An Act To Establish a High-risk Health Insurance Pool
Maine Legislature, Session 122, LD 1945
Committee: Health and Human Services
Sponsors: TARDY, MILLS, BOWLES, GLYNN, LINDELL, DAVIS, WESTON
Amends: 24-A MRSA §2736-C, 24-A MRSA §2848, 24-A MRSA §2849-B

Legislative Document 
No. 1945 
H.P. 1365 
House of Representatives, January 5,2006 
An Act To Establish a High-risk Health Insurance Pool 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Reference to the Committee on Health and Human Services suggested and ordered printed. 
Presented by Representative TARDY of Newport. 
Cosponsored by Senator MILLS of Somerset and 
If/~ 
/J7.1lltU~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BOWLES of Sanford, GLYNN of South Portland, LINDELL of Frankfort, 
Senators: DAVIS of Piscataquis, WESTON of Waldo. 
Prinled on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §2736-C, sub-§3, tA, as corrected by 
RR 
2001, c. 1, §30, is repealed. 
Sec. 2. 24-A MRSA §2736-C, sub-§3, ,C, 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 F, §1, is repealed.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, tn, as enacted by PL 1999, 
c. 256, Pt. D, §1, is amended to read: 
D. 
NetwithstaBQiB~-~~~~r-ea~~ie~s Carriers offering 
supplemental coverage for the Civilian Health and Medical 
Program 
for 
the 
Uniformed 
Services, 
CHAMPUS, 
are 
not 
required 
to 
issue 
this 
coverage 
if 
the 
applicant 
for 
insurance does not have CHAMPUS coverage. 
Sec. 4. 24-A MRSA §2848. sub-§I-B, tA, 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: 
(l) 
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 
benefi t 
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; 
(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) 
Ti tle 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 I s health insurance program under Title XXI of 
the Social Security Act; 
(5) 
The Civilian Health and Medical Program tor the 
Uniformed Services, 
CHAMPUS, 
United States Code, 
Chapter 55; 
(6) 
A medical 
care program of the federal 
Indian 
Health Care 
Improvement Act, 
United States Code, 
Section 1601 or of a tribal organization; 
(7) 
A state health benefits risk pool; 
(8) 
A health plan offered under the federal Employees 
Health Benefits Amendments Act, 
United States Code, 
Chapter 89; 
(9) 
A public 
health 
regulations authorized 
Service 
Act, 
Section 
Public Law 104-191; eF 
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) ... l........Q£ 
( 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 2001, 
c. 258, Pt. E, §7, is further amended to read: 
A. 
That person was covered under aB-~~~~~-eF g group 
contract or policy issued by 
any nonprofit hospital or 
medical service organization, insurer T 
Q£ 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 I-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-fl4i ... 4.Ei\ial 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 
C(JtpREHERSIVE HEALTH IHStlRAHCE RISK POOL ASSOCIATIQlf 
§390l. 
Short title 
This chapter may be known and cited as "the Comprehensive 
Health Insurance Risk Pool Association Act." 
§3902. 
Purpose 
It is the purpose oLt.his chapter to establish a mechanism 
to distribute among all insurers doing business in this State the 
costs of providing health and accident insurance coverage to 
those residents of this State who because of health conditions 
-C.onsume unusually large amounts of health care and to ensure a 
competitive insurance market. 
.§.l.2.o.l. 
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. 
2. 
Board. 
"Board" means the board of directors of the 
association. 
.3_, 
CO~~&.Q.n. 
"Covered person" means an individual 
resident of this State, exclusive of dependents, who: 
A. Is eligible to receive benefits from an insurer; 
B. 
Is 
~~~e for 
benefits 
under 
the 
federal 
Health 
Insurance Portability and Accountability Act of 1996; or 
C. 
Has 
been 
certified as 
eligible 
adjustment 
assistance 
or 
for 
pension 
corporation assistance, 
as provided by 
Adjustment Assistance Reform Act of 2002. 
for 
federal 
trade 
benefit 
guarantee 
the federal Trade 
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resident unmarried child under 19 years of age. 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 an organization authorized under chapter 56 
to operate a health maintenance organization in this State. 
6. 
Insurer. 
"Insurer" means an entity that is authorized 
to write medical insurance or that provides medical insurance in 
this State. 
