An Act To Establish a High-risk Health Insurance Pool
Maine Legislature, Session 122, LD 1945
Committee Amendment CA_A_H950 (House)
Amends: 24 MRSA §2317-B, 24 MRSA §2327, 24-A MRSA §2736-C, 24-A MRSA §2803-A, 24-A MRSA §2, 24-A MRSA §280, 24-A MRSA §4202-A, 24-A MRSA §4207, 24-A MRSA §4210, 24-A MRSA §4212, 24-A MRSA §4222-B, 24-A MRSA §4346

COMMITTEE AMENDMENT ,A" to H.P. 1365, L.D. 1945, 
Act To Establish a High-risk Health Insurance Pool" 
Bill, "An 
Amend the bill by inserting after the enacting clause and 
before section 1 the following: 
'Sec. I. 24 MRSA §2317-B, sub-§14-A is enacted to read: 
A. 
Title 24-A. 
sectioD 2808-C. 
Small 
group health 
plans, Title 24-A, section 2808-C: 
Sec. 2. 24 MRSA §2317-B, sub-§15, as enacted by PL 1999, c. 
256, Pt. M, §lD, is repealed. 
Sec. 3. 24 MRSA §2327, as amended by PL 2003, c. 469, Pt. E, 
§l, is further amended to read: 
§2327. 
Group rates 
A 
group health 
care contract 
may 
not 
be 
issued by 
a 
nonprofit hospital or medical service organization in this State 
until a copy of the group rates to be used in calculating the 
premium for these contracts has been filed for informational 
purposes with the superintendent. 
The filing must include the 
base rates and a description of any procedures to be used to 
adjust the base rates to reflect factors 
including but not 
limited to age, gender, health status, claims experience, group 
size and coverage of dependents. 
Notwithstanding this section, 
rates 
for 
group 
Medicare 
supplement, 
nursing 
home 
care 
or 
long-term care contracts and for certain group contracts included 
within the definition of "individual health plan" in Title 24-A, 
section 2736-C, 
subsection 1, 
paragraph 
C must 
be filed in 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H. P. 1365, L.D. 1945 
accordance with section 2321 and rates for small group health 
plans as defined by. Title 24-A, section 68Q8-E 2808-C must be 
filed in accordance with that section. 
Sec. 4. 24·A MRSA §2736·C, sub·§2, 1fB, as enacted by PL 1993, 
c. 477, Pt. C, §1 and affected by Pt. F, §1, is amended to read: 
B. 
A carrier may not vary the premium rate due to the 
gender, 
aea*~a-6~a~~sT claims experience or policy duration 
of the individual. 
A carrier may vary the premium rate 
based 
on 
health status. 
age 
and 
tobacco 
use 
only 
as 
permitted in paragraph D. 
Sec. 5. 24·A MRSA §2736-C, sub·§2, ,C, as amended by PL 2001, 
c. 410, Pt. A, §1 and affected by §10, is further amended to read: 
C. , A carrier may vary the premium rate due to smel£:iBIJ 
s~a~~&-aBe family membership. 
~ae-~~~~~-~-aeeFt 
p¥*es-6e~~4a~-~~~~~~4~~~~~~-~a~i~-pate 
e:isee~Bts-~-&B-~~~~r--R~~e6-~~-F¥Ps¥aBt 
te-~k46-~~~~~-~&~~iBe-~eeaBiea*-~~~~~~~B&G-:iB 
~:it*e-§T-eaapte~-i+§T-s¥Beaapte~-**-AT 
Sec. 6. 24·A MRSA §2736-C, sub-§2, ,D, as amended by PL 2001, 
, c. 410, Pt. A, §2 and affected by §10, is further amended to read: 
, 
, 
D. 
A carrier may vary the premium rate due to age, health 
status, occupation or industry aBeL geographic area eB*y 
¥Beep--~~--~e~~ew4B~--~1&--~--wi~aiB--~~--*:istee 
peEeeBta~e--BaBes and tobacco use in accordance with the 
following limitations. 
(1) 
For all policies, contracts or certificates that 
are executed, delivered, issued for delivery, continued 
or renewed in this State between December 1, 1993 and 
July 14, 1994, the premium rate may not deviate above 
or below the community rate filed by the carrier by 
more than 50'10. 
(2) 
For all policies, contracts or certificates that 
are executed, delivered, issued for delivery, continued 
or renewed in this State between July 15, 1994 and July 
14, 1995, the premium rate may not deviate above or 
below the community rate filed by the carrier by more 
than 33'10. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT .. 4, to H.P. 1365, L.D. 1945 
(3) 
For all policies, contracts or certificates that 
are executed, delivered, issued for delivery, continued 
or renewed in this State after July 15, 
1995, 
the 
premium 
rate 
may 
not 
deviate 
above 
or 
below 
the 
community rate filed by the carrier by more than 20%. 
(4) 
For all policies, contracts or certificates that 
are executed, delivered, issued for delivery, continued 
or renewed in this State after January L 
2008, the 
maximum rate differential from the community rate filed 
by the carrier for age as determined by ratio is 4 to 
one. 
The limitation does 
not apply for determining 
rates for an attained age of less than 19 or more than 
years. 
