An Act To Establish a Reinsurance Fund To Expand Health Insurance Coverage for Individuals and Small Groups February 1, 2007
Maine Legislature, Session 123, LD 0476
Committee: Insurance and Financial Services
Sponsors: ROSEN, NASS, RA YE, TURNER, RECTOR, SCHATZ

Legislative Document 
No. 476 
S.P.163 
An Act To Establish a Reinsurance Fund To Expand Health 
Insurance Coverage for Individuals and Small Groups 
February 1, 2007 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Senator ROSEN of Hancock. 
JOY J. O'BRIEN 
Secretary of the Senate 
Cosponsored by Senators: NASS of York, RA YE of Washington, TURNER of Cumberland, 
Representatives: RECTOR of Thomaston, SCHATZ of Blue Hill. 
Prinled on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA c. 54, is enacted to read: 
CHAPTER 54 
HEALTH INSURANCE INDIVIDUAL AND SMALL GROUP 
REINSURANCE FUND 
§3901. Short title 
This chapter may be known and cited as "the Health Insurance Individual and Small 
Group Reinsurance Fund Act. " 
§3902. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Carrier. "Carrier" means an insurance company, nonprofit hospital and medical 
service organization or health maintenance organization authorized to issue individual 
health plans or small group health plans in this State. 
2. Enrollee. "Enrollee" means a person covered under an individual health plan or 
small group health plan. 
3. Individual health plan. "Individual health plan" has the same meaning as in 
section 2736-C, subsection 1, paragraph C. 
4. Small group health plan. "Small group health plan" has the same meaning as in 
section 2808-B, subsection 1, paragraph G. 
§3903. Health Insurance Individual and Small Group Reinsurance Fund 
1. 
Fund established. The superintendent shall establish the Health Insurance 
Individual and Small Group Reinsurance Fund, referred to in this chapter as "the fund," 
from which carriers may receive reimbursement, to the extent funds are available, for 
claims paid by such carriers for enrollees. The superintendent shall establish separate and 
distinct accounts for funds from which carriers may receive reimbursement for claims 
paid under individual and small group health plans. The fund is created as an enterprise 
fund for the deposit of any funds appropriated or allocated to the fund from any public or 
private source. The fund may not lapse but must be carried forward to carry out the 
purposes of this chapter. 
2. Reinsurance levels; eligibility. A carrier is eligible to receive reimbursement for 
90% of claims paid between $25,000 and $75,000 in a calendar year for any enrollee 
covered under an individual or small group health plan. Once claims paid on behalf of an 
enrollee reach or exceed $75,000 in a given calendar year, no further claims paid on 
behalf of that enrollee in that calendar year are eligible for reimbursement. The 
superintendent may reallocate the money available for distribution from the fund among 
the individual and small group reinsurance accounts if the superintendent determines that 
such reallocation is warranted due to enrollment trends. 
3. 
Claims for reimbursement. A carrier is eligible for reimbursement on claims 
only for the calenda~ar in which the claims are paid. A carrier must submit a request 
for reimbursement for eligible individual and small group health plan claims on forms 
prescribed by the superintendent. A reimbursement claim must be submitted no later than 
April 1st following the end of the calendar year for which the reimbursement requests are 
being made. The superintendent may require a carrier to submit any claims data in 
connection with the reimbursement requests that the superintendent considers necessary 
to oversee the operation of the fund. The data must be submitted in the form and manner 
prescribed by the superintendent and reported separately for individual and small group 
health plans. 
4. 
Distribution; pro rata distribution permitted. The superintendent shall 
distribute reimbursement amounts from the fund to carriers on a calendar· year basis. For 
each reinsurance account within the fund, the superintendent shall calculate the total 
claims reimbursement amount for all carriers for the calendar year for which claims are 
being reported. In the event that the total amount requested for reimbursement for a 
calendar year exceeds funds available for distribution for claims paid during that same 
calendar year, the superintendent shall provide for the pro rata distribution of the 
available funds. Each carrier is eligible to receive only such proportionate amount of the 
available funds as the individual carrier's total eligible claims paid bears to the total 
eligible claims paid by all carriers. In the event that funds available for distribution for 
claims paid by all carriers during a calendar year exceed the total amount requested for 
reimbursement by all carriers during that same calendar year, the excess funds must be 
carried forward and made available for distribution in the next calendar year. Any excess 
funds are in addition to the funds appropriated for the fund in the next calendar year. 
5. Estimate of total reimbursement; actuarial assumptions. The superintendent 
shall separately estimate the per enrollee annual cost of total claims reimbursement from 
each reinsurance account based upon available data and appropriate actuarial 
assumptions. Upon request, each carrier shall furnish to the superintendent claims 
experience data and enrollment data for use in such estimations. The data must be 
furnished in the form and manner prescribed by the superintendent. 
6. 
Administrator. The superintendent may obtain the services, through a 
competitive bidding process, of a 3rd-party administrator or other organization to 
administer the fund. 
7. 
Purchase of stop loss or excess insurance. The superintendent, or the 
administrator of the fund pursuant to subsection 6 with the prior approval of the 
superintendent, may purchase stop loss or excess insurance from an insurance company 
authorized to do business in this State. Such stop loss or excess insurance may be 
purchased in an amount and at attachment levels determined appropriate by the 
superintendent for the purposes of providing reimbursement of claims in accordance with 
this section. 
8. Rules. The superintendent shall adopt rules as necessary for the administration 
and operation of the fund. Rules adopted pursuant to this subsection are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
9. 
Audit. The fund must be audited annually by the State Auditor. The 
superintendent, at the superintendent's discretion, may arrange for an independent audit 
to be conducted. A copy of the audit must be provided to the joint standing committee of 
the Legislature having jurisdiction over health insurance matters and the joint standing 
committee of the Legislature having jurisdiction over appropriations and financial affairs. 
10. Annual report. The superintendent shall report annually by March 15th on the 
operation of the fund to the joint standing committee of the Legislature having 
jurisdiction over health insurance matters and the joint standing committee of the 
Legislature having jurisdiction over appropriations and financial affairs. The report must 
include information on the total amount of reimbursement made from the fund, the total 
claims made for reimbursement and the financial solvency of the fund. 
SUMMARY 
This bill establishes the Health Insurance Individual and Small Group Reinsurance 
Fund to provide reimbursement of certain high-cost claims for persons covered under 
individual and small group health plans. The fund would reimburse carriers for 90% of 
claims paid between $25,000 and $75,000 for each enrollee covered by the carrier on a 
calendar year basis.