In this subtitle the following terms have the meanings indicated. “County board” means the board of education of a county. “County board” includes the Baltimore City Board of School Commissioners. “Program” means the State Employee and Retiree Health and Welfare Benefits Program. “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. “Wellness program” means a program that is designed to: promote health or prevent or detect disease or illness; improve clinical outcomes; prevent or reduce acute admissions and readmissions to health care facilities; improve treatment compliance for chronic conditions; promote healthy behaviors; or prevent or control injury.

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 § 6–101 of the Health – General Article.

There is a State Employee and Retiree Health and Welfare Benefits Program, to be developed and administered by the Secretary. The Program: subject to the regulations adopted under § 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; shall include the health insurance benefit options established by the Secretary; and except as provided in paragraph (2) of this subsection, may include any other benefit option that the Secretary considers appropriate. The Program may not contain any of the benefits provided under Division II or Title 35 or Title 37 of this article. The provisions of the Program that apply to spouses shall apply to parties who have entered into a domestic partnership, as defined in § 6–101 of the Health – General Article.

In this section, “Maryland Rx Program” means a purchasing pool for pharmacy benefits that meets the requirements of this section. The Department shall establish a Maryland Rx Program to achieve savings on the cost of prescription drugs for: the State Employee and Retiree Health and Welfare Benefits Program; and any local government or other entity identified under this subtitle that satisfies the conditions for participation established by the Department. The Maryland Rx Program shall seek savings through: a preferred list of covered prescription drugs; rebates from drug manufacturers; negotiated discounts; and other cost-saving measures. 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. 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. The State may: provide start-up funds for the Maryland Rx Program; and recoup any start-up funds from savings achieved for participating entities through the Maryland Rx Program. 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. The Department shall use a reverse auction, as provided for in § 2–502.2 of this subtitle, to select a pharmacy benefit manager or other entity to administer the Maryland Rx Program. The Department shall adopt regulations to implement this section.

In this section the following terms have the meanings indicated. “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. “Pharmacy benefits manager” has the meaning stated in § 15–1601 of the Insurance Article. “Price” means the projected cost of a bid for providing services over the duration of the contract. “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. It is the intent of the General Assembly to optimize prescription drug savings by the State through: adoption of a reverse auction process for the selection of a pharmacy benefits manager for the Program; electronic review and validation of pharmacy benefits manager claims invoices as the foundation for reconciling pharmacy bills; market checks of the incumbent pharmacy benefits manager’s prescription drug pricing; and limiting independent pharmacies from unsustainable reimbursement practices while preventing a reduction in employee benefits. 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 § 13–104 of the State Finance and Procurement Article, a technology platform, and any associated professional services necessary to operate the platform, to: evaluate the qualifications of prospective pharmacy benefits managers for the Program; automatically adjudicate prescription drug claims; and collect data on pharmacy reimbursement. The platform procured under paragraph (1) of this subsection shall have the capability to: host and conduct an online automated reverse auction; 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; 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; 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 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. 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. 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. The Department may not award a contract under paragraph (1) of this subsection to: a pharmacy benefits manager; a subsidiary or affiliate of a pharmacy benefits manager; or 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. The Department may structure a contract awarded under this subsection to require the pharmacy benefits manager selected under § 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. 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: common definitions; prescription drug classifications; rules that may include retail pricing rules such as maximum allowable cost price lists and dispensing fees; whether the vendor will be assessed a platform vendor fee described under subsection (c)(6) of this section; and 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. 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. 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. 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. 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. 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: a State–funded health plan other than the Program; a self–funded county, municipal, or other local government employee health plan; a public school employee health plan; and a health plan of a public institution of higher education. A health plan that participates in a reverse auction purchasing group under paragraph (1) of this subsection shall: retain full autonomy over determination of the entity’s prescription drug formulary and pharmacy benefit designs; but agree, before participating in the reverse auction, to accept the prescription drug pricing plan that is selected through the reverse auction process. 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: conduct the reverse auction; and carry out administrative and management duties. 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. If the pharmacy benefits manager selected under § 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. 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. 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.