(5) 
For all policies, contracts or certificates that 
are executed, delivered, issued for delivery, continued 
or renewed in this State after January L 
2008, the 
maximum rate differential from the community rate filed 
by the carrier for health status as determined by ratio 
is 1.5 to one and the maximum rate differential for 
tobacco use as determined by ratio is 1.5 to one. 
Rate 
variations based on health status do not apply to rate 
variations based on an insured's status as a tobacco 
~ 
(6) 
A variation in rate is not permitted on the basis 
of changes in health status after a policy. contract or 
certificate is issued or renewed. 
Sec. 7. 24-A MRSA §2736-C, sub-§2"G is enacted to read: 
G. 
A carrier that offered individual health plans prior to 
January 1. 2008 may close its individual book of business 
sold prior to January 1. 2008 and may establish a separate 
community rate for individuals applying for coverage under 
an individual health plan after January I. 2008.' 
Further amend the bill by inserting after section 3 the 
following: 
'Sec. 4. 24-A MRSA §2736-C, sub-§3"E is enacted to read: 
E. 
An individual may not be denied health insurance due to 
age or gender. 
This paragraph may not be construed to 
reguirea carrier to actively market health insurance to an 
individual 65 years of age or older. 
Sec. 5. 24-A MRSA §2736-C, sub-§9, as enacted by PL 1995, c. 
570, §7, is amended to read: 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ,A" to H.P. 1365, L.D. 1945 
9. 
Exemption for certain associations. 
The superintendent 
may exempt a 
group health insurance policy or group nonprofit 
hospital or medical service corporation contract issued to an 
association group, organized pursuant to section 2805-A, from the 
requirements 
of 
s1:l:eseet.i,e~--~,,---pa-~~--At 
subsection 
6, 
paragraph At and subsection 8 if: 
A. 
Issuance and renewal of coverage under the policy or 
contract is guaranteed to all members of the association who 
are residents of this State and to their dependents; 
B. 
Rates for the association comply with the premium rate 
requirements 
of 
subsection 
or 
are 
established 
on 
a 
nationwide basis and substantially comply with the purposes 
of this section, except that exempted associations may be 
rated separately from the carrier's other individual health 
plans, if any; 
C. 
The 
group's 
anticipated 
loss ratio, 
as 
defined in 
subsection 5, is at least 75%; 
D. 
The association's membership criteria do 
age, health status, medical utilization history 
factor with a similar purpose or effect; 
not include 
or any other 
E. 
The association's group health plan is not marketed to 
the general public; 
F. 
The 
association does not allow insurance agents or 
brokers 
to 
ll)arket 
association 
memberships, 
accept 
applications for memberships or enroll members, except when 
the association is an association of insurance agents or 
brokers organized under section 2805-A: 
G. 
Insurance is provided 
as 
an incidental benefit of 
association membership 
and 
the primary 
purposes 
of 
the 
association do not include group buying or mass marketing of 
insurance or other goods and services; and 
H. 
Granting 
an 
exemption to the association does 
not 
conflict with the purposes of this section. 
Sec. 6. 24-A MRSA §2803-A, sub-§4, as amended by PL 2001, c. 
410, Pt. B, §2, is further amended to read: 
4. 
Exception. 
An insurer is 
loss information described in this 
eligible for 
small group coverage 
2808-C. 
not required to provide the 
section for a group that is 
pursuant to section 
~gQg-8 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ·It" to H.P. 1365, L.D. 1945 
Sec. 7. 24-A MRSA §2S04, sub-§3, as amended by PL 1999, c. 
256, Pt. G, §1, is further amended to read: 
3. 
Except as provided in section 2736-C, 
2808-C and chapter 36, 
an insurer may exclude 
coverage 
on 
any 
person 
as 
to 
whom 
evidence 
insurability is not satisfactory to the insurer. 
section 6898-8 
or 
limit the 
of 
individual 
Sec. S. 24-A MRSA §2S05, sub-§3, as amended by PL 1999, c. 
256, Pt. G, §2, is further amended to read: 
3. 
Except as provided in section 2736-C, 
2808-C 
and chapter 36, 
an insurer may exclude 
coverage 
on 
any 
person 
as 
to 
whom 
evidence 
insurability is not satisfactory to the insurer. 
section 6898-8 
or limit the 
of 
indi vidual 
Sec. 9. 24-A MRSA §280S-A, sub-§4, as amended by PL 1999, c. 
256, Pt. G, §3, is further amended to read: 
4. 
Except as provided in section 2736-C, 
2808-C and chapter 36, 
an insurer may exclude 
coverage 
on 
any 
person 
as 
to 
whom 
evidence 
insurability is not satisfactory to the insurer. 
section 6898-8 
or 
limit the 
of 
individual 
Sec. 10. 24-A MRSA §2S06" sub-§3, as amended by PL 1999, c . 
256, Pt. G, §4, is further amended to read: 
3. 
Except as provided in section 2736-C, 
2808-C and chapter 36, 
an insurer may exclude 
coverage 
on 
any 
person 
as 
to 
whom 
evidence 
insurability is not, satisfactory to the insurer. 
section 6898-8 
or limit the 
of 
indi vidual 
Sec. 11. 24-A MRSA §2S07-A, sub-§3, as amended by PL 1999, c. 
256, Pt. G, §5, is further amended to read: 
3. 
