An Act To Clarify and Update the Laws Related to Health Insurance
Maine Legislature, Session 123, LD 1503
Committee: Insurance and Financial Services
Sponsors: BRAUTIGAM, SULLIVAN, CROCKETI, PRIEST, PERRY
Amends: 24-A MRSA §2834-B, 24-A MRSA §2849-B, 24-A MRSA §2849-C, 24-A MRSA §28, 24-A MRSA §4301-A, 24-A MRSA §4302, 24-A MRSA §4303, 24-A MRSA §4304, 24-A MRSA §4306, 24-A MRSA §4308, 24-A MRSA §2849, 24-A MRSA §2849-A, 24-A MRSA §409, 24-A MRSA §2809-A, 24-A MRSA §2696

Legislative Document 
No. 1503 
H.P.1053 
House of Representatives, March 19,2007 
An Act To Clarify and Update the Laws Related to Health 
Insurance 
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 Representative BRAUTIGAM of Falmouth. 
Cosponsored by Senator SULLIVAN of York and 
Ir/~ /n. 7I/ttc~ 
Mll.LICENT M. MacFARLAND 
Clerk 
Representatives: CROCKETI of Augusta, McKANE of Newcastle, PRIEST of Brunswick, 
Senator: PERRY of Penobscot. 
Primed nil recycled paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 24-A MRSA §2834-B, sub-§3, as amended by PL 1999, c. 256, Pt. B, 
§ 1, is further amended to read: 
3. Requirement. If a policy makes coverage available with respect to dependents of 
certificate holders, the policy must provide for a dependent special enrollment period 
when a person becomes a dependent of an eligible individual through marriage, birth or 
adoption or placement for adoption eF~ if a court order is issued changing custody of a 
child or if a dependent who has other coverage loses eligibility under that coverage. 
During this period, the dependent may be enrolled under the plan as a dependent of the 
eligible individual and, in the case of the birth or adoption of a child, the spouse of the 
eligible individual may be enrolled as a dependent if otherwise eligible for coverage. If 
the eligible individual is not already enrolled or is enrolled in a different benefit package, 
the individual may enroll during this period. 
Sec. A-2. 24-A MRSA §2834-B, sub-§4, as amended by PL 1999, c. 256, Pt. B, 
§2, is further amended to read: 
4. Length of period. A dependent special enrollment period under this section must 
be a period of not less than 30 days and must begin on the latef latest of: 
A. 
The date dependent coverage is made available; eF 
B. 
The date of the marriage, birth or adoption or placement for adoption or the date 
of the court order.,.; and 
C. The date a dependent loses other coverage. 
Sec. A-3. 24-A MRSA §2834-B, sub-§5, as amended by PL 1999, c. 256, Pt. B, 
§§3 and 4, is further amended to read: 
5. No waiting period. If an individual seeks to enroll a dependent during the first 30 
days of a dependent special enrollment period, the coverage of the dependent becomes 
effective: 
A. 
In the case of marriage, no later than the first day of the first month beginning 
after the date the completed request for enrollment is received; 
B. 
In the case ofa dependent's birth, as of the date of the birth; 
C. 
In the case ofa dependent's adoption or placement for adoption, as of the date of 
the adoption or placement for adoption; eF 
D. 
In the case of a court order changing custody of a child, as of the date of the 
order.,.; or 
E. In the case of a dependent who loses other coverage, as of the date of application 
for enrollment. 
Sec. A-4. 24-A MRSA §2849-B, sub-§3, ~A-l is enacted to read: 
A-I. That person incurs a claim under a prior contract or policy that -vould meet or 
exceed that contract or policy's lifetime limit on all benefits, and a request for 
enrollment is made not later than 30 days after a claim is denied in whole or in part 
due to the operation of a lifetime limit on all benefits. 
Sec. A-S. 24-A MRSA §2849-B, sub-§4, as amended by PL 1993, c. 477, Pt. A, 
§ 13 and affected by Pt. F, § 1, is further amended to read: 
4. Prohibition against discontinuity. Except as provided in this section, in an 
individual ef.1 a group or blanket policy subject to this section, the insurer or health 
maintenance organization must, for any person described in subsection 2, waive any 
medical underwriting or preexisting conditions exclusion to the extent that benefits would 
have been payable under a prior contract or policy if the prior contract or policy were still 
in effect or to the extent that benefits would have been payable under the prior contract or 
policy if not for the operation of a lifetime limit on all benefits. The succeeding policy is 
not required to duplicate any benefits covered by the prior contract or policy. 
