An Act To Improve the AfTordability of Health Insurance for Maine People
Maine Legislature, Session 123, LD 1659
Committee: Insurance and Financial Services
Sponsors: TARDY, TURNER, RICHARDSON, MILLS, SNOWE-MELLO
Amends: 24-A MRSA §2736-C, 24-A MRSA §2849-B, 24-A MRSA §2849-C

Legislative Document 
No. 1659 
H.P.1168 
House of Representatives, March 22, 2007 
An Act To Improve the AfTordability of Health Insurance for Maine 
People 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative TARDY of Newport. 
Cosponsored by Senator TURNER of Cumberland and 
'IY/~ 117· 71!~~ 
MILLICENT M. MacFARLAND 
Clerk 
Representati ves: McKANE of Newcastle, RICHARDSON of Warren, SA V AGE of Falmouth, 
V AUGHAN of Durham, Senators: MILLS of Somerset, SNOWE-MELLO of Androscoggin. 
Pnnleu Oil rt"i.:ydt'LI paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 24-A MRSA §2736-C, sub-§2,~, as enacted by PL 1993, c. 477, Pt. C, 
§ 1 and as affected by Pt. F, § 1, is amended to read: 
B. 
A carrier may not vary the premium rate due to the gender, healtH status, 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. 2. 24-A MRS A §2736-C, sub-§2, ~C, as amended by PL 2001, c. 410, Pt. 
A, § 1 and as affected by § 1 0, is further amended to read: 
C. 
A carrier may vary the premium rate due to smoking status and family 
membership. 
The superintendent may adopt rules setting forth appropriate 
methodologies regarding rate discounts based on smoking status. 
Rules adopted 
pursuant to tAis paragrapA are routine teCHnical rules as defined in Title 5, chapter 
375, subCHapter II ,A •• 
Sec. 3. 24-A MRSA §2736-C, sub-§2,~, as amended by PL 2001, c. 410, Pt. 
A, §2 and as affected by § 1 0, is further amended to read: 
D. 
A carrier may vary the premium rate due to age, health status, occupation or 
industry attd~ geographic area only under tHe following sCAedule and within tAe listed 
percentage bands and tobacco use in accordance with the following limitations. 
(\) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between December I, 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%. 
(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%. 
(3) For an 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 February 1, 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 persons who are under 19 years of age or over 65 years of age. 
(5) For an policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State after February 1, 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 
user. 
(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. 4. 24-A MRSA §2736-C, sub-§2, ~G is enacted to read: 
G. A carrier that offered individual health plans prior to April 1, 2008 may close its 
individual book of business sold prior to April 1, 2008 and may establish a separate 
community rate for individuals applying for coverage under an individual health plan 
after April 1, 2008. 
Sec. 5. 24-A MRSA §2736-C, sub-§3, ~A, as corrected by RR 2001, c. 1, §30, 
1 
is repealed. 
Sec. 6. 24-A MRSA §2736-C, sub-§3, ~C, as enacted by PL 1993, c. 477, Pt. C, 
l3 
§ 1 and as affected by Pt. F, § 1, is repealed. 
Sec. 7. 24-A MRSA §2736-C, sub-§3, ~, as enacted by PL 1999, c. 256, Pt. D, 
§ 1, is amended to read: 
D. 
Notwithstanding paragraph A, carriers 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. 8. 24-A MRSA §2736-C, sub-§6, ~A, as amended by PL 1995, c. 332, Pt. 
K, § 1, is further amended to read: 
A. Each carrier must actively market individual health plan coverage, iflCh-ldiflg aflY 
standardized plans defifled pursuant to subsection 8, to individuals in this State. 
Sec. 9. 24-A MRSA §2736-C, sub-§8, as amended by PL 1999, c. 256, Pt. D, §2, 
is further amended to read: 
8. Authority of the superintendent. The superintendent may by rule define one or 
more standardized individual health plans that m\:lSt may be offered by all carriers 
offering individual health plans in the State, other than carriers offering only CHAMPUS 
supplemental coverage. 
