This chapter applies to each group health insurance contract, each blanket health insurance contract, and each group nonprofit health service plan contract issued or delivered in Maryland. In this chapter, the following terms have the meanings indicated. Terms Defined. “Blanket health insurance” has the meaning stated in Insurance Article, §15-305, Annotated Code of Maryland. “Carrier” means an insurer or nonprofit health service plan. “Coverage period” means the interval of time the blanket health insurance contract or group health insurance contract provides protection, in exchange for the payment of a particular premium. Group Health Insurance. “Group health insurance” has the meaning stated in Insurance Article, §15-302, Annotated Code of Maryland. “Group health insurance” includes: A small employer health benefit plan as defined in Insurance Article, §15-1201, Annotated Code of Maryland; and A contract issued to a group policyholder by a nonprofit health service plan. “Group policyholder” means the entity to whom the group health insurance contract or blanket health insurance contract is issued. “Insured” means an individual covered under a group health insurance contract or blanket health insurance contract. “Preferred provider” means a provider that has entered into a provider service contract. “Preferred provider benefit” means a benefit that appears in a group health insurance contract or blanket health insurance contract under which health care services are to be provided to the insured by a preferred provider. “Provider service contract” means a contract between a provider and a carrier or other entity, under which the provider agrees to provide health care services on a preferential basis under contracts containing preferred provider benefits. A group health insurance contract may not be delivered in Maryland unless it contains in substance the provisions: Listed in Regulation .04 of this chapter; or Which in the opinion of the Commissioner, as compared to the provisions in Regulation .04 of this chapter, are: More favorable to the individuals insured, or At least as favorable to the individuals insured and more favorable to the policyholder. A blanket health insurance contract may not be delivered in Maryland unless it contains in substance the provisions: Listed in Regulation .05 of this chapter; or Which in the opinion of the Commissioner, as compared to the provisions in Regulation .05 of this chapter, are: More favorable to the individuals insured, or At least as favorable to the individuals insured and more favorable to the policyholder. Inapplicable and Inconsistent Provisions. If a provision required by Regulation .04 or .05 of this chapter is wholly or partly inapplicable to or inconsistent with the coverage provided by a particular contract, the carrier shall: Omit from the contract the inapplicable provision or part of the provision; or Modify the inconsistent provision or part of the provision to make it consistent with the coverage provided by the contract. Entire Contract; Changes. Each group health insurance contract shall contain a provision that specifies: Which documents constitute the entire contract of insurance; and That a change in the policy may not be valid: Until approved by an executive officer of the carrier, and Unless the approval is endorsed on the policy or attached to the policy. Contestability of Coverage. Each group health insurance contract shall contain a provision that: The contract may not be contested, except for nonpayment of premiums, after it has been in force for 2 years from its date of issue; A statement made by any person covered under the policy relating to insurability may not be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force before the contest for a period of 2 years during the person's lifetime; Absent fraud, each statement made by an applicant, group policyholder, or insured is considered to be a representation and not a warranty; and A statement made to effectuate insurance may not be used to avoid the insurance or reduce benefits under the policy unless: The statement is contained in a written instrument signed by the group policyholder or insured, and A copy of the statement is given to the group policyholder, insured, or beneficiary of the insured. The provision required by §B(1) of this regulation does not preclude the assertion at any time of defenses based upon the person's ineligibility for coverage under the contract or upon other provisions in the contract. Notice of Claim. Each group contract shall contain a provision describing how and when a claim form can be requested from a carrier. If the carrier requires written notice of claim for the carrier to send a claim form to the claimant, the provision shall indicate that: The written notice of claim is not required before 20 days after the occurrence or commencement of the loss covered by the policy; and The carrier may not invalidate or reduce a claim if it is shown that: It was not reasonably possible to give notice within 20 days, and Notice was given as soon as was reasonably possible. Claim Forms. Each group health insurance contract shall contain a provision that: The carrier shall provide claim forms for filing proof of loss to each claimant or to the group policyholder for delivery to the claimant; and If the carrier does not provide the claim forms within 15 days after notice of claim is received, the claimant is considered to have complied with the requirements of the policy as to proof of loss if the claimant submits, within the time fixed in the policy for filing proof of loss, written proof of the occurrence, character, and extent of the loss for which the claim is made. Proofs of Loss. Each group health insurance contract shall contain a provision that: Written proof of loss shall be furnished to the carrier: In case of claim for loss of time because of disability, within 90 days after the commencement of the period for which the carrier is liable, and that subsequent written proofs that the disability continues shall be furnished to the carrier at the intervals that the carrier reasonably requires; or In case of claim for any loss other than loss of time because of disability, within 90 days after the date of the loss; and Failure to furnish the proof of loss within the time required does not invalidate or reduce a claim if it was not reasonably possible to submit the proof within the required time, if the proof is furnished as soon as reasonably possible and, except in the absence of legal capacity of the claimant, not later than 1 year from the time proof is otherwise required. Time of Payment of Claims. Each group health insurance contract shall contain a provision that: Benefits payable under the policy for any loss other