Sec. A-6. 24-A MRSA §2849-C, sub-§2, ~, as enacted by PL 2001, c. 258, Pt. 
C, § 1, is amended to read: 
B. 
The certification described in this paragraph is a written certification of: 
(1) The period of federally creditable coverage of the individual under the plan 
and the coverage, if any, under the COBRA continuation provision; aaa 
(2) The waiting period, if any, imposed with respect to the individual for any 
coverage under the plan~; and 
(3) An educational statement regarding the federal Health Insurance Portability 
and Accountability Act of 1996, Public Law 104-191, consistent with federal 
law. 
Sec. A-7. 24-A MRSA §2849-C, sub-§4, as enacted by PL 2001, c. 258, Pt. C, 
§ 1, is amended to read: 
4. Notice. A carrier may not impose a preexisting condition exclusion before 
notifying the individaal providing the individual with notice consistent with federal law 
of the individual's continuity rights and giving the individual an opportunity to provide a 
certification as described in subsection 2 or alternative evidence of prior coverage as 
described in subsection 3. 
Sec. A-8. 24-A MRSA §28S0, sub-§2, as amended by PL 2001, c. 258, Pt. D, §3, 
is further amended to read: 
2. Limitation. An individual ef.1 group or blanket contract issued by an insurer may 
not impose a preexisting condition exclusion except as provided in this subsection. A 
preexisting condition exclusion may not exceed 12 months from the date of enrollment, 
including the waiting period, if any. For purposes of this subsection, "waiting period" 
includes any period between the time an inElividwll files a substantially complete 
application for an individual or small group health plan is filed and the time the coverage 
takes effect. A preexisting condition exclusion may not be more restrictive than as 
follows. 
A. 
In a group contract, a preexisting condition exclusion may relate only to 
conditions for which medical advice, diagnosis, care or treatment was recommended 
or received during the 6 months immediately preceding the date of enrollment. An 
exclusion may not be imposed relating to pregnancy as a preexisting condition. 
B. 
In an individual contract not subject to paragraph C, or in a blanket policy, a 
preexisting condition exclusion may relate only to conditions manifesting in 
symptoms that would cause an ordinarily prudent person to seek medical advice, 
diagnosis, care or treatment or for which medical advice, diagnosis, care or treatment 
was recommended or received during the 12 months immediately preceding the date 
of application or to a pregnancy existing on the effective date of coverage. 
C. 
An individual policy issued on or after January 1, 1998 to a federally eligible 
individual as defined in section 2848 may not contain a preexisting condition 
exclusion. 
D. 
A routine preventive screening or test yielding only negative results may not be 
considered to be diagnosis, care or treatment for the purposes of this subsection. 
E. 
Genetic information may not be used as the basis for imposing a preexisting 
condition exclusion in the absence of a diagnosis of the condition relating to that 
information. For the purposes of this paragraph, "genetic information" has the same 
meaning as set forth in the Code of Federal Regulations. 
PARTB 
Sec. B-1. 24-A MRSA §4301-A, sub-§I, as enacted by PL 1999, c. 742, §3, is 
amended to read: 
1. 
Adverse health care treatment decision. "Adverse health care treatment 
decision" means a health care treatment decision made by or on behalf of a carrier 
offering or renewing a health plan denying in whole or in part payment for or provision of 
otherwise covered services requested by or on behalf of an enrollee. 
Sec. B-2. 24-A MRSA §4302, first ~, as enacted by PL 1995, c. 673, Pt. C, § 1 
and affected by §2, is amended to read: 
To offer or renew a health plan in this State, a carrier must comply with the following 
requirements. 
Sec. B-3. 24-A MRSA §4302, sub-§2, as enacted by PL 1995, c. 673, Pt. C, § 1 
and affected by §2, is amended to read: 
2. Plan complaint; adverse decisions; prior authorization statistics. A carrier 
shall provide annually to the superintendent information for each health plan that it offers 
or renews on plan complaints, adverse decisions and prior authorization statistics. This 
statistical information must contain, at a minimum: 
A. 