The Secretary shall: adopt regulations for the administration of the Program; ensure that the Program complies with: all federal and State laws governing employee benefit plans; and §§ 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; each year, recommend to the Governor the State share of the costs of the Program; and 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. The Secretary may arrange as the Secretary considers appropriate any benefit option for inclusion in the Program. The Secretary shall include in the Program an option to purchase up to $200,000 of additional life insurance coverage for employees who: fly in a helicopter in the course of their employment with the State; scuba dive in the course of their employment with the State; or 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. The Secretary shall include a wellness program in the Program. The wellness program shall: be developed in consultation with the Secretary of Health; promote the goals of the Maryland Department of Health State Health Improvement Process; and aim to achieve savings in the Program over time that exceed the costs of the wellness program. The Secretary shall specify by regulation the types or categories of State employees who: are eligible to enroll and participate in the Program with State subsidies; are eligible to enroll and participate in the Program without State subsidies; and are not eligible to enroll or participate in the Program. The regulations adopted by the Secretary shall include provisions for the enrollment and participation of employees of all: organizations and entities that were participating in the Program as satellite organizations on January 1, 1993; and employee organizations that qualify for payroll deductions under the provisions of § 2–403 of this title. Employees of organizations and entities covered by this section may participate: without State subsidies; and with payment by the organization or entity of administrative costs resulting from the participation of its employees in the Program. The regulations adopted by the Secretary under this subsection shall provide that an employee organization specified in paragraph (1)(ii) of this subsection: 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 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.

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

Subject to the regulations adopted under § 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. 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: is receiving an allowance under Title 29, Subtitle 2 of this article; or is the sole primary designated beneficiary and receiving a periodic distribution of benefits under an optional retirement program under Title 30 of this article. 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. 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. 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. 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. This subsection applies to an individual receiving an allowance under § 29–203(b), § 29–204(b), § 29–204.1, § 29–204.2, or § 29–204.3 of this article. 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.

In this section the following words have the meanings indicated. “Creditable service” means: 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; 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 § 2–510 of the Courts Article; or service while a member of the Maryland Transit Administration Retirement Plan under § 7–206 of the Transportation Article. “Retiree” means: a former State employee who receives a retirement allowance under Division II of this article; a former employee of the Medical System Corporation, as defined in § 13–301 or § 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 a former employee of the Maryland Transit Administration who receives a Maryland Transit Administration retirement allowance under § 7–206 of the Transportation Article. “Retiree” does not include: a member of the faculty or staff of a community college; a teacher or a staff member employed by a county board of education; or an individual who retired under an optional program under Title 30 of this article. “State service” means service with the State by: an employee while a member of the Employees’ Retirement System or the Employees’ Pension System under Title 22 or Title 23 of this article; a member of the Judges’ Retirement System under Title 27 of this article; a teacher while a member of the Teachers’ Retirement System or Teachers’ Pension System under Title 22 or Title 23 of this article; a correctional officer, while a member of the Correctional Officers’ Retirement System under Title 25 of this article; an employee of the Medical System Corporation, as defined in § 13–301 or § 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; a State Police officer while a member of the State Police Retirement System under Title 24 of this article; a law enforcement officer while a member of the Law Enforcement Officers’ Pension System under Title 26 of this article; or an employee while a member of the Maryland Transit Administration Plan under § 7–206 of the Transportation Article. This subsection applies to a retiree who: began State service on or before June 30, 2011; or began State service on or after July 1, 2011; and is a retiree of the Judges’ Retirement System. A retiree may enroll and participate in the health insurance benefit options established under the Program if the retiree: 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; ended State service with at least 16 years of creditable service; ended State service on or before June 30, 1984; 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; retired directly from State service with a State disability retirement allowance on or after July 1, 1984; or retired directly from State service in the Judges’ Retirement System at the mandatory retirement age required by Article IV, § 3 of the Maryland Constitution with less than 5 years of creditable service. 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 § 7–206 of the Transportation Article. 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 § 7–206 of the Transportation Article. 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. 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. 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. 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, § 3 of the Maryland Constitution with less than 5 years of creditable service. 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. 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. This subsection does not apply to: a retiree of the Judges’ Retirement System; or a former Governor of Maryland who began serving as Governor on or after January 21, 2015. A retiree may enroll and participate in the health insurance benefit options established under the Program if the retiree: ends State service with at least 25 years of creditable service; 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; retires directly from State service with a State retirement allowance and has 10 years of creditable service; or retires directly from State service with a State disability retirement allowance. 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 § 7–206 of the Transportation Article. 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 § 7–206 of the Transportation Article. 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. 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. 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. Notwithstanding subsections (b) and (c) of this section and §§ 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. Subject to § 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: has the same co–payments, coinsurance, and deductible that apply to the prescription drug benefit for active State employees; requires: retirees who qualify for the maximum State subsidy to pay 25% of the premium for the prescription drug benefit; and 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 requires retirees to pay out–of–pocket limits equal to: $1,500 for the retiree only; and $2,000 for the retiree and the retiree’s family.

