# State Personnel and Pensions (GSP)

## Title 2. State Employment Generally

### Subtitle 1. General Provision

#### Section 2-101

Except as expressly provided by law, this title does not limit any express or implied management prerogative or other authority belonging to an appointing authority and management.

### Subtitle 2. Personnel Systems in State Government

#### Section 2-201

(a) Except as otherwise provided by law, an employee in the Judicial, Legislative, or Executive Branch of State government is governed by the laws and personnel policies and procedures applicable in that branch.

(b) A unit in the Executive Branch of State government may not petition or apply to the federal government for a waiver of any provision of the federal Fair Labor Standards Act that is applicable to the unit, even if the waiver is otherwise authorized under federal law.

#### Section 2-202

(a) The principal personnel system in the Executive Branch of State government is the State Personnel Management System.

(b) As expressly authorized by law, a unit in the Executive Branch of State government may establish a personnel system that operates independent of the State Personnel Management System.

#### Section 2-203

(a) Notwithstanding any other provision of law, and except as provided in subsection (c) of this section, this section applies to all employees in the Judicial, Legislative, and Executive branches of State government.

(b) This section does not apply to:

  (1) a position in the Department of Public Safety and Correctional Services;

  (2) a position for which an appointing authority has a statutory duty to conduct a criminal history records check; or

  (3) a position in the office of the sheriff for any county.

(c) Except for a position in the State Personnel Management System for which the Secretary determines that the specific duties and responsibilities of the position would require the appointing authority to know an applicant's criminal history, an appointing authority may not inquire into the criminal record or criminal history of an applicant for employment until the applicant has been provided an opportunity for an interview.

(d) This section does not prohibit an appointing authority from notifying an applicant for employment that certain prior criminal convictions may prohibit employment in some positions.

#### Section 2-203.1

(a)

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

  (2) "Commission" means the Commission on Civil Rights.

  (3) "Sexual harassment" has the meaning stated in Sec. 20-601 of the State Government Article.

(b)

  (1) This section applies to all units in the Executive, Judicial, and Legislative branches of State government, including all units with independent personnel systems.

  (2) For the University System of Maryland, this section applies to each constituent institution.

(c)

  (1) Each State employee shall complete at least a cumulative 2 hours of in-person or virtual, interactive training on sexual harassment prevention within:

    (i) 6 months after the employee's initial appointment; and

    (ii) every 2-year period thereafter.

  (2) The training required under paragraph (1) of this subsection shall include:

    (i) information on the federal and State laws concerning the prohibition of sexual harassment;

    (ii) best practices in prevention and correction of sexual harassment, abusive conduct, and retaliation;

    (iii) remedies and procedures available to victims of sexual harassment in employment; and

    (iv) additional training for supervisors regarding information on:

      (1) properly responding to complaints of sexual harassment and preventing further abuse and retaliation; and

      (2) creating and maintaining a workplace culture in which sexual harassment is not tolerated.

  (3)

    (i) This paragraph applies only to:

      (1) a unit of the University System of Maryland;

      (2) Morgan State University; and

      (3) St. Mary's College of Maryland.

    (ii) The training required under paragraph (1) of this subsection may consist of webinar, computer-based, or online training.

    (iii) If the training required under paragraph (1) of this subsection consists of webinar, computer-based, or online training, the training also shall include an evaluative component that:

      (1) ensures employee engagement in the training; and

      (2) assesses employee comprehension of training objectives.

(d)

  (1)

    (i) Each unit shall designate a representative to coordinate with the Commission to implement the training State employees are required to complete under subsection (c) of this section.

    (ii) A unit may incorporate the training into existing employment training for new employees and supervisors.

  (2) The Commission shall train each representative designated under paragraph (1) of this subsection in:

    (i) the prevention of sexual harassment, discrimination, and retaliation; and

    (ii) best practices in sexual harassment prevention.

  (3) The representatives designated under paragraph (1) of this subsection are encouraged to use Equal Employment Opportunity Commission materials to prevent sexual harassment in the workplace.

(e) If determined to be necessary by the appointing authority, a unit may require an employee to retake any part or all of the training, or to participate in additional classes or training.

(f) For a unit in the Executive Branch of State government, the Equal Employment Opportunity Coordinator established under Sec. 5-206 of this article:

  (1) shall enforce the requirements of this section; and

  (2) may recommend to the Legislative Auditor, the Joint Audit and Evaluation Committee, or the Executive Director of the Department of Legislative Services that the Office of Legislative Audits conduct a performance audit or review of a unit if the Equal Employment Opportunity Coordinator determines that the unit has not complied with this section.

(g) Unless the acts or omissions of an employee who completed the training required under subsection (c) of this section are willful, wanton, or grossly negligent, a person may not bring an action against the State for any act or omission resulting from:

  (1) any training or lack of training of a State employee; or

  (2) the implementation of the training required under subsection (c) of this section.

(h) The training required in this section is a minimum requirement and may not be construed to discourage or relieve any unit from providing a longer, more frequent, or more informative training on workplace sexual harassment prevention.

(i) The Commission shall adopt regulations to implement this section.

#### Section 2-204

(a) This section applies to an appointing authority for a position in the Executive Branch of State government, except a position in the State Personnel Management System.

(b) An appointing authority subject to this section shall develop a hiring preference for individuals with disabilities, as defined by the federal Americans with Disabilities Act, that is equivalent to the credit applied on a selection test under Sec. 7-207(g) of this article.

#### Section 2-205

(a) This section applies to an appointing authority for a position that is:

  (1) in a unit in the Executive Branch of State government with an independent personnel system; and

  (2) comparable to a position in the skilled service or the professional service in the State Personnel Management System.

(b) An appointing authority subject to this section shall develop a selection process for disabled veterans described in Sec. 7-203(b)(1) of this article that is comparable to the selection process for disabled veterans established under Sec. 7-203(b) of this article.

#### Section 2-206

(a) In this section, "chief financial officer" means:

  (1) the highest ranking executive who, for a period of at least 6 months, is responsible for directing all financial operations, including:

    (i) budgeting;

    (ii) accounting;

    (iii) procurement;

    (iv) grant management;

    (v) establishing fiscal policies;

    (vi) ensuring compliance with State and federal regulations; and

    (vii) providing strategic financial leadership to agency leadership; or

  (2) a position with equivalent duties.

(b)

  (1) Except as provided under paragraph (2) of this subsection, this section applies to a unit of the Executive Branch of State government that:

    (i) receives at least $1,750,000,000 annually in State and federal funding; and

    (ii) employs a chief financial officer.

  (2) This section does not apply to the University System of Maryland.

(c) Notwithstanding any other provision of law, the Secretary may set the pay scale for chief financial officer positions in order to assist with recruitment and retention.

(d) An appointing authority subject to this section shall make an appointment of a chief financial officer who meets the qualifications in subsection (e) of this section.

(e)

  (1) The Secretary shall establish minimum qualifications for chief financial officer positions that consider:

    (i) education;

    (ii) executive experience and the duration of that experience;

    (iii) supervisory or managerial experience;

    (iv) technical competence;

    (v) certifications;

    (vi) scope and complexity of the role; and

    (vii) alignment with the government or industry standards.

  (2) On or before November 1, 2026, the Department shall adopt regulations to establish minimum qualifications for chief financial officer positions.

(f) For preparation of the Annual Comprehensive Financial Report required under Sec. 2-102 of the State Finance and Procurement Article, a chief financial officer of a unit of State government subject to this section shall provide to the Office of the Comptroller at the close of the fiscal year:

  (1) all necessary entries of the unit's financial information;

  (2) the information necessary to prepare the schedule of expenditures of federal awards in accordance with applicable federal laws and regulations; and

  (3) a letter attesting to the accuracy and completeness of the information provided in items (1) and (2) of this subsection.

#### Section 2-207

(a) In this section, "chief information officer" means:

  (1) an individual acting as the senior executive officer responsible for the strategic planning, management, and oversight of an agency's information technology and computer systems and supporting its mission and goals, including through:

    (i) procurement;

    (ii) compliance with State and federal regulations; and

    (iii) providing information technology leadership to agency leadership; or

  (2) a position with equivalent duties.

(b)

  (1) Except as provided under paragraph (2) of this subsection, this section applies to a unit of the Executive Branch of State government that employs a chief information officer.

  (2) This section does not apply to the University System of Maryland.

(c) Notwithstanding any other provision of law, the Secretary may set the pay scale for chief information officer positions in order to assist with recruitment and retention.

### Subtitle 3. State Employment Policies

#### Section 2-301

(a) In keeping with State efforts to reinvent government, restructuring of the State's personnel system should enhance the delivery of services to citizens in an effective and timely manner.

(b) To maintain efficient and effective operations of State government, each State employee:

  (1) shall be treated with fairness in State employment;

  (2) may participate in the State Health and Welfare Benefits Program in accordance with Subtitle 5 of this title;

  (3) may participate in the State Retirement and Pensions Systems in accordance with Division II of this article;

  (4) subject to Title 9, Subtitle 6 of this article, may participate in the State Employees' Leave Bank and the Employee-to-Employee Leave Donation Program;

  (5) who transfers to a position in any unit of State government, regardless of the personnel system governing the position, shall do so without loss of leave earned or credit for State employment in other units of State government; and

  (6) is entitled to the rights and protections in this title.

#### Section 2-302

(a) The State recognizes and honors the value and dignity of every person and understands the importance of providing employees and applicants for employment with a fair opportunity to pursue their careers in an environment free of discrimination or harassment prohibited by law.

(b)

  (1) Except as provided in paragraph (2) of this subsection or by other law, all personnel actions concerning a State employee or applicant for employment in State government shall be made without regard to:

    (i) age;

    (ii) ancestry;

    (iii) color;

    (iv) creed;

    (v) gender identity;

    (vi) marital status;

    (vii) mental or physical disability;

    (viii) national origin;

    (ix) race;

    (x) religious affiliation, belief, or opinion;

    (xi) sex; or

    (xii) sexual orientation.

  (2) A personnel action may be taken with regard to age, sex, or disability to the extent that age, sex, or physical or mental qualification is required by law or is a bona fide occupational qualification.

(c)

  (1) Each State employee is expected to assume personal responsibility and leadership in ensuring fair employment practices and equal employment opportunity in Maryland State government.

  (2) Employment discrimination and harassment by State managers, supervisors, or other employees is prohibited.

  (3) A State employee who violates this subtitle is subject to disciplinary action by the employee's appointing authority, including the termination of State employment.

