An Act To Make Health Care Affordable, Accessible and Effective for All
Maine Legislature, Session 123, LD 1890
Committee: Insurance and Financial Services
Sponsors: PINGREE, EDMONDS
Amends: 24-A MRSA §2736-C, 24-A MRSA §2, 24-A MRSA §2808-B, 24-A MRSA §2839, 36 MRSA §2513, 36 MRSA §251, 36 MRSA §2521-A, 36 MRSA §5102, 36 MRSA §5256, 24-A MRSA §6908, 24-A MRSA §2849-B, 24-A MRSA §6903, 24-A MRSA §6910, 24-A MRSA §423-D, 24-A MRSA §2736, 24-A MRSA §2839-B, 24-A MRSA §6913, 24-A MRSA §6913-A

Legislative Document 
No. 1890 
H.P.1322 
House of Representatives, May 3,2007 
An Act To Make Health Care Affordable, Accessible and Effective 
for All 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
/J'l~/h.~ 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative PINGREE of North Haven. (GOVERNOR'S BILL) 
Cosponsored by President EDMONDS of Cumberland. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 24-A MRSA §2736-C, sub-§2, ~-1 is enacted to read: 
B-1. A carrier may vary the premium rate due to family membership. 
Sec. A-2. 24-A MRS A §2736-C, sub-§2, ~C, as amended by PL 2001, c. 410, 
Pt. A, § 1 and affected by § 1 0, is further amended to read: 
C. A carrier may must vary the premium rate due to smoking status and family 
membership for all policies, contracts or certificates that are executed, delivered, 
issued for delivery, continued or renewed in this State on or after January 1, 2008. 
The superintendent may adopt rules setting forth Carriers shall develop and submit to 
the superintendent appropriate methodologies regarding rate discounts based on 
smoking status. The superintendent shall report annually on the compliance with this 
l3 
paragraph to the joint standing committee of the Legislature having jurisdiction over 
insurance and financial services matters. Rules adopted pursuant to this paragraph 
are routine technical rules as defined in Title 5, chapter 375, subchapter Il-A 2-A. 
Sec. A-3. 24-A MRSA §2S0S-B, sub-§2, ~-1 is enacted to read: 
B-1. A carrier may vary the premium rate due to family membership and group size. 
Sec. A-4. 24-A MRSA §2S0S-B, sub-§2, ~-2 is enacted to read: 
B-2. A carrier must vary the premium rate due to smoking status for all policies, 
contracts or certificates that are executed, delivered, issued for delivery, continued or 
renewed in this State on or after January 1, 2008. Carriers shall develop and submit 
to the superintendent appropriate methodologies regarding rate discounts based on 
smoking status. The superintendent shall report annually on the compliance with this 
paragraph to the joint standing committee of the Legislature having jurisdiction over 
insurance and financial services matters. 
Sec. A-S. 24-A MRSA §2808-B, sub-§2, ~C, as amended by PL 2001, c. 410, 
Pt. A, §3 and affected by §IO, is further amended to read: 
C. A carrier may must vary the premium rate by January 1, 2008 due to fami.ly 
membership, smoking status, participation in wellness programs and group size 
certified by the Maine Quality Forum established in section 6951 for all policies, 
contracts or certificates that are executed, delivered, issued for delivery, continued or 
renewed in this State on or after January 1, 2008. The superintendent may adopt 
rules setting forth appropriate methodologies regarding rate discounts pursuant to this 
paragraph. Rules adopted pursuant to this paragraph are routine technical rules as 
defined in Title 5, chapter 375, subchapter II A. 
Sec. A-6. 24-A MRSA §2839, as amended by PL 2003, c. 428, Pt. E, §2, is 
further amended to read: 
§2839; Rates filed 
A policy of group health insurance may not be delivered in this State until a copy of 
the group rates to be used in calculating the premium for these policies has been filed for 
informational purposes with the superintendent. The filing must include the base rates 
and a description of any procedures to be used to adjust the base rates to reflect factors 
including but not limited to age, gender, health status, claims experience, group size and 
coverage of dependents. 
