(1) a judicial decree of adoption; or

(2) the assumption of custody, pending adoption, of a prospective adoptive child by a prospective adoptive parent.

(b) (1) This subsection applies to:

(i) each individual health insurance policy that:

1. is delivered, issued for delivery, or renewed in the State;

2. provides coverage on an expense-incurred basis; and

3. provides coverage for a family member of the insured;

(ii) each group health insurance policy, including a contract issued by a nonprofit health service plan, that:

1. is delivered, issued for delivery, or renewed in the State;

2. provides coverage on an expense-incurred basis for employees of an employer or employers or members of a union or unions; and

3. provides coverage for a family member of a covered employee or member;

(iii) each individual service or indemnity contract that:

1. is delivered, issued for delivery, or renewed in the State by a nonprofit health service plan; and

2. provides coverage for a family member of the subscriber;

(iv) each individual contract that:

1. is delivered, issued for delivery, or renewed in the State by a health maintenance organization; and

2. provides coverage for a family member of the subscriber; and

(v) each group contract that:

1. is delivered, issued for delivery, or renewed in the State by a health maintenance organization;

2. provides coverage for employees of an employer or employers or members of a union or unions; and

3. provides coverage for a family member of the covered employee or member.

(2) Each policy or contract subject to this subsection shall provide that the health insurance benefits applicable:

(i) for children or grandchildren shall be payable for a newly born or newly adopted dependent child or grandchild from the moment of birth or date of adoption of the child or grandchild; and

(ii) for a minor for whom guardianship is granted by court or testamentary appointment shall be payable from the date of appointment.

(c) On request, an insurer or nonprofit health service plan that issues an individual or group health insurance policy that provides coverage on an expense-incurred basis, or a health maintenance organization that issues an individual or group contract, shall offer family members’ coverage to an insured, subscriber, or member regardless of the marital status of the insured, subscriber, or member.

(d) Each insurer, nonprofit health service plan, or health maintenance organization that issues a policy or contract that does not provide family members’ coverage shall:

(1) provide notice to the policyholder or contract holder that coverage for a newly born or newly adopted child or grandchild or a minor for whom guardianship is granted by court or testamentary appointment is not provided under the policy or contract; and

(2) inform the insured, subscriber, or member of the right and conditions to purchase family members’ coverage under this section.

(e) To be eligible for coverage under this section:

(1) a grandchild must be a dependent, and in the court-ordered custody, of the insured, subscriber, or member; and

(2) a minor must be a dependent and in the custody of the insured, subscriber, or member as a result of a guardianship, other than a temporary guardianship of less than 12 months duration, granted by court or testamentary appointment.

(f) Coverage for a newly born or newly adopted child or grandchild or a minor for whom guardianship is granted by court or testamentary appointment shall consist of coverage for injury or sickness, including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities.

(g) If payment of a specific premium or subscription fee is required to provide coverage for a child or grandchild or a minor for whom guardianship is granted by court or testamentary appointment, the policy or contract may require notification of a birth, adoption, or appointment and payment of the required premium or fee to the insurer, nonprofit health service plan, or health maintenance organization within 31 days after the date of birth, date of adoption, or date of court or testamentary appointment in order to continue coverage beyond the 31-day period.

(h) (1) An insurer, nonprofit health service plan, or health maintenance organization may require proof that the insured, subscriber, or member is the parent or grandparent of a newly born or newly adopted child or grandchild or guardian of a minor under court or testamentary appointment.

(2) If the insurer, nonprofit health service plan, or health maintenance organization requires proof under this subsection, the insurer, nonprofit health service plan, or health maintenance organization shall pay the cost of the proof.