COMAR 31.10.32 · Chapter 32 Nonprofit Health Service Plans — Material Modification

Administrative History Effective date: September 26, 2005 (32:19 Md. R. 1588) Authority Insurance Article, §§ 2-109 (a)( 1 ) and 14-115 (d)( 11 )(ii), Annotated Code of Maryland

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.01 Scope. This chapter applies to each nonprofit health service plan that is subject to Insurance Article, §14-115(d), Annotated Code of Maryland .

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.02 Definitions. A. In this chapter, the following terms have the meanings indicated. B. Terms Defined. (1) "Baltimore metro region" means Anne Arundel County, Baltimore City, Baltimore County, Carroll County, Harford County, and Howard County. (2) "Cost-sharing arrangement" includes: (a) A deductible; (b) A co-insurance amount; (c) A co-payment amount; (d) An annual limit; (e) A lifetime limit; and (f) An out-of-pocket maximum. (3) "DC metro region" means Montgomery County and Prince George's County. (4) "Eastern Shore region" means Caroline County, Cecil County, Dorchester County, Kent County, Queen Anne's County, Somerset County, Talbot County, Wicomico County, and Worcester County. (5) Health Benefit Plan. (a) "Health benefit plan" means a hospital or medical policy, contract, or certificate issued by a nonprofit health service plan. (b) "Health benefit plan" includes: (i) A Medicare supplement policy, contract, or certificate; (ii) A long-term care policy, contract, or certificate; or (iii) A stop loss contract. (6) "Health care provider" has the meaning stated in Insurance Article, §14-101(b), Annotated Code of Maryland . (7) "Key specialty" means: (a) Cardiology; (b) Dermatology; (c) Family practice; (d) Gastroenterology; (e) Geriatrics; (f) Internal medicine; (g) Obstetrics/Gynecology (Ob/Gyn); (h) Ophthalmology; (i) Orthopedic surgery; or (j) Pediatrics. (8) "Market" means: (a) The individual Medigap market; (b) The individual non-Medigap market; (c) The small-employer market governed by Insurance Article, Title 15, Subtitle 12, Annotated Code of Maryland ; or (d) The group market other than the small-employer market governed by Insurance Article, Title 15, Subtitle 12, Annotated Code of Maryland . (9) "Nonprofit health service plan" means a corporation that: (a) Holds a certificate of authority from the Commissioner to act as a nonprofit health service plan; and (b) Has been assigned a National Association of Insurance Commissioners (NAIC) company code number. (10) "Option" means a benefit or cost-sharing arrangement that: (a) Is available in a health benefit plan; and (b) If chosen, would alter the cost of the health benefit plan. (11) "Product" means a category of one or more health benefits plans sold by a nonprofit health service plan in a particular market. (12) "Southern Maryland region" means Calvert County, Charles County, and St. Mary's County. (13) "Western Maryland region" means Allegany County, Frederick County, Garrett County, and Washington County.

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.03 Material Modification. For purposes of Insurance Article, §14-115(d)(11)(i), Annotated Code of Maryland , a modification is material if it modifies: A. The options available in a health benefit plan marketed in the State in a manner that results in a change of 20 percent or more in the actuarial benefit value of the health benefit plan; B. A provider network in a manner that results in a change of: (1) 10 percent or more in the number of health care providers in the provider network: (a) For the entire State: or (b) In the Baltimore metro region or DC metro region; (2) 7 percent or more in the number of health care providers in the provider network in the Southern Maryland region; (3) 5 percent or more in the number of health care providers in the provider network in the Eastern Shore region or Western Maryland region; (4) 10 percent or more in the number of health care providers in a key specialty in the provider network: (a) For the entire State; or (b) In the Baltimore metro region, DC metro region, Eastern Shore region, Southern Maryland region, or Western Maryland region; (5) 10 percent or more in the amount of reimbursement paid to health care providers in the provider network: (a) For the entire State; or (b) In the Baltimore metro region or DC metro region; (6) 7 percent or more in the amount of reimbursement paid to health care providers in the provider network in the Southern Maryland region; or (7) 5 percent or more in the amount of reimbursement paid to health care providers in the provider network in the Eastern Shore region or the Western Maryland region; C. Underwriting guidelines for a product of a nonprofit health insurance plan in a manner that results in: (1) A refusal to provide the least expensive rate for the product of a nonprofit health service plan to 20 percent or more of applicants for the product; or (2) A relative increase of 50 percent or more in the current level of refusals to provide the least expensive rate for the product of a nonprofit health service plan to applicants; or D. Rates or rating plans that are required to be approved by the Commissioner in a manner that results in: (1) A rate increase of 15 percent or more in 1 year for any product sold by a nonprofit health service plan in a particular market; or (2) A rate increase of 25 percent or more in 1 year for coverage variations within a product sold by a nonprofit health service plan in a particular market.

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.04 Marketing Plan. A. Development and Submission of Marketing Plan. Each year, a nonprofit health service plan shall: (1) Develop a marketing plan; and (2) Submit the marketing plan and any changes to the marketing plan to the board of directors of the nonprofit health service plan for approval. B. Contents of Marketing Plan. A nonprofit health service plan shall include in the marketing plan all of the nonprofit health service plan's marketing goals and objectives in the State, including any plan to: (1) Reenter a market; (2) Retain or expand enrollment in a market or market segment; (3) Change the product portfolio of the nonprofit health service plan; (4) Establish or change distribution methods or sales systems of the nonprofit health service plan; (5) Establish or change a pricing strategy; (6) Form a partnership with another entity for marketing purposes; (7) Establish or change a communication and image strategy; (8) Engage in community outreach and education; (9) Market membership through one company in a holding company system rather than another company in the holding company system; or (10) Move subscribers from one company in a holding company system to another company in the holding company system. C. Approval Required. A nonprofit health service plan may not wholly or partially implement a marketing plan or any change to the marketing plan unless the board of the nonprofit health service plan has approved the marketing plan or the change to the marketing plan.

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.05 Evaluation Report. One year after the effective date of this chapter, the board of directors of a nonprofit health service plan shall submit to the Commissioner an evaluation report that contains: A. The number of items that were required to be submitted to the board during the preceding year under each category contained in Regulation .03 of this chapter ; and B. An evaluation of whether Regulation .03 of this chapter is effective in ensuring that the board of a nonprofit health service plan reviews items that are appropriate for review by the board without being unduly burdened by review of items that are not appropriate for review by the board.

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.06 Fiduciary Duty. Compliance with Insurance Article, §14-115(d)(11)(i), Annotated Code of Maryland , and this chapter does not relieve the board of directors of a nonprofit health service plan or the individual members of the board from taking or refraining from taking any action otherwise required to comply with their fiduciary duties.

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