Notwithstanding this section, rates for group Medicare 
supplement, nursing home care or long-term care insurance contracts and for certain 
association groups and other groups specified in section 2701, subsection 2, paragraph C 
must be filed in accordance with section 2736. Rates for small group health insurance 
subject to section 2808-B are subject to the additional filing requirements specified in that 
section. 
A carrier must vary the premium rate due to smoking status for all policies, contracts 
or certificates that are executed, delivered, issued for delivery, continued or renewed in 
this State on or after January 1, 2008. 
Carriers shall develop and submit to the 
superintendent appropriate methodologies regarding rate discounts based on smoking 
status. The superintendent shall report annually on the compliance with this paragraph to 
the joint standing committee of the Legislature having jurisdiction over insurance and 
financial services matters. 
A carrier must vary the premium rate by January 1, 2008 due to participation in 
wellness programs certified by the Maine Quality Forum established in section 6951 for 
all policies, contracts or certificates that are executed, delivered, issued for delivery. 
continued or renewed in this State on or after January 1, 2008. 
Sec. A-7. 24-A MRS A §69S1, first ~, as enacted by PL 2003, c. 469, Pt. A, §8, 
is amended to read: 
The Maine Quality Forum, referred to in this subchapter as "the forum," is 
established within Dirigo Health. The forum is governed by the board with advice from 
the Maine Quality Forum Advisory Council pursuant to section 6952. The forum must be 
funded, at least in part, through the sayiags offset payments made pursuant to former 
section 6913 and section 6913-A. Except as provided in section 6907, subsection 2, 
information obtained by the forum is a public record as provided by Title 1, chapter 13, 
subchapter 1. The forum shall perform the following duties. 
Sec. A-S. 24-A MRS A §69S1, sub-§10 is enacted to read: 
10. Wellness program certification. The forum shall develop standards and criteria 
for wellness programs and shall certify such programs eligible for premium rate variances 
in accordance with section 2808-B, subsection 2, paragraph C and section 2839. 
PART B 
Sec. B-1. 24-A MRS A §2736, sub-§2, as amended by PL 1997, c. 344, §8, is 
further amended to read: 
2. Filing; information. When a filing is not accompanied by the infonnation upon 
which the insurer supports such filing, or the superintendent does not have sufficient 
infonnation to detennine whether such filing meets the requirements that rates not be 
excessive, inadequate or unfairly discriminatory, the superintendent shall require the 
insurer to furnish the infonnation upon which it supports the filing. -A- Notwithstanding 
the exception set forth in Title 1, section 402, subsection 3, paragraph B, a filing and 
supporting infonnation, including all accompanying rates, rating fonnulas, rating 
classifications, trend documentation and actuarial infonnation used to support the filing, 
are public records within the meaning of Title 1, section 402, subsection 3 and become 
part of the official record of any hearing held pursuant to section 2736-A. 
Sec. B-2. 24-A MRS A §2736-C, sub-§2, ~F, as enacted by PL 2003, c. 469, Pt. 
E, § 12, is amended to read: 
F. 
A carrier that adjusts its rate shall account for the savings offset payment 
payments paid pursuant to fonner section 6913 or section 6913-A or any recovery ill 
that offset payment of those payments in its experience consistent with this section 
and fonner section 6913 and section 6913-A. With regard to accounting for any 
recovery of the payments paid pursuant to fonner section 6913 or section 6913-A, a 
carrier shall provide demonstrable proof to the superintendent and quantify the total 
amount negotiated and saved by the carrier. 
Sec. B-3. 24-A MRS A §2S0S-B, sub-§2-A, ~, as enacted by PL 2003, c. 469, 
Pt. E, § 16, is amended to read: 
B. -A- Notwithstanding the exception set forth in Title 1, section 402, subsection 3, 
paragraph B, a filing and supporting infonnation, including all accompanying rates, 
rating fonnulas, rating classifications, trend documentation and actuarial infonnation 
used to support the filing, are public records e*eept as provided by within the 
meaning of Title 1, section 402, subsection 3 and become part of the official record of 
any hearing held pursuant to subsection 2-B, paragraphs paragraph B or F. 