Except as provided in section 2736-C, 
2808-C 
and chapter 36, 
an insurer may exclude 
coverage 
on 
any 
member 
as 
to 
whom 
evidence 
insurability is not satisfactory to the insurer. 
section 6898-8 
or 
limit the 
of 
individual 
Sec. 12. 24-A MRSA §2S0S-B, as amended by PL 2005, c. 121, 
Pt. E, §§1 and 2, is repealed. 
Sec. 13. 24-A MRSA §2S0S-C is enacted to read: 
§28Q8-C. 
Small group health plans 
1. 
Pu~se. The purpose of this section is to promote the 
availability of health insurance coverage to small employers, to 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT A" to H.P. 1365, L.D. 1945 
prevent abusive rating practices. to require disclosure of rating 
practices to purchasers of small group health plans. to establish 
standards for continuity of coverage 
for small employers and 
their 
covered 
employees 
and 
to 
improve 
the 
efficiency 
and 
fairness of the small group market. 
2. 
Definitions. 
As 
used in this 
section. 
unless 
the 
context 
otherwise 
indicates. 
the 
following 
terms 
have 
the 
following meanings. 
A. 
"Actuarial certification" means a written statement by a 
member 
of 
the 
American 
Academy 
of 
Actuaries 
or other 
individual acceptable to the superintendent that a carrier 
offering small group health plans is in compliance with the 
provisions of subsection 4 based on the person's examination 
and review of the carrier's appropriate records and the 
actuarial assumptions and methods used by the carrier to 
establish premium rates for its small group health plans. 
B. 
"Base premium rate" means, for each class of business as 
to a rating period. the lowest premium rate charged or which 
could have been charged under a rating system for that class 
of business by a small group carrier to small employers with 
similar case characteristics for health plans with the same 
or simi~ar coverage. 
C. 
"Carrier" 
means 
any 
insurance 
company. 
nonprofit 
hospital 
and 
medical 
service 
organization 
or 
health 
maintenance organization authorized to issue small group 
health plans in this State. 
For 
the purposes of this 
section. carriers that are affiliated companies or that are 
eligible to file consolidated tax returns are treated as one 
carrier and any restrictions or limitations imposed by this 
section apply as if all small group health plans delivered 
or issued for delivery in this State by affiliated carriers 
were issued by one carrier. 
For purposes of this section. 
health maintenance organizations are treated as separate 
organizations 
from 
affiliated 
insurance 
companies 
and 
nonprofit hospital and medical service organizations. 
D. 
"Case 
characteristics" 
means 
demographic 
or 
other 
relevant characteristics of a small employer as determined 
by a carrier that are considered by the carrier in the 
determination of the premium rates for the small employer. 
"Case characteristics" does not include claims experience. 
health status or duration of coverage. 
E. 
"Class of business" means all or a distinct grouping of 
small employers in accordance with this paragraph to whom 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,A" to H.P. 1365, L.D. 1945 
the 
carrier 
provides 
coverage 
as 
demonstrated 
by 
the 
carrier's records. 
(1) 
A distinct grouping may only be established by the 
small employer carrier on the basis that the applicable 
health benefit plans: 
(a) 
Are marketed and sold through individuals and 
organizations that are not participating in the 
marketing or sale of other distinct groupings of 
small employers for the carrier; 
(b) 
Have been acquired from another carrier as a 
distinct grouping of plans: 
(c) 
Are 
provided through an association with 
membership of not less than 50 small employers 
that has 
been 
formed 
for 
purposes 
other 
than 
obtaining insurance: or 
(d) 
Are in a class of business that meets the 
requirements 
for 
exception to 
the 
restrictions 
related to premium rates provided in subsection 4. 
(2) 
A carrier may establish no more than 2 additional 
groupings 
under 
subparagraph 
(1) 
on 
the 
basis 
of 
underwriting criteria that 
are expected 
to produce 
substantial variation in the health care costs. 
(3) 
The superintendent may approve the establishment 
of additional distinct groupings upon application to 
the superintendent and a finding by the superintendent 
that 
such action would 
enhance 
the efficiency and 
fairness of the small group health plan market. 
F. 
"Index rate" means, for each class of business for small 
employers with similar case characteristics, the arithmetic 
average 
of 
the 
applicable 
base 
premium 
rate 
and 
the 
corresponding highest premium rate. 
G. 
"Late enrollee" means an eligible employee or dependent 
who 
requests 
enrollment 
in 
a 
small 
group 
health plan 
following 
the 
initial 
m~n1mum 
30-day 
enrollment 
period 
provided under 
the 
terms 
of 
the plan, 
except that 
an 
eligible employee or dependent is not considered a late 
enrollee if the eligible employee or dependent meets the 
requirements of section 2849-B, subsection 3, paragraph At 
B. C-l or D. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ,A" to H.P. 1365, L.D. 1945 
H. 
"New business premium rate" means, 
for each class of 
business as to a rating period, the premium rate charged or 
offered by the carrier to small employers with similar case 
characteristics for newly issued health benefit plans with 
the Same or similar coverage. 
1. 
"Rating period" means the calendar period for which the 
premium rates established by a carrier are assumed to be in 
effect as determined by the carrier. 
J. 
"Small employer" means any person, firm, corporation, 
partnership or 
association actively engaged in business 
that. 
on 
at least 
50% 
of its working 
days 
during the 
preceding year. employed no more than 50 eligible employees 
and at least 2 eligible employees. In determining the number 
of 
eligible 
employees. 
companies 
that 
are 
affiliated 
companies or that are eligible to file a combined tax return 
for 
purposes 
of state taxation must 
be 
considered one 
employer. 
