anyone other than a plan member to a provider in connection with that provider's provision of discounts to plan members; or

    (ii) a patient assistance program that:

      (1) is sponsored, offered, or provided for by a pharmaceutical manufacturer; and

      (2) is not provided in exchange for fees, dues, charges, or other financial consideration.

(c) "Discount drug plan organization" means an entity that:

  (1) contracts directly or indirectly with providers or provider networks to provide pharmaceutical supplies, prescription drugs, or medical equipment and supplies at a discount to plan members; and

  (2) determines the charge to plan members.

(d) "Discount medical plan" means a business arrangement or contract in which a person, in exchange for fees, dues, charges, or other financial consideration paid by or on behalf of a plan member, provides the right to receive discounts on specified medical services from specified providers.

(e) "Discount medical plan organization" means an entity that:

  (1) contracts directly or indirectly with providers or provider networks to provide medical services at a discount to plan members; and

  (2) determines the charge to plan members.

(f) "Hospital services" has the meaning stated in Sec. 19-201 of the Health - General Article.

(g) "Medical services" means any care, service, or treatment of illness or dysfunction of, or injury to, the human body, including physician care, outpatient services, ambulance services, dental care services, vision care services, mental health services, substance abuse services, chiropractic services, podiatric care services, and laboratory services.

(h) "Medicare prescription drug plan" means a plan that provides a Medicare Part D prescription drug benefit in accordance with the requirements of the federal Medicare Modernization Act.

(i) "Plan member" means any individual who pays fees, dues, charges, or other financial consideration for the right to receive the benefits of a discount medical plan or a discount drug plan.

(j) "Provider" means:

  (1) any person or institution which is contracted, directly or indirectly, with a discount medical plan organization to provide medical services to plan members; or

  (2) any person or institution which is contracted, directly or indirectly, with a discount drug plan organization to provide pharmaceutical supplies, prescription drugs, or medical equipment and supplies to plan members.

(k) "State prescription drug plan" means any discount plan operated by a State agency.

#### Section 14-602

(a) Except as provided in subsection (b) of this section, this subtitle does not apply to an insurer, nonprofit health service plan, health maintenance organization, or dental plan organization that holds a certificate of authority in this State.

(b) An insurer, nonprofit health service plan, health maintenance organization, or dental plan organization shall:

  (1) comply with Sec.Sec. 14-606 through 14-611 of this subtitle;

  (2) notify the Commissioner in writing that it sells, markets, or solicits a discount medical plan or discount drug plan in the State; and

  (3)

    (i) file annually with the Commissioner a current list of the persons, other than licensed insurance producers, who  are authorized to sell, market, or solicit in the State a discount medical plan or discount drug plan established by the insurer, nonprofit health service plan, health maintenance organization, or dental plan organization; and

    (ii) provide the Commissioner with an additional list on request.

(c) An insurer, nonprofit health service plan, health maintenance organization, or dental plan organization may file the list required under subsection (b)(3) of this section electronically, in a format prescribed by the Commissioner.

(d) This subtitle does not apply to Medicare prescription drug plans or to a State prescription drug plan.

#### Section 14-603

(a)

  (1) An entity shall register with the Commissioner as a discount medical plan organization before a discount medical plan established by that entity is sold, marketed, or solicited in the State.

  (2) A discount medical plan may not be sold, marketed, or solicited in the State unless the discount medical plan organization that established the discount medical plan is registered with the Commissioner.

(b)

  (1) An entity shall register with the Commissioner as a discount drug plan organization before a discount drug plan established by that entity is sold, marketed, or solicited in the State.

  (2) A discount drug plan may not be sold, marketed, or solicited in the State unless the discount drug plan organization that established the discount drug plan is registered with the Commissioner.

(c) An applicant for registration shall:

  (1) file with the Commissioner an application on the form that the Commissioner requires; and

  (2) pay to the Commissioner  an application fee of $250.

(d) An entity that is required to register with the Commissioner under both subsections (a) and (b) of this section may file one application with the Commissioner and pay one application fee.

(e) An applicant shall file with its application a list of the persons authorized to sell, market, or solicit a discount medical plan or discount drug plan established by the applicant.

#### Section 14-604

(a) A registration expires on the second June 30 following the registration unless it is renewed as provided in this section.

(b) Before a registration expires, the registrant may renew it for an additional 2-year term, if the registrant:

  (1) otherwise is entitled to be registered;

  (2) files with the Commissioner a renewal application on the form that the Commissioner  requires; and

  (3) pays to the Commissioner a renewal fee of $150.

