An Act To Create the Comprehensive Health Insurance Risk Pool Association
Maine Legislature, Session 121, LD 1190
Committee: Insurance and Financial Services
Sponsors: LaFOUNTAIN, SNOWE-MELLO, O'NEIL, MAYO, TURNER, GLYNN, YOUNG
Amends: 24-A MRSA §2736-C, 24-A MRSA §2848, 24-A MRSA §2849-B

Legislative Document 
No. 1190 
S.P.394 
In Senate, March 6, 2003 
An Act To Create the Comprehensive Health Insurance Risk Pool 
Association 
(EMERGENCY) 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator LaFOUNTAIN of York. 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by Representative SNOWE-MELLO of Poland, Representative O'NEIL of Saco 
and Senators: MAYO of Sagadahoc, TURNER of Cumberland, Representatives: GLYNN of 
South Portland, YOUNG of Limestone. 
Printed on recycled paper 
Emergency preamble. Whereas. Acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, there is 
a 
crisis in Maine's health insurance 
markets; and 
Whereas. the Federal Government has offered states grants to 
start high-risk pools; and 
Whereas, the State must enact legislation to establish a 
high-risk pool in order to quality for a federal grant; and 
Whereas. in the judgment of the Legislature, these facts 
create an emergency within the meaning of the Constitution of 
Maine 
and 
require 
the 
following 
legislation 
as 
immediately 
necessary for the preservation of the public peace, health and 
safety; now, therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §2736-C. sub-§3. 1[A. 
as corrected by 
RR 
2001, c. 1, §30, is repealed. 
Sec. 2. 24-A MRSA §2736-C. sub-§3. 1rC, as enacted by PL 1993, 
c. 477, Pt. C, §1 and affected by Pt. F, §1, is repealed. 
Sec.3. 24-A MRSA §2736-C. sub-§3.1[E is enacted to read: 
E. 
An individual may not be denied health insurance due to 
age or gender. 
Sec. 4. 24-A MRSA §2848. sub-~I-B. 1[A. as amended by PL 1999, 
c. 256. Pt. L, §2, is further amended to read: 
A. 
"Federally creditable coverage" means health benefits or 
coverage provided under any of the following: 
(1) 
An employee welfare benefit plan as defined in 
Section 3(1) of the federal Employee Retirement Income 
Security Act of 1974, 
United States Code, Section 
1001, 
or 
a 
plan that would be 
an employee welfare 
benefit 
plan 
but 
for 
the 
"governmental 
plan" 
or 
"nonelecting 
church 
plan" 
exceptions, 
if 
the 
plan 
provides medical care as defined in subsection 2-A, and 
includes items and services paid for as medical care 
directly 
or 
through 
insurance, 
reimbursement 
or 
otherwise; 
Page l-LR0436(1) 
-
(2) 
Benefits 
consisting 
of 
medical 
care 
provided 
directly, 
through 
insurance 
or 
reimbursement 
and 
including items and services paid for as medical care 
under a policy, contract or certificate offered by a 
carrier; 
(3) 
Part A or Part B of Title XVIII of the Social 
Security Act, Medicare; 
(4) 
Title XIX of the Social Security Act, Medicaid, 
other than coverage consisting solely of benefits under 
Section 1928 of the Social Security Act or 
a state 
children's health insurance program under Title XXI of 
the Social Security Act; 
(5) 
The Civilian Health and Medical Program for the 
Uniformed Services, 
CHAMPUS, 
United States Code, 
Chapter 55; 
(6) 
A medical 
care 
program of 
the 
federal 
Health Care 
Improvement Act, 
United States 
Section 1601 or of a tribal organization; 
(7) 
A state health benefits risk pool; 
Indian 
Code, 
(8) 
A health plan offered under the federal Employees 
Heal th Benefits Amendments Act, 
United States Code, 
Chapter 89; 
(9) 
A 
public 
health 
regulations 
authorized 
Service 
Act, 
Section 
Public Law 104-191; 
e~ 
plan 
as 
defined 
in 
federal 
by 
the federal 
Public Health 
2701 ( c) ( 1) (I) , 
as 
amended 
by 
(10) 
A health benefit plan under Section 5(e) of the 
Peace 
Corps 
Act, 
United 
States 
Code, 
Section 
2504(e)TL...Q.K 
(11) 
Insurance coverage offered by the Comprehensive 
Health 
Insurance 
Risk 
Pool 
Association pursuant 
to 
chapter 54. 
Sec. 5. 24-A MRSA §2849-B. sub-§2, ,A, as amended by PL 200l, 
c. 258. Pt. E, §7, is further amended to read: 
A. 