"Insurer" includes an insurance company. nonprofit 
hospital 
and 
medical 
service organization. 
fraternal 
benefit 
1'!Qciety, 
he.alth 
main~.-ng.ru;e 
organization. 
self-insur~ 
arrangement that provides health care benefits in this State to 
the extent allowed under the federal Employee Retirement Income 
Securi ty Act of 1974, 3rd-party administrator, multiple-employer 
welfare arrangement. any other entity providing medical insurance 
or health benefits subject to state insurance regulation or any 
reinsurer reissuing health insurance in this State. 
7. 
Medical insurance. 
"Medical insurance" means a hospital 
~nd 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 
Qr otherwise, whether sold as an individual or group policy. 
"Medical insurance" does not include accidental injury, specified 
disease, hospital indemnity, dentaL 
v~s~on, disability income, 
Medicare 
supplement, 
long-term care or other limited benefit 
health 
insurance 
or credit 
insurance: 
coverage 
issued 
as 
a 
s~plement to liability insurance: 
insurance arising out of 
workers' 
compensation or similar 
law: 
and 
automobile medical 
payment insurance or insurance under which benefits are payable 
with or without regard to fault and that is statutorily reguired 
to be contained in any liability insurance policy or eguivalent 
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 seg., 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 legalJ,y loca.t.ed in the United States and has been 
legally domiciled in this State for a period established by 
the board and subject to the approval of the superintendent 
and not to ~xceed one year; 
B. 
Is 
l~_q.ally domi.ciled in this State on the date of 
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 in 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 an insurer from whom a 
~son providing 
health 
insurance 
for 
a 
resident 
procures 
insurance for itself with the insurer with respect to all or part 
of the medical insurance risk of the person. "Reinsurer" includes 
an insurer that provides employee benefits exc~s insurance. 
U. 
Third-part-y-~~_iIli~t.LqtID::. 
"Third-pJ;1.rty administrator" 
means an entity that is paying or processing medical insurance 
claims for a resident. 
53904. 
Comprebensive Health Insurance Risk Pool Association 
1. 
Risk 
pool 
establisbed. 
The 
COI1l.lli~nsive 
Health 
Insurance Risk Pool Association is established a;, 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 
shall participate in the association. 
2. 
Board of directors. 
The association is governed by a 
board of directors in accordance with the following. 
4.6 
A. 
The board consists of 11 members appointed as follows. 
(1) 
Six members appointed by the superintendent: 
(a) 
Two 
m~mO_ers..._rT)ust be 
chQ.s.gn.....J~.91IL.tb~~neral. 
public and may not be assQciated with the medical 
profession, a hospital or an insurer; 
(b) 
TWQ members must represent medical providers; 
(c) 
One member must represent health insurance 
prQducers; and 
(d) 
One 
member 
must 
represent 
a 
statewide 
association 
representing 
small 
businesses 
that 
receives the majority of its funding from persons 
and businesses in the State. 
A 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 
chairs 
of 
the 
joint 
standing 
committee 
Legislature having jurisdiction over health 
matt~ or 
thLl.!~gislators· designees, who 
nonvoting, ex officio members of the board. 
and House 
of 
the 
insurance 
serve as 
B. 
Terms 
for initial appointments to the board are as 
follows. 
Of those members of the board appointed by the 
su,perintendent. 2 members serve for a term of one year, 2 
members for a term of 2 years and 2 members for a term of 3 
years. 
Of those members appointed by the member insurers, 
one member serves for a term of one year, one member serves 
for a term of 2 years and one member serves for a term of 3 
years. 
The appointing au,thority 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 
years. 
C. 
The board shall elect one of its members as chair. 
0. 
Board 
members 
may 
be 
reimbu,rsed 
trQm 
funds 
of the 
association for actual and necessary expenses incurred by 
them as m..e!1'lbers 
bu,t may not otherwise be compensated for 
their services. 
3. 
Plan of operation; rules. 
The association shall adopt a 
plan of operation in accordance with the reQuirements of this 
chapter and submit its articles, bylaws and operating rules to 
the su,perintendent for approval. 
If the association fails to 
adopt the plan of operation and suitable articles and bylaws 
wi thin 
days 
after 
the 
appointment 
of 
the 
board, 
the 
superintendent shall adopt rules to effectu,ate the reQu,irements 
of 
this 
chapter, 
and 
those 
rules 
remain 
in 
effect 
u,ntil 
superseded by 
a 
plan of 
operation 
and articles 
and 
bylaws 
submitted by the association and approved by the su,perintendent. 