(d) The Equal Employment Opportunity Program in Title 5, Subtitle 2 of this article governs all employees of any unit in the Executive Branch of State government, including a unit with an independent personnel system.

(e)

  (1) At least annually, the Secretary shall report on the Equal Employment Opportunity Program established in Sec. 5-202 of this article to the Joint Committee on Fair Practices and State Personnel Oversight.

  (2) The head of a personnel system in the Legislative and Judicial branches may report periodically on equal employment opportunity programs and policies in effect in that personnel system to the Joint Committee on Fair Practices and State Personnel Oversight.

#### Section 2-303

(a) The State recognizes the rights and protections afforded to its employees under federal law.

(b)

  (1) This subsection does not affect an age requirement established by State law or a grant of authority under State law to establish reasonable minimum or maximum age requirements.

  (2) A denial of employment for medical reasons shall comply with applicable federal and State laws and regulations.

  (3) Before an applicant may be denied employment or an employee terminated for medical reasons, the appointing authority or a designee of the appointing authority shall document in writing:

    (i) that, under relevant provisions of federal and State law and regulations, reasonable accommodations were considered;

    (ii) the specific accommodations that were considered; and

    (iii) the reasons for rejecting those accommodations.

(c)

  (1) This subsection does not apply to temporary employees.

  (2) A State employee may not be denied the opportunity to seek, qualify for, or receive any promotion solely because the employee is on leave for maternity reasons or on sick leave, if the employee is expected to return to work within 120 days after receiving notice of an interview for the position.

#### Section 2-304

(a)

  (1) Employment by the State does not affect any right or obligation of a citizen under the Constitution and laws of the United States or under the Constitution and laws of the State.

  (2) Except as otherwise provided in this section or by federal law, a State employee:

    (i) may freely participate in any political activity and express any political opinion; and

    (ii) may not be required to provide any political service.

(b) Notwithstanding any other law of the State effective on or before June 30, 1973, the restrictions imposed by subsection (c) of this section are the only restrictions on the political activities of an employee, except for:

  (1) the restrictions imposed on employees of a local board of elections by Sec. 2-301 of the Election Law Article; and

  (2) the restrictions imposed on employees of the Department of Legislative Services by guidelines adopted under Sec. 2-1205 of the State Government Article.

(c) An employee may not:

  (1) engage in political activity while on the job during working hours; or

  (2) advocate the overthrow of the government by unconstitutional or violent means.

(d)

  (1) In this subsection, "political contribution" means a contribution as defined in Sec. 1-101 of the Election Law Article.

  (2) A public official or an employee of the State may not require any State employee to make a political contribution.

#### Section 2-305

(a) This section applies to all employees of all units in the Executive, Judicial, and Legislative branches of State government, including all units with independent personnel systems except for the Department of Transportation and the University System of Maryland.

(b) During any stage of a State employee's complaint, grievance, or other administrative or legal action that concerns State employment, the employee may not be subjected to coercion, discrimination, interference, reprisal, or restraint by or initiated on behalf of the employer solely as a result of that employee's pursuit of the grievance, complaint, or action.

(c) A State employee may not intentionally take or assist in taking an act of coercion, discrimination, interference, reprisal, or restraint against another employee solely as a result of that employee's pursuit of a grievance, complaint, or other administrative or legal action that concerns State employment.

(d) An employee who violates subsection (c) of this section is subject to disciplinary action, including the termination of State employment.

#### Section 2-306

(a)

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

  (2) "Alcohol concentration" has the meaning stated in Sec. 11-103.2 of the Transportation Article.

  (3) "Probation before judgment" means an entry of probation by a court in accordance with Sec. 6-220 of the Criminal Procedure Article.

  (4) "State Substance Abuse Policy" means the policy against substance abuse in State government, as set out in Executive Order Number 01.01.1991.16 and any subsequent Executive Order.

  (5) "Workplace" means any place where an employee is performing work for the State of Maryland.

(b) This section may not be construed to eliminate or alter in any way any requirement of an employee to report to an appointing authority an offense, conviction, or probation before judgment under the State Substance Abuse Policy.

(c) Except as provided in subsection (d) of this section, an appointing authority may not consider probation before judgment for a substance abuse offense to be a conviction for purposes of the State Substance Abuse Policy.

(d) An appointing authority may impose appropriate disciplinary action, including termination, against an employee under the State Substance Abuse Policy, if:

  (1) the employee receives probation before judgment in a substance abuse offense; and

  (2) the appointing authority can demonstrate a relationship between that substance abuse offense and the employee's job responsibilities.

(e) An employee who consumes an alcoholic beverage in the workplace:

  (1) shall be in violation of the State Substance Abuse Policy and subject to disciplinary action; and

  (2) may not drive a State vehicle or operate State construction equipment during the employee's normal workday.

(f)

  (1) Employees who are called in to work outside of their regularly scheduled hours shall be provided the opportunity to acknowledge they have consumed alcohol within the previous four hours.

  (2) The employees who make an acknowledgment under paragraph (1) of this subsection may not be subject to disciplinary action and may not be assigned to perform a safety-sensitive function.

#### Section 2-307

(a) A State employee may not directly supervise the employee's parent, spouse, sibling, or child.

(b) A State employee may not use, threaten to use, or attempt to use political influence or the influence of any State employee or officer in gaining an unfair advantage in any personnel decision affecting the employee, including a decision about promotion, transfer, leave of absence, or increased pay, or in disciplinary actions.

(c) A State employee may not use, threaten to use, or attempt to use personal influence in providing an unfair advantage to another individual in any personnel decision, including a decision about hiring, promotion, transfer, leave of absence, or increased pay, or in disciplinary actions.

(d) An employee who violates this section is subject to disciplinary action, including the termination of State employment.

#### Section 2-308

(a)

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

  (2) "Appropriate official" means:

    (i) for the Executive Branch, the Secretary;

    (ii) for the Judicial Branch, the State Court Administrator;

    (iii) for the Legislative Branch, the President of the Senate and the Speaker of the House, acting jointly; or

    (iv) for each public institution of higher education, the President of the institution.

  (3) "Public institution of higher education" means:

    (i) a public senior higher education institution, as defined in Sec. 10-101 of the Education Article; and

    (ii) a community college.

  (4) "Telework" means to work at a location other than a traditional office setting or an employee's usual and customary worksite, including:

    (i) the employee's home;

    (ii) a satellite office; and

    (iii) a telework center.

(b) This section applies to:

  (1) all employees in:

    (i) the Judicial, Legislative, and Executive branches of State government; and

    (ii) each public institution of higher education; and

  (2)

    (i) all units in the Judicial, Legislative, and Executive branches of State government, including units with independent personnel systems; and

    (ii) each public institution of higher education.

(c) Each appropriate official shall:

  (1) establish a telework program applicable to the appropriate official's branch of government or public institution of higher education; and

  (2) adopt a telework policy and telework guidelines applicable to the appropriate official's branch of government or public institution of higher education.

(d)

  (1) Each appropriate official may:

    (i) designate the positions for which an employee would be eligible to telework; and

    (ii) beginning fiscal year 2023, negotiate criteria for designated telework positions if the employees affected by telework policies are represented by an exclusive representative.

  (2) Each appropriate official shall, to the extent practicable, maximize the number of eligible employees participating in the telework program established under subsection (c) of this section.

(e)

  (1) Each appropriate official shall issue guidelines to ensure the adequacy of information and security protection for information and information systems used while teleworking.

  (2) The appropriate official for each unit in the Executive Branch shall develop the guidelines under paragraph (1) of this subsection in coordination with the Department of Information Technology.

  (3) Guidelines issued under this section shall, at a minimum, include requirements necessary to:

    (i) control access to and protect unit information and information systems;

    (ii) limit the introduction of vulnerabilities to unit information systems;

    (iii) protect information systems not under control of the unit that are used for teleworking;

    (iv) safeguard wireless and other communications capabilities that are used for teleworking; and

    (v) prevent inappropriate use of official time or resources in violation of a unit's policies.

  (4) An employee determined to be eligible to participate in a telework program established under subsection (c) of this section shall receive and acknowledge the guidelines issued under this section before participating in the telework program.

(f)

  (1) On or before December 1 each year, the Department shall report to the Senate Budget and Taxation Committee and the House Appropriations Committee, in accordance with Sec. 2-1257 of the State Government Article, on the number of eligible and participating employees in the applicable telework program established under subsection (c) of this section.

  (2) Each appropriate official shall submit to the Department any information the Department determines is necessary to complete the report required under paragraph (1) of this subsection.

#### Section 2-309

(a) This section applies to all units in the Executive Branch of State government, including units with independent personnel systems.

(b) A unit subject to this section may not limit, to less than 60 days, the aggregate number of days of accrued sick leave that two employees who are responsible for the care and nurturing of a child may use, without certification of illness or disability, to care for the child during the period immediately following:

  (1) the birth of the employees' child; or

  (2) the placement of the child with the employees for adoption.

(c) In implementing the federal Family and Medical Leave Act of 1993, a unit subject to this section may not limit, to less than 24 weeks, the aggregate number of weeks of family and medical leave that two employees who are married to one another may use during a 12-month period for:

  (1) the birth of the employees' child;

  (2) the placement of a child with the employees for adoption or foster care;

  (3) the serious health condition of the employees' child, if the child is a minor; or

  (4) the care of the employees' adult child, if the adult child is incapable of self-care.

#### Section 2-310

(a) The State, through its appropriate officers and employees, shall provide:

  (1) a reasonable break time for an employee to express breast milk for her nursing child after the child's birth each time the employee needs to express the milk; and

  (2) on notice, a place, other than a bathroom, that is shielded from view and free from coworkers and the public and that may be used by an employee to express breast milk.

(b) The State may not be required to compensate an employee receiving reasonable break time under subsection (a)(1) of this section for any time spent expressing breast milk at work.

#### Section 2-311

(a) In this section, "limitation" includes:

  (1) a temporary disability for job-related purposes caused or contributed to by pregnancy or childbirth; and

  (2) a restriction on the ability of an employee to perform job functions caused or contributed to by pregnancy or childbirth.

(b) This section applies to all units in the Executive, Judicial, and Legislative branches of State government, including all units with independent personnel systems.

(c) A unit of State government, through its appropriate officers and employees, shall provide reasonable accommodations to an employee with a limitation caused or contributed to by pregnancy or childbirth, including by:

  (1) changing the employee's job duties;

  (2) changing the employee's work hours;

  (3) relocating the employee's work area;

  (4) providing mechanical or electrical aids;

  (5) transferring the employee to a less strenuous or less hazardous position; or

  (6) providing leave.