That person was covered under 
an--i-ndi~1dua-1--eF .Q group 
contract or policy issued by 
any nonprofit hospital 
or 
medical service organization, insurerT or health maintenance 
organization, 
or was 
covered under an uninsured employee 
benefit 
plan 
that 
provides 
payment 
for 
health 
services 
received by employees and their dependents or a governmental 
program, 
including, 
but not limited to, 
those listed in 
section 2848, subsection 1-B, paragraph A, subparagraphs (3) 
to (10). 
For purposes of this section, the individual or 
group policy under which the person is seeking coverage is 
the "succeeding policy." 
The group 
eF-~~-i¥-i€h:l.a± contract 
or policy, uninsured employee benefit plan or governmental 
program that previously covered the person is the "prior 
contract or policy"; and 
Sec. 6. 24-A MRSA c. 54 is enacted to read: 
CHAPTER 54 
CC»WREBENSIVE HEALTH INSURANCE RISK POOL ASSOCIATION 
§3901. 
Short title 
This 
chapter 
may 
be 
cited as 
"the 
Comprehensive Health 
Insurance Risk Pool Association Act." 
§390Z. 
Purpose 
It is the purpose of this chapter to establish a mechanism 
to spread among all insurers doing business in this State the 
cost of providing health and accident insurance coverage to those 
residents of this State who because of health conditions consume 
unusually 
large 
amounts 
of 
health 
care 
and 
to 
ensure 
a 
competitive insurance market. 
§3903. 
Definitions 
As 
used 
in this 
chapter, 
unless 
the 
context 
otherwise 
indicates, the following terms have the following meanings. 
1. Association. "Association" means the Comprehensive Health 
Insurance Risk Pool Association established in section 3904. 
Z. 
Board. 
"Board" means 
the board of directors of the 
association. 
3. 
Covered person. 
"Covered person" means any individual 
resident of this State, not including dependents, who: 
A. Is eligible to receive benefits from any insurer; 
B. 
Is eligible 
for 
benefits 
under 
the 
federal 
Health 
Insurance Portability and Accountability Act of 1996; or 
C. 
Has 
been 
certified 
as 
eligible 
for 
federal 
trade 
adjustment 
assistance 
or 
for 
pension 
benefit 
guarantee 
corporation assistance, 
as provided by the federal Trade 
Adjustment Assistance Reform Act of 2002. 
4. 
Dependent. 
"Dependent" 
means 
a 
resident 
spouse 
or 
resident unmarried child under 19 years of age or a child who is 
a student under 23 years of age and who is financially dependent 
upon the parent or 
a 
child of 
any age 
who is disabled and 
dependent upon the parent. 
5. 
Health maintenance organization. 
"Health maintenance 
organization" means any organization authorized under chapter 56 
to operate a health maintenance organization in this State. 
6. 
Insurer. 
"Insurer" means any entity that is authorized 
to write medical insurance or that provides medical insurance in 
this State. For the purposes of this chapter, "insurer" includes 
an 
insurance 
company, 
nonprofit hospital 
and medical 
service 
organization, 
fraternal 
benefit 
society, 
health 
maintenance 
organization, 
self insurance 
arrangement 
that provides 
health 
care benefits in this State to the extent allowed under the 
federal 
Employee 
Retirement 
Income 
Security 
Act 
of 
1974, 
3rd party administrator, multiple employer welfare arrangement, 
any other entity providing medical insurance or health benefits 
subject 
to 
state 
insurance 
regulation 
and 
any 
reinsurer 
reinsuring health insurance in this State. 
7. 
Medical 
insurance. 
"Medical 
insurance" 
means 
any 
hospital and medical expense-incurred policy, nonprofit hospital 
and 
medical 
service 
plan, 
health 
maintenance 
organization 
subscriber contract or other health care plan or arrangement that 
pays for or furnishes medical or health care services whether by 
insurance or otherwise, whether sold as an individual or group 
policy. "Medical insurance" does not include accidental injury, 
specified disease, hospital indemnity, dental, vision, disability 
income, long term care or other limited benefit health insurance 
or credit insurance: coverage issued as a supplement to liability 
insurance; 
insurance arising out of 
workers' 
compensation or 
similar law; automobile medical payment insurance or insurance 
under which benefits are payable with or without regard to fault 
and that is statutorily required to be contained in any liability 
insurance policy or equivalent self-insurance. 
8. 
Medicare. 
"Medicare" means coverage under both Parts A 
and B of Title XVIII of the Social Security Act, 42 United States 
Code, Section 1395 et seq., as amended. 
9. 
Plan. "Plan" means the health insurance plan adopted by 
the board pursuant to this chapter. 
10. 
Producer. 
"Producer" means a person who is licensed to 
sell health insurance in this State. 
11. 