Ru,les adopted pu,rsu,ant to this su,bsection by the su,perintendent 
are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A, 
~.' 
l..u,uity. 
A board member is not liable and is immune 
from su,it at law or eQu,ity for any conduct performed in good 
faith that is within the subject matter over which the board has 
been given ju,risdiction. 
§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 in 
the performance of powers and duties pursuant to this chapter. 
2. 
Ind-nification. 
The board in its bylaws or rules may 
provide for indemnification of, and legal representation for, its 
members and employees. 
53906. 
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 
.J.2Q.ll 
D. 
Collect assessments as provided in section 3908. 
The 
level 
of 
payments 
must 
be 
established 
by 
the 
board. 
Assessments 
must 
be 
collecteQ 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 prpper to carry out 
the 
prov~s1Ons and purposes of this chapter, including the 
authority, with the approval of~~perintendent, to enter 
into contracts with similar organizations in 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 
a 
system to 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 or other contract design 
and 
any 
other 
function 
within 
the 
authority 
of 
the 
association: 
H. 
Borrow mone~ effect the purposes of the associatio~ 
Any 
notes 
or 
other 
evidence 
of 
indebtedness 
of 
the 
g,ssociation not in default must be legal investments for 
insurers and may be carried as admitted assets; 
I. 
Establi~~~lesl 
conditions 
and 
procedures 
for 
~uring risks of member insurers desiring to issue plan 
coverage to individuals otherwise eligible for plan coverage 
in their own names; 
J.. 
Prepat:.e and distribute application forms and enrollment 
instruction forms to 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 tYR_es of health insurance policies to 
~rovide optional 
coverage, 
including Medicare 
supplement 
health insurance: 
M. 
Provide for and employ cost-containment measures and 
requirements, including, but not limited to, preadmission 
screening, 
2nd 
surgical opinions, 
concurrent utilization 
review and individual case management for the purpose of 
making the plan more cost-effective; 
N. 
Design, utilize, contract or otherwise arrange for 
th~ 
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 qualified 
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 
~he operations of the association at least every 3 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 assessments 
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, 
~he superintendent 
may 
order 
the 
association 
to 
charge 
an 
assessment in excess of the cap for a period not to exceed 12 
months. 
5. 
Annual ~~rt. 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 coyerage 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 haying 
jurisdiction oyer health insurance matters. 
§3907. 
Selection of plan administrator 
1. 
Selection of plan administrator. 
The board shall select 
~n 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 or the 3rd-party administrator's proven 
ability to handle large group accident and health insurance; 
B. 
The 
~tficien&Y of 
the 
~psurer's or 
the 
3rd-party 
administrator's claims-payment procedures; and 
c. 
An estimate of total charges for administering the plan. 
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The 
pJ~ll 
administrator selected pursuant to subsection 1 is contracted 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 inyite all insurers, 
including the current plan 
administrator, to submit bids to serve 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 expiration of the 3-year period. 
• 
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selected pursuant to subsection I shall: 
b. 
PerforJn 
all 
eJ._.lgj.12,i,lity 
and 
administrative 
claims-payment functions relating to the plan; 
B. 
Pay a producer's referral fee as established by the 
board to each producer who refers an applicant to the plan, 
if the applicant's application i p 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 by the board; 
lL------rer.t~rm all n.e~s.saryJ~~~o ensure timely payment 
of benefits to covered persons under the plan, including: 
L1) 
Makin~vailable informat19n 
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 
(3) 
Notifying 
each 
claimant within 
days 
after 
receiving a properly completed and executed proof of 
loss of whether the claim is accepted, 
rejected or 
compromised. 
The 
board 
shall 
establish 
reasonable 
reimbursement amounts for any services covered under 
the benefit plans; 
E. 
Submit 
r~ular reports 
to 
the 
board 
regarding 
the 
operation of the plan. 
The freguency, 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 expenses 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 pl~inistrator. 
The plan administrator 
selected pursuant to subsection 1 must be paid, as provided in 
the contract of the association under subsection 2, for the plan 
administrator's direct and indirect expenses 
incurred in the 
performance of plan 
admini~tor' s services, 
As 
used in this 
@bsection, "direct and indir~J~xpenses" 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 
Ml.J2.~.~bJe to the administ..ult.ion of tbe plan and included in the 
specifications of a bid under subsection 2. 