The ratio of the number of complaints received by the plan to the total number 
of enrollees, reported by type of complaint and category of enrollee; 
B. 
The ratio of the number of adverse decisions issued by the plan to the number of 
complaints received, reported by category; 
C. 
The ratio of the number of prior authorizations denied by the plan to the number 
of prior authorizations requested, reported by category; 
D. 
The ratio of the number of successful enrollee appeals to the total number of 
appeals filed; 
E. 
The percentage of dis enrollments by enrollees and providers from the health plan 
within the previous 12 months and the reasons for the disenrollments. With respect 
to enrollees, the information provided in this paragraph must differentiate between 
voluntary and involuntary disenrollments; and 
F. 
Enrollee satisfaction statistics, including provider-to-enrollee ratio by geographic 
region and medical specialty and a report on what actions, if any, the carrier has taken 
to improve complaint handling and eliminate the causes of valid complaints. 
Sec. B-4. 24-A MRSA §4303, first~, as enacted by PL 1995, c. 673, Pt. C, §1 
and affected by §2, is amended to read: 
A carrier offering or renewing a health plan in this State must meet the following 
requirements. 
Sec. B-5. 24-A MRS A §4303, sub-§l, as amended by PL 2003, c. 469, Pt. E, 
§20 and c. 689, Pt. B, §6, is further amended to read: 
1. 
Demonstration of adequate access to providers. 
Except as provided in 
paragraph A, a carrier offering or renewing a managed care plan shall provide to its 
members reasonable access to health care services in accordance with standards 
developed by rule by the superintendent. These standards must consider the geographical 
and transportational problems in rural areas. All managed care plans covering residents 
of this State must provide reasonable access to providers consistent with the access-to-
services requirements of any applicable bureau rule. 
A. 
Upon approval of the superintendent, a carrier may offer a health plan that 
includes financial provisions designed to encourage members to use designated 
providers in a network if: 
(1) The entire network meets overall access standards pursuant to Bureau of 
Insurance Rule Chapter 850; 
(2) The health plan is consistent with product design guidelines for Bureau of 
Insurance Rule Chapter 750; 
(3) The health plan does not include financial provisions designed to encourage 
members to use designated providers of primary, preventive, maternity, 
obstetrical, ancillary or emergency care services, as defined in Bureau of 
Insurance Rule Chapter 850; 
(4) The financial provisions may apply to all of the enrollees covered under the 
carrier's health plan; 
(5) The carrier establishes to the satisfaction of the superintendent that the 
financial provisions permit the provision of better quality services and the quality 
improvements either significantly outweigh any detrimental impact to covered 
persons forced to travel longer distances to access services, or the carrier has 
taken steps to effectively mitigate any detrimental impact associated with 
requiring covered persons to travel longer distances to access services. The 
superintendent may consult with other state entities, including the Department of 
Health and Human Services, Bureau of Health and the Maine Quality Forum 
established in section 6951, to determine whether the carrier has met the 
requirements of this subparagraph. The superintendent shall provisionally adopt 
rules by January 1, 2004 regarding the criteria used by the superintendent to 
determine whether the carrier meets the quality requirements of this subparagraph 
and present those rules for legislative review during the Second Regular Session 
of the 121 st Legislature; and 
(6) The financial provisions may not permit travel at a distance that exceeds the 
standards established in Bureau of Insurance Rule Chapter 850 for mileage and 
travel time by 100%. 
This paragraph takes effect January 1,2004 and is repealed July 1,2007. 
Sec. B-6. 24-A MRSA §4303, sub-§3, as enacted by PL 1995, c. 673, Pt. C, §1 
and affected by §2, is amended to read: 
3. Provider's right to advocate for medically appropriate care. A carrier offering 
or renewing a managed care plan may not terminate or otherwise discipline a 
participating provider because the provider advocates for medically appropriate health 
care. 
A carrier may not restrict a provider from disclosing to any enrollee any 
information the provider determines appropriate regarding the nature of treatment and 
any risks or alternatives to treatment, the availability of other therapy, consultations or 
tests or the decision of any plan to authorize or deny health care services or benefits. 
A. 
