Employee benefits - Maryland

Summary of differences between federal and state regulations

Employee benefits are generally covered under the federal jurisdiction of the Employee Retirement Income Security Act (ERISA).

Federal ERISA plans generally do not have to comply with state laws. ERISA rules preempt or block state laws that relate to ERISA plans. State insurance laws, however, do apply. Maryland has laws that apply to group life insurance

Maryland has laws governing group life insurance. Some of the provisions include the following (from the Maryland Insurance Code):

• The premium for the policy shall be paid either from the employer's funds, or from funds contributed by the insured employees, or from both. (§17-201(b)).
• The employer may not be the beneficiary (§17-201(a)).
• The term “employees" must include the employees of one or more subsidiary corporations, and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietorships, or partnerships if the business of the employer and of the affiliated corporations, proprietorships, or partnerships is under common control; and the individual proprietor or partners if the employer is an individual proprietorship or partnership. "Employees" may include retired employees, former employees, and directors of a corporate employer (§17-201(b)).
• If the premium is not from funds contributed by employees, the policy must insure all eligible employees, except those who reject the coverage in writing, unless coverage is limited because evidence of individual insurability is not satisfactory to the insurer (§17-201(c)).
• A policy may be issued to a trust or to the trustees of a fund established or adopted by two or more employers (§17-203(a)).
• Coverage may be extended to cover the spouse and dependent children of each insured employee or member who elects to obtain the coverage (§17-209(a)).
• There is a 31 day grace period for premiums (§17-302(a)).
• If employment is terminated, covered employees are entitled to have issued, without evidence of insurability, an individual policy (§17-309(a)).
• If the group policy terminates, employees who lose their coverage and who have been insured for at least five years before the termination are entitled to have issued an individual policy (§17-310(a)).

State

Contact

Maryland Insurance Administration

Regulations

Maryland Insurance Code, Title 17

Federal

Contact

Employee Benefits Security Administration (EBSA)

Regulations

29 CFR chapter XXV (Parts 2509 – 2590)