This chapter applies to all health maintenance organizations operating in this State. In this chapter, the following terms have the meanings indicated. Terms Defined. “Coverage period” means the interval of time the individual contract or group contract provides protection, in exchange for the payment of a particular premium. Group Contract. “Group contract” means a contractual agreement entered into between an HMO and an employer, union, trustee, association, or other organization for the provision of health care services on a prepaid basis to: Subscribers of the group contract holder; or Subscribers of the group contract holder and the subscriber's dependents. “Group contract” includes a small employer health benefit plan as defined in Insurance Article, §15-1201, Annotated Code of Maryland. “Group contract holder” means the entity to whom the group contract is issued. “HMO” means a health maintenance organization. “Individual contract” means a contractual agreement for the provision of health care services on a prepaid basis entered into between an HMO and a subscriber covering: The subscriber; The subscriber and the subscriber's dependents; or The subscriber's dependents. “Member” means an individual entitled to receive health care benefits from the HMO under an individual or group contract. “Subscriber” means for: Group contracts, the individual who is eligible to be covered under the contract, other than as a dependent, by reason of satisfying the eligibility requirements of the group contract; and Individual contracts, the individual to whom the HMO contract is issued. A group 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 members, or At least as favorable to the members and more favorable to the group contract holder. An individual 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 at least as favorable to the subscriber and members. 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 HMO 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 contract shall contain a provision that specifies: Which documents constitute the entire contract; and That a change in the contract may not be valid: Until approved by an executive officer of the HMO, and Unless the approval is endorsed on the contract or attached to the contract. Contestability of the Contract. Each group 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 a member covered under the contract relating to insurability may not be used in contesting the validity of the coverage with respect to which the statement was made after the coverage has been in force before the contest for a period of 2 years during the member's lifetime; Absent fraud, each statement made by an applicant, group contract holder, or member is considered to be a representation and not a warranty; and A statement made to effectuate coverage may not be used to avoid the coverage or reduce benefits under the contract unless: The statement is contained in a written instrument signed by the group contract holder or member, and A copy of the statement is given to the group contract holder or member. 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 the HMO. If the HMO requires written notice of claim for the HMO 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 contract; and The HMO 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 contract shall contain a provision that: The HMO shall provide claim forms for filing proof of loss to each claimant or to the group contract holder for delivery to the claimant; and If the HMO does not provide the claim forms within 15 days after notice of claim is given, the claimant is considered to have complied with the requirements of the contract as to proof of loss if the claimant submits, within the time fixed in the contract 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 contract shall contain a provision that: Written proof of loss shall be furnished to the HMO at its office within 90 days after the date of the loss; and Failure to furnish the proof within the time required does not invalidate or reduce any claim if it was not reasonably possible to give proof within the required time, if the proof is furnished as soon as reasonably possible and, except in the absence of legal capacity, not later than 1 year from the time proof is otherwise required. Time of Payment of Claims. Each group contract shall contain a provision that benefits payable under the contract for any loss will be paid not more than 30 days after receipt of written proof of loss. Payment of Claims. Each group contract shall contain a provision that all benefits, other than those described in §G(2) of this regulation, will be paid to the health care provider who rendered the services. The provision may indicate that, if the member has paid the health care provider for services rendered, benefits will be payable to the member. Legal Action. Each group contract shall contain a provision that an action at law or in equity may not be brought: To recover on the contract before the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of the contract; or After the expiration of 3 years after the written proof of loss is required to be furnished. Grace Period. Each group 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 HMO does not intend to renew the contract beyond the period for which premiums have been accepted and notice of the intention not to renew is delivered to the group contract holder at least 45 days before the premium is due. During the grace period the contract shall continue in force.” Any additional provisions related to the grace period shall be expressly stated in the contract subject to the following limitations: Unless the