K. 
"Small group health plan" means any hospital and medical 
expense-incurred policy; health. hospital or medical service 
corporation 
plan 
contract: 
or 
health 
maintenance 
organization 
subscriber 
contract 
covering 
an 
eligible 
group. 
"Small group health plan" 
does 
not include the 
following types of insur~nce: 
(1 ) 
Accident; 
(2) 
Credit; 
(3) 
Disability: 
(4) 
Long-term care or nursing home care; 
(5) 
Medicare supplement: 
(6) 
Specified disease: 
(7) 
Dental or vision: 
(8) 
Coverage 
issued as 
a 
supplement 
to liability 
insurance: 
(9) 
Workers' compensation: 
(10) 
Automobile medical payment: or 
(11) 
Insurance under which benefits are payable with 
or 
without 
regard 
to 
fault 
and 
that is 
required 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ·A .. to H.P. 1365, L.D. 1945 
statutorily to be contained in any liability insurance 
policy or equivalent self-insurance. 
3. 
Small groyp health plans subject to this section. 
The 
following small group health plans are subject to this section. 
A. 
Ex~e12t a§ 
prQvigeg in thi§ pgrggraph( 
thi§ section 
gpplig§ 
tQ 
gny 
§mgll 
groyp 
bgaUb 
plgn 
that 
12r Qviggs 
~QV!Uggg tQ Qn~ or mQre empIQY~~§ Qf Sl, §mSl,ll employer, 
B. 
Tbis §ectiQn gQes nQt gpply to ingiyiguSl,1 health plans 
thgt gre sUbject tQ sectiQn 2736-C. 
4. 
Premium rates. 
Premium rgtes fQr §mgll grouP health 
plgns gre subject tQ the follQwing prQyisions, 
A. 
The ingex rSl,te fQr 
g rgting periQg fQr gny class of 
businus may nQt exceeg the ingex rgte fQr Sl,ny other class 
of business by more thgn 20~. 
This parggrgph gQe§ not apply 
tQ a class of business if gny Qf tbe fQllowing gpply; 
(1) 
Tbe class Qf business is Qng fQr which the carrier 
gQes . not 
rejgcL 
gng 
never 
hgs 
rejected. 
§mall 
employers inclugeg within tbe cgHier' s gefinitiQn of 
employer§ 
eligible 
fQr 
thg 
class 
of 
by§ine§s 
or 
Qthgrwise eligible employees gnd gepengents who enrQll 
Qn a timely ba§is ( bgseg uPQn their clgims experience 
Qr health §tatus; 
(2) 
Thg carrier dQe§ nQt inYQlyntarily trgn§feL gng 
never bas invQluntarily trgnsferreg( a hgalth benefit 
plan intQ Qr out of the clg§s Qf business; gng 
(3) 
The cla§s Qf bysine§§ i§ gygilable for purchg§e. 
B. 
FQr g clg§s Qf bysines§( the premium rate charged during 
g 
rgting periog 
tQ 
smgll 
emplQyers 
with 
§imilgr 
case 
characteristics for the same Qr similar coyerage, or the 
rates that cQuld bg chSl,rged to such employers 
undgr the 
rgting system for thSl,t clas§ of business. mSl,y nQt vary from 
thg indgx rate by morg than 25~ of thg indgx ratg. 
C. 
The pgrcentSl,gg incregsg in thg premium ratg charggg to a 
smgll gmplQyer for a new rgting periQg mgy nQt exceed the 
Sum Qf the fQIIQwing; 
(1) 
The percentSl,ge change in the new by§ine§s premium 
rgte megsurgg frQm the first ggy Qf the prior rating 
periQd tQ the first ggy Qf thg new rating period. In 
the Cgse of a clMs Qf business for which the small 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ,A.. to H. P. 13 65, L • D • 1945 
group carrier is not issuing new policies, the carrier 
shall use the percentage change in the base premium 
rate: 
(2) 
An 
adjustment. 
not to exceed 15% annually and 
adjusted pro rata for rating periods of less than one 
year, due to the claims experience, health status or 
duration of coverage or the employees or dependents of 
the small employer as determined from the carrier's 
rate manual for the class of business; and 
(3) 
Any adjustment due to change in coverage or change 
in the case characteristics of the small employer as 
determined from the carrier's rate manual for the class 
of business. 
D. 
In the case of health benefit plans issued prior to the 
effective date of this section, a premium rate for a rating 
period may exceed the ranges described in paragraphs A and B 
for a period of 5 years following the effective date of this 
section. 
In that case, 
the percentage 
increase in the 
premium rate charged to a small employer in such a class of 
business for a new rating period may not exceed the Sum of 
the following: 
(1) 
The percentage change in the new business premi urn . 
rate measured from the first day of the prior rating 
period to the first day of the new rating period. In 
the case of a class of business for which the small 
group carrier is not issuing new policies, the carrier 
shall use t:he percentage change in the base premi urn 
rate: and 
(2) 
Any adjustment due to change in coverage or change 
in the case characteristics of the small employer as 
determined from the carrier's rate manual for the class 
of business. 
E. 