than benefits for the loss of time will be paid not more than 30 days after receipt of written proof of loss; and Subject to written proof of loss, all accrued indemnities for loss of time will be paid not less frequently than monthly during the continuance of the period for which the carrier is liable, and any balance remaining unpaid at the termination of the period will be paid as soon as reasonably possible after receipt of proof. A policy is considered to provide for periodic payment for loss under §F(1)(b) of this regulation only if the policy contains a specific statement to that effect. Payment of Claims. Each group health insurance contract shall contain a provision that all benefits, other than those described in §G(2) and (3) of this regulation, will be payable to the insured. Loss of Life Benefits. Benefits for loss of life of the insured shall be payable to the beneficiary designated by the insured. If the contract contains conditions pertaining to family status, the beneficiary may be the family member specified by the policy terms. The payment of the loss of life benefits are subject to the provisions of the policy if no designated or specified beneficiary is living at the time of death of the insured. If a group health insurance policy contains a preferred provider benefit, the policy may indicate that benefits for services rendered by a preferred provider will be paid directly to the preferred provider rendering the services. At the option of the carrier, the contract may provide that if any benefit of the contract is payable to the estate of an individual, or to an individual who is a minor or otherwise not competent to give a valid release, the carrier may pay the benefit, up to an amount not exceeding $5,000, to any relative by blood or connection by marriage of the individual who is considered by the carrier to be equitably entitled to the benefit. Legal Action. Each group health insurance contract shall contain a provision that an action at law or in equity may not be brought: To recover on the policy before the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of the policy; and After the expiration of 3 years after the written proof of loss is required to be furnished. Grace Period. Each group health insurance contract shall contain in substance the following provision: “Grace Period: A grace period of 30 days will be granted for payment of each premium due after the first premium, unless the carrier does not intend to renew the policy beyond the period for which premium has been accepted and notice of the intention not to renew is delivered to the group policyholder at least 45 days before the premium is due. During the grace period the policy shall continue in force.” Any additional provisions related to the grace period shall be expressly stated in the policy subject to the following limitations: Unless a carrier receives a notice of the group policyholder's intention to terminate the policy before the end of the grace period, the carrier may collect premium for the 30-day grace period; If a carrier receives a notice of intention to terminate the policy during the grace period, the carrier may collect premium for the period beginning on the first day of the grace period until the date on which notice is received or the date of termination stated in the notice, whichever is later; and If premium for the 30-day grace period is paid after the grace period ends, a carrier may charge interest for the premium, but: Interest may not begin to accrue during the 30-day grace period, and The interest rate charged may not exceed an effective rate of 6 percent per year. Certificates. Each group health insurance contract shall contain a provision that: Unless the carrier makes delivery directly to the employee or member, the carrier will provide to the group policyholder, for delivery to each employee or member of the insured group, a statement that summarizes the essential features of the insurance coverage of the employee or member and that indicates to whom benefits under the policy are payable; and If dependents are included in the coverage, only one statement need be issued for each family unit. Addition of Employees/Members. Each group health insurance contract shall contain a provision that eligible new employees, members, or dependents may be added periodically to the group originally insured in accordance with the terms of the policy. Misstatement of Age. If the premiums or benefits vary by age, each group health insurance contract shall contain: A provision specifying an equitable adjustment of premiums or of benefits, or both, to be made in the event the age of an insured has been misstated; and A clear statement of the method of adjustment to be used. Group Policyholder Liable for Premium Until Notice of Termination is Received. Each group health insurance contract shall contain a provision that requires the employer, labor union, association, or other entity to which a contract of group health insurance has been issued to continue to pay the premium for an employee, member, or dependent under the policy until notice of termination of coverage has been received by the carrier. Premium Due Date. Each group health insurance contract shall specify the premium due date. The premium due date shall be the date the coverage period begins. A carrier may offer each group policyholder the option to pay the premium through an electronic payment. If the group policyholder elects an electronic payment, the carrier may not debit or charge the amount of the premium due prior to the premium due date, except as authorized by the group policyholder. Each blanket health insurance contract shall contain in substance the provisions set forth in Regulation .04A, C, D, G, H, I, and L of this chapter. Statements in Applications. Each blanket health insurance contract shall contain a provision that: Absent fraud, each statement made by the group policyholder is considered to be a representation and not a warranty; and A statement made by the group policyholder may not be used in defense to a claim under the policy unless the statement is contained in a written application. Proofs of Loss. Each blanket health insurance contract shall contain a provision that: If a claim is for loss of time because of disability, written proof of loss shall be submitted to the insurer within 30 days after the beginning of the period for which the insurer is liable, and subsequent written proofs that the disability continues shall be submitted to the insurer at the intervals that the insurer reasonably requires; If a claim is for a loss other than loss of time because of disability, written proof of loss shall be submitted to the insurer within 90 days after the date of the loss; and Failure