(d) A unit of State government may not:

  (1) require an employee to take leave, whether paid or unpaid, if the employer can provide another reasonable accommodation for the employee's limitation caused or contributed to by pregnancy or childbirth; or

  (2) require an employee to accept an accommodation that the employee chooses not to accept if:

    (i) the employee does not have a limitation caused or contributed to by pregnancy or childbirth; or

    (ii) the accommodation is not necessary for the employee to perform the essential duties of the employee's job.

#### Section 2-312

(a)

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

  (2) "Gender-affirming treatment" has the meaning stated in Sec. 15-151 of the Health - General Article.

  (3) "Legally protected health care" means:

    (i) all reproductive health services, medications, and supplies related to the direct provision or support of the provision of care related to pregnancy, contraception, assisted reproduction, and abortion that is lawful in the State; or

    (ii) all gender-affirming treatment, including medications and supplies, related to the direct provision or support of the provision of care related to gender-affirming treatment that is lawful in the State.

(b) This section does not apply to an interstate investigation or proceeding described under subsection (c) of this section if:

  (1) the interstate investigation or proceeding concerns conduct that would be subject to civil liability, criminal liability, or administrative sanction if committed in the State; or

  (2) the subject of the interstate investigation or proceeding submits a written request to provide information or assistance to the investigation or proceeding.

(c) An agency of the State or a political subdivision of the State, an agent or employee of the State or a political subdivision of the State acting in the agent's or employee's official capacity, or a private party providing services on behalf of the State or a political subdivision of the State, may not provide information, expend time or money, or use State facilities, State property, State equipment, State personnel, or other State resources in furtherance of any interstate investigation or proceeding seeking to impose civil or criminal liability on, or administrative sanction against, a person for any activity relating to legally protected health care if the activity would not be subject to civil or criminal liability or professional sanction in the State.

### Subtitle 4. State Compensation Generally and Payroll

#### Section 2-401

(a) Except as otherwise provided by law, compensation for State employees is determined under a pay plan.

(b) The pay plans for the State Personnel Management System are described in Title 8 of this article.

#### Section 2-402

(a) Except as provided in subsection (b) of this section and notwithstanding any other law, the Central Payroll Bureau of the Office of the State Comptroller shall provide for the payment of all wages to:

  (1) each officer and employee of the State who is paid from funds appropriated by the General Assembly; and

  (2) whether or not paid from funds appropriated by the General Assembly, each officer and employee of:

    (i) the University System of Maryland;

    (ii) Morgan State University;

    (iii) St. Mary's College of Maryland; and

    (iv) Baltimore City Community College.

(b) The Central Payroll Bureau shall maintain all supporting payroll records for the payment of wages under this section.

(c)

  (1) In this subsection:

    (i) "wage" means all compensation that is due to an employee; and

    (ii) "wage" includes:

      (1) a bonus;

      (2) a commission;

      (3) a fringe benefit;

      (4) overtime wages;

      (5) premium pay; or

      (6) any other remuneration promised for service.

  (2) The Central Payroll Bureau shall:

    (i) establish regular pay periods; and

    (ii) except as provided in paragraph (3) of this subsection, pay each employee at least once every 2 weeks or twice each month.

  (3) The Central Payroll Bureau may pay an administrative, an executive, or a professional employee less frequently than required under paragraph (2)(ii) of this subsection.

(d) Each appointing authority shall accurately and timely calculate and report to the Central Payroll Bureau the payroll information for each employee.

#### Section 2-403

(a)

  (1) Subject to subsection (b) of this section, on the written request of an employee to pay dues to an organization by payroll deduction, the Central Payroll Bureau shall:

    (i) deduct the dues from the employee's wages; and

    (ii) timely pay over the amount deducted to the organization.

  (2) An employee may cancel a payroll deduction of organization dues by written notification to the Central Payroll Bureau.

(b) The Central Payroll Bureau may deduct dues under this section only for:

  (1) an organization that has a membership of 1,000 or more State employees;

  (2) an organization for which the potential field of membership is limited to fewer than 1,000 State employees, if the Governor has approved the deduction for that organization; or

  (3) an organization for which payment of dues by payroll deduction was authorized on or before June 29, 1983.

(c) The State Comptroller shall adopt regulations to carry out this section.

#### Section 2-404

(a)

  (1) This section applies to income tax that is imposed by a state other than this State.

  (2) This section does not apply to any income tax that is imposed by a political subdivision of another state.

(b) Subject to subsection (c) of this section, the Central Payroll Bureau shall:

  (1) withhold income tax imposed by another state from the wages of a State officer or employee who is a resident of that state; and

  (2) pay over the amount withheld to the appropriate tax collecting agency of that state.

(c) This section applies only if:

  (1) Maryland State income tax is not required to be withheld from the wages of the officer or employee under Title 10, Subtitle 9, Part II of the Tax - General Article; and

  (2) the state where the officer or employee resides:

    (i) withholds Maryland State income tax from the wages of Maryland residents who are employed by that state; and

    (ii) pays over the amount withheld to the Maryland State Comptroller.

#### Section 2-405

(a) In addition to the payment of wages by cash or check, the State Treasurer, on warrant of the State Comptroller, may pay a wage by direct deposit.

(b) Except as provided in subsection (c) of this section, the payment of wages by direct deposit shall be made in accordance with regulations adopted by the State Treasurer, with the concurrence of the State Comptroller.

(c) The regulations adopted by the State Treasurer under subsection (b) of this section:

  (1) may not require the payment of wages by direct deposit for any employee who:

    (i) is hired prior to the effective date of the regulations; or

    (ii) requests an exemption to the payment of wages by direct deposit; and

  (2) shall require that, when an employee is hired, the employee be notified of the right to request an exemption.

#### Section 2-406

(a) Each appointing authority shall provide each employee, at the time of hiring, notice of:

  (1) the employee's rate of pay;

  (2) the regular pay periods; and

  (3) the employee's leave benefits.

(b) The Central Payroll Bureau of the Office of the State Comptroller shall provide for each employee, for each pay period, a statement of the gross earnings of the employee and any deductions from the gross earnings.

#### Section 2-407

(a) If an appointing authority does not report payroll information in accordance with Sec. 2-402 of this subtitle, the employee or the employee's exclusive representative may initiate a grievance under the grievance procedure established under:

  (1) Title 12, Subtitle 2 of this article;

  (2) Title 13, Subtitle 2 of the Education Article;

  (3) Title 14, Subtitle 3 of the Education Article;

  (4) Sec. 14-408 of the Education Article;

  (5) Sec. 16-510(a) of the Education Article;

  (6) Sec. 2-103.4 of the Transportation Article;

  (7) any other applicable grievance procedure; or

  (8) any other applicable collective bargaining agreement.

(b)

  (1) Except as provided in paragraph (2) of this subsection, and notwithstanding any statutory or regulatory deadline in any grievance procedure listed under subsection (a) of this section, a grievance under subsection (a) of this section shall be initiated within 20 days after the failure to pay occurred.

  (2) If the failure to pay is not known to, or discovered by, the employee within 20 days after the failure to pay occurs, a grievance under subsection (a) of this section may be initiated no later than 6 months after the date on which the failure to pay occurred.

(c)

  (1) Subject to paragraphs (2) and (3) of this subsection, if a grievance is initiated in accordance with subsection (a) of this section, an employee is entitled to wages and damages unless the wage is withheld as a result of a bona fide dispute.

  (2) If the grievance was filed:

    (i) in the first 3 business days of a pay period, then damages shall start in the following regular pay period; or

    (ii) after the third business day of a pay period, then the damages shall start in the second regular pay period following the pay period in which the employee was not paid the employee's full wage.

  (3) The damages under paragraph (1) of this subsection:

    (i) may not begin until at least 1 regular pay period has elapsed since the employee was not paid the employee's full wage due for a pay period;

    (ii) shall increase per pay period by 30% of the wage that the appointing authority failed to report;

    (iii) shall continue until the pay period when the appointing authority reports the missing wages and damages, if any, to the Central Payroll Bureau; and

    (iv) may not exceed 3 times the amount of wage due that the appointing authority failed to report for a pay period.

### Subtitle 5. Health and Welfare Benefits Program

#### Section 2-501

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

(b)

  (1) "County board" means the board of education of a county.

  (2) "County board" includes the Baltimore City Board of School Commissioners.

(c) "Program" means the State Employee and Retiree Health and Welfare Benefits Program.

(d) "Satellite organization" means any organization or entity whose employees are eligible to participate in the State Employee and Retiree Health and Welfare Benefits Program as a separate account.

(e) "Wellness program" means a program that is designed to:

  (1) promote health or prevent or detect disease or illness;

  (2) improve clinical outcomes;

  (3) prevent or reduce acute admissions and readmissions to health care facilities;

  (4) improve treatment compliance for chronic conditions;

  (5) promote healthy behaviors; or

  (6) prevent or control injury.

#### Section 2-501.1

In this subtitle, the terms "spouse", "family", "immediate family", "dependent", and any other terms that denote the spousal relationship shall be construed to include a party to a domestic partnership, as defined in Sec. 6-101 of the Health - General Article.

#### Section 2-502

(a) There is a State Employee and Retiree Health and Welfare Benefits Program, to be developed and administered by the Secretary.

(b)

  (1) The Program:

    (i) subject to the regulations adopted under Sec. 2-503 of this subtitle, shall encompass all units in the Executive, Judicial, and Legislative branches of State government, including any unit with an independent personnel system;

    (ii) shall include the health insurance benefit options established by the Secretary; and

    (iii) except as provided in paragraph (2) of this subsection, may include any other benefit option that the Secretary considers appropriate.

  (2) The Program may not contain any of the benefits provided under Division II or Title 35 or Title 37 of this article.

(c) The provisions of the Program that apply to spouses shall apply to parties who have entered into a domestic partnership, as defined in Sec. 6-101 of the Health - General Article.

#### Section 2-502.1

(a) In this section, "Maryland Rx Program" means a purchasing pool for pharmacy benefits that meets the requirements of this section.

(b) The Department shall establish a Maryland Rx Program to achieve savings on the cost of prescription drugs for:

  (1) the State Employee and Retiree Health and Welfare Benefits Program; and

  (2) any local government or other entity identified under this subtitle that satisfies the conditions for participation established by the Department.

(c) The Maryland Rx Program shall seek savings through:

  (1) a preferred list of covered prescription drugs;

  (2) rebates from drug manufacturers;

  (3) negotiated discounts; and

  (4) other cost-saving measures.