A small group carrier may use any legitimate rating 
factor, 
including 
claims 
experience, 
health 
status 
or 
duration of coverage, in the determination of premium rates 
subject to this section, except that the maximum variation 
for all small employers in a class of business using all 
legitimate rating factors is 5 to one for the premium rate 
charged to any small employer in that class of business. 
F. 
A small group carrier may not transfer a small employer 
inVOluntarily into or out of a class of business. A small 
group carrier may not transfer a small employer into or out 
of a class of business unless such offer is made to transfer 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ,A .. to H.P. 1365, L.D. 1945 
all small employers in the class of business without regard 
to any changes in case characteristics, claims experience, 
health status or duration of coverage since the first date 
of coverage. 
5. 
Coverage for late enrollees. 
In providing coverage to 
late enrollees, small group health plan carriers are allowed to 
exclude or limit coverage for a late enrollee subject to the 
limitations set forth in section 2849-B, subsection 3. 
6. 
Guaranteed issuance and guaranteed renewal. 
Carriers 
providing 
small 
group health plans 
must 
meet 
the 
following 
reQuirements on issuance and renewal. 
A. 
Any small group health plan offered to any eligible 
group or subgroup must be offered to all eligible groups 
that meet the carrier's minimum participation reQuirements, 
which mAY not exceed 
75"t., 
to all eligible employees and 
their dependents in those groups. 
In determining compliance 
with minimum participation reQuirements, eligible employees 
and their dependents that have existing health care coverage 
may not be considered in the calculation. 
If an employee 
declines coverage because the employee has other coverage, 
any dependents of that employee who are not eligible under 
the 
emp.loyee' s 
other coverage are eligible for 
coverage 
under the small group health plan. 
B. 
A carrier may deny coverage under a managed care plan, 
as defined by section 430l-A: 
(1) 
To 
employers 
who 
have 
no 
employees 
who 
live, 
reside or work within the approved service area of the 
plan: and 
(2) 
To employers if the carrier has demonstrated to 
the superintendent's satisfaction that: 
(a) 
The carrier does not have the capacity to 
deliver 
services 
adeguately 
to 
additional 
enrollees within all or a designated part of its 
service 
area 
because 
of 
its 
obligations 
to 
existing enrollees: and 
(b) 
The 
carrier 
is 
applying 
this 
provl.sl.on 
uniformly to individuals and groups without regard 
to any health-related factor. 
A carrier that denies coverage in accordance with this 
subparagraph may not enroll individuals residing within 
the service area subject to denial of coverage, 
or 
Page ll-LR28l4(2) 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ./1 .. to H;P. 1365, L.D. 1945 
groups or subgroups within that area for a period of 
days after the date of the first denial of coverage. 
7. 
Disclosure 
of 
rating 
practices 
and 
reneWabili ty 
provisions. 
Each 
small 
group 
carrier 
shall 
disclose 
the 
following in the sales and marketing materials provided to small 
employers: 
A. 
The extent to which premium rates for a specific small 
employer 
are established or adjusted due 
to the claims 
experience, health status or duration of coverage of the 
employees and dependents of the small employer: 
B. 
The ability of the carrier to change premium rates and 
rating factors, 
including case characteristics, 
that may 
affect changes in premium rates: 
C. 
A description of the class of business in which the 
small 
employer 
is 
or 
will 
be 
included. 
including 
the 
applicable grouping of plans: and 
D. 
The small employer's rights regarding renewal of the 
small group health plan. 
8. 
Maintenance of records. 
A small group carrier shall 
maintain at its principal place of business 
a 
complete 
and 
detailed 
description 
of 
its 
rating 
practices 
and 
renewal 
underwriting practices, including information and documentation 
that demonstrate that its rating methods and practices are based 
upon 
commonly 
accepted 
actuarial 
assumptions 
and 
are 
in 
accordance with sound actuarial principles. On or before March 
1st annually, 
a carrier shall file with the superintendent an 
actuarial certification that the carrier is in compliance with 
this section and that the rating methods of the carrier are 
actuarially sound. 
A copy of the certification must be retained 
by the carrier at its principal place of business. 
A carrier 
shall also make the information and documentation required in 
this subsection available to the superintendent upon request. 
The information provided to the superintendent pursuant to this 
subsection is proprietary and must be kept confidential by the 
su,perintendent. The information may not be disclosed except as 
agreed to by the carrier or as ordered by a court of competent 
ju,risdiction. 
9. 
Discretion of su;perintendent. 
The superintendent may 
su,spend all or any part of subsection 4 as to the premium rates 
applicable to one or more small employers for one or more rating 
periods upon a filing by the small grou,p carrier and a finding by 
the superintendent that either the su,spension is reasonable in 
light of the financial condition of the carrier or that the 
COMMITTEE AMENDMENT 
~. (§. ~. 
COMMITTEE AMENDMENT ~, to H.P. 1365, L.D. 1945 
suspension would enhance 
the efficiency and fairness 
of the 
marketplace for small group health plans. 
10. 
Applicability. 
This section applies to all small group 
health 
plan 
policies, 
contracts 
and 
certificates 
executed, 
delivered, 
issued for delivery, 
continued or renewed in this 
State on or after January 1, 2009. 
For purposes of this section, 
all contracts are deemed to be renewed no later than the next 
yearly anniversary of the contract date.' 