to submit proof of loss within the time required does not invalidate or reduce a claim if it is shown that it was not reasonably possible to submit the proof of loss within the time required, and that proof of loss was submitted as soon as was reasonably possible. Time of Payment of Claims. Each blanket health insurance contract shall contain a provision that: Benefits payable under the policy, other than benefits for loss of time, are payable immediately on the insurer's receipt of written proof of loss; and Subject to proof of loss: Accrued benefits payable under the policy for loss of time are payable not later than at the end of each period of 30 days during the period for which the insurer is liable, and Any balance remaining unpaid at the end of the period set forth in §D(2)(a) of this regulation is payable immediately on the insurer's receipt of proof of loss. Crime. Except as described in §A(3) of this regulation, a group health insurance contract or blanket health insurance contract may not include a limitation or exclusion for loss to which a contributing cause was the insured's commission of or attempt to commit a crime. A group health insurance contract or blanket health insurance contract may not include a limitation or exclusion for loss for which a contributing cause was the commission of or the attempt to commit a crime by an individual other than the insured. A group disability benefit or a group accidental death and dismemberment benefit: May include an exclusion or limitation for loss to which a contributing cause was the insured's commission of or attempt to commit a felony; and May not contain an exclusion or limitation which is more restrictive to the insured than the exclusion or limitation set forth in §A(3)(a) of this regulation. Illegal Occupation. Except as described in §B(2) of this regulation, a group health insurance contract or blanket health insurance contract may not include a limitation or exclusion for loss to which a contributing cause was the insured's being engaged in an illegal occupation. A group disability benefit or a group accidental death and dismemberment benefit: May include an exclusion or limitation for loss to which a contributing cause was the insured being engaged in an illegal occupation; and May not contain an exclusion or limitation which is more restrictive to the insured than the exclusion or limitation set forth in §B(2)(a) of this regulation. Intoxicants and Narcotics. Except as described in §C(2) of this regulation, a group health insurance contract or blanket health insurance contract may not include a limitation or exclusion for loss: Sustained or contracted in consequence of the insured being intoxicated or under the influence of any drug; Due to the use of alcohol; Due to the use of drugs or narcotics; or Due to alcoholism or drug addiction. A group disability benefit or a group accidental death and dismemberment benefit: May include an exclusion or limitation for loss sustained or contracted in consequence of the insured's being intoxicated or under the influence of any narcotic; and May not contain an exclusion or limitation regarding the use of alcohol or drugs which is more restrictive to the insured than the exclusion or limitation set forth in §C(2)(a) of this regulation. Preexisting Conditions. Each group health insurance contract or blanket health insurance contract shall contain a provision specifying the additional exclusions or limitations, if any, applicable under the contract with respect to a disease or physical condition of an individual, not otherwise excluded from the individual's coverage by name or specific description effective on the date of the individual's loss, that existed before the effective date of the individual's coverage under the contract. The exclusion described in §D(1) of this regulation may apply only to a disease or physical condition for which medical advice or treatment was received by the individual during the 12 months before the effective date of the individual's coverage. The exclusion described in §D(1) of this regulation does not apply to loss incurred or disability beginning after the earlier of: The end of a continuous period of 12 months beginning on or after the effective date of the individual's coverage during all of which the individual has received no medical advice or treatment in connection with the disease or physical condition; The end of the 1-year period beginning on the effective date of the individual's coverage, if the individual's application or enrollment form does not include health questions; and The end of the 2-year period beginning on the effective date of the individual's coverage, if the individual's application or enrollment form includes health questions. If a group health insurance contract or blanket health insurance contract contains a preexisting condition limitation or exclusion, the limitation or exclusion may not apply to a condition that the applicant revealed in the application for the contract, unless the condition is excluded by means of a signed waiver rider attached to the contract. Physical Examination. A carrier may include a provision in a group health insurance contract or blanket health insurance contract giving the carrier the right to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim under the contract. If the carrier includes the provision described in §A(1) of this regulation, the provision shall indicate that any physical examination required by the carrier will be performed at the expense of the carrier. Autopsy. A carrier may include a provision in a group health insurance contract or blanket health insurance contract giving the carrier the right to make an autopsy in case of death when an autopsy is not forbidden by law. A carrier may include a provision in a group health insurance contract or blanket health insurance contract that any autopsy required by the carrier will be performed at the expense of the carrier. Arbitration. A carrier may include a provision in a group health insurance contract or blanket health insurance contract giving the insured or the group policyholder the option of entering binding arbitration to settle a dispute with the carrier. If the carrier includes the provision described in §C(1) of this regulation, the provision may not require the insured or the group policyholder to enter binding arbitration. Insurance Article, §12-203(g), Annotated Code of Maryland Effective date: October 30, 2000 (27:21 Md. R. 1978) Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1438) Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1438) Regulation .06A amended as an emergency provision effective May 9, 2003 (30:11 Md. R. 733); amended permanently effective October 27, 2003 (30:21 Md. R. 1531)