53908. 
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 are due 
not less than 30 days after receipt of written notice by member 
insurers and accrue interest at 12% per annum on and after the 
due date. 
~. 
Maximum assessment. 
The boa~d shall assess each insurer 
an amount not to exceed $3 per perso~ insured or reinsured by 
each insurer per month for medical insurance. 
A member insurer 
may not be assessed on policies or contracts insuring federal or 
state employees. 
This assessment begins January 1, 2007. 
reasonable efforts to ensure that each covered person is counted 
only once with respect to any assessment. 
For that purpose. the 
bQ9rd shall require each insurer that obtains excess or stop loss 
insurance 
to 
include 
in 
its 
count 
of 
covered 
persons 
all 
individuals whose 
coverage is insured, 
in whole or in part, 
through excess or stop loss coverage. 
The board shall allow a 
reinsurer to exclude from its number of covered persons those who 
have been counted by the primary insurer or 
by the primary 
reinsurer or primary excess or stop loss insurer for the purpose 
of determining its assessment under this subsection. The board 
may verify each insurer's assessment based on annual statement§. 
and other reports determined to be necessary by the board. 
The 
board may use any reasonable method of estimating the number of 
covered persons of an insurer if the specific number is unknown. 
~~xCe_ss fJm(J~~_~sses$ments and otheLJ_eceipts 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 
reduc~~an premiums. 
As 
used in this 
subsection. "future losses" includes reserves for claims incurred 
but not reported. 
_5. 
Failure 
~9Y ass.es~~nt_-----1'he superintend.ent 
ma-l': 
suspend or revoke, after notice and hearing, the certificate of 
authority to 
tran~act ins~_e 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 
~~~~rintendent m~se any l?~e~x~nted to the superintendent by 
this Title to collect any unpaid assessment. 
§3909. 
Availability of coverage 
l'~soci~tj.o~ball offer a choice of 2 or more coverage 
options through the plan. The requirements of this plan become 
effective 
January 
1, 
2007. 
Policies 
offered 
through 
the 
association must be available for sale beginning on January L 
2008. The associatiQn shall directly insure the coverage provided 
~he plan, and the policies must be issued through the plan 
administrator. 
At 
least 
one 
coverage 
option 
must 
be 
a 
standardized health plan as defined in Chapter 750 of the rules 
of the bureau. 
§3910. 
Requirements for coverage 
1. 
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 premiums 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. 
~r medical eli:.P:epse 
cover~e. 
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 
an~he1: 
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 and economic factors as determined appropriate. 
3. 
Rates. 
Rates for coverage issued by the association 
must meet the requirements of this subsection. 
A. 
Rates 
may 
not 
be 
unreasonable 
in relation to 
the 
pene_:(its 
provide~~he 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 
rate_s 
for 
coverage 
issued 
by 
the. 
association must be established by the association, subject 
to 
approval 
by 
the 
superintendent, 
using 
reasonable 
actuarial 
techniques 
and 
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 
maxi~um of 150% of the weighted 
~verage 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 all relevant requirements of this 
Title 
applicable 
to 
individual 
health 
insurance 
policies. 
including requirements for mandated coverage for specific health 
services, 
for specific diseases 
and for certain providers of 
health care services. 
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 associati.JLn 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 ir.surance; 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 government program or any other insurance. 
or self-insurance maintained in lieu of otherwise statutorily 
regui£gd insurance, may not be made or recognized as claims under 
.s.JJ.ch 
a policy or be recognized as or towards satisfaction of 
~plicable ded.Y~tibles or out-of-pocket m.aximums 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 
~J..p.imed or recogn.ized 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. 
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 
within 
months 
of 
the 
date 
of 
the 
~rtificate, 
or 
if 
the 
resident 
meets 
other 
eligibility 
requirements adopted by rule by the superintendent that are not 
inconsistent with this chapter and that indicate that a person is 
unable to obtain coverage substantially similar to that which may 
be obtained by a ~rson who is c.onsidered a 
standa~d rLsk. 
Rules 
adopted pursuant to this subsection are routine technical rules 
as defined in Title 5, chapter 375, subchapter 2-A. 