Further amend the bill by inserting after section 5 
the 
following: 
'Sec. 6. 24·A MRSA §2850·B, sub.§2, 1[1[C and D, as enacted by 
PL 1997, c. 445, §30 and affected by §32, are amended to read: 
C. 
"Large group market" means groups not subject to section 
2736-C or aSQS-8 2S0S-C. 
D. 
"Small group market" means groups subject to section 
agQg-8 2808-C. 
Sec. 7. 24·A MRSA §2850.B, sub·§3, 1[G, as' amended by PL 2003, 
c. 428, Pt. A, §1, is further amended to read: 
G. 
When the carrier ceases offering a product and meets the 
following requirements: 
(1) 
In the large group market: 
(a) 
The 
carrier 
must 
provide 
notice 
to 
the 
policyholder and to the insureds at least 90 days 
before termination; 
(b) 
The carrier must offer to each policyholder 
the option to purchase any other product currently 
being offered in the large group market; and 
(c) 
In exercising the option to discontinue the 
product and in offering the option of coverage 
under division (b), the carrier must act uniformly 
without regard to the claims experience of the 
policyholders or the health status of the insureds 
or prospective insureds; 
(2) 
In the small group market: 
(a) 
The carrier shall replace the product with a 
product that complies with the requirements of 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT l.fj .. to H.P. 1365, L.D. 1945 
this section, 
including renewability, 
and with 
section 6ggg-8 2808-C: 
(b) 
The 
superintendent 
shall 
find 
that 
the 
replacement 
is 
in the 
best 
interests 
of 
the 
policyholders; and 
(c) 
The 
carrier shall provide notice 
to 
the 
policyholder and to the insureds at least 90 days 
before replacement; or 
(3) 
In the individual market: 
(a) 
The carrier shall replace the product with a 
product that complies with the requirements of 
this section, 
including renewability, 
and with 
section 2736-C: 
(b) 
The 
superintendent 
shall 
find 
that 
replacement 
is 
in the 
best 
interests 
of 
policyholders: and 
the 
the 
(c) 
The 
carrier shall provide notice 
to 
the 
policyholder 
and, 
if 
a 
group 
policy, 
to 
the 
insureds at least 90 days before replacement; 
Sec. 8. 24·A MRSA §2850·B, sub.§4, 1JB, as amended by PL 2001, 
c. 258, Pt. E, §11, is further amended to read: 
B. 
Carriers that cease to write new small group business 
continue to be governed 
by section 
6ggg-8 
2808-C 
with 
respect to small group contracts in force and their renewal 
or replacement contracts. I 
Further amend the bill in section 6 in §3904 in subsection 2 
by striking out all of paragraph A (page 5, lines 30 to 49 and 
following: 
'A. 
The board consists of 11 members appointed as follows: 
(1) 
Six members appointed by the superintendent: 
(a) 
Two members must be chosen from the general 
public and may not be associated with the medical 
profession. a hospital or an insurer: 
(b) 
Two members must represent medical providers: 
COMMITTEE AMENDMENT 
It ~ t. 
". 
COMMITTEE AMENDMENT ,fI" to H.P. 1365, L.D. 1945 
(c) 
One member must represent health insurance 
producers; 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; and 
(2) 
Five members appointed by the member insurers, at 
least 2 of whom are domestic insurers and at least 2 of 
whom are self-insured or 3rd-party administrators. ' 
Further amend the bill in section 6 in §3906 in subsection 2 
in paragraph N in last line (page 9, line 23 in L.D.) by striking 
out the following: 
"and" 
Further amend the bill in section 6 in §3906 in subsection 2 
in paragraph 0 in the last line (page 9, line 27 in L.D.) by 
striking out the following: 
" ..... " and inserting in its place the 
following: 
'~' 
Further amend the bill in section 6 in §3906 in subsection 2 
by inserting at the end the following: 
'Po 
Develop a plan to subsidize low-income individuals. 
The association shall submit that plan to the joint standing 
committee of the Legislature haviUg jurisdiction over health 
insurance matte(s 
no 
later than 
February 
1, 
2008. 
If 
necessary, 
the 
joint standing 
committee 
may 
report out 
legislation to the Second Regular Session of the l23rd 
Legislature 
to 
implement 
the 
plan 
submitted 
by 
the 
association. ' 
Further amend the bill by inserting after section 6 the 
following: 
'Sec. 7. 24-A MRSA §4202-A, sub-§10, 1[B, as amended by PL 
1993, c. 645, Pt. A, §5, is further amended to read: 
B. 
I s 
compensated, except for reasonable copayments, for 
basic health care services to enrolled participants solely 
on a 
predetermined periodic rate basis, except that the 
organization is not prohibited from having a provision in a 
group contract allowing an adjustment of premiums based upon 
the actual health services utilization of the enrollees 
covered under the contract, and except that such a contract 
may 
not 
be 
sold to 
an eligible group 
Subject to 
the 
eemmQRi~y rating requirements of section aSGS-B 2808-C; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,;C1" to H.P. 1365, L.D. 1945 
Sec. 8. 24-A MRSA §4207, sub-§5, as amended by PL 2003, c. 
469, Pt. E, §19, is further amended to read: 
5. 
A schedule or an amendment to a schedule of charge for 
enrollee health coverage for health care services may not be used 
by any health maintenance organization unless it complies with 
section 2736, 
~8Qg-8 2808-C or 2839, whichever is applicable. 