Sec. 10. 24-A MRSA §2736-C, sub-§9, as enacted by PL 1995, c. 570, §7, is 
amended to read: 
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 subsection 3, paragraph A; subsection 6, paragraph A~ 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 2 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 not include age, health status, medical 
utilization history or any other factor with a similar purpose or effect; 
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 market 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. 11. 24-A MRS A §2848, suh-§l-B, ~A, 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: 
(1) An employee welfare benefit plan as defined in Section 3( 1) of the federal 
Employee Retirement Income Security Act of 1974, 29 United States Code, 
Section 1001, or a plan that would be an employee welfare benefit 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) 
Title 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's health insurance program under Title XXI of the Social Security 
Act; 
(5) 
The Civilian Health and Medical Program for the Uniformed Services, 
CHAMPUS, 10 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, 5 United States Code, Chapter 89; 
(9) A public health plan as defined in federal regulations authorized by the 
federal Public Health Service Act, Section 2701(c)(l)(I), as amended by Public 
Law 104-191; Sf 
(10) A health benefit plan under Section 5( e) of the Peace Corps Act, 22 United 
States Code, Section 2504( e}.~ 
I 1 
(11) Insurance coverage offered by the Comprehensive Health Insurance Risk 
Pool Association pursuant to chapter 54. 
Sec. 12. 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 an individual or £! group contract or policy issued 
by any nonprofit hospital or medical service organization, insurer, or health 
maintenance organization, or the plan administrator of the Comprehensive Health 
Insurance Risk Pool Association pursuant to chapter 54, 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 f-l-Q1 ill} For purposes of this section, the individual or group policy under 
which the person is seeking coverage is the "succeeding policy." 
The group Sf 
individual contract or policy, uninsured employee benefit plan or governmental 
program that previously covered the person is the "prior contract or policy"; and 
Sec. 13. 24-A MRSA §2849-C, sub-§I, as enacted by PL 2001, c. 258, Pt. C, §1, 
is amended to read: 
1. Application. This section applies to: 
A. 
Individual health plans subject to section 2736-C; aOO 
B. 
Group and blanket health insurance contracts subject to chapter 35, except: 
I 
(I) Medicare supplement policies subject to chapter 67; and 
(2) 
Contracts designed to cover specific diseases, hospital indemnity or 
accidental injury only"; and 
C. 
Insurance contracts or policies issued by the plan administrator of the 
Comprehensive Health Insurance Risk Pool Association pursuant to chapter 54. 
Sec. 14. 24-A MRSA c. 54 is enacted to read: 
CHAPTER 54 
COMPREHENSIVE HEALTH INSURANCE RISK POOL ASSOCIATION 
§3901. Short title 
This chapter may be known and cited as "the Comprehensive Health Insurance Risk 
Pool Association Act. " 
§3902. 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 3903. 
2. Board. "Board" means the board of directors of the association. 
3. Covered person. "Covered person" means an individual resident of this State 
who: 
A. Is eligible to receive benefits from an insurer; 
B. 
Is eligible for benefits under the federal Health Insurance Portability and 
Accountability Act of 1996; or 
C. 
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. 
For the purposes of this chapter, "covered person" does not include a dependent of a 
covered person. 
4. Dependent. "Dependent" means a resident spouse, a domestic partner as defined 
in section 2832-A, subsection 1, a 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. For the purposes of this chapter, "insurer" 
includes an insurance company, a nonprofit hospital and medical service organization, a 
fraternal benefit society, a health maintenance organization, a self-insurance arrangement 
that provides health care benefits in this State to the extent allowed under the federal 
Employee Retirement Income Security Act of 1974, a 3rd-party administrator, a multiple-
employer welfare arrangement, another entity providing medical insurance or health 
benefits subject to state insurance regulation, a reinsurer that reinsures health insurance or 
health benefits in this State and the Dirigo Health Program or any similar program 
sponsored by the Dirigo Health Agency or any other state-run or state-sponsored health 
insurance or health benefit program whether fully insured or self-funded. 