For the purposes of this section, "to advocate for medically appropriate health 
care" means to discuss or recommend a course of treatment to an enrollee; to appeal a 
managed care plan's decision to deny payment for a service pursuant to an established 
grievance or appeal procedure; or to protest a decision, policy or practice that the 
provider, consistent with the degree of learning and skill ordinarily possessed by 
reputable providers, reasonably believes impairs the provider'S ability to provide 
medically appropriate health care to the provider's patients. 
B. 
Nothing in this subsection may be construed to prohibit a plan from making a 
determination not to pay for a particular medical treatment or service or to enforce 
reasonable peer review or utilization review protocols. 
Sec. B-7. 24-A MRSA §4303, sub-§3-A, as enacted by PL 1997, c. 163, §2, is 
amended to read: 
3-A. Termination of participating providers. A carrier offering or renewing a 
managed care plan may not terminate or nonrenew a contract with a participating 
provider unless the carrier provides the provider with a written explanation prior tCle 
termination or nonrenewal of the reasons for the proposed contract termination or 
nonrenewal and provides an opportunity for a review or hearing in accordance with this 
subsection. The existence of a termination without cause provision in a carrier's contract 
with a provider does not supersede the requirements of this subsection. This subsection 
does not apply to termination cases involving imminent harm to patient care, a final 
determination of fraud by a governrnental agency, a final disciplinary action by a state 
licensing board or other governrnental agency that impairs the ability of a provider to 
practice. A review or hearing of proposed contract termination must meet the following 
requirements. 
A. 
The notice of the proposed contract termination or nonrenewal provided by the 
carrier to the participating provider must include: 
(1) The reason or reasons for the proposed action in sufficient detail to permit 
the provider to respond; 
(2) Reference to the evidence or documentation underlying the carrier's decision 
to pursue the proposed action. A carrier shall permit a provider to review this 
evidence and documentation upon request; 
(3) Notice that the provider has the right to request a review or hearing before a 
panel appointed by the carrier; 
(4) A time limit of not less than 30 days from the date the provider receives the 
notice within which a provider may request a review or hearing; and 
(5) A time limit for a hearing date that must be not less than 30 days after the 
date of receipt of a request for a hearing. 
Termination or nonrenewal may not be effective earlier than 60 days from the receipt 
of the notice of termination or nonrenewal. 
B. 
A hearing panel must be composed of at least 3 persons appointed by the carrier 
and one person on the hearing panel must be a clinical peer in the same discipline and 
the same or similar specialty of the provider under review. A hearing panel may be 
composed of more than 3 persons if the number of clinical peers on the hearing panel 
constitutes 1/3 or more of the total membership of the panel. 
C. 
A hearing panel shall render a written decision on the proposed action in a 
timely manner. This decision must be either the reinstatement of the provider by the 
carrier, the provisional reinstatement of the provider subject to conditions established 
by the carrier or the termination or nonrenewal of the provider. 
D. 
A decision by a hearing panel to terminate or nonrenew a contract with a 
provider may not become effective less than 60 days after the receipt by the provider 
of the hearing panel's decision or until the termination date in the provider's contract, 
whichever is earlier. 
Sec. B-8. 24-A MRS A §4303, sub-§3-B, as amended by PL 2001, c. 288, §5, is 
further amended to read: 
3-B. Prohibition on financial incentives. A carrier offering or renewing a managed 
care plan may not offer or pay any type of material inducement, bonus or other financial 
incentive to a participating provider to deny, reduce, withhold, limit or delay specific 
medically necessary health care services covered under the plan to an enrollee. This 
subsection may not be construed to prohibit contracts that contain incentive plans that 
involve general payments such as capitation payments or risk-sharing agreements that are 
made with respect to providers or groups of providers or that are made with respect to 
groups of enrollees. 
Sec. B-9. 24-A MRSA §4303, sub-§4, as amended by PL 2003, c. 309, §1, is 
further amended to read: 
4. Grievance procedure for enrollees. A carrier offering or renewing a health plan 
in this State shall establish and maintain a grievance procedure that meets standards 
developed by the superintendent to provide for the resolution of claims denials or other 
matters by which enrollees are aggrieved. 
A. 