Sec. 9. 24-A MRSA §4210, sub-§I, as amended by PL 1995, c. 
332, Pt. 0, §4, is further amended to read: 
1. 
After a 
health maintenance organization has been in 
operation 24 months, it shall have an annual 
open enrollment 
period of at least one month during which it accepts enrollees up 
to the limits of its capacity, 
as determined by the health 
maintenance organization, in the order in which they apply for 
enrollment. 
To the extent not inconsistent with the requirements 
of chapter 36 and sections 2736-C and ~8Q8-8 2SQ8-C as qualified 
by 
section 
4222-B, 
subsection 
3, 
a 
health 
maintenance 
organization may apply to the superintendent for authorization to 
impose such underwriting restrictions upon enrollment as are 
necessary 
to 
preserve 
its 
financial 
stability, 
to 
prevent 
excessive adverse selection by prospective enrollees or to avoid 
unreasonably high or unmarketable charges for enrollee coverage 
for health care services. The superintendent shall approve or 
deny the application within 10 days of the receipt of that 
application from the health maintenance organization. 
Sec. 10. 24-A MRSA §4212, sub-§2, ,C, as enacted by PL 1995, 
c. 332, Pt. 0, §6, is amended to read: 
C. 
When the provisions of the State's community rating law 
are applicable, as provided by section 2736-C, subsection 3, 
paragraph B aBa-seeeieB-68Q8-8T-SYBSeeeieB-4T-Fa~a~~aFa-8; or 
Sec. 11. 24-A MRSA §4222-B, sub-§3, as enacted by PL 1995, c. 
332, Pt. 0, §8, is amended to read: 
3. 
The 
requirements 
of 
sections 
2736-C 
and 
~8Q8-1h 
eemmQBi~y--~~~--~awT 2808-C 
apply 
to 
health 
maintenance 
organizations, except that a health maintenance organization is 
not required to offer coverage or accept applications from an 
eligible 
group 
or 
individual 
located 
outside 
the 
health 
maintenance organization's approved service area. 
Sec. 12. 24-A MRSA §4346, sub-§I, tn, as enacted by PL 2001, 
c. 70S, §3, is amended to read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "f}., to H.P. 1365, L.D. 1945 
D. 
"Eligible employee" or "employee" means an individual 
who: 
( 1 ) 
Mee l:: e - -t-he-- -t'le-f.,i -fl-i-t,.,i -ei'l--9:1f - -'!e-],..i<j-i-b-J:.e. - ~~-ee-!-'-- se l:: 
:lf9~l::a--1R-~~~R-~r-~~~-~~--pa£a~£aph--G 
Works on a full-time basis, with a normal work week of 
hours or more. 
"Eligible employee" includes a sole 
proprietor, 
a 
partner 
of 
a 
partnership 
or 
an 
independent contractor, but does not include employees 
who 
work 
on 
a 
temporary or 
substitute basis. 
An 
employer 
may 
elect to treat 
as 
eligible 
employees 
part-time employees who work a normal work week of 10 
hours or more as long as at least one employee works a 
normal work week of 30 hours or more. 
An employer may 
elect to treat as eligible employees 
employees who 
retire from the employer's employment; 
(2) Is a self-employed individual who: 
(a) Works and resides in the State; and 
(b) Is organized as a sole proprietorship or in 
any 
other 
legally 
recognized 
manner 
that 
a 
self-employed 
individual 
may 
organize, 
a 
substantial part of whose income derives from a 
trade or business through which the individual has 
attempted to earn taxable 
income, 
and 
who 
has 
filed 
the 
appropriate 
United 
States 
Internal 
Revenue 
Service 
form 
for 
the previous 
taxable 
year, 
and 
for 
whom 
a 
copy of the appropriate 
United States Internal Revenue Service 
form or 
forms and schedule has been filed with the plan or 
its administrator; or 
(3) Is a sole employee of a nonprofit organization that 
has been determined by the Internal Revenue Service to 
be 
exempt 
from 
taxation 
under 
the 
United 
States 
Internal Revenue Code, Section 501(c)(3),(4) or (6) and 
who has a normal work week of at least 20 hours and is 
not covered under a public or private plan for health 
insurance or other health benefit arrangement. 
Sec. 13. 24·A MRSA §4346, sub-§I, ,G, as enacted by PL 2001, 
c. 708, §3, is amended to read: 
G. 
"Small employer" means an eligible group as defined in 
section 6898-B 2808-C, subsection ~ 1, paragraph g ~. 
Sec. 14. 24·A MRSA §6603, sub-§I, 1rH, as amended by PL 2001, 
c. 410, Pt. A, §9, is further amended to read: 
COMMITTEE AMENDMENT 
". t: 'e. 
;" 
COMMITTEE AMENDMENT ,fI" to H.P. 1365, L.D. 1945 
H. 
May issue only health care benefit plans that comply 
with the requirements of section a8g8-i! 2808-C with regard 
to 
rating 
practices, 
coverage 
for 
late 
enrollees 
and 
guaranteed renewal. 
An arrangement may not provide health 
care benefits that do not meet or exceed the requirements 
for 
mandated 
benefits 
applicable 
to 
comparable 
insured 
plans. ' 
Further amend the bill by striking out section 9 (page 18, 
lines 20 to 24 in L.D.) and inserting in its place the following: 
'Sec. 9. Department of Professional and Financial Regulation, 
Bureau of Insurance review of health insurance rate and form filing 
requirements. 