Resident. 
"Resident" means an individual who: 
A. 
Is legally located in the United States and has been 
legally domiciled in this State for a period not to exceed 
one year to be established by the board and subject to the 
approval of the superintendent; 
B. 
Is legally domiciled in this State on the date 
o{ 
application to the plan and is eligible for enrollment in 
the risk pool under this chapter as a result of the federal 
Health Insurance Portability and Accountability Act of 1996; 
or 
C. 
Is legally domiciled ln this State on 
the 
date of 
application to the plan and has been certified as eligible 
for 
federal 
trade 
adjustment 
assistance 
or 
for 
pension 
benefit guarantee corporation assistance, as provided by the 
federal Trade Adjustment Assistance Reform Act of 2002. 
12. 
Reinsurer. 
"Reinsurer" means any insurer from whom any 
person providing health insurance for any Maine resident procures 
insurance for itself with the insurer with respect to all or~art 
of 
the 
medical 
insurance 
risk 
of 
the 
person. 
"Reinsurer" 
includes 
an 
insurer 
that 
provides 
employee 
benefits 
excess 
insurance. 
13. 
Third party administrator. 
"Third party administrator" 
means any entity that is paying or processing medical insurance 
claims for any resident. 
§3904. 
Comprehensive Health Insurance Risk Pool Association 
I. 
Risk 
pool 
established. 
The 
Comprehensive 
Health 
Insurance Risk Pool Association is established as 
a 
nonprofit 
legal entity. 
As 
a condition of doing business, every insurer 
that has sold medical insurance within the previous 12 months or 
is actively marketing a medical insurance policy in this State 
must participate in the association. 
2. 
Board of directors. 
The association is governed by a 
board of directors in accordance with the following. 
A. 
The board consists of 9 members appointed as follows: 
(1) 
Four members appointed by the superintendent: 
members must be chosen from the general public and may 
-
• 
not 
be 
associated 
with 
the 
medical 
profession, 
a 
hospital 
or 
an 
insurer; 
one 
member 
must 
represent 
medical providers; and one member must represent health 
insurance producers. 
Any board member appointed by the 
superintendent may be removed at any time without cause; 
(2) 
Three members appointed by the member insurers, at 
least 2 of whom are domestic insurers; and 
(3) 
Two Legislators who serve as the Senate and House 
chairs 
of 
the 
joint 
standing 
committee 
of 
the 
Legislature having jurisdiction over health insurance 
matters, or the Legislators' designees, 
who serve as 
nonvoting, ex officio members of the board. 
B. 
Of 
those 
members 
of 
the 
board 
appointed 
by 
the 
superintendent, one member shall serve for a 
term of one 
year, 2 members for a term of 2 years and one member for a 
term of 3 years. 
Of those members appointed by the member 
insurers, one member shall serve for a term of one year, one 
member shall serve for a term of 2 years and one member 
shall serve for a term of 3 years. 
The appointing authority 
shall 
designate 
the 
period 
of 
service 
of 
each initial 
appointee at the time of appointment. All terms after the 
initial terms must be for 3 vears. 
C. 
The board shall elect one of its members as chair. 
D. 
Board 
members 
may 
be 
reimbursed 
from 
funds 
of 
the 
association for actual and necessary expenses incurred by 
them as members but may not otherwise be compensated for 
their services. 
3. 
Plan of operation. 
The association shall adopt a plan 
of operation in accordance with the reguirements of this chapter 
and 
submit its articles, 
bylaws 
and operating rules 
to 
the 
superintendent for approval. 
If the association fails to adopt 
the plan of operation and suitable articles and bylaws within 90 
days after the appointment of the board, the superintendent shall 
adopt rules to effectuate the reguirements of this chapter and 
those 
rules 
remain in effect until superseded by 
a 
plan of 
operation and articles and bylaws submitted by the association 
and approved by the superintendent. 
Rules adopted pursuant to 
this subsection by the superintendent are routine technical rules 
as defined in Title 5, chapter 375, subchapter 2-A. 
4. 
IDmlunity. 
A board member is not liable and is immune 
from suit at law or egui ty for any conduct performed in good 
faith that is within the subject matter over which the board has 
been given jurisdiction. 
§3905. 
Liability and indemnification 
1. 
Liability. 
The board and its employees may not be held 
liable for any obligations of the association. 
A cause of action 
may not arise against the association; the board, its agents or 
its employees; 
any member insurer or its agents, 
employees or 
producers; or the superintendent for any action or omission ln 
the performance of powers and duties pursuant to this chapter. 
2. 
Indemnification. 
The board may provide in its bylaws or 
rules for indemnification of , 
and legal representation for , its 
members and employees. 
§3906. 
Duties and powers of association 
1. 