(c) An application for renewal of a registration shall be considered made in a timely manner if it is postmarked on or before June 30 of the year of renewal.

(d) Subject to the provisions of Sec. 14-605 of this subtitle, the Commissioner shall renew the registration of each registrant that meets the requirements of this section.

(e)

  (1) A registrant shall file annually with the Commissioner a current list of the persons authorized to sell, market, or solicit in the State a discount medical plan or discount drug plan established by the registrant.

  (2) A registrant shall provide the Commissioner an additional list on request.

  (3) A registrant may file the list required under this subsection electronically, in a format prescribed by the Commissioner.

#### Section 14-605

(a) Subject to the hearing provisions of Title 2 of this article, the Commissioner  may deny a registration to an applicant or refuse to renew, suspend, or revoke the registration of a registrant if the applicant or registrant, or an officer, director, or employee of the applicant or registrant:

  (1) makes a material misstatement or misrepresentation in an application for registration;

  (2) fraudulently or deceptively obtains or attempts to obtain a registration for the applicant or registrant or for another;

  (3) has been convicted of a felony or of a misdemeanor involving moral turpitude;

  (4) in connection with the administration of a discount medical plan or discount drug plan, commits fraud or engages in illegal or dishonest activities;

  (5) has violated any provision of this subtitle or a regulation adopted under it;

  (6) provides a false, falsely disparaging, or misleading oral or written statement, visual description, or other representation of any kind that has the capacity, tendency, or effect of deceiving or misleading consumers;

  (7) makes a representation that a discount medical plan or discount drug plan has a sponsorship, approval, characteristic, use, or benefit that it does not have;

  (8) has violated Sec. 13-301 of the Commercial Law Article; or

  (9) fails to maintain on file with the Commissioner a current list of the persons authorized to sell, market, or solicit a discount medical plan or discount drug plan established by the applicant or the registrant.

(b) This section does not limit any regulatory power of the Commissioner under Title 2 of this article.

#### Section 14-606

A discount medical plan organization and a discount drug plan organization may not:

(1) use in their advertisements, marketing material, brochures, and discount cards the term "insurance" except:

  (i) in the name of an insurer, nonprofit health service plan, health maintenance organization, or dental plan organization whose corporate name includes the word "insurance";

  (ii) when comparing the discount medical plan or discount drug plan to insurance or otherwise distinguishing the discount medical plan or discount drug plan from insurance; or

  (iii) as otherwise provided in this subtitle;

(2) use in their advertisements, marketing material, brochures, and discount cards the terms "health plan", "coverage", "copay", "copayments", "preexisting conditions", "guaranteed issue", "premium", "ppo", "preferred provider organization", or other terms in a context that could reasonably mislead a person into believing the discount medical plan or discount drug plan was health insurance;

(3) have restrictions on access to discount medical plan or discount drug plan providers, including waiting periods and notification periods;

(4) pay providers any fees for medical services, pharmaceutical supplies, prescription drugs, or medical equipment and supplies, except that a discount medical plan organization or a discount drug plan organization that also has an active registration under Title 8, Subtitle 3 of this article may continue to pay fees to providers in its capacity as a third party administrator;

(5) refuse to modify the method of payment for membership in a discount medical plan or a discount drug plan on request, unless a specific method of payment is required as a term of the discount medical plan or the discount drug plan and was agreed to in writing in advance;

(6) if membership is billed on a monthly basis, refuse to permit membership to terminate without financial penalty on no more than 30 calendar days' written notice; or

(7)

  (i) continue electronic fund transfer as a method of payment more than 30 calendar days after a written request for termination of electronic fund transfer has been made; or

  (ii) require the member to notify more than one entity that is either the discount medical plan organization or the discount drug plan organization or an entity identified by the discount medical plan organization or the discount drug plan organization that electronic fund transfer should be terminated.

#### Section 14-607

(a) The following disclosures shall be made in writing printed in 12 point type to any prospective member of a discount medical plan organization and shall be included in any marketing materials or brochures relating to an application or contract for a discount medical plan:

  (1) a statement that the discount medical plan is not insurance;

  (2) a statement that membership in the discount medical plan entitles members to discounts for certain medical services offered by providers who have agreed to participate in the discount medical plan;

  (3) a statement that the discount medical plan organization itself does not pay providers of medical services for services provided to plan members;

  (4) a statement that the plan member is required to pay for any medical service provided, but is entitled to receive a discount on certain identified medical services from those providers who have contracted with the discount medical plan organization;