(d)

  (1) Each entity that participates in the Maryland Rx Program shall be responsible for the cost of drugs purchased by or on behalf of the entity.

  (2) The cost of drugs purchased by or on behalf of the State Employee and Retiree Health and Welfare Benefits Program shall be paid in accordance with the State budget and the provisions of this subtitle.

(e) The State may:

  (1) provide start-up funds for the Maryland Rx Program; and

  (2) recoup any start-up funds from savings achieved for participating entities through the Maryland Rx Program.

(f) The Department may charge an administrative fee to an entity sufficient to offset the administrative costs resulting from the entity's participation in the Maryland Rx Program.

(g) The Department shall use a reverse auction, as provided for in Sec. 2-502.2 of this subtitle, to select a pharmacy benefit manager or other entity to administer the Maryland Rx Program.

(h) The Department shall adopt regulations to implement this section.

#### Section 2-502.2

(a)

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

  (2) "Market check" means a technology-driven evaluation of prescription drug pricing based on benchmarks derived from pharmacy benefits managers' reverse auction processes conducted in the United States over the immediately preceding 12 months.

  (3) "Pharmacy benefits manager" has the meaning stated in Sec. 15-1601 of the Insurance Article.

  (4) "Price" means the projected cost of a bid for providing services over the duration of the contract.

  (5) "Reverse auction" means an automated bidding process conducted online that starts with an opening price and allows qualified bidders to counteroffer a lower price for multiple rounds of bidding.

(b) It is the intent of the General Assembly to optimize prescription drug savings by the State through:

  (1) adoption of a reverse auction process for the selection of a pharmacy benefits manager for the Program;

  (2) electronic review and validation of pharmacy benefits manager claims invoices as the foundation for reconciling pharmacy bills;

  (3) market checks of the incumbent pharmacy benefits manager's prescription drug pricing; and

  (4) limiting independent pharmacies from unsustainable reimbursement practices while preventing a reduction in employee benefits.

(c)

  (1) At least 3 months before a pharmacy benefits manager reverse auction is scheduled to be completed, the Department shall procure, through a competitive sealed proposal conducted in accordance with Sec. 13-104 of the State Finance and Procurement Article, a technology platform, and any associated professional services necessary to operate the platform, to:

    (i) evaluate the qualifications of prospective pharmacy benefits managers for the Program;

    (ii) automatically adjudicate prescription drug claims; and

    (iii) collect data on pharmacy reimbursement.

  (2) The platform procured under paragraph (1) of this subsection shall have the capability to:

    (i) host and conduct an online automated reverse auction;

    (ii) automate repricing of diverse and complex pharmacy benefits manager prescription drug pricing proposals to enable direct comparisons of the price of bids using all annual claims data available for state-funded health plans or multiple health plan prescription drug purchasing groups using code-based classification of prescription drugs from nationally accepted drug sources;

    (iii) produce an automated report and analysis of bids, including the ranking of bids based on the comparative costs and qualitative aspects of the costs within 48 hours after the close of each round of reverse auction bidding;

    (iv) after the close of a reverse auction, perform electronic, line by line, claim by claim review of all invoiced pharmacy benefits manager claims within 12 hours of receipt and identify all deviations from the specific terms of the services contract resulting from the reverse auction process; and

    (v) if available, after the close of a reverse auction, perform comparisons of the financial effects on the State of alternative drug-pricing metrics, such as the national average drug acquisition cost and average wholesale price.

  (3) A responsive offeror under paragraph (2) of this subsection may not subcontract any part of the reverse auction or a review described under paragraph (2)(iv) of this subsection.

  (4) The Department shall consult with the Department of Information Technology and Department of General Services in conducting the procurement required under paragraph (1) of this subsection.

  (5) The Department may not award a contract under paragraph (1) of this subsection to:

    (i) a pharmacy benefits manager;

    (ii) a subsidiary or affiliate of a pharmacy benefits manager; or

    (iii) a vendor that is managed by a pharmacy benefits manager or receives, directly or indirectly, remuneration from a pharmacy benefits manager for aggregating clients into a contractual relationship with a pharmacy benefits manager.

  (6) The Department may structure a contract awarded under this subsection to require the pharmacy benefits manager selected under Sec. 2-502.1(g) of this subtitle to pay the cost of the technology platform and associated professional services contracted under this subsection by assessing a per-prescription fee paid by the pharmacy benefits manager directly to the technology platform vendor.

(d)

  (1) In consultation with the vendor selected under subsection (c) of this section, and with consideration of recommendations that may be offered by the Maryland Prescription Drug Affordability Board, the Department shall specify the terms of a participant bidding agreement that all bidders must accept as a prerequisite for participation in the reverse auction, including:

    (i) common definitions;

    (ii) prescription drug classifications;

    (iii) rules that may include retail pricing rules such as maximum allowable cost price lists and dispensing fees;

    (iv) whether the vendor will be assessed a platform vendor fee described under subsection (c)(6) of this section; and

    (v) any other contract terms the Department determines are necessary to further the intent of the General Assembly as established in subsection (b) of this section.

  (2) The terms of a participant bidding agreement specified under paragraph (1) of this subsection may not be modified except by affirmative approval by the Department.

(e)

  (1)

    (i) The Department may perform annual market checks of pharmacy benefits manager services during the term of a pharmacy benefits manager contract to ensure continuing competitiveness of prescription drug pricing over the life of the contract.

    (ii) A market check performed under this paragraph shall include an evaluation of the effect of alternative drug-pricing metrics, such as the national average drug acquisition cost and average wholesale price, on the cost of prescription drugs and savings to the State.

  (2) The Department shall make regular, periodic payment of invoices within the time periods specified in a contract based on the automated adjudication of invoiced claims using the technology platform to validate that claims payments comply with the terms of the contract.

(f)

  (1) The following health plans in the State may use the reverse auction process established under this section individually or collectively as a joint purchasing group with the Program:

    (i) a State-funded health plan other than the Program;

    (ii) a self-funded county, municipal, or other local government employee health plan;

    (iii) a public school employee health plan; and

    (iv) a health plan of a public institution of higher education.

  (2) A health plan that participates in a reverse auction purchasing group under paragraph (1) of this subsection shall:

    (i) retain full autonomy over determination of the entity's prescription drug formulary and pharmacy benefit designs; but

    (ii) agree, before participating in the reverse auction, to accept the prescription drug pricing plan that is selected through the reverse auction process.

(g) A pharmacy benefits manager that submits a bid under a reverse auction process under this section or enters into a contract with the Department or a health plan described under subsection (f)(1) of this section shall provide the Department and health plan access to complete pharmacy claims data necessary for the Department and health plan to:

  (1) conduct the reverse auction; and

  (2) carry out administrative and management duties.

(h)

  (1) A prospective bidder or offeror, a bidder, or an offeror may submit a protest as provided under Title 15, Subtitle 2 of the State Finance and Procurement Article.

  (2) If the pharmacy benefits manager selected under Sec. 2-502.1(g) of this subtitle asserts that the Department has underpaid on a claim, the pharmacy benefits manager may submit a contract claim as provided under Title 15, Subtitle 2 of the State Finance and Procurement Article.

(i)

  (1) If the Department and the Department of General Services determine that the implementation of this section is not administratively feasible for the benefit year beginning after December 31, 2020, the Department may delay implementation of this section to the benefit year beginning after December 31, 2021.

  (2) For purposes of carrying out the provisions of subsections (c) and (d) of this section before January 1, 2021, the Board of Public Works may approve a request from the Department for an exemption from specific provisions of Division II of the State Finance and Procurement Article.

#### Section 2-503

(a) The Secretary shall:

  (1) adopt regulations for the administration of the Program;

  (2) ensure that the Program complies with:

    (i) all federal and State laws governing employee benefit plans; and

    (ii) Sec.Sec. 15-826, 15-826.1, 15-826.2, and, as applicable to contraceptive drugs and devices, 15-831(a) through (d) of the Insurance Article;

  (3) each year, recommend to the Governor the State share of the costs of the Program; and

  (4) make ongoing eligibility determinations to ensure that participation in the Program does not impede, undermine, or conflict with federal compliance obligations or government and cafeteria plan status.

(b)

  (1) The Secretary may arrange as the Secretary considers appropriate any benefit option for inclusion in the Program.

  (2) The Secretary shall include in the Program an option to purchase up to $200,000 of additional life insurance coverage for employees who:

    (i) fly in a helicopter in the course of their employment with the State;

    (ii) scuba dive in the course of their employment with the State; or

    (iii) as a result of their employment with the State, face a significant likelihood of receiving a less favorable life insurance rating than an individual employed in a nonhazardous position.

  (3)

    (i) The Secretary shall include a wellness program in the Program.

    (ii) The wellness program shall:

      (1) be developed in consultation with the Secretary of Health;

      (2) promote the goals of the Maryland Department of Health State Health Improvement Process; and

      (3) aim to achieve savings in the Program over time that exceed the costs of the wellness program.

(c) The Secretary shall specify by regulation the types or categories of State employees who:

  (1) are eligible to enroll and participate in the Program with State subsidies;

  (2) are eligible to enroll and participate in the Program without State subsidies; and

  (3) are not eligible to enroll or participate in the Program.

(d)

  (1) The regulations adopted by the Secretary shall include provisions for the enrollment and participation of employees of all:

    (i) organizations and entities that were participating in the Program as satellite organizations on January 1, 1993; and

    (ii) employee organizations that qualify for payroll deductions under the provisions of Sec. 2-403 of this title.

  (2) Employees of organizations and entities covered by this section may participate:

    (i) without State subsidies; and

    (ii) with payment by the organization or entity of administrative costs resulting from the participation of its employees in the Program.

  (3) The regulations adopted by the Secretary under this subsection shall provide that an employee organization specified in paragraph (1)(ii) of this subsection:

    (i) may not enroll or participate in the Program unless the organization has notified the Secretary, in writing, on or before July 1, 1994 of the organization's intent to enroll and participate in the Program during calendar year 1994; and

    (ii) may not enroll or participate in the Program on or after January 1, 1995 unless the organization has participated in the Program during calendar year 1994.

#### Section 2-504

Each year the Governor shall include money in the State budget to pay the State share of the costs of the Program.

#### Section 2-507

(a) Subject to the regulations adopted under Sec. 2-503 of this subtitle, a State employee may enroll and participate in any of the health insurance or other benefit options established under the Program.

