REGISTRATION OF DISCOUNT MEDICAL PLAN ORGANIZATIONS AND DISCOUNT DRUG PLAN by richman5

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									 REGISTRATION OF DISCOUNT
MEDICAL PLAN ORGANIZATIONS
 AND DISCOUNT DRUG PLAN
      ORGANIZATIONS

                October 1, 2007




            525 St. Paul Place, Baltimore MD 21202
                 410-468-2000/1-800-492-6116
                 www.mdinsurance.state.md.us

             MARTIN O’MALLEY, GOVERNOR
           ANTHONY G. BROWN, LT. GOVERNOR


            RALPH S. TYLER, COMMISSIONER
      JAMES V. MCMAHAN, III, DEPUTY COMMISSIONER
MARYLAND INSURANCE ADMINISTRATION



              REGISTRATION OF DISCOUNT
           MEDICAL PLAN ORGANIZATIONS AND
          DISCOUNT DRUG PLAN ORGANIZATIONS

Background

The Acts of 2007 (the "Act") of the General Assembly of Maryland requires Discount
Medical Plan Organizations and Discount Drug Plan Organizations (hereinafter
collectively referred to as “Discount Plans”) to register with the Maryland Insurance
Administration ( the "MIA"). The Act, codified in Title 14, Subtitle 6 of the Insurance
Article Annotated Code of Maryland (the “Insurance Article”), defines certain terms and
sets forth requirements for Discount Plans doing business in Maryland.


The purpose of this material is to summarize and outline briefly the administrative
procedures of the MIA for processing registration applications of Discount Plans. This
material is not intended to contradict or supersede specific insurance laws, regulations or
bulletins. Discount Plans should determine their obligations and requirements according
to insurance law and regulations of the State.


The requirements of Title 14, Subtitle 6 of the Insurance Article do not apply to
Medicare Prescription Drug Plans or to a State Prescription Drug Plan.


Registration of Discount Plans


An entity doing business in Maryland as a Discount Medical Plan must register with the
Insurance Commissioner (the “Commissioner”) as a Discount Medical Plan Organization
before a discount medical plan established by the entity is sold, marketed, or solicited in
the State. An entity operating in Maryland as a Discount Drug Plan Organization has the
same requirement.




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MARYLAND INSURANCE ADMINISTRATION



In general, an applicant for registration submits a completed Discount Medical Plan and
Discount Drug Plan Registration Application form to the MIA along with the
appropriate registration fee. The current initial application fee is $250.00, payable to the
Maryland Insurance Administration by check or money order.


The registration term expires on the second June 30 following the registration unless it is
renewed for an additional two-year term. To renew registration, a registrant must
complete and submit to the MIA the Discount Medical Plan and Discount Drug Plan
Registration Application form and pay a renewal fee. Currently, the renewal fee of
$150.00 should be made payable to the Maryland Insurance Administration in the
form of a check or money order.


An application for renewal is considered to be made in a timely manner if it is
postmarked or otherwise submitted to the MIA on or before June 30 of the year of
renewal. A registration that is not renewed in a timely will be considered to have
expired.


An entity operating as both a Discount Medical Plan and Discount Drug Plan in the State
may file one registration application with the Commissioner and pay one application fee.


A single application form is designed to accommodate applications for registration. On
the Discount Medical Plan and Discount Drug Plan Registration Application form,
the applicant identifies itself by type (medical, dental or both) and indicates whether the
application is for an initial registration or a renewal term.


The form is available in hardcopy format on the MIA web site:
www.mdinsurance.state.md.us




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MARYLAND INSURANCE ADMINISTRATION




Registration of Licensees

Title 14, Subtitle 6 of the Insurance Article applies to insurers, nonprofit health service
plans, health maintenance organizations (“HMOs”) and dental plan organizations
(hereinafter collectively referred to as “Licensees”) holding a Certificate of Authority to
conduct insurance business in the State. However, Licensees are not required to register
in the same manner as Discount Plans.


A licensee must, however, notify the Commissioner in writing that it sells, markets, or
solicits a Discount Medical Plan or Discount Drug Plan, or both in the State. In
conjunction with notifying the Commissioner, a Licensee must file annually with the
Commissioner by August 1, a list of the persons, other than licensed insurance producers,
who are authorized to sell, market or solicit in the State Discount Medical Plan or
Discount Drug Plan on its behalf as of that date. A complete list is required: a list of only
additions or subtractions to a previous list is not acceptable.


Additionally, a Licensee must provide the Commissioner an additional or more frequent
list upon request of the MIA.


The list of authorized representative shall be in a format consistent with the list provided
by applicants on the Discount Medical Plan and Discount Drug Plan Registration
Application form. A Licensee may file the list electronically.



Completion of the Discount Plan Application Form

The date of receipt is recorded on applications received by the MIA. Payments are
processed by the MIA Financial Unit and application forms are forwarded to the
administrator assigned to review them to ensure the applicant:
          •   Designated the application as an initial or renewal application;
          •   Properly indicated the business entity (discount plan) type;
          •   Completed all the required sections of the form;


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MARYLAND INSURANCE ADMINISTRATION



          •   Provided all required information and attachments;
          •   Properly made the required certifications and attestations;
          •   Provided the required signature(s); and
          •   Enclosed the required application fee made payable to the MIA.