  (5) a description of the medical services subject to discount, a description of the discounts that the plan member is entitled to receive, and the mechanism by which a current or prospective plan member can obtain the names of the providers that have contracted with the discount medical plan organization to offer discounts to plan members;

  (6) the name, location, and contact information, including a telephone number, for the discount medical plan organization;

  (7) all fees, dues, charges, or other financial consideration to be paid by the plan member with respect to the member's participation in the discount medical plan, including all fees or charges relating to the processing of discounts or billing;

  (8) if the marketing materials or brochures refer to hospital services, a statement that the discount medical plan does not offer a discount on hospital services in Maryland; and

  (9) if applicable, a statement that a nominal fee associated with enrollment costs will be retained by the discount medical plan organization, in accordance with Sec. 14-608(a) of this subtitle, if membership is canceled within the first 30 calendar days after the effective date of enrollment.

(b) The following disclosures shall be made in writing printed in 12 point type to any prospective member of a discount drug plan organization and shall be included in any marketing materials or brochures relating to an application or contract for a discount drug plan:

  (1) a statement that the discount drug plan is not:

    (i) insurance; or

    (ii) a Medicare prescription drug plan;

  (2) a statement that membership in the discount drug plan entitles members to discounts for certain pharmaceutical supplies, prescription drugs, or medical equipment and supplies offered by providers who have agreed to participate in the discount drug plan;

  (3) a statement that the discount drug plan organization itself does not pay providers of pharmaceutical supplies, prescription drugs, and medical equipment and supplies provided to plan members;

  (4) a statement that the discount drug plan member is required to pay for all pharmaceutical supplies, prescription drugs, and medical equipment and supplies provided, but is entitled to receive a discount on certain identified pharmaceutical supplies, prescription drugs, or medical equipment and supplies from those providers who have contracted with the discount drug plan organization;

  (5) a description of the discounts that the discount drug plan member is entitled to receive and the mechanism by which a current or prospective plan member can obtain:

    (i) unless the discount drug plan offers an open formulary, a listing of the items, including prescription drugs, subject to discount; and

    (ii) the names of the providers who have contracted to offer discounts to plan members;

  (6) the name, location, and contact information, including a telephone number, for the discount drug plan organization;

  (7) all fees, dues, charges, or other financial consideration to be paid by the plan member with respect to the member's participation in the discount drug plan, including all fees or charges relating to the processing of discounts or billing; and

  (8) if applicable, a statement that a nominal fee associated with enrollment costs will be retained by the discount drug plan organization, in accordance with Sec. 14-608(a) of this subtitle, if membership is canceled within the first 30 calendar days after the effective date of enrollment.

(c) If a discount medical plan or a discount drug plan is sold, marketed, or solicited by telephone, the disclosures required by subsections (a) and (b) of this section shall be:

  (1) made orally; and

  (2) included with the membership card when mailed to the prospective plan member.

(d) The following disclosures shall be made in writing in 12 point type in any advertisement to promote interest in or  promote the desire to inquire further about a discount medical plan:

  (1) a statement that the discount medical plan is not insurance;

  (2) a statement that membership in the discount medical plan entitles members to discounts for certain medical services offered by providers who have agreed to participate in the discount medical plan;

  (3) a statement that the plan member, and not the discount medical plan organization, is required to pay for all medical services provided;

  (4) the name, location, and contact information, including a telephone number, for the discount medical plan organization;

  (5) a statement of the mechanism by which a prospective plan member may obtain the names of the providers who have contracted to offer discounts to plan members; and

  (6) if the advertisement refers to hospital services, a statement that the discount medical plan does not offer a discount on hospital services in Maryland.

(e) The following disclosures shall be made in writing in 12 point type in any advertisement to promote interest in or  promote the desire to inquire further about a discount drug plan:

  (1) a statement that the discount drug plan is not:

    (i) insurance; or

    (ii) a Medicare prescription drug plan;

  (2) a statement that membership in the discount drug plan entitles members to discounts for certain pharmaceutical supplies, prescription drugs, or medical equipment and supplies offered by providers who have agreed to participate in the discount drug plan;

  (3) a statement that the plan member, and not the discount drug plan organization, is required to pay for all pharmaceutical supplies, prescription drugs, or medical equipment and supplies provided;

  (4) the name, location, and contact information, including a telephone number, for the discount drug plan organization; and

  (5) a statement of the mechanism by which a prospective plan member may obtain the names of the providers who have contracted to offer discounts to plan members.