The grievance procedure must include, at a minimum, the following: 
(1) Notice to the enrollee promptly of any claim denial or other matter by which 
enrollees are likely to be aggrieved, stating the basis for the decision, the right to 
file a grievance, the procedure for doing so and the time period in which the 
grievance must be filed; 
(2) Timelines within which grievances must be processed, including expedited 
processing for exigent circumstances. Timelines must be sufficiently expeditious 
to resolve grievances promptly. Decisions for second level grievance reviews as 
defined by bureau rules must be issued within 30 calendar days if the insured has 
not requested the opportunity to appear in person before authorized 
representatives of the health carrier; 
(3) 
Procedures for the submission of relevant information and enrollee 
participation; 
(4) Provision to the aggrieved party of a written statement upon the conclusion 
of any grievance process, setting forth the reasons for any decision. 
The 
statement must include notice to the aggrieved party of any subsequent appeal or 
external review rights, the procedure and time limitations for exercising those 
rights and notice of the right to file a complaint with the Bureau of Insurance and 
the toll-free telephone number of the bureau; and 
(5) Decision-making by one or more individuals not previously involved in 
making the decision subject to the grievance. 
B. 
In any appeal under the grievance procedure in which a professional medical 
opinion regarding a health condition is a material issue in the dispute, the aggrieved 
party is entitled to an independent 2nd opinion, paid for by the plan, of a provider of 
the same specialty participating in the pian. If a provider of the same specialty does 
not participate in the plan, then the 2nd opinion must be given by a nonparticipating 
provider. 
C. 
In any appeal under the grievance procedure, the carrier shall provide auxiliary 
telecommunications devices or qualified interpreter services by a person proficient in 
American Sign Language when requested by an enrollee who is deaf or hard-of-
hearing or printed materials in an accessible format, including Braille, large-print 
materials, computer diskette, audio cassette or a reader when requested by an enrollee 
who is visually impaired to allow the enrollee to exercise the enrollee's right to an 
appeal under this subsection. 
D. 
Notwithstanding this subsection, a group health plan sponsored by an 
agricultural cooperative association located outside of this State that provides health 
insurance coverage to members of one or more agricultural cooperative associations 
located within this State may employ a grievance procedure for enrollees in the group 
health plan that meets the requirements of the state in which the group health plan is 
located if enrollees in the group health plan that reside in this State have the right to 
independent external review in accordance with section 4312 following any adverse 
health care treatment decision. 
Any difference in the grievance procedure 
requirements between those of the state in which the group health plan is located and 
those of this State must be limited to the number of days required for notification of 
prior authorization for nonemergency services and the number of days required for 
the issuance of a decision following the filing of an appeal of an adverse health care 
treatment decision. Enrollees in the group health plan that reside in this State must be 
notified as to the grievance procedure used by the group health plan and their right to 
independent external review in accordance with section 4312. 
Sec. B-10. 24-A MRSA §4303, sub-§5, as enacted by PL 1999, c. 396, §5 and as 
affected by § 7, is amended to read: 
5. 
Identification of services provided by certified nurse practitioners and 
certified nurse midwives. All claims for coverage of services provided by certified 
nurse practitioners and certified nurse midwives must identify the certified nurse 
practitioners and certified nurse midwives who provided those services. 
A carrier 
offering or renewing a health plan in this State shall assign identification numbers or 
codes to certified nurse practitioners and certified nurse midwives who provide covered 
services for enrollees covered under that plan. A claim submitted for payment to a 
carrier by a health care provider or facility must include the identification number or code 
of the certified nurse practitioner or certified nurse midwife who provided the service and 
may not be submitted using the identification number or code of a physician or other 
health care provider who did not provide the covered service. 
Sec. B-11. 24-A MRSA §4303, sub-§9, as enacted by PL 2003, c. 218, §9, is 
amended to read: 
9. Notice of amendments to provider agreements. A carrier offering or renewing 
a health plan in this State shall notify a participating provider of a proposed amendment 
to a provider agreement at least 60 days prior to the amendment's proposed effective date. 
If an amendment that has substantial impact on the rights and obligations of providers is 
made to a manual, policy or procedure document referenced in the provider agreement, 
such as material changes to fee schedules or material changes to procedural coding rules 
specified in the manual, policy or procedure document, the carrier shall provide 60 days' 
notice to the provider. After the 60-day notice period has expired, the amendment to a 
manual, policy or procedure document becomes effective and binding on both the carrier 
and the provider subject to any applicable termination provisions in the provider 
agreement, except that the carrier and provider may mutually agree to waive the 60-day 
notice requirement. This subsection may not be construed to limit the ability of a carrier 
and provider to mutually agree to the proposed change at any time after the provider has 
received notice of the proposed amendment. 