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: is at least 62 years old; is receiving a normal service retirement allowance under Division II of this article; or is receiving a disability retirement allowance under Division II of this article. 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. 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. 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.

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. 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: ended service with a State institution of higher education with at least 10 years of service and was at least age 57; ended service with a State institution of higher education with at least 16 years of service; or 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. For purposes of this subsection only, years of service shall be calculated as follows: 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; 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 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. 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. 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. 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 § 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. 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 § 2–508(b)(4)(i) of this subtitle. 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. 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: ended service with a State institution of higher education with at least 10 years of service and was at least age 57; ended service with a State institution of higher education with at least 25 years of service; or 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. For purposes of this paragraph only, years of service shall be calculated as follows: 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; 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 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. 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. 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. 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 § 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. 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 § 2–508(c)(4)(i) of this subtitle.

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 §§ 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. Except as provided in subsection (b) of this section: a retiree may elect to cover the retiree’s spouse or dependent child under the State prescription drug benefit plan under §§ 2–508 and 2–509 of this subtitle; and if a surviving spouse or surviving dependent child of a retiree is eligible to enroll in the State prescription drug benefit plan under § 2–508 or § 2–509 of this subtitle, the surviving spouse or surviving dependent child may elect to enroll in the State prescription drug benefit plan. Except as provided in subsection (c) of this section, on January 1, 2019, the State shall discontinue prescription drug benefits for: a Medicare–eligible retiree; the Medicare–eligible spouse or surviving spouse of a retiree; and a Medicare–eligible dependent child or surviving dependent child of a retiree. 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. If the surviving spouse or surviving dependent child of a retiree is eligible to enroll in the State prescription drug benefit plan under § 2–508 or § 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. This subsection applies only to a retiree, a retiree’s spouse or surviving spouse, and a retiree’s dependent child or surviving dependent child: who is enrolled in a prescription drug benefit plan under Medicare; if the retiree is retired on or before December 31, 2019; and if the retiree is eligible under § 2–508 or § 2–509 of this subtitle to enroll and participate in the health insurance benefit options established under the Program. 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 § 2–508(d)(2)(iii) of this subtitle. 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. The Maryland State Retiree Prescription Drug Coverage Program established under paragraph (2) of this subsection may include: a health reimbursement account established in accordance with § 105(h) of the Internal Revenue Code; or another program that provides assistance with prescription drug costs. 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. This subsection applies only to a retiree, a retiree’s spouse or surviving spouse, and a retiree’s dependent child or surviving dependent child: who is enrolled in a prescription drug benefit plan under Medicare; and if the retiree: began State service on or before June 30, 2011; retired on or after January 1, 2020; and is eligible under § 2–508 or § 2–509 of this subtitle to enroll and participate in the health insurance benefit options established under the Program. 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. The Department may establish a maximum reimbursement amount for a retiree who qualifies for a partial State subsidy. The Maryland State Retiree Catastrophic Prescription Drug Assistance Program under paragraph (2) of this subsection may provide reimbursements through: a health reimbursement account established in accordance with § 105(h) of the Internal Revenue Code; or another program that provides assistance with prescription drug costs. 