The 
Department 
of 
Professional 
and 
Financial 
Regulation, Bureau of Insurance shall review the State's health 
insurance 
rate 
and 
form 
filing 
requirements 
and 
make 
recommendations for changes in the requirements to reduce the 
costs and resources 
expended for insurers 
seeking regulatory 
approval of new health insurance products. 
In its review, the 
bureau 
shall 
identify 
the 
typical 
costs 
and 
resources 
for 
insurers seeking regulatory approval for new health insurance 
products in this State and, to the extent possible, compare those 
to the costs and resources for the regulatory approval of new 
heal th insurance products in other states. 
The bureau shall 
submit a report with its review and recommendations to the joint 
standing committee of the Legislature having jurisdiction over 
insurance and financial services matters by January 15, 2007. 
In 
its report, the bureau shall include draft legislation to move 
the State to a file-and-use standard for health insurance rate 
and 
form 
filings. 
The 
joint 
standing 
committee 
of 
the 
Legislature having 
jurisdiction over 
insurance 
and financial 
services matters shall submit a bill to the First Regular Session 
of the 123rd Legislature based on the recommendations from the 
bureau's report. 
Sec. 
10. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
PROFESSIONAL AND FIBANCIAL REGULATION, 
DEPARTMENT OF 
Bureau of Insurance 
0092 
The 
following 
Initiative: 
Allocates funds for contracting the preparation of a 
grant application to secure federal funds for the purpose of 
operating a high-risk health insurance pool. 
orBER SPECIAL REVENUE FUNDS 
All Other 
2005-06 
$0 
2006-07 
$15,000 
COMMITTEE AMENDMENT 
t l;. 
~.'. 
COMMITTEE AMENDMENT • ./1" to H.P. 1365, L.D. 1945 
OTHER SPECIAL REVENUE FUNDS TOTAL 
$0 
$15,000 
Sec. 11. 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 1-B, paragraph A and section 2849-B, subsection 
2, paragraph A take effect January 1, 2008. 
Those sections of 
this Act that amend Title 24-A, section 2736-C, subsection 2, 
paragraphs B to D and section 2736-C, 
subsection 9 and enact 
Title 24-A, section 2736-C, subsection 2, paragraph G and section 
2736-C, subsection 3, paragraph E take effect January 1, 2008. 
Sec. 12. Effective date. 
Those sections of this Act that amend 
the Maine Revised Statutes, Title 24, sections 2317-B and 2327 
and Title 
24-A, 
sections 
2803-A, 
2804, 
2805, 
2805-A, 
2806, 
2807 -A, 
2850-B, 4202-A, 4207, 4210, 4212, 4222-B, 4346 and 6603 
take effect January 1, 
2009. 
That section of this Act that 
repeals Title 24-A, section 2808-B takes effect January 1, 2009. 
That section of this Act that enacts Title 24-A, section 2808-C 
takes effect January 1, 2009.' 
Further amend the bill by 
nonconsecuti ve 
consecutively. 
Part 
letter 
relettering 
or 
section 
SUMMARY 
or renumbering any 
number 
to 
read 
This amendment is the minority report of the committee and 
makes the following changes to the bill. 
The 
amendment broadens the community rating laws to allow 
carriers to vary premiums on the basis of age within a maximum 
rate differential on a ratio of 4 to one and on the basis of 
health status and tobacco use within a maximum rate differential 
on a ratio of 1.5 to one. 
The 
amendment 
changes ·the 
composition of 
the 
board of 
directors of the high-risk pool 
by 
removing the legislative 
members and adding 2 additional members who are member insurers. 
The 
amendment repeals the community rating law for small 
group health plans effective January 1, 2009 and enacts in its 
place provisions governing the rating of small group health plans 
based on a model act from the National Association of Insurance 
Commissioners. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .p .. to H.P. 1365, L.D. 1945 
The amendment requires the Department of Professional and 
Financial Regulation, Bureau of Insurance to conduct a study of 
the State' s rate and form filing laws and make recommendations 
for changes to reduce the costs and resources expended by health 
insurance carriers seeking regulatory approval of 
new health 
insurance products. 
This amendment also adds an appropriations and allocations 
section to the bill. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 03129/06 frae 
LD 1945 
LR 2814(02) 
An Act To Establish a High-risk Health Insurance Pool 
Fiscal Note for Bill as Amended by Committee Amendment .f}" 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
2005-06 
2006-07 
Projections 
2007-08 
Appropriations/Allocations 
Other Special Revenue Funds 
Fiscal Detail and Notes 
$0 
$15,000 
$0 
Projections 
2008-09 
$0 
The bill includes an allocation to the Bureau of Insurance in the Department of Professional and Financial Regulation 
of $15,000 in fiscal year 2006-07 for contracting the preparation of a grant application to secure federal funds for the 
purpose of operating a high-risk health insurance pool. The fiscal note assumes the Comprehensive Health Insurance 
Risk Pool Association would not require an appropriation or allocation of resources and would not result in 
transactions on the State's books because the Association would be established as an independent non-profit legal 
entity. 
LR2814(2) - Fiscal Note - Page 1 of 1