PART C 
Sec. C-l. 24-A MRSA §2736-C, sub-§5, as amended by PL 2003, c. 469, Pt. E, 
§ 13, is further amended to read: 
5. Loss ratios. For all policies and certificates issued on or after the effective date of 
this section, the superintendent shall disapprove any premium rates filed by any carrier, 
whether initial or revised, for an individual health policy unless it is anticipated that the 
aggregate benefits estimated to be paid under all the individual health policies maintained 
in force by the carrier for the period for which coverage is to be provided will return to 
policyholders at least ~ 
78% of the aggregate premiums collected for those policies, as 
detennined in accordance with accepted actuarial principles and practices and on the 
basis of incurred claims experience and earned premiums. 
For the purposes of this 
calculation, any savings offset payments paid pursuant to fonner section 6913 or section 
6913-A must be treated as incurred claims. If incurred claims were less than 78% of 
aggregate earned premiums over a continuous 36-month period, the carrier shall refunQ 
total excess premiums to current in-force policyholders. The excess premium is the 
amount of premium above that amount necessary to achieve a 78% loss ratio for all of the 
carrier's individual policies during the same 36-month period. 
The refund must be 
distributed to policyholders in an amount reasonably calculated to correspond to the 
aggregate experience of all policyholders holding policies having similar benefits. The 
total of all refunds must equal the excess premiums. The superintendent may require 
further support for the unpaid claims estimate and may require refunds to be recalculated 
if the estimate is found to be unreasonably large. The superintendent may adopt rules 
setting forth appropriate methodologies regarding refunds pursuant to this subsection. 
Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
Sec. C-2. 24-A MRS A §2808-B, sub-§2-B, as enacted by PL 2003, c. 469, Pt. E, 
§ 16, is amended to read: 
2-B. Rate review and hearings. Except as proyided in sl:HJsection 2 G, rate Rate 
filings are subject to this subsection. 
A. 
The superintendent shall disapprove any premium rates filed by any carrier, 
whether initial or revised, for a small group health plan unless it is anticipated that the 
aggregate benefits estimated to be paid under all the small group health plans 
maintained in force by the carrier for the period for which coverage is to be provided 
will return to policyholders at least ~ 
78% of the aggregate premiums collected for 
those policies, as determined in accordance with accepted actuarial principles and 
practices and on the basis of incurred claims experience and earned premiums. For 
the purposes of this calculation, any sayings offset payments paid pursuant to former 
section 6913 or section 6913-A must be treated as incurred claims. 
B. If at any time the superintendent has reason to believe that a filing does not meet 
the requirements that rates not be excessive, inadequate or unfairly discriminatory or 
that the filing violates any of the provisions of chapter 23, the superintendent shall 
cause a hearing to be held. Hearings held under this subsection must conform to the 
procedural requirements set forth in Title 5, chapter 375, subchapter 4. 
The 
superintendent shall issue an order or decision within 30 days after the close of the 
hearing or of any rehearing or reargument or within such other period as the 
superintendent for good cause may require, but not to exceed an additional 30 days. 
In the order or decision, the superintendent shall either approve or disapprove the rate 
filing. 
If the superintendent disapproves the rate filing, the superintendent shall 
establish the date on which the filing is no longer effective, specify the filing the 
superintendent would approve and authorize the insurer to submit a new filing in 
accordance with the terms of the order or decision. 
C. When a filing is not accompanied by the information upon which the carrier 
supports the filing or the superintendent does not have sufficient information to 
determine whether the filing meets the requirements that rates not be excessive, 
inadequate, unfairly discriminatory or not in compliance with former section 6913 or 
section 6913-A, the superintendent shall require the carrier to furnish the information 
upon which it supports the filing. 
D. 