Duties. 
The association shall: 
A. 
Establish administrative and accounting procedures for 
the operation of the association; 
B. 
Establish 
procedures 
under 
which 
applicants 
and 
participants in the plan may have grievances reviewed by an 
impartial body and reported to the board; 
c. 
Select a plan administrator in accordance with section 
D. 
Collect the assessments provided in section 3908. 
The 
level 
of 
payments 
must 
be 
established 
by 
the 
board. 
Assessments 
must 
be 
collected pursuant 
to 
the 
plan 
of 
operation 
approved 
by 
the 
board. 
In 
addition 
to 
the 
collection 
of 
such 
assessments, 
the 
association 
shall 
collect an organizational assessment or assessments from all 
insurers as necessary to provide for expenses that have been 
incurred or are estimated to be incurred prior to receipt of 
the 
first 
calendar 
year 
assessments. 
Organizational 
assessments must be equal in amount for all insurers but may 
not 
exceed 
$500 
per 
insurer 
for 
all 
such 
assessments. 
Assessments are due and payable within 30 days of receipt of 
the assessment notice by the insurer; 
E. 
Require that all policy forms issued by the association 
conform to standard forms developed by the association. 
The 
forms must be approved by the superintendent and must comply 
with this Title; and 
F. 
Develop 
and 
implement 
a 
program 
to 
publicize 
the 
existence of the plan, the eligibility requirements for the 
plan and the procedures for enrollment in the plan and to 
maintain public awareness of the plan. 
2. 
Powers. The association may: 
A. 
Exercise powers granted to insurers under the laws of 
this State; 
B. 
Enter into contracts as necessary or proper to carry out 
the provisions and purposes of this chapter, including the 
authority, with the approval of the superintendent, to enter 
into contracts with similar organizations of other states 
for the joint performance of common administrative functions 
or with persons or other organizations for the performance 
of administrative functions; 
c. 
Sue or 
be 
sued, 
including taking any legal actions 
necessary or proper to recover or collect assessments due 
the association; 
D. 
Take any legal actions necessary to avoid the payment of 
improper 
claims 
against 
the 
association or 
the 
coverage 
provided 
by 
or 
through 
the 
association, 
to 
recover 
any 
amounts erroneously or improperly paid by the association, 
to recover any amounts paid by the association as a result 
of mistake of fact or law or to recover other amounts due 
the association; 
E. 
Establish, and modify from time to time as appropriate, 
rates, rate schedules, rate adjustments, expense allowances, 
producers' 
referral fees, 
claim reserve formulas 
and 
any 
other actuarial function appropriate to the operation of the 
association in accordance with section 3910; 
F. 
Issue policies 
of 
insurance 
in accordance with 
the 
requirements of this chapter; 
G. 
Appoint 
appropriate 
legal, 
actuarial 
and 
other 
commi ttees as necessary to provide technical assistance in 
the operation of the plan, policy and other contract design 
and 
any 
other 
function 
within 
the 
authority 
of 
the 
association; 
H. 
Borrow money to effect the purposes of the association. 
Any 
notes 
or 
other 
evidence 
of 
indebtedness 
of 
the 
association not in default must be legal investments for 
insurers and may be carried as admitted assets; 
I. 
Establish 
rules, 
conditions 
and 
procedures 
for 
reinsuring risks of member insurers desir ing to issue plan 
coverage to individuals otherwise eligible for plan coverage 
in their own names; 
J. 
Prepare and distribute application forms and enrollment, 
instruction forms to insurance producers and to the general 
pUblic; 
K. 
Provide 
for 
reinsurance 
of 
risks 
incurred 
by 
the 
association. The provision of reinsurance may 
not subject 
the 
association 
to 
any 
of 
the 
capital 
or 
surplus 
requirements, if any, otherwise applicable to reinsurers; 
L. 
Issue additional types 
provide 
optional 
coverage, 
of health insurance policies _ to 
including 
Medicare 
supplement 
health insurance; 
M. 
Provide for 
and employ cost-containment measures 
and 
requirements, 
including, but not limited to, 
preadmission 
screening, 
2nd 
surgical 
opinion, 
concurrent 
utilization 
review and individual case management for the 
making the benefit plan more cost-effective; 
purpose of 
N. 
Design, utilize, contract or otherwise arrange for the 
delivery of cost-effective health care services, including 
establishing 
or 
contracting 
with 
preferred 
provider 
organizations, 
health maintenance organizations 
and other 
limited network provider arrangements; and 
o. 
Apply 
for 
funds 
or 
grants 
from 
public 
or 
private 
sources, 
including 
federal 
grants 
provided 
to 
gualifiec1 
high-risk pools. 
3. 
Additional duties and powers. 
