1. A. Voluntary. Provided an employer has joined the State plan or has an approved application for a different EPIP:

   1. (1) The employer may voluntarily terminate enrollment in an EPIP provided the employer has been enrolled in the EPIP for at least 1 year.
   2. (2) The employer shall provide the requisite notice to the Division of the voluntary termination no later than 30 days before the termination’s effective date.
   3. (3) The employer shall provide the requisite notice to employees prescribed by COMAR 09.42.01.03 of the voluntary termination no later than 30 days before the termination’s effective date.
   4. (4) The employer shall continue the approved EPIP’s coverage through the termination’s effective date.
   5. (5) The voluntary termination shall become effective on the first date of the calendar quarter following the expiration of the 30 day period.

2. B. Involuntary. An employer’s EPIP enrollment may be terminated by the Division when the Division determines that terms or conditions of the plan have been repeatedly or egregiously violated in a manner that necessitates termination.

   1. (1) Causes for plan termination may include:

      1. (a) Failure to pay benefits in the amount and duration required by Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland and this subtitle;
      2. (b) Failure to make timely benefit determinations or reconsiderations;
      3. (c) Failure to pay benefits in the amount and duration required by the EPIP, where the EPIP provides benefits in a greater amount or duration than is required by Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland and this subtitle;
      4. (d) Failure to pay benefits within the timeframes and in the manner specified by Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland and this subtitle;
      5. (e) Failure to maintain an adequate surety bond in accordance with this subtitle;
      6. (f) Failure to comply with Regulation .03(L) of this chapter;
      7. (g) Failure to submit reports or comply with other compliance requirements as required by Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland or this subtitle;
      8. (h) Failure to otherwise comply with Labor and Employment Article, §§8.3-101, et seq., Annotated Code of Maryland or this subtitle;
      9. (i) Failure to notify the Division that their plan has been cancelled by their carrier; or
      10. (j) Failure to notify the Division that the product is no longer offered by their carrier.
   2. (2) If the Division withdraws approval of an employer’s EPIP, the Division shall issue to the employer and the EPIP administrator a notice of involuntary termination of EPIP approval with an effective date 14 days after the date of the notice.
   3. (3) An employer may request a review under COMAR 09.42.05 of the withdrawal of EPIP approval before its effective date by filing with the Division.
   4. (4) Involuntary terminations shall result in the establishment of past-due mandatory contribution debt in the amount that would have been owed to the State plan had the employer been in the State plan for a period of 1 year prior to the date of the notice of termination of EPIP approval.
   5. (5) Involuntary terminations may result in civil penalties against an employer, including but not limited to execution on and collection of any bond amount.
   6. (6) An employer shall provide the requisite notice to employees prescribed by COMAR 09.42.01.03 of the involuntary termination no later than 5 days after the termination’s effective date.

3. C. Termination Generally.

   1. (1) Continuation of Benefits.

      1. (a) An EPIP shall pay or continue to pay benefits under the terms of the EPIP to an employee who filed a valid claim for benefits under the EPIP before the effective date of termination until the total amount of the benefit claim is paid, the duration of approved leave ends, or the application year ends, whichever occurs first.
      2. (b) If the employer or EPIP administrator does not pay the benefits, the employee may seek relief with the Division under COMAR 09.42.05.
   2. (2) Within 60 days after the effective date of the termination of an EPIP, the employer shall send to the Division all reporting requirement information on benefit claims paid and amounts of contributions collected or owing from the date of the last report provided to the Division under the EPIP reporting requirements to the date of termination.

   3. (3) Outstanding Contributions.

      1. (a) On receipt of the report specified in §C(2) of this regulation, the Division will provide an invoice of the contribution amounts due, if any.
      2. (b) The contribution amount due shall be calculated based on any contributions withheld from employees’ wages that remain in the possession of the employer on the effective date of the EPIP termination, minus an amount equal to the amount of any benefits due to be paid as required under §C(1) of this regulation or any premium due to a carrier for commercially insured EPIPs.
      3. (c) Once all required benefits are paid under §C(1) of this regulation, the employer shall send to the Division the final report on any additional benefit claims paid or administrative expenses incurred after the date of the last report provided under §C(2) of this regulation within 5 business days.
      4. (d) The Division will provide an invoice of any additional contribution amounts due.
   4. (4) Any employer whose EPIP approval has been terminated, either voluntarily or involuntarily, shall be immediately enrolled in the State plan, with contribution obligations going back to the most recent quarter start date, unless and until the employer is approved for a new EPIP.
4. D. To the extent that any of the regulations in this section conflict with the Temporary Provisions applicable to EPIP termination in Regulation .10 of this chapter, the provisions in Regulation .10 of this chapter control.

Authority: Labor and Employment Article, §§8.3-101, 403, 503, and 705, Annotated Code of Maryland

Effective date: March 30, 2026 (53:6 Md. R. 290)