.. 
7. Medical insurance. "Medical insurance" means a hospital and 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 
furnishes medical or health care services whether by insurance or otherwise, whether sold 
as an individual or group policy. "Medical insurance" does not include accidental injury, 
specified disease, hospital indemnity, dental, vision, disability income, Medicare 
supplement, long-term care or other limited benefit health insurance or credit insurance; 
coverage issued as a supplement to liability insurance; insurance arising out of workers' 
compensation or similar law; automobile medical payment insurance; or insurance under 
which benefits are payable with or without regard to fault and that is statutorily required 
to be contained in any liability insurance policy or equivalent self-insurance. 
8. Medicare. "Medicare" means coverage under both Parts A and B of Title XVIII 
of the federal Social Security Act, 42 United States Code, Section 1395 et seq. 
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 legally located in the United States and has been legally domiciled in this State 
for a period to be established by the board, not to exceed one year, subject to the 
approval of the superintendent; 
B. 
Is legally domiciled 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 of2002. 
12. Reinsurer. "Reinsurer" means an insurer from whom a person providing health 
insurance for a resident procures insurance for itself with the insurer with respect to all or 
lli!£Lof the medical insurance risk of the person. "Reinsurer" includes an insurer that 
provides employee benefits excess insurance. 
13. Third-party administrator. "Third-party administrator" means any entity that 
is paying or processing medical insurance claims for any resident. 
§3903. Comprehensive Health Insurance Risk Pool Association 
1. 
Risk pool established. 
The Comprehensive Health Insurance Risk Pool 
Association is established as a nonprofit legal entity. As a condition of doing business, 
an insurer that has sold medical insurance within the previous 12 months or is actively 
marketing a medical insurance policy in this State must participate in the association. 
I 
2. Board of directors. The association is governed by a board of directors In 
accordance with the following. 
A. The board consists of 10 members appointed as follows: 
(1) Six members appointed by the superintendent: 2 members chosen from the 
general public and who are not associated with the medical profession, a hospital 
or an insurer; 2 members who represent medical providers; one member who 
represents a statewide organization that represents small businesses and that 
receives a majority of its funding from small businesses located in this State; and 
one member who represents producers. 
A board member appointed by the 
superintendent may be removed at any time without cause; and 
(2) Four members appointed by the member insurers, at least 2 of whom are 
domestic insurers and at least one of whom is a 3rd-party administrator. 
B. 
Members of the board serve for 3-year terms, except that of those members 
initially appointed by the superintendent, 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 and of those 
members initially appointed by the member insurers, one member serves for a term of 
one year, one member serves for a term of 2 years and 2 members serve for a term of 
years. The appointing authority shall designate the period of service of each initial 
appointee at the time of appointment. 
C. The board shall elect one of its members as chair. 
D. Board members may be reimbursed from funds of the association for actual and 
necessary expenses incurred by them as members but may not otherwise be 
compensated for their services. 
3. Plan of operation. The board shall adopt a plan of operation in accordance with 
the requirements of this chapter and submit its articles, bylaws and operating rules to the 
superintendent for approval. If the board fails to adopt the plan of operation and suitable 
articles and bylaws within 90 days after the appointment of the board, the superintendent 
shall adopt rules to effectuate the requirements of this chapter and those rules remain in 
effect until superseded by a plan of operation and articles and bylaws submitted by the 
board and approved by the superintendent. Rules adopted by the superintendent pursuant 
to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter 
2-A. 
4. Immunity. A board member is not liable and is immune from suit at law or 
equity for any conduct performed in good faith that is within the scope of the board's 
jurisdiction. 
§3904. 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; a 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. 
Indemnification. 