The superintendent may, 
by rule, establish additional powers and duties of the board and 
may adopt such rules as are necessary and proper to implement 
this chapter. 
Rules 
adopted pursuant to this subsection are 
routine technical rules as defined in Title 5, 
chapter 
375, 
subchapter 2-A. 
4. 
Review for SOlvency. 
The superintendent shall review 
the 
association 
at 
least 
every 
years 
to 
determine 
its 
solvency. 
If the superintendent determines that the funds of the 
association are insufficient to support enrollment of additional 
persons, the superintendent may order the association to increase 
its 
assessment 
or 
increase 
its 
premium 
rates. 
If 
the 
superintendent determines that the funds of the association are 
insufficient to support the enrollment of additional persons and 
that the cap of assessments in section 3908 is too low to support 
the 
enrollment of additional persons, 
the 
superintendent may 
order the association to charge an assessment in excess of the 
cap for a period not to exceed 12 months. 
~. 
Annual report. 
The association shall report annually to 
the 
joint 
standing 
committee 
of 
the 
Legislature 
having 
jurisdiction over health insurance matters by March 15th. 
The 
report 
must 
include 
information 
on 
the 
benefits 
and 
rate 
structure of coverage offered by the association, the financial 
solvency of the association and the administrative expenses of 
the plan. 
6. 
Audit. 
The association must be audited at least every 3 
years. A copy of the audit must be provided to the superintendent 
and to the joint standing committee of the Legislature having 
jurisdiction over health insurance matters. 
§3907. 
Selection of plan administrator 
1. 
Selection of plan administrator. 
The board shall select 
an 
insurer 
or 
3rd-party administrator, 
through 
a 
competitive 
bidding 
process, 
to 
administer 
the 
plan. 
The 
board 
shall 
evaluate bids submitted under this subsection based on criteria 
established by the board, including: 
A. 
The 
insurer's proven ability to 
handle 
large group 
accident and health insurance; 
B. 
The 
efficiency 
of 
the 
insurer's 
Claims-paying 
procedures; and 
C. 
An estimate of total charges for administering the plan. 
2. 
Contract 
with 
plan 
administrator. 
The 
plan 
administrator selected pursuant to subsection 1 
serves for 
a 
period of 3 years. 
At least one year prior to the expiration of 
each 3-year period of service by a plan administrator, the board 
shall invite all insurers, including the current administering 
insurer, to submit bids to ser-v'e as the plan administrator for 
the 
succeeding 
3-year 
period. 
The 
selection 
of 
the 
plan 
administrator for the succeeding period must be made at least 6 
months prior to the ending of the 3-year period. 
3. 
Duties of plan administrator. 
The plan administrator 
selected pursuant to subsection I shall: 
A. 
Perform 
all 
eliGibility 
and 
administrative 
claims-payment functions relating to the plan; 
B. 
Pay a 
producer's referral fee 
as established by the 
board to each insurance producer who refers an applicant to 
the plan, if the applicant's application is accepted. 
The 
selling or marketing of the plan is not limited to the plan 
administrator 
or 
its producers. 
The 
plan 
administrator 
shall pay the referral fees from funds received as premiums 
for the plan; 
C. 
Establish a premium billing procedure for collection of 
premiums 
from 
insured 
persons. 
Billings 
must 
be 
made 
periodically as determined bv the board; 
D. 
Perform all necessary functions to ensure timely payment 
of benefits to covered persons under the plan, including: 
(1) 
Making 
available 
information 
relating 
to 
the 
proper manner of submitting a claim for benefits under 
the plan and distributing forms upon which submissions 
must be made; 
(2) 
Evaluating 
the 
eligibility of 
each 
claim 
for 
payment under the plan; and 
ilL Notifying 
each 
claimant 
receiving a properly completed 
loss 
whether 
the 
claim 
is 
compromised. 
The 
board 
shall 
reimbursement amounts 
for 
any 
the benefit plans; 
within 
days 
after 
and executed proof of 
accepted, 
rejected 
or 
establish 
reasonable 
services covered under 
E. 
Submit 
regular 
reports 
to 
the 
board 
regarding 
the 
operation of the plan. 
The frequency, content and form of 
the reports must be as determined by the board; 
F. 
Following the close of each calendar year, determine net 
premiums, 
reinsurance premiums less administrative expense 
allowance, the expense of administration pertaining to the 
reinsurance operations of the association and the incurred 
losses 
of 
the 
year 
and 
report 
this 
information 
to 
the 
superintendent; and 
G. 
Pay claims expenses from the premium payments received 
from or on behalf of covered persons under the plan. 