(b) The surviving spouse of a State employee who died while employed by the State may enroll and participate in the health insurance benefit options established under the Program as long as the surviving spouse:

  (1) is receiving an allowance under Title 29, Subtitle 2 of this article; or

  (2) is the sole primary designated beneficiary and receiving a periodic distribution of benefits under an optional retirement program under Title 30 of this article.

(c) The surviving child or dependent parent of a State Police officer who died while employed by the State may enroll and participate in the health insurance benefit options established under the Program as long as the child or parent is receiving an allowance under Title 29, Subtitle 2 of this article.

(d) The surviving child or dependent parent of a correctional officer who at the time of death was a member of the Correctional Officers' Retirement System and who died while employed by the State may enroll and participate in the health insurance benefit options established under the Program as long as the child or parent is receiving an allowance under Title 29, Subtitle 2 of this article.

(e) The surviving child or dependent parent of a State employee who at the time of death was a member of the Employees' Retirement System, Employees' Pension System, Teachers' Retirement System, or Teachers' Pension System and who was killed or died while employed by the State may enroll and participate in the health insurance benefit options established under the Program as long as the child or parent is receiving an allowance under Title 29, Subtitle 2 of this article.

(f) The surviving child or dependent parent of an individual who at the time of death was a member of the Judges' Retirement System and who died while employed by the State may enroll and participate in the health insurance benefit options established under the Program as long as the child or parent is receiving an allowance under Title 29, Subtitle 2 of this article.

(g)

  (1) This subsection applies to an individual receiving an allowance under Sec. 29-203(b), Sec. 29-204(b), Sec. 29-204.1, Sec. 29-204.2, or Sec. 29-204.3 of this article.

  (2) An individual described under paragraph (1) of this subsection who elects to participate in the health insurance benefit options established under the Program shall be entitled to the maximum allowable State subsidy provided for a State retiree.

#### Section 2-508

(a)

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

  (2) "Creditable service" means:

    (i) any period during which an individual was employed by the State in the Executive, Legislative, or Judicial Branch and enrolled as a member of one of the several systems under Division II of this article or the Optional Retirement Program under Title 30 of this article;

    (ii) service while an employee was employed by the Domestic Relations Division of the Anne Arundel County Circuit Court, prior to transfer on or before July 1, 2002, into the State Personnel Management System, in accordance with Sec. 2-510 of the Courts Article; or

    (iii) service while a member of the Maryland Transit Administration Retirement Plan under Sec. 7-206 of the Transportation Article.

  (3)

    (i) "Retiree" means:

      (1) a former State employee who receives a retirement allowance under Division II of this article;

      (2) a former employee of the Medical System Corporation, as defined in Sec. 13-301 or Sec. 13-401 of the Education Article, who receives a retirement allowance from the Employees' Retirement System of the State of Maryland or the Employees' Pension System of the State of Maryland under Title 22 or Title 23 of this article; or

      (3) a former employee of the Maryland Transit Administration who receives a Maryland Transit Administration retirement allowance under Sec. 7-206 of the Transportation Article.

    (ii) "Retiree" does not include:

      (1) a member of the faculty or staff of a community college;

      (2) a teacher or a staff member employed by a county board of education; or

      (3) an individual who retired under an optional program under Title 30 of this article.

  (4) "State service" means service with the State by:

    (i) an employee while a member of the Employees' Retirement System or the Employees' Pension System under Title 22 or Title 23 of this article;

    (ii) a member of the Judges' Retirement System under Title 27 of this article;

    (iii) a teacher while a member of the Teachers' Retirement System or Teachers' Pension System under Title 22 or Title 23 of this article;

    (iv) a correctional officer, while a member of the Correctional Officers' Retirement System under Title 25 of this article;

    (v) an employee of the Medical System Corporation, as defined in Sec. 13-301 or Sec. 13-401 of the Education Article, while a member of the Employees' Retirement System of the State of Maryland or the Employees' Pension System of the State of Maryland under Title 22 or Title 23 of this article;

    (vi) a State Police officer while a member of the State Police Retirement System under Title 24 of this article;

    (vii) a law enforcement officer while a member of the Law Enforcement Officers' Pension System under Title 26 of this article; or

    (viii) an employee while a member of the Maryland Transit Administration Plan under Sec. 7-206 of the Transportation Article.

(b)

  (1) This subsection applies to a retiree who:

    (i) began State service on or before June 30, 2011; or

    (ii)

      (1) began State service on or after July 1, 2011; and

      (2) is a retiree of the Judges' Retirement System.

  (2) A retiree may enroll and participate in the health insurance benefit options established under the Program if the retiree:

    (i) ended State service with at least 10 years of creditable service and within 5 years before the age at which a vested retirement allowance normally would begin;

    (ii) ended State service with at least 16 years of creditable service;

    (iii) ended State service on or before June 30, 1984;

    (iv) retired directly from State service with a State retirement allowance on or after July 1, 1984, and had at least 5 years of creditable service;

    (v) retired directly from State service with a State disability retirement allowance on or after July 1, 1984; or

    (vi) retired directly from State service in the Judges' Retirement System at the mandatory retirement age required by Article IV, Sec. 3 of the Maryland Constitution with less than 5 years of creditable service.

  (3)

    (i) The surviving spouse or dependent child of a deceased retiree who was eligible to enroll may enroll and participate in the health insurance benefit options established under the Program as long as the spouse or child is receiving a periodic allowance under Division II of this article or the Maryland Transit Administration Retirement Plan under Sec. 7-206 of the Transportation Article.

    (ii) Subparagraph (i) of this paragraph does not apply to a deceased retiree's spouse or dependent child who receives an Option 1, Option 4, or Option 7 benefit under Division II of this article or a lump-sum payment of benefits under the Maryland Transit Administration Retirement Plan under Sec. 7-206 of the Transportation Article.

  (4)

    (i) If a retiree receives a State disability retirement allowance or has 16 or more years of creditable service, the retiree or the retiree's surviving spouse or dependent child is entitled to the same State subsidy allowed a State employee.

    (ii) In all other cases, if a retiree has at least 5 years of creditable service, the retiree or the retiree's surviving spouse or dependent child is entitled to 1/16 of the State subsidy allowed a State employee for each year of the retiree's creditable service up to 16 years.

    (iii) Notwithstanding subparagraph (ii) of this paragraph and subsection (a)(4)(i) of this section, if a retiree is an additional employee or agent of the State Racing Commission, for the purposes of determining a retiree's State subsidy, creditable service shall be determined with respect to service as an additional employee or agent beginning from the initial date of employment or January 1, 1986, whichever is later.

    (iv)

      (1) This paragraph applies only to a retiree of the Judges' Retirement System who retired directly from State service at the mandatory retirement age required by Article IV, Sec. 3 of the Maryland Constitution with less than 5 years of creditable service.

      (2) Notwithstanding subparagraph (ii) of this paragraph, a retiree of the Judges' Retirement System or the retiree's surviving spouse or dependent child is entitled to 1/16 of the State subsidy allowed a State employee for each year of the retiree's creditable service.

(c)

  (1)

    (i) Except as provided in subparagraph (ii) of this paragraph, this subsection applies to a retiree who begins State service on or after July 1, 2011.

    (ii) This subsection does not apply to:

      (1) a retiree of the Judges' Retirement System; or

      (2) a former Governor of Maryland who began serving as Governor on or after January 21, 2015.

  (2) A retiree may enroll and participate in the health insurance benefit options established under the Program if the retiree:

    (i) ends State service with at least 25 years of creditable service;

    (ii) ends State service with at least 10 years of creditable service within 5 years before the age at which a vested retirement allowance normally would begin;

    (iii) retires directly from State service with a State retirement allowance and has 10 years of creditable service; or

    (iv) retires directly from State service with a State disability retirement allowance.

  (3)

    (i) The surviving spouse or dependent child of a deceased retiree who was eligible to enroll may enroll and participate in the health insurance benefit options established under the Program as long as the spouse or child is receiving a periodic allowance under Division II of this article or the Maryland Transit Administration Retirement Plan under Sec. 7-206 of the Transportation Article.

    (ii) Subparagraph (i) of this paragraph does not apply to a deceased retiree's spouse or dependent child who receives an Option 1, Option 4, or Option 7 benefit under Division II of this article or a lump-sum payment of benefits under the Maryland Transit Administration Retirement Plan under Sec. 7-206 of the Transportation Article.

  (4)

    (i) If a retiree receives a State disability retirement allowance or has 25 or more years of creditable service, the retiree or the retiree's surviving spouse or dependent child is entitled to the same State subsidy allowed a State employee.

    (ii) In all other cases, if a retiree has at least 10 years of creditable service, the retiree or the retiree's surviving spouse or dependent child is entitled to 1/25 of the State subsidy allowed a State employee for each year of the retiree's creditable service up to 25 years.

    (iii) Notwithstanding subparagraph (ii) of this paragraph and subsection (a)(4)(i) of this section, if a retiree is an additional employee or agent of the State Racing Commission, for the purposes of determining a retiree's State subsidy, creditable service shall be determined with respect to service as an additional employee or agent beginning from the initial date of employment.

(d)

  (1) Notwithstanding subsections (b) and (c) of this section and Sec.Sec. 2-509 and 2-509.1 of this subtitle, the State may establish separate health insurance benefit options for retirees that differ from those for active State employees.

  (2) Subject to Sec. 2-509.1 of this subtitle, on or after July 1, 2011, the health insurance benefit option for retirees shall include a prescription drug benefit that:

    (i) has the same co-payments, coinsurance, and deductible that apply to the prescription drug benefit for active State employees;

    (ii) requires:

      (1) retirees who qualify for the maximum State subsidy to pay 25% of the premium for the prescription drug benefit; and

      (2) retirees who qualify for a partial State subsidy to pay 25% of the premium for the prescription drug benefit plus the proportional additional amount required under subsections (b)(4)(ii) and (c)(4)(ii) of this section; and

    (iii) requires retirees to pay out-of-pocket limits equal to:

      (1) $1,500 for the retiree only; and

      (2) $2,000 for the retiree and the retiree's family.

#### Section 2-508.1

(a) A former Governor of Maryland who began serving as Governor on or after January 21, 2015, may enroll and participate in the health insurance benefit options established under the Program if the former Governor:

  (1) is at least 62 years old;

  (2) is receiving a normal service retirement allowance under Division II of this article; or

  (3) is receiving a disability retirement allowance under Division II of this article.

(b) The surviving spouse of a deceased Governor or former Governor may enroll and participate in the health insurance benefit options established under the Program as long as the spouse is receiving a periodic allowance under Division II of this article.