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. This subsection applies only to a retiree, a retiree’s spouse or surviving spouse, and a retiree’s dependent child or surviving dependent child: who is enrolled in: the Maryland State Retiree Prescription Drug Coverage Program established under subsection (d) of this section; or the Maryland State Retiree Catastrophic Prescription Drug Assistance Program established under subsection (e) of this section; and if the retiree is eligible under § 2–508 or § 2–509 of this subtitle to enroll and participate in the health insurance benefit options established under the Program. 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: covered by the prescription drug benefit plan in the health insurance benefit options established under the Program; and not covered by the prescription drug benefit plan under Medicare in which the participant is enrolled. The Department shall develop a list of the prescription drugs that qualify for reimbursement under subparagraph (i) of this paragraph. The Department may establish maximum reimbursement amounts for a retiree who qualifies for a partial State subsidy. The Maryland State Retiree Life–Sustaining Prescription Drug Assistance Program established under paragraph (2) of this subsection may provide reimbursements through: a health reimbursement account established in accordance with § 105(h) of the Internal Revenue Code; or another program that provides assistance with prescription drug costs. 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: the Maryland State Retiree Prescription Drug Coverage Program established under subsection (d) of this section; or the Maryland State Retiree Catastrophic Prescription Drug Assistance Program established under subsection (e) of this section. 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: Maryland State Retiree Prescription Drug Coverage Program; Maryland State Retiree Catastrophic Prescription Drug Assistance Program; or Maryland State Retiree Life–Sustaining Prescription Drug Assistance Program. The notice shall include information regarding: 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; 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; the programs available under subsections (d), (e), and (f) of this section; and any additional resources made available by the Department in accordance with this section. 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. The Department shall develop a plan to communicate to Medicare–eligible retirees the availability of: the programs under subsections (d), (e), and (f) of this section; and services and information regarding prescription drug benefit plans under Medicare. 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 § 2–1257 of the State Government Article, on the plan developed under paragraph (2) of this subsection. The report required under paragraph (3) of this subsection shall include: options for providing one–on–one counseling, including: in–person, over–the–phone, or web–based counseling; the times at which one–on–one counseling will be available; a plan to ensure equitable geographic access to one–on–one counseling; and entering into a statewide contract with an employee benefits administrator or similar entity to provide one–on–one counseling services; 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; plans for providing access to a web–based overview and interactive website that provide information on: Medicare prescription drug benefit plans; and subsidy and financial assistance programs for low–income individuals; and plans for providing a toll–free hotline for reporting issues and concerns regarding the services provided in accordance with this paragraph. Subject to the requirements of § 13–108 of the State Finance and Procurement Article, the Department may make an emergency procurement for: staff required to carry out the provisions of this section; and a third party to administer health reimbursement accounts established under this section. The Department shall submit quarterly reports to the Governor and, in accordance with § 2–1257 of the State Government Article, the House Appropriations Committee, the Senate Budget and Taxation Committee, and the Joint Committee on Pensions, on: the status of establishing the programs under subsections (d), (e), and (f) of this section, including: the status of procuring any contracts necessary to operate the programs; and 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; the availability of one–on–one counseling services required under subsection (h) of this section; 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: the specific out–of–pocket costs eligible for reimbursement; the required process for receiving reimbursement; the method of reimbursement; the timing of reimbursement; and a plan to use debit cards to process reimbursements in a convenient and efficient manner; and in total and by category for the previous quarter, the number of issues and concerns reported to the hotline. The Department shall adopt regulations to implement the provisions of this section.

This section applies only to former Baltimore City Jail employees, as described in § 23–201(a)(9) of this article. 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: the health insurance benefit options established under the Program, subject to the same terms and conditions as those provided for retirees under § 2–508 of this subtitle; or 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. On retirement, a former Baltimore City Jail employee who elected to remain a member of the Employees’ Retirement System of the City of Baltimore: shall receive from the City of Baltimore the same health insurance benefits granted to other members of the City’s retirement system; and may not receive any health insurance benefits allowed a State retiree under the Program.