HMO receives a notice of the group contract holder's intention to terminate the contract before the end of the grace period, the HMO may collect premiums for the 30-day grace period; If the HMO receives a notice of intention to terminate the contract during the grace period, the HMO may collect premiums 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 premiums for the 30-day grace period are paid after the grace period ends, the HMO 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 contract shall contain a provision that: Unless the HMO makes delivery directly to the employee or member, the HMO will provide to the group contract holder, for delivery to each employee or member of the group, a statement that summarizes the benefits and rights which pertain to the members covered under the group contract; and If dependents are included in the coverage, only one statement need be issued for each family unit. Addition of Employees/Members. Each group contract shall contain a provision that eligible new employees, members, or dependents may be added periodically to the group originally covered in accordance with the terms of the contract. Misstatement of Age. If the premiums or benefits vary by age, each group contract shall contain a provision specifying an equitable adjustment of premiums or benefits to be made in the event the age of a member has been misstated. Premium Due Date. Each group contract shall specify the premium due date. The premium due date shall be the date the coverage period begins. An HMO may offer each group contract holder the option to pay the premium through an electronic payment. If the group contract holder elects an electronic payment, the HMO may not debit or charge the amount of the premium due prior to the premium due date, except as authorized by the group contract holder. Each individual contract shall contain in substance the provisions set forth in Regulation .04C, E, F, G, H, and L of this chapter. Entire Contract; Changes. Each individual contract shall contain in substance the following provision: “Entire contract; changes: This agreement, including the endorsements and the attached papers, if any, constitutes the entire contract. No change in this agreement shall be valid until approved by an executive officer of the HMO and unless such approval is endorsed on the agreement or attached to the agreement. No agent has authority to change this agreement or to waive any of its provisions.” Contestability of the Contract. Each individual contract shall contain in substance 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; Absent fraud, each statement made by an applicant or member is considered to be a representation and not a warranty; and A statement made to effectuate coverage may not be used to avoid the coverage or reduce benefits under the contract unless: The statement is contained in a written instrument signed by the subscriber or member, and a copy of the statement is given to the subscriber or member. The provision required by §C(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. Grace Period. If the individual contract is guaranteed renewable for the life of the contract, the contract shall contain in substance the following provision: “Grace period: A grace period of 31 days will be granted for the payment of each premium falling due after the first premium, during which grace period this contract shall continue in force.” If the contract gives the HMO the right to refuse renewal, the contract shall contain in substance the following provision: “Grace period: Unless not less than thirty days prior to the premium due date the HMO has delivered to the subscriber or has mailed to the subscriber's last address as shown by the records of the HMO written notice of its intention not to renew this contract beyond the period for which the premium has been accepted, a grace period of 31 days will be granted for the payment of each premium falling due after the first premium, during which grace period this contract shall continue in force.” If an individual contract lapses due to nonpayment of premium, an HMO may not charge a premium for the time coverage continues in force under the grace period, except as permitted in the unpaid premiums provision in Regulation .08C of this chapter. An HMO must not apply the unpaid premiums provision to recover a premium due for the grace period as described in §D(3) of this regulation, unless the HMO includes the unpaid premiums provision in the individual's contract. An individual contract may not require the subscriber to notify the HMO in advance of the subscriber's intention to terminate the individual contract. Reinstatement. Each individual contract shall contain in substance the following provision: “Reinstatement: If any renewal premium is not paid in full within the time granted the subscriber for payment, a later acceptance of premium in full by the HMO or by any agent authorized by the HMO to accept the premium, without requiring a reinstatement application in connection with the acceptance of the premium in full, shall reinstate the contract. However, if the HMO or the agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the contract will be reinstated upon approval of the application by the HMO or, lacking approval, upon the forty-fifth day following the date of the conditional receipt unless the HMO has previously notified the subscriber in writing of its disapproval of the reinstatement application. The subscriber and HMO shall have the same rights under the reinstated contract as they had under the contract immediately before the due date of the defaulted premium, subject to any provisions endorsed on the