Z_. _!:];laJ;l9~f dQlIIici.le. 
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. 
3. 
Eligibilit~jthout application. 
The 
board 
shall 
develop a list of medical or health conditions for which a person 
is 
eligible 
for 
plan 
coverage 
withQut 
applying 
for 
health 
insurance under subsection 1. 
A person who can demonstrate the 
existence or history of a medical or health condition 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. 
4. 
Exclusions from eligibility. 
A person is 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: 
Page lS-LR2814(1) 
ill 
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 
i) 
A p~S~gy 
__ ~~intain plap~yerage for the period 
of 
time 
the 
~son is 
satisfying 
a 
preexisti:qg 
condition waiting period under another health insurance 
policy intended to replace the plan policy: 
B. 
Th~~D~s--de~mined 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 $3,000,000; 
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 coverage. 
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 
t~tion of the association, 
days after the 
association 
makes 
any 
inquiry 
concerning 
the 
person's 
eligibility 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. 
.fj~pfair trade---RLactice. 
It constitutes an unfair trade 
PrQctice 
for 
any 
insul·er-L-----Prod1J~~~, 
employer 
or 
3rd-par.ty 
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 
b~nefits plan provided in 
connection with the employee's employment. 
§3912. 
Action~~g~i~~~As~~~iation or members based upon joint 
or collective actions 
~cipation 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 or criminal or civil liability or penalty against the 
association or any member insurer. 
§39l3. 
Reimbursement of carriers 
J.~eiDDJ,u·lietll.ent~jl.XJ· ier m~ek r..eJmbyrsement from tbe 
association and the association shall reimburse the carrier to 
the extent claims made by a 
mem!;>~fier January 1, 2008 exceed 
premiums paid on a 
calendar year basis by the member to the 
carrier for a member who meets the follow~criteria: 
A. 
The carrier sold an individual health plan to the member 
between December 1, 1993 and January 1, 2008, and the policy 
that was sold has been continuously renewed by the member; 
B. 
The carrier is able to determine through the use of 
individual 
health 
statements, 
claims 
history 
or 
any 
reasonable means that at any time while the policy was in 
effect, the member was diagnosed with one of the following 
medical 
conditions: 
acquired 
immune 
deficiency 
syndrome, 
angina pectoris, ascites, chemical dependency cirrhosis of 
the liver, coronary occlusion, cystic fibrosis, Friedreich's 
ataxia, hemophilia, Hodgkin's disease, Huntington's chorea, 
juvenile diabetes, 
leukemia, 
metastatic cancer, 
motor or 
sensory 
aphasia, 
multiple 
sclerosis, 
muscular 
dystrophy, 
myasthenia 
gravis, 
myotonia, 
heart 
disease 
requ~r~ng 
open-heart surgery, Parkinson's disease, polycystic kidney 
disease, 
psychotic 
disorders, 
quadriplegia, 
stroke, 
syringomyelia or Wilson's disease: and 
C. 
The 
carrier 
has 
closed 
its 
book 
of 
business 
for 
individual health plans sold prior to January 1, 2008. 
2. 
Rules. 
The superintendent may adopt rules to facilitate 
payment to a carrier pursuant to this section. 
Rules adopted 
pursuant 
to 
this 
subsection 
are 
routine 
technical 
rules 
as 
defined in Title 5, chapcer 375, subchapter 2-A. 
Sec. 7. 
Study of reinsurance. 
The 
Comprehensive 
Health 
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 a 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 costs, potential funding 
mechanisms 
and 
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, 2008. 
Sec. 8. Application for funds. 
The Superintendent of Insurance 
shall apply for all available federal funds for the purpose of 
operating a high-risk health insurance pool. 
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 and amend Title 24-A, section 
2848, subsection I-B, paragraph A and section 2849-B, subsection 
2, paragraph A take effect January 1, 2008. 
SUMMARY 
This 
bill 
requires 
the 
Department 
of 
Professional 
and 
Financial Regulation, Bureau of Insurance to apply for federal 
funds 
that 
Congress 
is offering states 
to 
create high-risk 
insurance pools. 
It repeals the requirement of guaranteed issue 
for 
individual health insurance 
and enacts 
the 
Comprehensive 
Health 
Insurance 
Risk 
Pool 
Association 
Act. 
The bill also 
creates a study of a reinsurance pool for the small group market.