.02 Definitions.

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) "Applicable change in status" means the divorce of the insured and the insured's spouse.

(2) "Dependent child" means an individual who:

(a) Is a child of the insured; and

(b) Either was covered under the group contract as a qualified or eligible dependent of the insured immediately preceding the applicable change in status, or was born to a qualified secondary beneficiary after the applicable change in status.

(3) "Employer" means an employer, an association of employers, or a trust sponsored by an employer or an association of employers to whom a group contract has been issued.

(4) Expense-Incurred Basis.

(a) "Expense-incurred Basis" means that the:

(i) Payment of benefits is based in whole or in part on the charge made by the provider; or

(ii) Services are directly provided without additional charge except for any deductible or copayment specified in the policy.

(b) Policies or contracts issued on an expense-incurred basis include, but are not limited to:

(i) Health maintenance organization coverage;

(ii) A policy which provides for the cost of a semiprivate hospital room;

(iii) A policy which provides coverage for a semiprivate hospital room subject to a daily deductible;

(iv) A policy which provides coverage for a semiprivate hospital room but which is subject to a copayment;

(v) A policy which provides a daily hospital benefit of more than $100;

(vi) A policy which pays medical-surgical benefits on a usual and customary basis.

(c) The following policies or contracts are not to be regarded as being on an expense-incurred basis:

(i) A policy which provides a daily hospital benefit of a fixed dollar amount not in excess of $100 per day;

(ii) A policy which provides only medical-surgical benefits in accordance with a fixed schedule of fees.

(5) "Group policy" or "group contract" means an insurance contract issued or delivered in this State which provides hospital, surgical, medical, or major medical coverage issued to an employer for the benefit of its employees by:

(a) An authorized insurer in accordance with Insurance Article, §15-302, Annotated Code of Maryland;

(b) A nonprofit health service plan authorized under Insurance Article, 14-108-----14-111, Annotated Code of Maryland; or

(c) A health maintenance organization authorized under Health-General Article, Title 19, Subtitle 7, Annotated Code of Maryland.

(6) "Insured" means an employee who is a resident of this State and is covered under a group policy.

(7) "Qualified secondary beneficiary" means, with respect to the insured, an individual other than the insured who is a:

(a) Beneficiary under the group contract as the spouse of the insured for at least the 30-day period immediately preceding an applicable change in status; or

(b) Dependent child.

(8) "Self-insured group health benefit program or plan" means a program or plan furnished by an employer for the benefit if its employees providing hospital, medical, surgical, or major medical benefits on an expense-incurred basis similar to benefits which could be provided under a group health insurance policy.

(9) "Termination statement" means a written notice of an event specified in Regulation .07 of this chapter provided to an employer on a form containing language prescribed by the Commissioner, or in substantially similar language, which is signed by the insured and:

(a) A qualified secondary beneficiary; or

(b) Accompanied by a signed and sworn affidavit of the insured verifying the factual content of the statement.