If the 
payments 
by 
the 
plan 
administrator 
for 
claims 
expenses 
exceed the portion of premiums allocated by the board for 
payment of claims expenses, the board shall provide the plan 
administrator with additional funds for payment of claims 
expenses. 
4" 
Payment to plan administrator. 
The plan administrator 
selected pursuant to subsection I 
must be paid, as provided in 
the contract of the association, 
for its direct and indirect 
Page ll-LR0436(l) 
.. 
expenses incurred in the performance of its services. As used in 
this subsection, 
"direct and indirect expenses" 
includes that 
portion of the audited administrative costs, printing expenses, 
claims 
administration 
expenses, 
management 
expenses, 
building 
overhead expenses and other actual operating and administrative 
expenses of the plan administrator that are approved by the board 
as allocable to the administration of the plan and included in 
the bid specifications. 
§3908. 
Assessments against insurers 
1. 
Assessments. 
For the purpose of providing the funds 
necessary to carry out the powers and duties of the association, 
the board shall assess member insurers at such a time and for 
such amounts as the board finds necessary. 
Assessments must be 
due not less than 30 days after written notice to the member 
insurers and must accrue interest at 12°", per annum on and after 
the due date. 
2. 
Maximum assessment. 
Each insurer must be assessed an 
amount not to exceed $2 per covered person insured or reinsurecl 
by 
each insurer 
per 
month 
for 
medical 
insurance. 
A member 
insurer may not be assessed 
OIl policies or contracts insuring 
federal or state employees. 
3. 
Determination of assessment. 
The 
board 
shall 
make 
reasonable efforts to ensure that each covered person is counted 
only once with respect to any assessment. 
For that purpose, the 
board shall require each insurer that obtains excess or stop loss 
insurance 
to 
include 
in 
its 
count 
of 
covered 
persons 
all 
individuals whose 
coverage is insured, 
in whole 
or 
in part, 
through excess or stop loss coverage. 
The board shall allow a 
reinsurer to exclude from its number of covered persons those who 
have 
been counted by 
the 
pr~mary insurer or 
by 
the primary 
reinsurer or primary excess or stop loss insurer for the purpose 
of determining its assessment under this subsection. The board 
may verify each insurer 0 s assessment based on annual statements 
and other reports determined to be necessary by the board. 
The 
board may use any reasonable method of estimating the number of 
covered persons of an insurer if the specific number is unknown. 
4. 
Excess funds. 
If assessments and other receipts by the 
association, board or plan administrator exceed the actual losses 
and administrative expenses of the plan, the board shall hold the 
excess 
as interest and may 
use 
those excess 
funds 
to offset 
future 
losses 
or 
to 
reduce 
plan 
premiums. 
As 
used 
in this 
subsection, "future losses" includes reserves for claims incurred 
but not reported. 
3. 
Failure to 
pay 
assessment. 
The 
superintendent 
may 
suspend or revoke, after notice and hearing, the certificate of 
authority to transact insurance in this State of any member 
insurer that fails to pay an assessment. 
As an alternative, the 
superintendent may levy a penalty on any member insurer that 
fails 
to 
pay 
an 
assessment 
when 
due. 
In 
addition, 
the 
superintendent may use any power oranted to the superintendent by 
this Title to collect any unpaid assessment. 
§3909. 
Availability of coverage 
The association shall offer' a choice of 2 or more coverage 
options through the plan. The reguirements of this plan become 
effective 
April 
1, 
2003. 
Policies 
offered 
through 
the 
association must 
be 
available 
for 
sale August 
1, 
2003. 
The 
association shall directly insure the coverage provided by the 
plan, 
and 
the 
policies 
must 
be 
issued 
through 
the 
plan 
administrator. 
§39l0. 
Requirements for coveraae 
I. 
Coverage offered. 
The plan must offer in an annually 
renewable policy the coverage specified in this section for each 
eligible person. 
If an eligible person is also eligible for 
Medicare coverage, the plan may not payor reimburse any person 
for expenses paid by Medicare. 
Any person whose health insurance 
coverage is involuntarily terminated for any reason other than 
nonpayment of premium may apply for coverage under the plan. 
If 
such coverage is applied for within 90 days after the involuntary 
termination and if premiums are paid for the entire period of 
coverage, 
the effective date of the coverage is the date of 
termination of the previous coverage. 
2. 
Major medical expense coverage. 
The plan must offer 
major medical expense coverage to every eligible person who is 
not eligible for Medicare. 
The coverage to be issued by the 
plan, 
its 
schedule 
of 
benefits 
and 
exclusions 
and 
other 
limitations must be established by the board and may be amended 
from time to time subject to the approval of the superintendent. 
In establishing the plan coverage, 
the board shall take into 
consideration the levels of health insurance provided in the 
State and medical economic factors as determined appropriate. 
