House Bill 116 details exclusions for hospital indemnity insurance coverage in health plans

On January 8, 2025, the Maryland Legislature introduced House Bill 116, a significant piece of legislation aimed at clarifying the definitions and regulations surrounding health benefit plans, particularly in relation to hospital indemnity and fixed indemnity insurance. The bill seeks to ensure that these types of insurance are clearly distinguished from traditional health insurance plans, thereby addressing potential confusion among consumers regarding their coverage options.

Key provisions of House Bill 116 include stipulations that hospital indemnity insurance must be offered as independent, non-coordinated benefits. This means that the benefits provided under such policies will not interact with or be affected by any group health plans maintained by the same employer. The bill specifies that benefits must be paid in fixed dollar amounts per period of hospitalization or service, regardless of the actual expenses incurred. Additionally, it mandates that a prominent notice be included in application materials, clearly stating that these policies are supplementary and not substitutes for major medical coverage.

The introduction of this bill has sparked discussions among lawmakers and stakeholders in the health insurance industry. Proponents argue that the bill will enhance consumer protection by ensuring that individuals are fully informed about the nature of their insurance coverage and the limitations of indemnity plans. Critics, however, express concerns that the bill may inadvertently limit access to necessary coverage options for those who rely on these types of insurance.

The implications of House Bill 116 extend beyond consumer protection; it also raises questions about the broader landscape of health insurance in Maryland. Experts suggest that if passed, the bill could lead to increased scrutiny of indemnity plans and potentially influence how these products are marketed and sold in the state.

As the legislative process unfolds, stakeholders will be closely monitoring the bill's progress and any amendments that may arise during discussions. The outcome of House Bill 116 could have lasting effects on health insurance practices in Maryland, shaping the way consumers understand and access their health benefits.