WILLIAM DONALD SCHAEFER, Governor                                Ch. 9

(1) INCLUDE COST-SHARING AND OTHER INCENTIVES TO HELP
PREVENT CONSUMERS FROM SEEKING UNNECESSARY SERVICES;

(2)      BALANCE THE EFFECT OF THE COST-SHARING IN REDUCING
PREMIUMS AND IN AFFECTING UTILIZATION OF APPROPRIATE SERVICES; AND

(3)      LIMIT THE TOTAL COST-SHARING THAT MAY BE INCURRED BY AN
INDIVIDUAL IN A YEAR.

701.

(A)     (1) UNTIL SEPTEMBER 30, 1996 DECEMBER 31, 1994, CARRIERS MAY LIMIT
COVERAGE UNDER ANY HEALTH BENEFIT PLAN UNDER A PREEXISTING CONDITION
PROVISION, BUT ONLY FOR A PERIOD NOT EXCEEDING 6 MONTHS FROM THE
EFFECTIVE DATE OF COVERAGE FOR ANY ENROLLEE, FOR ANY PREEXISTING
CONDITION THAT EXISTED WITHIN THE 6 MONTHS PRECEDING THE DATE OF
COVERAGE FOR THE ENROLLEE UNDER THE HEALTH BENEFIT PLAN.

(2) IN DETERMINING THE LENGTH OF TIME THAT A PREEXISTING
CONDITION PROVISION APPLIES TO AN ELIGIBLE EMPLOYEE OR DEPENDENT, A
HEALTH BENEFIT PLAN SHALL CREDIT THE TIME THE INDIVIDUAL WAS
PREVIOUSLY COVERED BY PUBLIC OR PRIVATE HEALTH INSURANCE OR BY
ANOTHER HEALTH BENEFIT ARRANGEMENT. AN INDIVIDUAL IS DEEMED TO HAVE
BEEN PREVIOUSLY COVERED IF:

(I)      AN INTERRUPTION OF NO MORE THAN 60 DAYS HAD
OCCURRED FROM THE TIME THE INDIVIDUAL WAS COVERED BY ANY PUBLIC OR
PRIVATE HEALTH INSURANCE OR BY ANOTHER HEALTH BENEFIT ARRANGEMENT
UNTIL THE EFFECTIVE DATE OF THE NEW COVERAGE; OR

(II)     AN INTERRUPTION OF NO MORE THAN 60 DAYS HAD
OCCURRED FROM THE TIME THE INDIVIDUAL WAS COVERED BY ANY PUBLIC OR
PRIVATE HEALTH INSURANCE OR BY ANOTHER HEALTH BENEFIT ARRANGEMENT
UNTIL THE INDIVIDUAL BECAME AN ELIGIBLE EMPLOYEE WHO ELECTED TO
ENROLL BUT AGAINST WHOM THE EMPLOYER IMPOSED A WAITING PERIOD PRIOR
TO ENROLLMENT.

(3) AN EXCLUSION OF COVERAGE FOR PREEXISTING CONDITIONS MAY
NOT BE APPLIED TO HEALTH CARE SERVICES FURNISHED FOR PREGNANCY OR
NEWBORNS.

(4)      ON AND AFTER OCTOBER 1, 1996 JANUARY 1, 1995, A CARRIER MAY
NOT LIMIT COVERAGE UNDER A HEALTH BENEFIT PLAN FOR A PREEXISTING
CONDITION.

(B)     NOTWITHSTANDING SUBSECTION (A) OF THIS SECTION, A LATE
ENROLLEE MAY BE SUBJECT TO A 12-MONTH PREEXISTING CONDITION PROVISION.

(C)     A HEALTH BENEFIT PLAN THAT DOES NOT USE A PREEXISTING
CONDITION PROVISION MAY IMPOSE ON ENROLLEES A WAITING PERIOD NOT TO
EXCEED 30 DAYS BEFORE THE COVERAGE UNDER THE HEALTH BENEFIT PLAN IS

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