The MIA may return an application form if the necessary information is not provided, if
the form is not completed properly, or if the appropriate fee is not paid.


If all registration requirements are met, the application form is completed appropriately
and the applicant is of good standing, the application is approved. A registration
confirmation letter notifies the applicant of the approval and effective dates of
registration.


The MIA reviews the information submitted by the applicant or registrant as the
Commissioner may deny a registration to an applicant, or refuse to renew, suspend, or
revoke a registration of a registrant for reasons listed by §14-605 of the Insurance Article.
A registration may be revoked or suspended if at any time during the registration term,
the MIA determines that the registrant violated Title 14, Subtitle 4 of the Insurance
Article or any other applicable insurance law or regulation. A written notification of
revocation or suspension is sent to the registrant.


Applicants complete sections of the form as follows:
          Section 1 – Check whether the form is for a Discount Medical Plan only, a
          Discount Drug Plan only, or both. Check whether the registration is a new
          registration or a renewal. Check whether the applicant is a resident (domestic)
          business entity. Non-resident business entities leave blank but Corporations and
          Limited Liability Companies must check whether they are registered with the
          State’s Department of Assessment and Taxation. Note: non-resident
          Corporations and Limited Liability Companies should register before submitting
          an application.




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MARYLAND INSURANCE ADMINISTRATION



          Section 2 – Provide information identifying the applicant business entity. Be sure
          to provide name under which the discount plan is operating under in Maryland if
          different than the applicant’s corporate or official name.


          Section 3 – Provide information for a senior business entity contact such as an
          officer or principal of the company. This is the person that should receive
          notification of all important information about the company from the MIA.


          Section 4 – Provide the information for a routine contact such as a compliance
          officer, plan manager or other senior operating person responsible for the
          company’s business in Maryland.


          Section 5 – Provide information for appointed Agent of Service of Process in the
          State. If an agent of process has not been appointed by the business entity, leave
          blank.


          Section 6 – List the names and identifying licensed insurance producer number,
          or Federal Employer Identification Number (FEIN) or individual’s Social
          Security Number (SSN) of persons authorized to sell, market or solicit business
          on the applicant’s behalf. If the list is extensive, provide additional information
          by attachment to the application.


          Section 7 – Read and answer all questions. Provide explanations to any questions
          answered “Yes” in attachments to the application. All attachments and/or related
          written material or statements must include an original signature and reference the
          applicant's name and identifying (SSN/FEIN) number.


          Section 8 – After reading all questions carefully and assuring that all application
          material is correct and accurate to the best knowledge of the applicant, the
          applicant must sign and date the application. The signer should be an officer or
          principal of the business entity.



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MARYLAND INSURANCE ADMINISTRATION




          Section 9 – This section serves as a reminder about attachments.


          Section 10 – This section explains the fee requirements for initial and renewal
          registrations.


Discount Plans Authorized Persons List


Applicants shall file with their initial registration a list of the names and identifying
licensed insurance producer number, or Federal Employer Identification Number (FEIN)
or individual’s Social Security Number (SSN) of persons authorized to sell, market or
solicit business on the their behalf. When renewing registration, the list must be updated
as of the date of the renewal application.


In addition to the list associated with the application form, registrants shall file annually
with the Commissioner by July 1, a current list of persons who are authorized to sell,
market or solicit business on their behalf as of that date. A registrant may file the annual
list electronically in a format consistent with the list provided with the application form.
A complete list is required: a list of only additions or subtractions to a previous list is not
acceptable.


The Commissioner may request that a registrant provide a current (additional) list at any
time.

Market Conduct Examination of Discount Plans

Discount Plans are expected to comply with all of the requirements of Title 14, Subtitle 6
of the Insurance Article and related laws and regulations of the State, as they may be
applicable.




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MARYLAND INSURANCE ADMINISTRATION



As such, whenever the Commissioner considers it advisable, the MIA may examine the
affairs, transactions, accounts, records and assets of a Discount Plan or Licensee.
Examinations shall be conducted pursuant to and in accordance with §2-207 and §14-610
of the Insurance Article.


The expense of an examination shall be paid in accordance with §2-208 of the Insurance
Article. The reports of any examination and investigation shall be issued in accordance
with §2-209 of the Insurance Article.


In addition to any enforcement action taken or Oder issued by the Commissioner under
Title 2 and/or Title 4 of the Insurance Article, the Commissioner may impose a civil
penalty of not more than $10,000 for each violation of Title 4, Subtitle 6 and/or a civil
penalty of not more than $1,000 per day for each day a person is in violation of §14-603.


State Contact Information for Discount Plans

If Discount Plan organizations have questions about registration with the State or the
filing of registration and related materials, they should contact the Coordinator of
Compliance and Enforcement of the Maryland Insurance Administration at 1-800-492-
6116.


If Consumers have concerns about a representative of a Discount Plan and the manner in
which a plan was offered or sold to them, they should contact the Chief Enforcement
Officer of the Maryland Insurance Administration at 1-800-492-6116.


If there is concern about the legitimacy of a plan or if fraud is suspected, contact the
Maryland Attorney General’s Consumer Protection Division at 1-888-743-0023.


Or, to find out if any complaints have been filed against a particular Discount Plan, call
the Maryland Attorney General’s Health Advocacy Division at 1-877-261-8807.




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