A carrier that adjusts its rate shall account for the savings offset payment 
payments paid pursuant to former section 6913 or section 6913-A or any recovery ffi 
that savings offset payment of those payments in its experience consistent with this 
section and former section 6913 and section 6913-A. With regard to accounting for 
any recovery of the payments paid pursuant to former section 6913 or section 
6913-A, a carrier shall provide demonstrable proof to the superintendent and quantify 
the total amount negotiated and saved by the carrier. 
E. Any filing of rates, rating formulas and modifications that satisfies the criteria set 
forth in this paragraph is subject to the provisions of paragraph F: 
(1) The proposed rate for any group or subgroup does not include a unit cost 
change that exceeds the index of inflation multiplied by 1.5, excluding any 
approved rate differential based on age. For the purposes of this subparagraph, 
"index of inflation" means the rate of increase in medical costs for a section of 
the United States selected by the superintendent that includes this State for the 
most recent 12-month period immediately preceding the date of the filing for 
which data are available; and 
(2) The carrier demonstrates in accordance with generally accepted actuarial 
principles and practices consistently applied that, as of a date no more than 210 
days prior to the filing, the ratio of benefits incurred to premiums earned averages 
no less than 78% for the previous 36-month period. 
F. 
Any rate hearing conducted with respect to filings that meet the criteria III 
paragraph E is subject to this paragraph. 
(1) A person requesting a hearing shall provide the superintendent with a written 
statement detailing the circumstances that justify a hearing, notwithstanding the 
satisfaction of the criteria in paragraph E. 
(2) If the superintendent decides to hold a hearing, the superintendent shall issue 
a written statement detailing the circumstances that justify a hearing, 
notwithstanding the satisfaction of the criteria in paragraph E. 
(3) In any hearing conducted under this paragraph, the bureau and any party 
asserting that the rates are excessive have the burden of establishing that the rates 
are excessive. 
The burden of proving that rates are adequate, not unfairly 
discriminatory and in compliance with the requirements of former section 6913 
or section 6913-A remains with the carrier. 
G. If incurred claims were less than 78% of aggregate earned premiums over a 
continuous 36-month period, the carrier shall refund total excess premiums to current 
in-force policyholders. For the purposes of calculating this loss-ratio percentage, any 
payments paid pursuant to former section 6913 or section 6913-A must be treated as 
incurred claims. The excess premiurp is the amount of premium above that amount 
necessary to achieve a 78% loss ratio for all of the carrier's small group policies 
during the same 36-month period. The refund must be distributed to policyholders in 
an amount reasonably calculated to correspond to the aggregate experience of all 
policyholders holding policies having similar benefits. The total of all refunds must 
equal the excess premiums. The superintendent may require further support for the 
unpaid claims estimate and may require refunds to be recalculated if the estimate is 
found to be unreasonably large. The superintendent may adopt rules setting forth 
appropriate methodologies regarding refunds pursuant to this subsection. 
Rules 
adbpted pursuant to this paragraph are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
Sec. C-3. 24-A MRSA §2S0S-B, sub-§2-C, as amended by PL 2005, c. 121, Pt. 
E, §§ 1 and 2, is repealed. 
PARTD 
Sec. D-l. 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 adequ~te access to providers. 
Except as provided in 
paragraph A paragraphs A-I and B, a carrier offering 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 
I 7 
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 
1 
persons forced to travel longer distances to access services, or the carrier has 
taken steps to effectively mitigate any detrimental impact as~ociated 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 121st Legislature; and 
(6) The financial provisions may not pennit 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. 
A-I. 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 pennit 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 and the Maine Quality Forum established in section 
6951, to detennine whether the carrier has met the requirements of this 
subparagraph; and 
(6) The financial provisions may not pennit travel at a distance that exceeds the 
standards established in Bureau of Insurance Rule Chapter 850 for mileage and 
travel time by 100%. 
B. 
Notwithstanding paragraph A-I, a carrier may develop and file with the 
superintendent for approval a pilot program that does not adhere to any geographic 
access requirements set forth in this Title or in rules adopted by the superintendent. 