Sec. B-12. 24-A MRSA §4304, first ~, as amended by PL 1999, c. 742, § 11, is 
further amended to read: 
The following requirements apply to health plans doing business in this State that 
require prior authorization by the plan of health care services or otherwise subject 
payment of health care services to review for clinical necessity, appropriateness, efficacy 
or efficiency. A carrier offering or renewing a health plan subject to this section that 
contracts with other entities to perform utilization review on the carrier's behalf is 
responsible for ensuring compliance with this section and chapter 34. 
Sec. B-13. 24-A MRS A §4304, sub-§I, as amended by PL 2001, c. 288, §6, is 
further amended to read: 
1. Requirements for medical review or utilization review practices. A carrier 
must appoint a medical director who is responsible for reviewing and approving the 
carrier's policies governing the clinical aspects of coverage determinations by any health 
plan that it offers or renews. A carrier's medical review or utilization review practices 
must be governed by the standard of medically necessary health care as defined in this 
chapter. 
Sec. B-14. 24-A MRS A §4305, first~, as amended by PL 1999, c. 742, §14, is 
further amended to read: 
A carrier offering or renewing a health plan that subjects payment of benefits for 
otherwise covered services to review for clinical necessity, appropriateness, efficacy or 
efficiency must meet the following requirements relating to quality of care. 
Sec. B-15. 24-A MRSA §4306, as amended by PL 1999, c. 742, §15, is further 
amended to read: 
§4306. Enrollee choice of primary care provider 
A carrier offering or renewing a managed care plan shall allow enrollees to choose 
their own primary care providers, as allowed under the managed care plan's rules, from 
among the panel of participating providers made available to enrollees under the managed 
care plan's rules. A carrier shall allow physicians, and certified nurse practitioners who 
have been approved by the State Board of Nursing to practice advanced practice 
registered nursing without the supervision of a physician pursuant to Title 32, section 
2102, subsection 2-A, to serve as primary care providers for managed care plans. A 
carrier is not required to contract with certified nurse practitioners or physicians as 
primary care providers in any manner that exceeds the access and provider network 
standards required in this chapter or chapter 56, or any rules adopted pursuant to those 
chapters. A carrier must shall allow enrollees in a managed care plan to change primary 
care providers without good cause at least once annually and to change with good cause 
as necessary. When an enrollee fails to choose a primary care provider, the carrier may 
assign the enrollee a primary care provider located in the same geographic area in which 
the enrollee resides. 
Sec. B-16. 24-A MRSA §4308, first~, as enacted by PL 1999, c. 742, §18, is 
amended to read: 
A contract between a carrier offering or renewing a health plan and a provider for the 
provision of services to enrollees may not require the provider to indemnify the carrier for 
any expenses and liabilities, including, without limitation, judgments, settlements, 
attorney's fees, court costs and any associated charges incurred in connection with aHY f! 
claim or action brought against the health plan based on the carrier's own' fault. Nothing 
in this section may be construed to remove responsibility of a carrier or provider for 
expenses or liabilities caused by the carrier's or provider's own negligent acts or 
omissions or intentional misconduct. 
Sec. B-17. 24-A MRS A §4312, first~, as enacted by PL 1999, c. 742, §19, is 
amended to read: 
An enrollee has the right to an independent external review of a carrier's adverse 
health care treatment decision made by or on behalf of a carrier offering or renewing a 
health plan in accordance with the requirements of this section. An enrollee's failure to 
obtain authorization prior to receiving an otherwise covered service may not preclude an 
enrollee from exercising the enrollee's rights under this section. 
Sec. B-18. 24-A MRS A §4313, sub-§I, as enacted by PL 1999, c. 742, §19, is 
amended to read: 
1. Duty of ordinary care; cause of action. An enrollee may maintain a cause of 
action against a carrier offering or renewing a health plan in accordance with the 
following. 
A. 
A carrier has the duty to exercise ordinary care when making health care 
treatment decisions that affect the quality of the diagnosis, care or treatment provided 
to an enrollee and is liable for damages as provided in this section for harm to an 
enrollee proximately caused by the failure of the carrier or its agents to exercise such 
ordinary care. 
