An Act Limiting Recovery of Disability Benefits Subject to Offsets
Maine Legislature, Session 122, LD 0408
Committee: Insurance and Financial Services
Sponsors: PERRY, SULLIVAN, CANAVAN, NUTTING, WOODBURY
Amends: 24-A MRSA §2717-A, 24-A MRSA §2829-A

Legislative Document 
No. 408 
S.P. 132 
In Senate, January 25, 2005 
An Act Limiting Recovery of Disability Benefits Subject to Offsets 
Submitted by the Department of Professional and Financial Regulation pursuant to Joint 
Rule 204. 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator PERRY of Penobscot. 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by Senator: SULLIVAN of York, Representatives: CANAVAN of Waterville, 
NUTTING of Oakland, WOODBURY of Yarmouth. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §2717-A, as enacted by PL 2003, c. 321, 
§1, is repealed and the following enacted in its place: 
§2717-A. 
Disability benefit offsets 
1. Disclosure to applicants. 
At 
or before 
the 
time 
of 
application for any policy subject to this chapter that provides 
disability 
income 
benefits, 
the 
insurer 
shall 
provide 
the 
applicant with a clear and conspicuous written notice, 
on the 
application form 
or in 
a 
separate 
document, 
that accurately 
explains to the applicant all types of other sources of income 
that may result in a reduction of the benefits payable under the 
policy. 
2. Recovery of disability ben~~QY~ents. For claim§ 
tiled after January I, 
2006, 
an insurer that is entitled to 
reduce 
disability 
income 
benefit 
payments 
when 
the 
insured 
receives 
income 
from other 
sources 
and that is entitled to 
recover overpayments through offsets against current payments to 
the insured may not recover such overpayments at a rate greater 
than 10% of the net benefit per benefit payment period unless: 
A. 
The 
insurer 
has 
complied with 
the 
requirements 
of 
subsection I: 
B. 
The insurer effects the offset of benefits within 60 
days of notice to the insurer that the insured is receiving 
or is entitled to receive 
income that may result in a 
. reduction of benefits payable under the policy: 
c. 
The 
overpayment 
did 
not 
result 
from 
the 
insurer's 
miscalculation 
of 
benefit 
reductions 
or 
the 
insurer' s 
miscalculation of benefits payable under the policy: and 
D. 
The insurer provided the insured with written notice of 
contract provisions permitting benefit reductions within 60 
days of the date disability benefits commenced. 
Sec. 2. 24-A MRSA §2829-A. as enacted by PL 2003, c. 321, 
§2., is repealed and the following enacted in its place: 
§2829-A. Disability benefit offsets 
1. Disclosure to persons eligible for coverage. 
For 
any 
policy 
or 
contract 
subject 
to 
this 
chapter 
that 
provides 
disability income benefits, if the benefits under that policy or 
contract are subject to reduction due to other sources of income, 
then the insurer shall include in any written enrollment material 
Page l-LR0446 (1) 
• 
and certificate of coverage developed by the insurer that is 
intended to be distributed to persons eligible for coverage under 
the 
policy or contract 
a 
clear 
and 
conspicuous notice that 
9_c_curately explains all types of other sources of income that may 
result in a reduction of the benefits payable under the policy or 
contract. 
The notice 
re~irement under this section does not 
apply to an advertisement intended for the general public. 
2. Recovery of disabili~enefit overpayments. 
For claims 
Xiled after January 1, 
2006, 
an insurer that is entitled to 
reduce 
disability 
income 
benefit 
payments 
when 
the 
insured 
receives 
income 
from other 
sources 
and that is entitled to 
recover overpayments throQ9h offsets 
a~ainst current payments to 
the insured may not recover such overpayments at a rate greater 
than 10% of the net benefit per benefit payment period unless: 
A. 
The 
insurer 
has 
complied with 
the 
requirements 
of 
subsection 1; 
B. 
The insurer effects the offset of benefits within 60 
days of notice to the insurer that the insured is receiving 
or is entitled to receive 
income that may result in a 
reduction of benefits payable under the policy, 
C. 
The 
ove rpayment 
did"'----"n'-'o'-'t"---~r__"e"'s'_'u"_'l"_t"'_______=f'_"r'_"o"_'m"____"t±h"'e'___~~=_· n 
....... s-"'u"'r'-'e"-'r'--"'.· s 
miscalculation 
of 
benefit 
reductions 
or 
the 
insurer' s 
miscalculation of benefits payable under the policy, and 
D. 
The insurer provided the insured with written notice of 
contract Qrovisions permitting benefit reductions within 60 
days of the date disability benefits commenced. 
SUMMARY 
This bill limits the rate at which an insurer's overpayment 
of disability income benefits may be recovered by the insurer 
through offsets against current payments to the insured.