Bill
HB 116
Align Maryland’s health benefit plan definitions to federal rules for hospital indemnity and fixed indemnity, making federal exceptions the controlling standard.
Status snapshot
- Jurisdiction: Maryland General Assembly (House Bill 116; cross-file SB 211)
- Hearing: January 28, 2025, at 2:00 p.m. (Health & Government Operations)
- Prefiled: October 6, 2024; introduced/read first time January 8, 2025
- Effective date in bill text: October 1, 2025
- Fiscal notes: Maryland Insurance Administration (MIA) and Department of Legislative Services estimate minimal or no fiscal impact
Purpose and intent
- Align Maryland statutory definitions of “health benefit plan” with recent federal regulatory requirements for hospital indemnity and fixed indemnity (limited-benefit) insurance products. The bill replaces several Maryland-specific exemptions with references to the federal exceptions found in 45 C.F.R. §146.145(b)(4) and 45 C.F.R. §148.220(b)(4).
Key provisions
- Repeals existing Maryland statutory language that carved out hospital indemnity and fixed indemnity products from the State definition of “health benefit plan” in multiple places:
- Small group market — Insurance Article §15‑1201
- Individual market — §15‑1301
- Large group market — §15‑1401
- Maryland Health Benefit Exchange definitions — §31‑101
- Replaces those state-specific exemptions with a single conformity rule: hospital indemnity or fixed indemnity insurance is excluded from the State definition of “health benefit plan” only if the coverage qualifies under the applicable federal exceptions (45 C.F.R. §146.145(b)(4) and/or §148.220(b)(4)).
- By codifying the federal standard, the bill makes the federal disclosure and product‑qualification requirements (including a required consumer disclosure for many fixed‑indemnity products) the controlling standard for whether a product is treated as an excepted/limited benefit product in Maryland.
Who and what would be affected
- Insurers and producers offering hospital indemnity or fixed indemnity products in Maryland (individual, small group, large group, and plans sold through the Maryland Health Benefit Exchange).
- Consumers purchasing fixed‑indemnity or hospital indemnity coverage — products that do not meet federal excepted‑benefit criteria (including required disclosures) would no longer be treated as excepted and could be subject to comprehensive health‑insurance rules and protections.
- Maryland Insurance Administration — gains clearer statutory authority to enforce federal conformity requirements at the State level.
Background and context
- Fixed indemnity insurance pays a predetermined dollar benefit for covered events (e.g., a set daily hospital benefit) regardless of medical expenses; it is not comprehensive coverage.
- On April 3, 2024, HHS issued a final rule updating rules for short‑term limited‑duration insurance and independent noncoordinated excepted benefits, adding a federal disclosure requirement for fixed indemnity products. Effective January 1, 2025, fixed indemnity products must include that disclosure to qualify as excepted under federal law.
- This bill incorporates the federal standard into State law to clarify applicable requirements for Maryland markets and to vest MIA with direct enforcement authority over compliance.
Fiscal and small‑business impact
- MIA and the Department of Legislative Services judge the bill would not materially affect State finances. The MIA estimates minimal or no economic impact on Maryland small businesses.
Procedural notes
- Cross-filed as SB 211 (Finance Committee, by request of MIA).
- If enacted as written, statutory changes take effect October 1, 2025.
Compiled from official sources — confirm details with the bill’s official record.
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