B. 
A carrier is also liable for damages as provided in this section for harm to an 
enrollee proximately caused by the health care treatment decisions made by its agents 
who are acting on the carrier's behalf and over whom the carrier exercised control or 
influence in the health care treatment decisions that result in the failure to exercise 
ordinary care. 
PART C 
Sec. C-l. 24-A MRS A §2850-B, sub-§3, ~F-l is enacted to read: 
F -1. When the carrier ceases offering individual health plans in compliance with 
section 2736-C, subsection 4 and does not renew an existing policy in that market; 
PARTD 
Sec. D-l. 24-A MRSA §2849, sub-§l, as amended by PL 1995, c. 332, Pt. F, §3, 
is further amended to read: 
1. Policies subject to this section. Notwithstanding any other provision of law, this 
section applies to all group and blanket medical insurance policies issued by insurers or 
health maintenance organizations to policyholders who are obtaining coverage for a 
group or subgroup to replace coverage under a different contract or policy is~ued by aHJ' .1! 
nonprofit hospital or medical service organization, insurer or health maintenance 
organization, or to replace coverage under an uninsured employee benefit plan that 
provides payment for health services received by employees or their dependents if the 
policyholder has applied for coverage under the replacement policy within 90 days after 
termination of coverage under the contract or policy being replaced. For purposes of this 
section, the group or blanket policy issued to replace the prior contract or policy is the 
"replacement policy." The group or blanket contract or policy or uninsured employee 
benefit plan, or a number of individual contracts or policies if the premiums were paid by 
the employer or by payroll deduction, being replaced is the "replaced contract or policy." 
Sec. D-2. 24-A MRSA §2849-A, sub-§2, as amended by PL 1999, c. 256, Pt. L, 
§6, is further amended to read: 
2. Requirement. Every group or blanket policy subj ect to this section must provide 
a reasonable extension of benefits for a person who is totally disabled on the date the 
group or blanket policy is discontinued, or on the date coverage for a subgroup in the 
policy is discontinued. A premium may not be charged during the period of extension. 
For a policy providing hospital or medical expense coverage, an extension of benefits 
provision is reasonable if it provides benefits for covered expenses directly relating to the 
condition causing total disability for at least 6 months following the effective date of 
discontinuance. For a policy providing specific indemnity during hospital confinement, 
"extension of benefits" means that discontinuance of the policy during a disability has no 
effect on benefits payable for that confinement. 
Sec. D-3. 24-A MRSA §2849-A, sub-§4-A, as enacted by PL 1997, c. 604, Pt. 
H, §2, is amended to read: 
4-A. Coordination of benefits. If replacement coverage is secured by the group or 
blanket policyholder from aHJ' an insurer, nonprofit hospital or medical service 
organization or health maintenance organization and a totally disabled person is covered 
under 5Heh the replacement coverage, the replacement coverage must pay as primary 
coverage and the replaced coverage must pay as secondary coverage for the covered 
expenses directly relating to the condition causing total disability during the extension of 
benefits required under this section. 
Sec. D-4. 24-A MRS A §2849-B, sub-§2, as amended by PL 2001, c. 258, Pt. E, 
§ 7, is further amended to read: 
2. Persons provided continuity of coverage. Except as provided in subsection 3, 
this section provides continuity of coverage for a person who seeks coverage under an 
individual eF-a.1 group or blanket insurance policy or health maintenance organization 
policy if: 
A. 
That .person was covered under an individual ef.1 group or blanket contract or 
policy issued by aay f! nonprofit hospital or medical service organization, insurer, 
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 ef.1 group or blanket policy under which the 
person is seeking coverage is the "succeeding policy." 
The group, blanket or 
individual contract or policy, uninsured employee benefit plan or governmental 
program that previously covered the person is the "prior contract or policy"; and 
B. 
Coverage under the prior contract or policy terminated: 
(1) Within 180 days before the date the person enrolls or is eligible to enroll in 
7 
the succeeding contract if: 
(a) Coverage was terminated due to unemployment, as defined in Title 26, 
section 1043; 
(b) The person was eligible for and received unemployment compensation 
benefits for the period of unemployment, as provided under Title 26, chapter 
13; and 
(c) The person is employed at the time replacement coverage is sought under 
this provision; or 
(2) Within 90 days before the date the person enrolls or is eligible to enroll in the 
succeeding contract. 