3. 
Rates. 
Rates for coverage issued by the association 
must meet the reguirements of this subsection. 
A. 
Rates 
may 
not 
be 
unreasonable 
in relation 
to 
the 
benefits provided, the risk experience and the reasonable 
expenses of providing the coverage. 
B. 
Rate schedules must comply with section 2736-C and are 
subject to approval by the superintendent. 
C. 
Standard 
risk 
rates 
for 
coverage 
issued 
by 
the 
association must be established by the association, subject 
to 
approval 
by 
the 
superintendent, 
using 
reasonable 
actuarial 
techniques 
ann 
must 
reflect 
anticipated 
experiences 
and 
expenses 
of 
such 
coverage 
for 
standard 
risks. The premium for the standard risk rates must range 
from a minimum of 125% to a maximum of 150% of the weighted 
average 
of 
rates 
charged 
by 
those 
insurers 
and 
health 
maintenance 
organizations 
with 
individuals 
enrolled 
in 
similar medical insurance plans. 
4. 
Compliance with state law. 
Products offered by the 
association must comply with the provisions of this Title that 
apply to similar insurance products. 
5. 
Other sources primary. 
The association must be payer of 
last resort of benefits whenever any other benefit or source of 
3rd-party payment is available. 
The coverage provided by the 
association must 
be 
considered excess 
coverage, 
and benefits 
otherwise payable under association coverage must be reduced by 
all amounts paid or payable through any other health insurance 
and by all hospital and medical expense benefits paid or payable 
under any short-term, accident, dental-only, vision-only, fixed 
indemnity, limited benefit or credit insurance; coverage issued 
as 
a 
supplement to liability insurance; workers' 
compensation 
coverage; 
automobile 
medical 
payment; 
or 
liability insurance 
whether or not provided on the basis of fault, 
and by 
any 
hospital or medical benefits paid or payable by any insurer or 
insurance arrangement or any hospital or medical benefits paid or 
payable under or provided pursuant to any state or federal law or 
program. 
6. 
Recovery of claims paid. 
An amount paid or payable by 
Medicare 
or 
any 
other 
governmental 
program 
or 
any 
other 
insurance, 
or self-insurance maintained in lieu of otherwise 
statutorily required insurance, may not be made or recognized as 
claims 
under 
such 
a 
policy or 
be 
recognized 
as 
or 
towards 
satisfaction of applicable deductibles or out-of pocket maximums 
or to reduce the limits of benefits available. 
The association 
has a cause of action against a participant for the recovery of 
the amount of any benefits paid to the participant that should 
not have been claimed or recoanized as claims because of the 
provisions 
of 
this 
subsection 
or 
because 
the 
benefits 
are 
otherwise not covered. 
Benefits due from the association may be 
reduced or refused as a setoff against any amount recoverable 
under this subsection. 
§39ll. 
Eligibility for coverage 
1. 
Eligibility; application for coverage. 
An 
individual 
who is and continues to be a resident is eligible for coverage 
under 
the 
plan 
if 
evidence 
is 
provided 
of 
rejection, 
a 
reQuirement 
of 
restrictive 
riders, 
a 
rate 
increase 
or 
a 
preexisting conditions limitation on a Qualified plan, the effect 
of which is to substantially reduce coverage from that received 
by 
a 
person 
considered 
a 
standard 
risk 
by 
at 
least 
one 
association 
member 
wi thin 
months 
of 
the 
date 
of 
the 
certificate, 
or 
if 
the 
individual 
meets 
other 
eligibility 
reQuirements adopted by rule by the superintendent that are not 
inconsistent with this chapter and that evidence that a person is 
unable to obtain coverage substantially similar to that which may 
be obtained by a person who is considered a standard risk. 
Rules 
adopted pursuant to this subsection are routine technical rules 
as defined in Title 5, chapter 375, subchapter 2-A. 
2. 
Change of domicile. 
The board shall develop standards 
for eligibility for coverage by the association for any natural 
person who changes that person' s domicile to this State and who 
at the time domicile is established in this State is insured by 
an organization similar to the association. 
The eligible maximum 
lifetime benefits for that covered person may not exceed the 
lifetime benefits available through the association, 
less any 
benefits 
received 
from 
a 
similar organization in the 
former 
domiciliary state. 
_ 
Eligibility 
without 
application. 
The 
board 
shall 
develop a list of medical or health conditions for which a person 
is 
eligible 
for 
plan 
coverage 
without 
applying 
for 
health 
insurance under subsection 1. 
A person who can demonstrate the 
existence or history of any medical or health conditions on the 
list developed by the board may not be required to provide the 
evidence specified in subsection 1. The board may amend the list 
from time to time as appropriate. 
