This chapter sets forth the structure, implementation, and eligibility standards for the State-Based Health Insurance Subsidies Program, as required under Insurance Article, §31-117, Annotated Code of Maryland. If the advance premium tax credits under 26 U.S.C. §36B(b)(3)(A)(iii) are extended for calendar years 2026 and 2027, the subsidy under this chapter shall be abrogated and of no further force and effect. In this chapter, the following terms have the meanings indicated. Terms Defined. “Enrollee” means a qualified individual who is enrolled in a qualified health plan through the Individual Exchange. “Essential health benefit” has the meaning set forth in Insurance Article, §31-116(a), Annotated Code of Maryland, and 42 U.S.C. §18022(b). “Federal poverty level (FPL)” means the most recently published federal poverty level guidelines, updated periodically in the Federal Register by the Secretary of HHS as set forth in 42 U.S.C. §9902(2), as of the first day of the open enrollment period for qualified health plans (QHPs) offered through the Individual Exchange for a calendar year. “Program” means the State-Based Health Insurance Subsidies Program. An enrollee is eligible to receive subsidies from the Program during a month if: The enrollee is a member of a tax filer’s tax household and the tax filer has met the eligibility requirements for APTC in accordance with the requirements in COMAR 14.35.07.08A(2), B— C, E, F and H; and The enrollee experiences an increase in the applicable percentages established under 26 U.S.C. §36B(B)(3)(A)(iii) for premiums based on household income in calendar years 2026 and 2027, as compared to the applicable percentages in place for calendar year 2025. The subsidy shall be automatically applied to eligible enrollees’ premiums. In any calendar year of the program: The Board may limit the availability of subsidies, regardless of eligibility, if the costs of the program are projected to exceed the budgeted allowance for that calendar year; The limit described in §C(1) of this regulation may take the form of: A limit on the number of enrollees eligible for the subsidy; A limit on increases in subsidies during a plan year for enrollees after enrollment; or Any other limit or combination of limits as the Board deems appropriate; Any limit on the availability of subsidies for enrollees in the program shall be applied uniformly to all enrollees after the effective date of the Board’s decision; and The Exchange shall monitor the data outlined in Regulation .05 of this chapter to determine, in consultation with the Maryland Insurance Administration, the recommended limits to the Program. Effective Dates for Changes in Subsidy Eligibility. Except as otherwise specified under this regulation, changes in eligibility for subsidies determined by the Individual Exchange are effective the first day of the month following the date on which the determination is made. When an applicant is determined newly eligible for Medicaid or MCHP, the applicant shall be ineligible for subsidies beginning the first of the month after the enrollee is determined newly eligible for Medicaid or MCHP. When an applicant is eligible for a special enrollment period under COMAR 14.35.07.12—.19, the applicant or enrollee shall be determined eligible for subsidies as of the applicable effective date specified for each special enrollment period under COMAR 14.35.07.12—.19. When an enrollee’s enrollment is terminated by the enrollee as set forth in 45 CFR §155.430(b)(1) or terminated by the Exchange under 45 CFR §155.430(b)(2)(i)—(vii) the subsidy shall be terminated in accordance with the applicable effective date of the termination set forth in 45 CFR §155.430(d). The subsidy may not exceed the enrollee’s premium amount. The subsidy shall be applied to the premium balance remaining after application of the Advance Premium Tax Credit. Basis of Calculation. For enrollees with a greater than 0 percent premium contribution based on the payment parameters set by the Board, the subsidy shall be calculated based on, and applied only to, the portion of premium allocated to essential health benefits. For enrollees with a 0 percent premium contribution based on the payment parameters set by the Board, the subsidy shall also be applied to nonessential health benefits so that the enrollee’s total premium responsibility is equal to $0. For plan years 2026 and 2027, the Board shall set the payment parameters for each plan year of the Program before December 31 preceding the applicable plan year. The Exchange shall track data on the Program including: On a monthly basis, or more frequently as required to appropriately monitor enrollment and spending under the program, the average number of enrollees receiving subsidies under the Program; On a monthly basis, or more frequently as required to appropriately monitor enrollment and spending under the program, the average subsidy amount received by enrollees under the Program; and The impact the Program has on rates in the individual insurance market. Information tracked in §A(1) and (2) of this regulation shall be posted on the website of the Individual Exchange and included in the Annual Report required under Insurance Article, §31-119(d), Annotated Code of Maryland. The Individual Exchange shall maintain documents and records relating to the Program, whether paper, electronic, or in other media, for each benefit year for at least 10 years. The Individual Exchange shall ensure that the collection of personally identifiable information is limited to information reasonably necessary for use in the calculation of subsidies. Any use and disclosure of personally identifiable information shall be limited to those purposes for which the personally identifiable information was collected, including for purposes of data validation. The Individual Exchange shall maintain