A period of ineligibility for aay f! health plan imposed by terms of employment may 
not be considered in determining whether the coverage ended within a time period 
specified under this section. 
This section does not apply to replacements of group or blanket coverage within the 
scope of section 2849 or if the succeeding policy is an individual policy and the prior 
contract or policy was a short-term policy. 
PART E 
Sec. E-l. 24-A MRSA §409, sub-§3, as enacted by PL 1991, c. 385, §1, is 
amended to read: 
3. Life or health insurer. A life or health insurer is authorized to transact life 
insurance, life and annuity insurance or health insurance as defined in sections 702 to +Q4 
704-A. A life insurer, health insurer or a life and health insurer does not become an all 
lines insurer merely by transacting specific lines of casualty insurance that life or health 
insurers are expressly authorized by law to transact. 
PARTF 
Sec. F-l. 24-A MRSA §2809-A, sub-§l-B, as amended by PL 2003, c. 156, §4, 
is further amended to read: 
I-B. Notification of availability of individual coverage. An insurer ffil:iSt shall 
provide forms to group policyholders and certificate holders as when required ffi Qy 
subsection I-A for the purpose of informing terminating group members of their right to 
purchase any individual health plan available in this State. An adequate supply of forms 
must be provided to each group policyholder when the policy is issued and at least 
annually thereafter after the policy is issued. 
The superintendent may prescribe the 
content of the form by routine technical rule pursuant to Title 5, chapter 375, subchapter 
2-A. The form must include at least the following: 
A. 
A statement that all state residents not eligible for Medicare have a right to 
purchase any individual health plan available in this State; 
B. 
A statement that in order to avoid a gap in coverage, the individual should apply 
for individual coverage prior to termination of group coverage; 
C. A statement that if more than 90 days pass between the time the group coverage 
ends and the time individual coverage begins, the individual coverage may exclude 
preexisting conditions for one year; and 
D. 
A statement that information concerning individual coverage is available from 
the Bureau of Insurance. 
The bureau's toll-free telephone number must also be 
provided. 
PARTG 
Sec. G-l. 24-A MRSA §2696, sub-§2, as enacted by PL 2001, c. 410, Pt. C, §1, 
is amended to read: 
2. 
Exclusion based on preexisting condition limited after 6 months. 
Notwithstanding the provisions of subsection 1 and section 2706, subsection 2, division 
(b), an insurer that issues a specified disease policy or certificate, regardless of whether 
the poliey or eertifieate is iss1:led on the basis of a detailed applieation foffil, a simplified 
applieation foffil or an eRfOllrneat foffil may not deny a claim for any covered loss that 
begins after the policy or certificate has been in force for at least 6 months, unless that 
loss results from a preexisting condition that was diagnosed by a physician before the 
date of application for coverage or that first manifested itself within the 6 months 
immediately preceding the application date. Exeept for reseission for misrepresentation, 
Other defenses based upon preexisting conditions are not permitted except for rescission 
for misrepresentation. 
This subsection applies regardless of whether the policy or 
certificate is issued on the basis of a detailed application form, a simplified application 
form or an enrollment form. 
SUMMARY 
This bill amends various provisions of law concerning health insurance in order to 
comply with final federal rules published in December 2004 to clarify the federal Health 
Insurance Portability and Accountability Act of 1996. It also provides that a waiting 
period in a smhll group health plan includes a period between the time a substantially 
complete application is filed and the time the coverage takes effect. 
This bill requires that second level appeals of health insurance claims be completed 
within 30 days when the insured has not requested the opportunity to appear in person 
before authorized representatives of the health carrier. It also clarifies that provisions of 
the health plan improvement laws applying to carriers offering health plans apply to 
carriers renewing health plans even if the plans are no longer sold. 
This bill amends the list of exceptions to the law concerning guaranteed renewal of 
individual health insurance to include withdrawal from the market. 
This bill amends the law concerning continuity of health insurance to clarify that it 
applies to blanket coverage. 
This bill clarifies that a life and health Insurer can be licensed to Issue health 
maintenance organization contracts. 
This bill clarifies the law requiring notice of group health termination. 
This bill clarifies the law regarding permissible limitations on coverage of preexisting 
conditions in specified disease policies.