contract or attached to the contract in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than sixty days prior to the date of reinstatement.” Claims Forms. Each individual contract shall contain in substance the following provision: “Claim forms: The HMO, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If claim forms are not furnished within fifteen days after the giving of notice, the claimant shall be deemed to have complied with the requirements of this contract as to proof of loss upon submitting, within the time fixed in the contract for filing proof of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made.” Age Limit; Misstatement of Age. Each individual contract shall state that the contract will continue in effect until the end of the period for which the HMO has accepted the premium if an individual contract establishes, as an age limit or otherwise, a date after which the coverage provided by the contract will not be effective and: The date falls within a period for which the HMO accepts a premium for the contract; or The HMO accepts a premium for the contract after the date specified in this section. Each individual contract shall state that the liability of the HMO is limited to the refund, on request, of the premiums paid for the period not covered by the contract if the age of the member is misstated and according to the correct age of the member, the coverage provided by the contract would: Not have become effective; or Have ceased before the acceptance of the premium for the contract. Premium Due Date. Each individual contract shall specify the premium due date. The premium due date shall be no earlier than the date the coverage period begins. An HMO may offer each subscriber the option to pay the premium through an electronic payment. If the subscriber elects an electronic payment, the HMO may not debit or charge the amount of the premium due prior to the premium due date, except as authorized by the subscriber. Crime. An individual or group contract may not include a limitation or exclusion for loss to which a contributing cause was the member's commission of or attempt to commit a crime. An individual or group 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 member. Illegal Occupation. An individual or group contract may not include a limitation or exclusion for loss to which a contributing cause was the member being engaged in an illegal occupation. Intoxicants and Narcotics or Use of Intoxicants or Narcotics. An individual or group contract may not include a limitation or exclusion for loss sustained or contracted in consequence of the member being intoxicated or under the influence of any drug. An individual or group contract may not include a limitation or exclusion for loss due to: The use of alcohol; The use of drugs or narcotics; or Alcoholism or drug addiction. Preexisting Conditions. An individual or group contract may not include a limitation or exclusion for a preexisting condition. An HMO may include in group contracts any of the optional provisions described in §§C and D of this regulation. An HMO may not include in a group contract an optional provision dealing with the same subjects set forth in §§C and D of this regulation if the provision is drafted in a manner that is less favorable to the group contract holder, subscriber, or member than the corresponding optional provision set forth in §§C and D of this regulation. Physical Examination. An HMO may include a provision in a group contract giving the HMO the right to examine the person of the member when and as often as it may reasonably require during the pendency of a claim under the contract. If the HMO includes the provision described in §C(1) of this regulation, the provision shall indicate that any physical examination required by the HMO will be performed at the expense of the HMO. Arbitration. An HMO may include a provision in a group contract giving the group contract holder or the member the option of entering binding arbitration to settle a dispute with the HMO. If the HMO includes the provision described in §D(1) of this regulation, the provision may not require the group contract holder or the member to enter binding arbitration. An HMO may include in an individual contract any of the optional provisions described in Regulation .07C and D of this chapter and §C of this regulation. An HMO may not include in an individual contract an optional provision dealing with the same subjects set forth in Regulation .07C and D of this chapter and §C of this regulation if the provision is drafted in a manner that is less favorable to the subscriber or member than the corresponding optional provision set forth in Regulation .07C and D of this chapter and §C of this regulation. Unpaid Premiums. An individual contract may contain the following provision: “Unpaid premiums: Upon the payment of a claim under this contract, any premium then due and unpaid or covered by any note or written order may be deducted from the claim payment.” Health-General Article, §19-713(f); Insurance Article, §12-203(g); Annotated Code of Maryland Effective date: October 30, 2000 (27:21 Md. R. 1979) Regulation .02B amended effective October 18, 2010 (37:21 Md. R. 1439) Regulation .04 amended effective August 3, 2015 (42:15 Md. R. 1019) Regulation .04N adopted effective October 18, 2010 (37:21 Md. R. 1439) Regulation .05D amended effective November 7, 2005 (32:22 Md. R. 1760) Regulation .05E amended effective August 3, 2015 (42:15 Md. R. 1019) Regulation .05H adopted effective October 18, 2010 (37:21 Md. R. 1439) Regulation .05H amended effective April 22, 2019 (46:8 Md. R. 402) 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)