This section applies to employees of: the Maryland Environmental Service; the Northeast Maryland Waste Disposal Authority; the Baltimore Metropolitan Council; the Maryland Automobile Insurance Fund; the City of Hyattsville; and the Chesapeake Bay Commission. Subject to the regulations adopted under § 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: may enroll and participate in the health insurance or other benefit options established under the Program; and except as provided in subsection (d) of this section, is subject to the same terms and conditions as those provided under § 2–507 of this subtitle. 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: may enroll and participate in the health insurance benefit options established under the Program; and except as provided in subsection (d) of this section, is subject to the same terms and conditions as those provided under § 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. 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. The respective employer share of the cost of the Program under this paragraph shall be based on the State subsidy allowed under this subtitle. The State may charge the City of Hyattsville the participant’s total cost resulting from participation in the Program under this section. The City of Hyattsville shall determine the extent to which the City will subsidize participation in the Program.

In this section, “qualifying nonprofit organization” means an organization that: receives State funds from the Maryland Department of Health that cover more than one–third of the organization’s operating expenses; and is: described in § 501(c)(3) of the Internal Revenue Code; and exempt from income tax under § 501(a) of the Internal Revenue Code; is the Legal Aid Bureau, Inc.; is a corporation, a limited liability company, or any other entity that is wholly owned by the Legal Aid Bureau, Inc.; or is the Maryland Crime Victims’ Resource Center. 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. A qualifying nonprofit organization that participates in the Program as a satellite organization shall: pay to the State: a premium in the amount determined by the Secretary; and any costs, as determined by the Secretary, for the administration of this Program; and determine the extent to which the organization will subsidize participation by its employees in the Program. 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. § 125.

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. 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. The governing body of the county, municipal corporation, or county board shall: pay to the State the total costs resulting from the participation of its employees in the Program; and determine the extent to which the county or municipal corporation will subsidize participation by its employees in the Program.

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. 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.

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. 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. A council subject to this section shall: pay to the State the total costs resulting from the participation of its employees in the Program; and determine the extent to which the council will subsidize participation of its employees in the Program.

This section applies to the Southern Maryland Regional Library, the Eastern Shore Regional Library, and the Western Maryland Regional Library. 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. A regional library subject to this section shall: pay to the State the total costs resulting from the participation of its employees in the Program; and determine the extent to which the regional library will subsidize participation of its employees in the Program.

The Maryland Small Business Retirement Savings Board may enroll and participate in the Program as a satellite organization. The Board shall: 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 determine the extent to which the Board will subsidize participation of its employees in the Program.

This section applies to the Maryland Agricultural and Resource–Based Industry Development Corporation and the Maryland Clean Energy Center. 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. An entity subject to this section shall: pay to the State the total costs resulting from the participation of its employees in the Program; and determine the extent to which the entity will subsidize participation of its employees in the Program.

In this section, “Fund” means the State Employees and Retirees Health and Welfare Benefits Fund established under this section. 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. The Fund is a continuing, nonlapsing fund that is not subject to § 7–302 of the State Finance and Procurement Article. The State Treasurer shall separately hold and the Comptroller shall account for the Fund. The Fund shall be invested and reinvested in the same manner as other State funds. Any investment earnings shall be credited to the Fund. 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. Except as otherwise provided in this section, the Fund shall be retained in reserve and may not be spent for any purpose. Subject to the budget amendment procedure provided for in § 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.

In this section, “carrier” means: a health insurer; a nonprofit health service plan; a health maintenance organization; and a dental plan organization. This section does not apply to a fixed indemnity health insurance policy or contract if the premiums are paid solely by an individual. 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. 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. § 1320d–4 as adopted by the Secretary of Health and Human Services. 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. 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: the eligibility of an individual to receive benefits under the Program; or the receipt by an individual of benefits under the Program.