The board may provide in its bvlaws or rules for 
indemnification of, and legal representation for, its members and employees. 
§3905. 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 3906; 
D. Collect the assessments provided in section 3907. The level of payments must be 
established by the board. Assessments must be collected pursuant to the plan of 
operation approved by the board and adopted pursuant to section 3903, subsection 3. 
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; 
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; 
G. Develop and implement 2 or more benefit plans to be offered through the plan; 
and 
H. Comply with all reserve requirements and solvency requirements applicable to 
insurers that offer fully insured products if the association offers a self-funded health 
benefit plan through 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 proper to carry out the provIsIons and 
purposes of this chapter and may, with the approval of the superintendent, enter into 
contracts with similar organizations of 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, and may take legal actions necessary or proper to recover or 
collect assessments due the association; 
D. Take 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 amounts paid 
by the association as a result of mistake of fact or law or to recover other amounts 
due the association; 
E. Establish, and 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 3909; 
F. Issue policies of insurance in accordance with the requirements of this chapter; 
G. Appoint appropriate legal, actuarial and other committees as necessary to provide 
technical assistance in the operation of the plan, policy and other contract design and 
any other function within the authority of the association; 
H. Borrow money to effect the purposes of the association. Notes or other evidence 
of indebtedness of the association not in default must be legal investments for 
insurers and may be carried as admitted assets; 
I. Establish rules, conditions and procedures for reinsuring risks of member insurers 
desiring to issue in their own names plan coverage to individuals otherwise eligible 
for plan coverage; 
J. 
Prepare 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 types of health insurance policies to provide optional coverage, 
including Medicare supplement health insurance; 
M. Provide for and employ cost-containment measures and requirements, including, 
but not limited to, the imposition of preexisting condition exclusions or limitations as 
the board determines necessary by rule, preadmission screening, 2nd surgical 
opinion, concurrent utilization review and individual case management for the 
purpose of making the benefit plan more cost-effective; 
N. Design, use, contract or otherwise arrange for the 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. 
• 
I 
4. Review for solvency. The superintendent shall review the association at least 
every 3 years to detennine its solvency. If the superintendent detennines 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 detennines that the funds of the association are 
insufficient to support the enrollment of additional persons and that the cap of 
assessments in section 3907 is too low to support the enrollment of additional persons, 
the superintendent may order the association to charge assessments in excess of the cap 
for a period not to exceed 12 months. 
5. 
Annual report. 
The association shall report annually to the joint standing 
II 
committee of the Legislature having jurisdiction over health insurance matters by March 
15th. The report must include infonnation on the benefits and rate structure of coverage 
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 having jurisdiction over health insurance matters. 
§3906. Selection of plan administrator 
1. Selection of plan administrator. The board shall select an 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 proven abilitv to handle large group accident and health insurance; 
B. The efficiency of the insurer's claims-paying procedures; and 
C. An estimate of total charges for administering the plan. 
2. Contract with plan administrator. The plan administrator selected pursuant to 
subsection 1 serves for a period of 3 years pursuant to a contract with the association. At 
least one year prior to the expiration of that 3-year period of service, the board shall invite 
all insurers, including the current plan administrator, to submit bids to serve as the plan 
administrator for the succeeding 3-year period. 
The board shall select the plan 
administrator for the succeeding period at least 6 months prior to the ending of the 3-year 
period. 
3. 
Duties of plan administrator. 
The plan administrator selected pursuant to 
subsection I shall: 
A. Perfonn all eligibility and administrative claims-payment functions relating to the 
plan; 
B. Pay a producer's referral fee as established by the board to each producer that 
refers an applicant to the plan, if the applicant's application is 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; 
D. Perform all necessary functions to ensure timely payment of benefits to covered 
persons under the plan, including: 
(1) Making available information 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 45 days after receiving a properly completed 
and executed proof of loss whether the claim is accepted, rejected or subject to 
compromise. The board shall establish reasonable reimbursement amounts for 
any services covered under the benefit plans; 
E. 