_ 
Exclusions from eligibility. 
A person 
~s not eligible 
for coverage under the plan if: 
A. 
The person has or obtains health insurance coverage 
substantially similar to or more comprehensive than a plan 
policy or would be eligible to have coverage if the person 
elected to obtain it, except that: 
(1) 
A person may maintain other 
coverage 
for 
the 
period of time the person is satisfying a preexisting 
condition waiting period under a plan policy; and 
.. 
(2) 
A person may maintain plan coverage for the period 
of 
time 
the 
person 
is 
satisfying 
a 
preexisting 
condition waiting period under another health insurance 
policy intended to replace the plan policy; 
B. 
The 
person is 
determined eligible 
for 
health 
care 
benefits under the MaineCare program pursuant to Title 22; 
C. 
The person previously terminated plan coverage, unless 
months have elapsed since the person's last termination; 
D. 
The person has met the lifetime maximum benefit amount 
under the plan of $1,000,000; 
E. 
The 
person 
is 
an 
inmate 
or 
resident 
of 
a 
public 
institution; or 
F. 
The person's premiums are paid for or reimbursed under 
any government-sponsored program or by any government agency 
or health care provider, except as an otherwise qualifying 
full time employee, 
or dependent thereof, of a government 
agency or health care provider. 
5. 
Termination of coveraoe. 
The coverage of any person 
ceases: 
A. 
On the date a person is no longer a resident; 
B. 
Upon the death of the covered person; 
C. 
On 
the date state law requires cancellation of 
the 
policy; or 
D. 
At the option of the association, 
days after the 
association 
makes 
any 
inquiry 
concerning 
the 
person's 
eligibili ty or place of residence to which the person does 
not reply. 
The coverage of any person who ceases to meet the eligibility 
requirements of this section may be terminated immediately. 
6. 
Unfair trade practice. 
It constitutes an unfair trade 
practice 
for 
any 
insurer, 
insurance 
producer, 
employer 
or 
3rd-party administrator to refer 
an individual employee 
or 
a 
dependent of an individual employee to the association, or to 
arrange 
for 
an 
individual 
employee 
or 
a 
dependent 
of 
an 
individual employee to apply to the plan, for the purpose of 
separating such an employee or dependent from 
a 
group health 
benefi ts 
plan 
provided 
1.n 
connection 
with 
the 
employee's 
employment. 
§3912. 
Actions against association or members based upon joint 
or collective actions 
Participation 
in 
the 
association, 
the 
establishment 
of 
rates, 
forms 
or procedures or 
any other joint or collective 
action, required by this chapter may not be the basis of any 
legal action criminal or civil liability or penalty against the 
association or any member insurer. 
Sec. 7. Application for federal grant. 
Within 30 days of the' 
effective date of this Act, the Superintendent of Insurance shall 
submi t 
an application to the federal Department of Health and 
Human Services, Health Resources and Services Administration for 
a 
federal 
seed 
grant 
to 
support 
the 
creation 
and 
initial 
operation 
of 
the 
Comprehensive 
Health 
Insurance 
Risk 
Pool 
Association established in the 
Maine 
Revised Statutes, Title 
24-A, chapter 54. 
Sec. 8. 
Study of reinsurance. 
The 
Comprehens i ve 
Heal th 
Insurance Risk Pool Association established pursuant to the Maine 
Revised Statutes, Title 24-A, section 3904 shall conduct a study 
of the possibility of offering c. reinsurance pool for the small 
group medical insurance market in order to spread the cost of 
high-risk 
individuals 
for 
the 
small 
group 
medical 
insurance 
market. 
The study must address the cost of the reinsurance pool, 
potential 
funding 
mechanisms 
and 
the 
effectiveness 
of· 
a 
reinsurance pool. 
The association may address any other issues 
regarding a reinsurance pool that it determines are relevant in 
the study. 
The association shall submit its report to the joint 
standing committee of the Legislature having jurisdiction over 
health insurance matters by March 1, 2005. 
Sec. 9. Effective date. 
Those sections of this Act that repeal 
the 
Maine 
Revised 
Statutes, 
Title 
24-A, 
section 
2736-C, 
subsection 3, paragraphs A and C take effect October 1, 2004. 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect when approved. 
SUMMARY 
This bill creates the Comprehensive Health Insurance Risk 
Pool Association. The purpose of the association is to spread the 
cost of high-risk individuals among all health insurers. 
The 
bill funds the high-risk pool through an assessment on insurers. 
The bill requires the State to 
submit an application to the 
Federal Government for federal assistance to create a high-risk 
pool. 
Page l7-LR0436(1) 
The bill also removes the guaranteed issuance requirement 
for individual health plans effective October 1, 2004. 
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