(c) A former Governor described in subsection (a)(1) or (2) of this section or the surviving spouse of a deceased Governor or former Governor is entitled to 1/16 of the State subsidy allowed a State employee for each year served as Governor.

(d) A former Governor described in subsection (a)(3) of this section or the surviving spouse of a deceased former Governor is entitled to the same State subsidy allowed a State employee.

#### Section 2-509

(a)

  (1) This subsection applies to a retiree of an optional retirement program under Title 30 of this article who began service as an employee of the State in the Executive, Legislative, or Judicial Branch of government on or before June 30, 2011.

  (2)

    (i) Subject to subparagraph (ii) of this paragraph, an individual may enroll and participate in the health insurance benefit options established under the Program if the individual retired under an optional program under Title 30 of this article and:

      (1) ended service with a State institution of higher education with at least 10 years of service and was at least age 57;

      (2) ended service with a State institution of higher education with at least 16 years of service; or

      (3) retired directly from and had at least 5 years of service with a State institution of higher education with a periodic distribution of benefits on or after July 1, 1984.

    (ii)

      (1) For purposes of this subsection only, years of service shall be calculated as follows:

      (A) except as provided in subsubparagraph 2 of this subparagraph, a year of service means a period of 12 months during which an employee was a participant in an optional retirement program under Title 30 of this article and the participant's employer made contributions to the participant's account in the Program;

      (B) if an employee's work year is an academic year of at least 9 but less than 12 months, a year of service means a period equal to the academic year during which an employee was a participant in an optional retirement program under Title 30 of this article and the participant's employer made contributions to the participant's account in the Program; or

      (C) any period during which an individual was employed by the State in the Executive, Legislative, or Judicial Branch and enrolled as a member of one of the several systems under Division II of this article.

      (2) To determine eligibility for health insurance benefits under this section, each year of service shall be multiplied by the participant's percentage of full-time employment for that year of service.

    (iii) The surviving spouse or dependent child of a deceased individual who was eligible to enroll may enroll and participate in the health insurance benefit options established under the Program as long as the spouse or child is receiving a periodic distribution of benefits under an optional retirement program under Title 30 of this article.

  (3)

    (i) An enrollee under this section who was in service with a State institution of higher education at the time of the retirement is entitled to the same State subsidy allowed a retiree under Sec. 2-508(b)(4) of this subtitle. However, except as provided in subparagraph (ii) of this paragraph, the subsidy shall apply only to the costs of coverage for the enrollee and may not apply to any additional costs of coverage for the enrollee's spouse or children.

    (ii) If the enrollee has 25 or more years of service as an employee of the State in the Executive, Legislative, or Judicial Branch of government, the enrollee or the enrollee's surviving spouse or dependent child is entitled to the same State subsidy allowed a retiree with 16 or more years of creditable service under Sec. 2-508(b)(4)(i) of this subtitle.

(b)

  (1) This subsection applies to a retiree of an optional retirement program under Title 30 of this article who begins service as an employee of the State in the Executive, Legislative, or Judicial Branch of government on or after July 1, 2011.

  (2)

    (i) Subject to subparagraph (ii) of this paragraph, an individual may enroll and participate in the health insurance benefit options established under the Program if the individual retired under an optional program under Title 30 of this article and:

      (1) ended service with a State institution of higher education with at least 10 years of service and was at least age 57;

      (2) ended service with a State institution of higher education with at least 25 years of service; or

      (3) retired directly from and had at least 10 years of service with a State institution of higher education with a periodic distribution of benefits on or after July 1, 2011.

    (ii)

      (1) For purposes of this paragraph only, years of service shall be calculated as follows:

      (A) except as provided in subsubparagraph 2 of this subparagraph, a year of service means a period of 12 months during which an employee was a participant in an optional retirement program under Title 30 of this article and the participant's employer made contributions to the participant's account in the Program;

      (B) if an employee's work year is an academic year of at least 9 but less than 12 months, a year of service means a period equal to the academic year during which an employee was a participant in an optional retirement program under Title 30 of this article and the participant's employer made contributions to the participant's account in the Program; or

      (C) any period during which an individual was employed by the State in the Executive, Legislative, or Judicial Branch and enrolled as a member of one of the several systems under Division II of this article.

      (2) To determine eligibility for health insurance benefits under this section, each year of service shall be multiplied by the participant's percentage of full-time employment for that year of service.

    (iii) The surviving spouse or dependent child of a deceased individual who was eligible to enroll may enroll and participate in the health insurance benefit options established under the Program as long as the spouse or child is receiving a periodic distribution of benefits under an optional retirement program under Title 30 of this article.

  (3)

    (i) An enrollee under this subsection who was in service with a State institution of higher education at the time of the retirement is entitled to the same State subsidy allowed a retiree under Sec. 2-508(c)(4) of this subtitle. However, except as provided in subparagraph (ii) of this paragraph, the subsidy shall apply only to the costs of coverage for the enrollee and may not apply to any additional costs of coverage for the enrollee's spouse or children.

    (ii) If the enrollee has 25 or more years of service as an employee of the State in the Executive, Legislative, or Judicial Branch of government, the enrollee or the enrollee's surviving spouse or dependent child is entitled to the same State subsidy allowed a retiree with 25 or more years of creditable service under Sec. 2-508(c)(4)(i) of this subtitle.

#### Section 2-509.1

(a)

  (1) Except as provided in subsection (b) of this section, the State shall continue to include a prescription drug benefit plan in the health insurance benefit options established under the Program and available to retirees under Sec.Sec. 2-508 and 2-509 of this subtitle notwithstanding the enactment of the federal Medicare Prescription Drug, Improvement, and Modernization Act of 2003 or any other federal law permitting states to discontinue prescription drug benefit plans to retirees of a state.

  (2) Except as provided in subsection (b) of this section:

    (i) a retiree may elect to cover the retiree's spouse or dependent child under the State prescription drug benefit plan under Sec.Sec. 2-508 and 2-509 of this subtitle; and

    (ii) if a surviving spouse or surviving dependent child of a retiree is eligible to enroll in the State prescription drug benefit plan under Sec. 2-508 or Sec. 2-509 of this subtitle, the surviving spouse or surviving dependent child may elect to enroll in the State prescription drug benefit plan.

(b) Except as provided in subsection (c) of this section, on January 1, 2019, the State shall discontinue prescription drug benefits for:

  (1) a Medicare-eligible retiree;

  (2) the Medicare-eligible spouse or surviving spouse of a retiree; and

  (3) a Medicare-eligible dependent child or surviving dependent child of a retiree.

(c)

  (1) If a retiree is eligible to participate in the prescription drug benefit plan under Medicare, but the retiree's spouse or dependent child is not eligible to participate in a Medicare prescription drug benefit plan, the retiree may elect to cover the retiree's spouse or dependent child under the State prescription drug benefit plan.

  (2) If the surviving spouse or surviving dependent child of a retiree is eligible to enroll in the State prescription drug benefit plan under Sec. 2-508 or Sec. 2-509 of this subtitle, but is not eligible to participate in the prescription drug benefit plan under Medicare, the surviving spouse or surviving dependent child may elect to enroll in the State prescription drug benefit plan.

(d)

  (1) This subsection applies only to a retiree, a retiree's spouse or surviving spouse, and a retiree's dependent child or surviving dependent child:

    (i) who is enrolled in a prescription drug benefit plan under Medicare;

    (ii) if the retiree is retired on or before December 31, 2019; and

    (iii) if the retiree is eligible under Sec. 2-508 or Sec. 2-509 of this subtitle to enroll and participate in the health insurance benefit options established under the Program.

  (2)

    (i) Subject to subparagraph (ii) of this paragraph, on or before January 1, 2020, the Department shall establish a Maryland State Retiree Prescription Drug Coverage Program that reimburses a participant for out-of-pocket costs that exceed the limits established for non-Medicare-eligible retirees in Sec. 2-508(d)(2)(iii) of this subtitle.

    (ii) The Department may establish an out-of-pocket limit higher than the limits established in subparagraph (i) of this paragraph for a retiree who qualifies for a partial State subsidy.

  (3) The Maryland State Retiree Prescription Drug Coverage Program established under paragraph (2) of this subsection may include:

    (i) a health reimbursement account established in accordance with Sec. 105(h) of the Internal Revenue Code; or

    (ii) another program that provides assistance with prescription drug costs.

  (4) A retiree, a retiree's spouse or surviving spouse, and a retiree's dependent child or surviving dependent child may enroll in the Maryland State Retiree Prescription Drug Coverage Program during the open enrollment period or any special enrollment period for retiree health insurance benefit options.

(e)

  (1) This subsection applies only to a retiree, a retiree's spouse or surviving spouse, and a retiree's dependent child or surviving dependent child:

    (i) who is enrolled in a prescription drug benefit plan under Medicare; and

    (ii) if the retiree:

      (1) began State service on or before June 30, 2011;

      (2) retired on or after January 1, 2020; and

      (3) is eligible under Sec. 2-508 or Sec. 2-509 of this subtitle to enroll and participate in the health insurance benefit options established under the Program.

  (2)

    (i) Subject to subparagraph (ii) of this paragraph, on or before January 1, 2020, the Department shall establish a Maryland State Retiree Catastrophic Prescription Drug Assistance Program that reimburses a participant for out-of-pocket costs after the participant has entered catastrophic coverage under a prescription drug benefit plan under Medicare.

    (ii) The Department may establish a maximum reimbursement amount for a retiree who qualifies for a partial State subsidy.

  (3) The Maryland State Retiree Catastrophic Prescription Drug Assistance Program under paragraph (2) of this subsection may provide reimbursements through:

    (i) a health reimbursement account established in accordance with Sec. 105(h) of the Internal Revenue Code; or

    (ii) another program that provides assistance with prescription drug costs.

  (4) A retiree, a retiree's spouse or surviving spouse, and a retiree's dependent child or surviving dependent child may enroll in the Maryland State Retiree Catastrophic Prescription Drug Assistance Program during the open enrollment period or any special enrollment period for retiree health insurance benefit options.

(f)

  (1) This subsection applies only to a retiree, a retiree's spouse or surviving spouse, and a retiree's dependent child or surviving dependent child:

    (i) who is enrolled in:

      (1) the Maryland State Retiree Prescription Drug Coverage Program established under subsection (d) of this section; or

      (2) the Maryland State Retiree Catastrophic Prescription Drug Assistance Program established under subsection (e) of this section; and

    (ii) if the retiree is eligible under Sec. 2-508 or Sec. 2-509 of this subtitle to enroll and participate in the health insurance benefit options established under the Program.