Submit regular reports to the board regarding the operation of the plan. The 
frequency, 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 expense 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 plan administrator. The plan administrator selected pursuant to 
subsection 1 must be paid, as provided in the contract of the association, for its direct and 
indirect expenses incurred in the performance of its services. As used in this subsection, 
"direct and indirect expenses" 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 allocable to the administration of the plan 
and included in the bid specifications. 
§3907. 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 written notice to the member insurers and accrue interest at 12% per 
annum on and after the due date. 
2. Maximum assessment. Each insurer must be assessed by the board an amount 
not to exceed $3 per covered person insured or reinsured by each insurer per month for 
medical insurance. An insurer may not be assessed on policies or contracts insuring 
federal or state employees. The assessment for any insurer is allowed as a credit on the 
premium tax return for that member pursuant to Title 36, sectiQn 2513-B. 
3. Determination of assessment. The board shall make reasonable efforts to ensure 
that each covered person is counted only once with respect to an assessment. For that 
purpose, the board 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 
II 
purpose of determining its assessment under this subsection. The board may verify each 
insurer's assessment based on annual statements 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. 
4. Excess funds. If assessments and other receipts 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 reduce plan premiums. As used in this subsection, "future losses" includes reserves for 
claims incurred but not reported. 
5. Failure to pay assessment. The superintendent may suspend or revoke, after 
notice and hearing, the certificate of authority to transact insurance 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 superintendent may use any power granted to the superintendent by this 
Title to collect any unpaid assessment. 
§3908. Availability of coverage 
The association shall offer a choice of 2 or more coverage options through the plan as 
set out in section 3909, subsections 1 and 2. The plan becomes effective January I, 2008. 
Policies offered through the association must be available for sale January I, 2009. The 
association shall directly insure the coverage provided by the plan, and the policies must 
be issued through the plan administrator. 
§3909. 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 a covered person is also 
eligible for Medicare coverage, the plan mav not payor reimburse any person for 
expenses paid by Medicare. A person whose health insurance coverage is involuntarily 
terminated for any reason other than nonpayment of premium 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. Major medical expense coverage. The plan must offer major medical expense 
coverage to every covered person who is not eligible for Medicare. The board shall 
establish the coverage to be issued by the plan, its schedule of benefits and exclusions and 
other limitations, which the board may amend from time to time subject to the approval 
of the superintendent. All benefit coverage options must be comprehensive, and at least 
one benefit coverage option developed by the plan must include unlimited lifetime 
benefits. In establishing the plan coverage, the board shall take into consideration the 
levels of health insurance provided in the State and medical 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 benefits provided, the 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. Subject to approval by the superintendent, standard risk rates for coverage issued 
by the association must be established by the association using reasonable actuarial 
techniques and must reflect anticipated experiences and expenses of such coverage 
for standard risks. The premium for the standard risk rates may not exceed a 
maximum of 150% of the weighted average 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, 
including requirements for mandated coverage for specific health care services and 
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 association 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 insurance; 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 
governmental program or any other insurance, or self-insurance maintained in lieu of 
otherwise statutorily required insurance, may not be made or recognized as a claim under 
such a policy or be recognized as or towards satisfaction of an applicable deductible or 
out-of-pocket maximum or to reduce the limits of benefits available under the plan. The 
association has a cause of action against a covered person for the recovery of the amount 
I 
of any benefits paid to the covered person that should not have been claimed or 
recognized 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. 
§3910. Eligibility for coverage 
1. Eligibility; application for coverage. A resident is eligible for coverage under 
the plan if the resident provides evidence 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 member insurer within 6 months of the date of the certificate, 
I I 
or if the resident meets other eligibility requirements adopted by rule by the 
superintendent that are not inconsistent with this chapter and that evidence that a person 
is unable to obtain coverage substantially similar to that which may be obtained by a 
person who is considered a standard risk. Individuals who are not eligible for coverage 
under this section must be considered a standard risk and eligible for coverage in the 
individual market. Rules adopted pursuant to this subsection are routine technical rules 
as defined in Title 5, chapter 375, subchapter 2-A. 