standards that provide administrative, physical, and technical safeguards for the personally identifiable information consistent with applicable State and federal standards. The Individual Exchange shall transmit subsidies directly to the carrier with whom the recipient is enrolled, to be applied to the recipient’s premium. A carrier that receives notice from the Individual Exchange that an individual enrolled in the carrier’s QHP is eligible for subsidies shall: Reduce the portion of the premium charged to or for the individual for the applicable month or months by the amount of the subsidy; Notify the Exchange of the reduction in the portion of the premium charged to the individual in accordance with 45 CFR §156.265(g); and Include with each billing statement, as applicable, to or for the individual the amount of the subsidy for the applicable month or months, and the remaining premium owed. Failure to Timely Report Effectuations. The Individual Exchange requires carriers to send 834 effectuation files to the Individual Exchange in a timely manner, and not more than 90 days after receiving an 834 enrollment file for a recipient. Notwithstanding §A of this regulation, if a carrier sends an 834 effectuation file to the Individual Exchange more than 90 days after the coverage start date on the 834 enrollment file sent by the Individual Exchange to the carrier, the Individual Exchange will transmit subsidies to a carrier for a maximum of 3 months retroactively, including the month in which the effectuation file is transmitted to the Individual Exchange as one of the 3 retroactive months. An individual enrolled in a carrier’s QHP shall be held harmless for any portion of premium not transmitted to the carrier under § C(2) of this regulation. Refunds. If a carrier discovers that it did not reduce the portion of the premium charged to or for an enrollee for the applicable month or months by the amount of the subsidy in accordance with §B(1) of this regulation, the carrier shall notify the enrollee of the improper reduction within 45 calendar days of the carrier’s discovery of the improper reduction and refund any excess premium paid by or for the enrollee. Unless a refund is requested by or for the enrollee, the carrier shall, within 45 calendar days of discovery of the error, either apply the excess premium paid by or for the enrollee to the enrollee’s portion of the premium or refund the amount directly. If any excess premium remains after application of premium as described in §C(2) of this regulation: The carrier shall apply the excess premium to the enrollee’s portion of the premium for each subsequent month for the remainder of the period of enrollment or benefit year until the excess is fully applied or refund the remaining amount directly; and At the end of the period of enrollment or benefit year, the carrier shall refund any excess premium within 45 calendar days of the end of the period of enrollment or benefit year, whichever comes first. If a refund is requested by or for the enrollee, the refund shall be provided within 45 calendar days of the date of the request. A carrier may not refuse to commence coverage under a policy or terminate coverage on account of any delay of advance payment of a subsidy on behalf of an enrollee if the carrier has been notified by the Exchange that the carrier will receive such advance payment. Carriers shall participate in the payment and reconciliation process established by the Individual Exchange to ensure that appropriate payments are received by the carriers and that excess payments are returned by the carriers to the Individual Exchange. Carriers shall maintain documents and records, whether paper, electronic, or in other media, sufficient to substantiate the disbursement of subsidies made pursuant to Regulations .03 and .06 of this chapter for a period of at least 10 years and shall timely make those documents and records available upon request by the Board or its designee to any such entity for purposes of verification, investigation, audit, or other review of subsidy disbursement. Audits. The Individual Exchange may require a carrier offering subsidies through the program to participate in an audit to assess its compliance with the requirements of this chapter. For any audit under this section, the Individual Exchange shall determine whether the audit shall be conducted by: The Individual Exchange, A designee of the Individual Exchange; or An independent, third-party auditor compensated by the carrier. Timeliness of Audit Reports. If the audit is conducted by an independent, third-party auditor as specified in §B(1)(c) of this regulation, the carrier must obtain the results no later than 6 months after an audit is requested by the Individual Exchange. If the audit is conducted by an independent, third-party auditor as specified in §B(1)(c) of this regulation, the carrier shall send the audit report to the Individual Exchange within 15 days of receipt of the audit report by the carrier. The carrier shall ensure that its relevant contractors, subcontractors, or agents cooperate with any audit under this section. If an audit results in a finding of material weakness or significant deficiency with respect to compliance with any requirement of these regulations, the carrier shall complete all of the following: Within 30 calendar days of the issuance of the final audit report, provide a written corrective action plan to the Individual Exchange for approval; Implement the corrective action plan; and Provide to the Individual Exchange written documentation of the corrective actions once taken. Insurance Article §31-106(c)(1)(iv); Annotated Code of Maryland Effective date: Regulations .01 — .07 adopted as an emergency provision effective July 11, 2025 (52:16 Md. R. 845); adopted permanently effective October 13, 2025 (52:20 Md. R. 1003)