  (2)

    (i) On or before January 1, 2020, the Department shall establish a Maryland State Retiree Life-Sustaining Prescription Drug Assistance Program that reimburses a participant for out-of-pocket costs for a life-sustaining prescription drug that is:

      (1) covered by the prescription drug benefit plan in the health insurance benefit options established under the Program; and

      (2) not covered by the prescription drug benefit plan under Medicare in which the participant is enrolled.

    (ii) The Department shall develop a list of the prescription drugs that qualify for reimbursement under subparagraph (i) of this paragraph.

    (iii) The Department may establish maximum reimbursement amounts for a retiree who qualifies for a partial State subsidy.

  (3) The Maryland State Retiree Life-Sustaining Prescription Drug Assistance Program established under paragraph (2) of this subsection may provide reimbursements through:

    (i) a health reimbursement account established in accordance with Sec. 105(h) of the Internal Revenue Code; or

    (ii) another program that provides assistance with prescription drug costs.

  (4) A retiree, a retiree's spouse or surviving spouse, and a retiree's dependent child or surviving dependent child shall be automatically enrolled in the Maryland State Retiree Life-Sustaining Prescription Drug Assistance Program on enrollment in:

    (i) the Maryland State Retiree Prescription Drug Coverage Program established under subsection (d) of this section; or

    (ii) the Maryland State Retiree Catastrophic Prescription Drug Assistance Program established under subsection (e) of this section.

(g)

  (1) Subject to paragraph (2) of this subsection, not later than July 1 of each year, the Secretary shall provide written certified notice of the change in the State prescription drug benefit plan under this section to the individuals who will become eligible in the next calendar year to enroll in the:

    (i) Maryland State Retiree Prescription Drug Coverage Program;

    (ii) Maryland State Retiree Catastrophic Prescription Drug Assistance Program; or

    (iii) Maryland State Retiree Life-Sustaining Prescription Drug Assistance Program.

  (2) The notice shall include information regarding:

    (i) coverage options available in the Medicare prescription drug benefit plan, including options that are similar to the prescription drug benefit plan in the health insurance benefit options established under the Program;

    (ii) the potential for significant penalties if an individual does not promptly choose a Medicare prescription drug benefit plan immediately on termination of the individual's participation in the State prescription drug benefit plan;

    (iii) the programs available under subsections (d), (e), and (f) of this section; and

    (iv) any additional resources made available by the Department in accordance with this section.

(h)

  (1) The Department shall ensure Medicare-eligible retirees have access to one-on-one counseling services to assist retirees in selecting a Medicare prescription drug benefit plan.

  (2) The Department shall develop a plan to communicate to Medicare-eligible retirees the availability of:

    (i) the programs under subsections (d), (e), and (f) of this section; and

    (ii) services and information regarding prescription drug benefit plans under Medicare.

  (3) On or before December 31, 2019, the Department shall submit a report to the Senate Budget and Taxation Committee and the House Appropriations Committee, in accordance with Sec. 2-1257 of the State Government Article, on the plan developed under paragraph (2) of this subsection.

  (4) The report required under paragraph (3) of this subsection shall include:

    (i) options for providing one-on-one counseling, including:

      (1) in-person, over-the-phone, or web-based counseling;

      (2) the times at which one-on-one counseling will be available;

      (3) a plan to ensure equitable geographic access to one-on-one counseling; and

      (4) entering into a statewide contract with an employee benefits administrator or similar entity to provide one-on-one counseling services;

    (ii) plans for holding seminars in every county of the State to provide information regarding eligibility for and available benefits under the programs established under subsections (d), (e), and (f) of this section;

    (iii) plans for providing access to a web-based overview and interactive website that provide information on:

      (1) Medicare prescription drug benefit plans; and

      (2) subsidy and financial assistance programs for low-income individuals; and

    (iv) plans for providing a toll-free hotline for reporting issues and concerns regarding the services provided in accordance with this paragraph.

(i) Subject to the requirements of Sec. 13-108 of the State Finance and Procurement Article, the Department may make an emergency procurement for:

  (1) staff required to carry out the provisions of this section; and

  (2) a third party to administer health reimbursement accounts established under this section.

(j) The Department shall submit quarterly reports to the Governor and, in accordance with Sec. 2-1257 of the State Government Article, the House Appropriations Committee, the Senate Budget and Taxation Committee, and the Joint Committee on Pensions, on:

  (1) the status of establishing the programs under subsections (d), (e), and (f) of this section, including:

    (i) the status of procuring any contracts necessary to operate the programs; and

    (ii) the prescription drugs determined to qualify for reimbursement under the Maryland State Retiree Life-Sustaining Prescription Drug Assistance Program under subsection (f) of this section;

  (2) the availability of one-on-one counseling services required under subsection (h) of this section;

  (3) the details of the health reimbursement accounts or other programs to provide assistance with prescription drug costs for individuals enrolled in the programs under subsections (d), (e), and (f) of this section, including:

    (i) the specific out-of-pocket costs eligible for reimbursement;

    (ii) the required process for receiving reimbursement;

    (iii) the method of reimbursement;

    (iv) the timing of reimbursement; and

    (v) a plan to use debit cards to process reimbursements in a convenient and efficient manner; and

  (4) in total and by category for the previous quarter, the number of issues and concerns reported to the hotline.

(k) The Department shall adopt regulations to implement the provisions of this section.

#### Section 2-510

(a) This section applies only to former Baltimore City Jail employees, as described in Sec. 23-201(a)(9) of this article.

(b) On retirement, a former Baltimore City Jail employee who elected to become a member of the State Retirement and Pension System may elect to enroll and participate in one of the following:

  (1) the health insurance benefit options established under the Program, subject to the same terms and conditions as those provided for retirees under Sec. 2-508 of this subtitle; or

  (2) the Baltimore City Health Insurance Program for retirees, subject to the same terms and conditions as those provided for members of the Employees' Retirement System of the City of Baltimore.

(c) On retirement, a former Baltimore City Jail employee who elected to remain a member of the Employees' Retirement System of the City of Baltimore:

  (1) shall receive from the City of Baltimore the same health insurance benefits granted to other members of the City's retirement system; and

  (2) may not receive any health insurance benefits allowed a State retiree under the Program.

#### Section 2-511

(a) This section applies to employees of:

  (1) the Maryland Environmental Service;

  (2) the Northeast Maryland Waste Disposal Authority;

  (3) the Baltimore Metropolitan Council;

  (4) the Maryland Automobile Insurance Fund;

  (5) the City of Hyattsville; and

  (6) the Chesapeake Bay Commission.

(b) Subject to the regulations adopted under Sec. 2-503 of this subtitle, an employee or, while receiving an allowance under the Employees' Retirement System of the State of Maryland or the Employees' Pension System of the State of Maryland, an employee's surviving spouse:

  (1) may enroll and participate in the health insurance or other benefit options established under the Program; and

  (2) except as provided in subsection (d) of this section, is subject to the same terms and conditions as those provided under Sec. 2-507 of this subtitle.

(c) While receiving an allowance under the Employees' Retirement System of the State of Maryland or the Employees' Pension System of the State of Maryland, a former employee or a former employee's surviving spouse or dependent child:

  (1) may enroll and participate in the health insurance benefit options established under the Program; and

  (2) except as provided in subsection (d) of this section, is subject to the same terms and conditions as those provided under Sec. 2-508 of this subtitle, with the employee's service with the Maryland Environmental Service, Northeast Maryland Waste Disposal Authority, the Baltimore Metropolitan Council, the Maryland Automobile Insurance Fund, the City of Hyattsville, and the Chesapeake Bay Commission being included as part of the employee's State service.

(d)

  (1)

    (i) The State may charge the Maryland Environmental Service, the Northeast Maryland Waste Disposal Authority, the Baltimore Metropolitan Council, the Chesapeake Bay Commission, and the Maryland Automobile Insurance Fund, or any successor agency, the respective participant's total cost resulting from participation in the Program under this section.

    (ii) The respective employer share of the cost of the Program under this paragraph shall be based on the State subsidy allowed under this subtitle.

  (2)

    (i) The State may charge the City of Hyattsville the participant's total cost resulting from participation in the Program under this section.

    (ii) The City of Hyattsville shall determine the extent to which the City will subsidize participation in the Program.

#### Section 2-512

(a) In this section, "qualifying nonprofit organization" means an organization that:

  (1)

    (i) receives State funds from the Maryland Department of Health that cover more than one-third of the organization's operating expenses; and

    (ii) is:

      (1) described in Sec. 501(c)(3) of the Internal Revenue Code; and

      (2) exempt from income tax under Sec. 501(a) of the Internal Revenue Code;

  (2) is the Legal Aid Bureau, Inc.;

  (3) is a corporation, a limited liability company, or any other entity that is wholly owned by the Legal Aid Bureau, Inc.; or

  (4) is the Maryland Crime Victims' Resource Center.

(b) The Secretary shall adopt regulations for the enrollment and participation of employees of a qualifying nonprofit organization to participate in the Program as a satellite organization.

(c) A qualifying nonprofit organization that participates in the Program as a satellite organization shall:

  (1) pay to the State:

    (i) a premium in the amount determined by the Secretary; and

    (ii) any costs, as determined by the Secretary, for the administration of this Program; and

  (2) determine the extent to which the organization will subsidize participation by its employees in the Program.

(d) The participation of a satellite organization in the Program may not impede, undermine, or conflict with the Program's federal compliance obligations or governmental and cafeteria plan status, as defined in 26 U.S.C. Sec. 125.

#### Section 2-513

(a)

  (1) Subject to paragraph (2) of this subsection, an employee of a county, municipal corporation, or county board may enroll and participate in the health insurance benefit options established under the Program with the approval of the governing body of the county, municipal corporation, or county board.

  (2) An employee of a county board may enroll and participate in the health insurance benefit options under paragraph (1) of this subsection subject to any additional authorization required under the terms and conditions of the employee's employment.

(b) The governing body of the county, municipal corporation, or county board shall:

  (1) pay to the State the total costs resulting from the participation of its employees in the Program; and

  (2) determine the extent to which the county or municipal corporation will subsidize participation by its employees in the Program.

#### Section 2-514

(a) In addition to regular open enrollment periods, the Program shall provide special open enrollment for health insurance benefit options established under the Program for a nonparticipating State employee after the death of a spouse who was not a State employee.

(b) Evidence of insurability may not be required under this section if the State employee was covered under a group health insurance policy at the time of the death of the employee's spouse.