#### Section 14-608

(a)

  (1) If membership in a discount medical plan or a discount drug plan is canceled within the first 30 calendar days after the effective date of enrollment, all fees, dues, charges, or other financial consideration, except a nominal fee, not to exceed any fees, dues, charges, or other financial consideration the  member has already paid, associated with enrollment costs that were part of the cost of the discount medical plan card or the discount drug plan card, shall be refunded to the payor on return of the discount medical plan card to the discount medical plan organization or return of the discount drug plan card to the discount drug plan organization.

  (2) The Commissioner, in consultation with the Attorney General, shall adopt regulations that establish standards for determining the nominal fee associated with enrollment costs that may be retained by a discount medical plan organization or a discount drug plan organization under this subsection.

  (3) Subject to paragraph (1) of this subsection, any regulation adopted under this subsection shall include a cap on the nominal fee that may be retained.

(b) If a discount medical plan organization or a discount drug plan organization cancels a membership for any reason other than nonpayment, the discount medical plan organization or discount drug plan organization shall make a pro rata refund to the payor of all fees, dues, charges, or other financial consideration within 30 calendar days after the date of cancellation.

#### Section 14-609

(a) Each discount medical plan organization and each discount drug plan organization shall provide to a plan member or to a plan member for the member's family a discount card that includes, at a minimum, the following data elements:

  (1) a statement that the discount medical plan or discount drug plan is not insurance;

  (2)

    (i) the name or identifying trademark of the discount medical plan organization or the discount drug plan organization; or

    (ii) the name or identifying trademark of the provider networks that participate with the discount medical plan or discount drug plan; and

  (3) the telephone number that the plan member may call for assistance.

(b)

  (1) If a change occurs in the data element required under subsection (a)(3) of this section, a discount medical plan organization or a discount drug plan organization shall reissue a discount card.

  (2) A discount medical plan organization or a discount drug plan organization shall notify a plan member when there is a material change in plan benefits or in the data elements required under subsection (a)(1), (2), or (3) of this section.

#### Section 14-610

(a) Whenever the Commissioner considers it advisable, the Commissioner may examine the affairs, transactions, accounts, records, and assets of a discount medical plan organization or discount drug plan organization.

(b) The examination shall be conducted in accordance with Sec. 2-207 of this article.

(c) The expense of the examination shall be paid in accordance with Sec. 2-208 of this article.

(d) The reports of the examination and investigation shall be issued in accordance with Sec. 2-209 of this article.

#### Section 14-611

(a) To enforce this subtitle and any regulation adopted under it, the Commissioner  may issue an order:

  (1) that requires the violator to cease and desist from the identified violation and further similar violations;

  (2) that requires the violator to take specific affirmative action to correct the violation;

  (3) that requires the violator to make restitution of money, property, or other assets to a person who has suffered financial injury because of the violation; or

  (4) that requires a discount medical plan organization or a discount drug plan organization to make restitution of money, property, or other assets to a person who has suffered financial injury because of a violation by any person authorized to sell, market, solicit, or administer a discount medical plan or discount drug plan established by the discount medical plan organization or discount drug plan organization while the person is acting with the actual or apparent authority of the discount medical plan organization or discount drug plan organization.

(b)

  (1) An order of the Commissioner  issued under this section may be served on a violator who is registered under this subtitle in the manner provided in Title 2 of this article.

  (2) An order of the Commissioner  issued under this section may be served on a violator that is not registered under this subtitle in the manner provided for service on an unauthorized insurer that does an act of insurance business in Title 4 of this article.

  (3) A request for a hearing on any order issued under this subsection does not stay that portion of the order that requires the violator to cease and desist from conduct identified in the order.

  (4) The Commissioner  may file a petition in the circuit court of any county to enforce an order issued under this section, whether or not a hearing has been requested or, if requested, whether or not a hearing has been held.

  (5) If the Commissioner prevails in an action brought by the Commissioner under this section, the Commissioner may recover for the use of the State reasonable attorney's fees and the costs of the action.

(c)

  (1) In addition to any other enforcement action taken by the Commissioner under this section, the Commissioner may impose a civil penalty of not more than $10,000 for each violation of this subtitle.

  (2) Notwithstanding paragraph (1) of this subsection, the Commissioner  may impose a civil penalty of not more than $1,000 per day for each day that a person is in violation of Sec. 14-603 of this subtitle.

(d) This section does not limit any regulatory power of the Commissioner under this article.

#### Section 14-612

The Commissioner shall adopt regulations to carry out the provisions of this subtitle.

---

Md. Code Ann., Ins. (as displayed at mgaleg.maryland.gov, October 16, 2026)