2. 
Change of domicile. 
The board shall develop standards for eligibility for 
coverage by the association for a natural person who changes 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. Eligibility without application. The board shall develop a list of medical or 
health conditions for which a person is eligible for plan coverage without applying for 
health insurance under subsection I. A person who can demonstrate the existence or 
history of any medical or health conditions 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: 
(I) A covered person may maintain other coverage for the period of time the 
person is satisfying a preexisting condition waiting period under a plan policy; 
and 
(2) A covered person may maintain plan coverage for the period of time the 
person is satisfying a preexisting condition waiting period under another health 
insurance policy intended to replace the plan policy; 
B. The person is determined eligible for health care benefits under the MaineCar~ 
program pursuant to Title 22; 
C. The person previously terminated plan coverage, unless 12 months have elapsed 
since the person's last termination; 
D. The person is an inmate or resident of a public institution; 
E. 
The person's premiums are paid for or reimbursed under any government-
S 
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; or 
F. The person has met a maximum lifetime benefit amount under the plan. 
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 the option of the association, 30 days after the association makes any inquiry 
concerning the person's eligibility or place of residence to which the person does not 
IS 
~ 
The coverage of any person who ceases to meet the eligibility requirements of this section 
may be terminated immediately. 
6. Unfair trade practice. It constitutes an unfair trade practice for any insurer, 
producer, employer or 3rd-party 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 benefits plan provided 
in connection with the employee's employment. 
§3911. 
Actions against association or member insurers based upon joint or 
collective actions 
Participation 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 a member insurer. 
§3912. Reimbursement of member insurer 
.. 
1. 
Reimbursement. 
A member insurer may seek reimbursement from the 
association and the association shall reimburse the member insurer to the extent claims 
made by a covered person after January 1, 2009 exceed premiums paid on a calendar-year 
basis by the covered person to the member insurer for a covered person who meets the 
following criteria: 
A. The member insurer sold an individual health plan to the covered person between 
December 1, 1993 and January 1, 2009 and the policy that was sold has been 
continuously renewed by the covered person and the carrier has closed its book of 
business for individual health plans sold between December 1, 1993 and January 1, 
2009; and 
B. The member insurer is able to determine through the use of individual health 
statements, claims history or any reason!lble means that at the time the person applied 
for insurance coverage with the member insurer, the covered person 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 causing open heart surgery, Parkinson's disease, polycystic kidney, psychotic 
disorders, quadriplegia, stroke, syringomyelia or Wilson's disease. 
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, chapter 375, subchapter 2-A. 
Sec. 15. Application for federal grant. Within 30 days of the effective date of 
this Act, the Superintendent of Insurance shall submit an application to the federal 
Department of Health and 
Human Services, Health 
Resources and 
Services 
Administration for a federal seed grant to support the creation and initial operation of the 
Comprehensive Health Insurance Risk Pool Association established in the Maine Revised 
Statutes, Title 24-A, chapter 54. 
Sec. 16. 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 that amend 
Title 24-A, section 2736-C, subsection 3, paragraph 0 and subsection 9 take effect April 
1,2008. 
SUMMARY 
This bill creates the Comprehensive Health Insurance Risk Pool Association. The 
purpose of the association is to spread the cost of high-risk individuals among all health 
insurers. 
The bill funds the high-risk pool through an assessment on insurers. 
An 
individual insured through the high-risk pool may be charged a premium up to 150% of 
the average premium rates charges by carriers for similar health insurance plans. The bill 
requires the State to submit an application to the Federal Government for federal 
assistance to create a high-risk pool. 
The bill also 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 bill also removes the guaranteed issuance requirement for individual health 
plans, effective January 1,2008. 
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