#### Section 2-515

(a) This section applies to the Tri-County Council for Southern Maryland, the Tri-County Council for Western Maryland, the Tri-County Council for the Lower Eastern Shore of Maryland, and the Mid-Shore Regional Council.

(b) An employee of a council subject to this section may enroll and participate in the health insurance benefit options established under the Program with the approval of the council.

(c) A council subject to this section shall:

  (1) pay to the State the total costs resulting from the participation of its employees in the Program; and

  (2) determine the extent to which the council will subsidize participation of its employees in the Program.

#### Section 2-515.1

(a) This section applies to the Southern Maryland Regional Library, the Eastern Shore Regional Library, and the Western Maryland Regional Library.

(b) An employee of a regional library subject to this section may enroll and participate in the health insurance benefit options established under the Program with the approval of the library.

(c) A regional library subject to this section shall:

  (1) pay to the State the total costs resulting from the participation of its employees in the Program; and

  (2) determine the extent to which the regional library will subsidize participation of its employees in the Program.

#### Section 2-515.2

(a) The Maryland Small Business Retirement Savings Board may enroll and participate in the Program as a satellite organization.

(b) The Board shall:

  (1) pay to the State the total costs resulting from the participation of its employees in the Program and a monthly administrative fee determined by the Secretary; and

  (2) determine the extent to which the Board will subsidize participation of its employees in the Program.

#### Section 2-515.3

(a) This section applies to the Maryland Agricultural and Resource-Based Industry Development Corporation and the Maryland Clean Energy Center.

(b) If the Secretary determines that an entity subject to this section is an eligible entity, an employee of the entity may enroll and participate in the health insurance benefit options established under the Program with the approval of the entity.

(c) An entity subject to this section shall:

  (1) pay to the State the total costs resulting from the participation of its employees in the Program; and

  (2) determine the extent to which the entity will subsidize participation of its employees in the Program.

#### Section 2-516

(a) In this section, "Fund" means the State Employees and Retirees Health and Welfare Benefits Fund established under this section.

(b)

  (1) A special reserve fund is established to retain certain State revenues and State general and special funds for the purpose of funding the State Employee and Retiree Health and Welfare Benefits Program established under this subtitle.

  (2) The Fund is a continuing, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

  (3) The State Treasurer shall separately hold and the Comptroller shall account for the Fund.

  (4)

    (i) The Fund shall be invested and reinvested in the same manner as other State funds.

    (ii) Any investment earnings shall be credited to the Fund.

(c) The Fund consists of money appropriated for State Employee and Retiree Health Insurance or authorized to be transferred to that purpose in the State budget.

(d)

  (1) Except as otherwise provided in this section, the Fund shall be retained in reserve and may not be spent for any purpose.

  (2) Subject to the budget amendment procedure provided for in Sec. 7-209 of the State Finance and Procurement Article, money credited to the Fund may be used only for the purpose of funding the State costs of the State Employee and Retiree Health and Welfare Benefits Program.

#### Section 2-517

(a) In this section, "carrier" means:

  (1) a health insurer;

  (2) a nonprofit health service plan;

  (3) a health maintenance organization; and

  (4) a dental plan organization.

(b) This section does not apply to a fixed indemnity health insurance policy or contract if the premiums are paid solely by an individual.

(c)

  (1) A carrier shall provide, at the request of the Department, information about individuals who are eligible for benefits under the Program or are Program recipients so that the Department may determine whether the individual is receiving health care coverage from the carrier and the nature of that coverage.

  (2) A carrier shall provide the information required under this subsection in a manner prescribed by the Department, in accordance with the standard data elements for standard transactions required under 42 U.S.C. Sec. 1320d-4 as adopted by the Secretary of Health and Human Services.

(d) A carrier shall accept the Program's right of recovery and the assignment to the Program of any right of an individual or other entity to payment from the carrier for an item or service for which payment has been made under the Program if the carrier has a legal obligation to make payment for the item or service.

(e) A carrier may not reject, deny, limit, cancel, refuse to renew, increase the rates of, affect the terms or conditions of, or otherwise affect a health insurance policy or contract for a reason based wholly or partly on:

  (1) the eligibility of an individual to receive benefits under the Program; or

  (2) the receipt by an individual of benefits under the Program.

### Subtitle 6. Reinstatements to State Employment

#### Section 2-601

(a) Except as provided for in subsection (c)(2) of this section, a former nontemporary State employee who returns to State employment in a position in the State Personnel Management System within 3 years from separation is reinstated.

(b) A reinstated State employee shall have unused accumulated sick leave restored.

(c)

  (1) A former nontemporary employee who is reinstated in a position in the State Personnel Management System shall receive credit for time employed before separation for the purpose of determining the employee's:

    (i) step in the pay grade applicable to the employee's class;

    (ii) rate of annual leave accrual; and

    (iii) seniority rights.

  (2) A former nontemporary State employee who returns to a position in an independent personnel system in accordance with the reinstatement provisions of that system shall receive benefits allowed by that personnel system.

### Subtitle 7. Reinstatement of Veterans

#### Section 2-701

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

(b)

  (1) "Returning veteran" means an individual who left State employment to perform service in the uniformed services and who seeks reinstatement to State employment.

  (2) "Returning veteran" does not include an individual who left State employment while serving as a temporary employee.

(c) "Service in the uniformed services" has the meaning stated in 38 U.S.C. Sec. 4303.

#### Section 2-702

This subtitle applies to all units in the Executive, Judicial, and Legislative branches of State government, including any unit with an independent personnel system.

#### Section 2-703

(a) A returning veteran who was inducted into the armed forces is eligible for reinstatement under this subtitle if the veteran:

  (1) performed military service of a nature and length that meet the requirements of the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. Sec. 4301 et seq., and any subsequent federal law governing reemployment of a returning veteran;

  (2) received a certificate of satisfactory completion of military service; and

  (3) except as otherwise provided in Sec. 2-704 of this subtitle, submits an application for reinstatement within 90 days after the veteran is discharged from that military service.

(b) A returning veteran who enlisted in the armed forces is eligible for reinstatement under this subtitle if the veteran:

  (1) performed military service of a nature and length that meet the requirements of the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. Sec. 4301 et seq., and any subsequent federal law governing reemployment of a returning veteran;

  (2) was released from service under honorable conditions; and

  (3) except as otherwise provided in Sec. 2-704 of this subtitle, submits an application for reinstatement within 90 days after the end of the enlistment period.

(c) A returning veteran who was called to active duty in the uniformed services is eligible for reinstatement under this subtitle if the veteran:

  (1) performed service in the uniformed services of a nature and length that meet the requirements of the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. Sec. 4301 et seq., and any subsequent federal law governing reemployment of a returning veteran;

  (2) was relieved from active duty under honorable conditions; and

  (3) except as otherwise provided in Sec. 2-704 of this subtitle, submits an application for reinstatement within 90 days after the veteran is relieved from that duty.

#### Section 2-704

An otherwise eligible returning veteran who was hospitalized at the time of discharge, end of enlistment, or relief from active duty may apply for reinstatement if:

(1) the application is submitted within 90 days after the returning veteran is discharged from the hospital; and

(2) the hospitalization does not last more than 1 year from the date of discharge, end of enlistment, or relief from active duty.

#### Section 2-705

(a) A returning veteran who meets the requirements of this subtitle shall be reinstated:

  (1) to the class previously held by the returning veteran within the principal department or other independent unit in which the returning veteran had been employed; or

  (2) to a position of equal responsibilities, qualifications, and rate of pay.

(b) If, because of a disability sustained during service in the uniformed services, a returning veteran is not qualified to perform the duties of the position that the veteran previously held, the returning veteran shall be reinstated to a position that:

  (1) has duties that the veteran is qualified to perform; and

  (2) provides the rate of pay, seniority, and status that are the same as or as similar as the circumstances of the case allow to those of the position previously held by the veteran.

(c) Subsections (a) and (b) of this section need not be implemented if the circumstances in State government have changed to the extent that implementation is impossible or unreasonable.

#### Section 2-706

(a) A returning veteran who is reinstated under this subtitle is entitled to start at the salary and rate of leave accrual that the veteran would have attained if employment with this State had been continuous.

(b) In calculating seniority, status, and length of State employment of a returning veteran who is reinstated under this subtitle, the period from the day the veteran entered service in the uniformed services to the day that the veteran is reinstated shall be added to the period of the veteran's State employment.

(c) A returning veteran who is reinstated under this subtitle is entitled to:

  (1) all benefits and privileges, including rate of pay, that result from the additional seniority and status credited under subsection (b) of this section;

  (2) pension and retirement rights as determined under Title 38, Subtitle 1 of this article; and

  (3) any service status that the veteran had when the veteran entered service in the uniformed services, with adjustments to reflect the additional seniority credited under subsection (b) of this section.

(d) A returning veteran who is reinstated to a position under this subtitle may not be discharged from that position within 1 year after reinstatement without substantial cause and, if the position is a skilled service or professional service position, with the exception of special appointments, only for the reasons and in the manner provided for skilled service or professional service employees.

#### Section 2-707

(a) A member of a reserve component is eligible for the reinstatement rights and benefits specified in Sec.Sec. 2-705 and 2-706(a), (b), and (c) of this subtitle if the reservist:

  (1) performed active duty for training of a nature and length that meet the requirements for eligibility under Title 38 U.S.C. Sec. 4301 et seq.;

  (2) was released from that duty after satisfactory service; and

  (3) except as provided in subsection (b) of this section, submits an application for reinstatement within 31 days after the reservist was released from that duty.

(b) An otherwise eligible member of a reserve component who was hospitalized at the time the reservist was scheduled to be released from active duty for training may apply for reinstatement if:

  (1) the application is submitted within 31 days after the reservist is discharged from the hospital; and

  (2) the hospitalization:

    (i) is connected to the reservist's active duty for training; and

    (ii) does not last more than 1 year from the date on which the reservist was scheduled to be released from that duty.

(c) A member of a reserve component who is reinstated to a position under this section may not be discharged from that position within 6 months after reinstatement without substantial cause and, if the position is a skilled service or professional service position, with the exception of special appointments, only for the reasons and in the manner provided for skilled service or professional service employees.

### Subtitle 8. Hiring Prohibitions

#### Section 2-801

(a) This section applies to all units in the Executive, Judicial, and Legislative branches of State government, including any unit with an independent personnel system.

(b) An appointing authority may not hire an individual who has been terminated with prejudice from State service.

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Md. Code Ann., State Pers. & Pens. (as displayed at mgaleg.maryland.gov, October 16, 2026)