Any carrier offering a health plan using this pilot program must collect data on the 
impact of the pilot program on premiums paid by enrollees, payments made to 
providers, quality of care received and access to health care services by individuals 
enrolled in health plans under the pilot program and must submit that data to the 
superintendent. The superintendent shall report annually beginning January 15, 2002 
to the joint standing committee of the Legislature having jurisdiction over insurance 
and financial services matters on any approval of a pilot program pursuant to this 
paragraph. 
PARTE 
Sec. E-l. 5 MRS A §12004-G, sub-§14-F is enacted to read: 
14-F. 
Health Care 
Board of Directors 
of the Maine 
Individual 
Reinsurance 
Program 
Not Authorized 
24-AMRSA 
§3903 
Sec. E-2. 24-A MRSA §2736-C, sub-§2,~, as enacted by PL 1993, c. 477, Pt. 
C, § 1 and affected by Pt. F, § 1, is amended to read: 
B. A carrier may not vary the premium rate due to the gender, health status, claims 
experience or policy duration of the individual. A carrier may vary the premium rate 
due to health status on that date that reinsurance is available under chapter 54. 
Sec. E-3. 24-A MRS A §2736-C, sub-§2, ~, as amended by PL 2001, c. 410, 
Pt. A, §2 and affected by § 10, is further amended to read: 
D. A carrier may vary the premium rate due to age, occupation or industry health 
status and geographic area only under the following schedule aRd 'Nitffin the listed 
percentage bands, in accordance with the limitations set out in this paragraph. 
(1) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between December 1, 1993 and 
July 14, 1994, the premium rate may not deviate above or below the community 
rate filed by the carrier by more than 50%. 
(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 all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State afteJ: between July 15, 1995 and 
December 31, 2007, 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 between January 1, 2008 and the 
date on which reinsurance is available under chapter 54, the maximum premium 
rate may not deviate above or below the community rate filed by the carrier for 
age and geographic area by more than 33%. 
For all policies, contracts or 
certificates that are executed, delivered, issued for delivery, continued or renewed 
in this State on or after the date on which reinsurance is available under chapter 
54, the maximum premium rate may not deviate above or below the community 
rate filed by the carrier for age and geographic area by more than 50%. This 
limitation does not apply for determining rates for an attained age of less than 19 
or more than 65 years. 
(5) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after the date when 
reinsurance is available under chapter 54, the maximum premium rate may not 
deviate for health status by more than 10% above the community rate filed by the 
carrier and adjusted pursuant to subparagraph (4). 
(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. E-4. 24-A MRSA §2736-C, sub-§2-A is enacted to read: 
2-A. Reinsurance requirement. Carriers providing individual health plans must, as 
a condition of offering health benefit plans in this State to individuals, reinsure, pursuant 
to chapter 54, all such plans offered. 
Sec. E-5. 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 shall by rule define 
one or more standardized individual health plans that must be offered by all carriers 
offering individual health plans in the State, other than carriers offering only CHAMPUS 
supplemental coverage. One of the plans defined by rule under this section must be a 
plan that includes a $1,000 deductible, a prescription drug benefit not subject to a 
deductible and the option of no lifetime benefit maximum. 
Sec. E-6. 24-A MRSA c. 54 is enacted to read: 
CHAPTER 54 
MAINE INDIVIDUAL REINSURANCE PROGRAM 
§3901. Short title 
This chapter may be known and cited as "the Maine Individual Reinsurance Program 
Act." 
§3902. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Board. "Board" means the board of directors of the program. 
2. Dependent. "Dependent" has the same meaning as set forth in section 6903. 
3. Insurer. "Insurer" means an entity that is authorized to write medical insurance 
or that provides medical insurance in this State. 
"Insurer" includes an insurance 
company, nonprofit hospital and medical service organization, fraternal benefit society, 
health maintenance organization, 3rd-party administrator, multiple-employer welfare 
arrangement, any other entity providing medical insurance or health benefits subject to 
state insurance regulation or any reinsurer reissuing health insurance in this State. 
4. 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 or 
furnishes medical or health care services 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; or 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. 
5. Medicare. "Medicare" means coverage under either Medicare Part A or Medicare 
Part B pursuant to 42 United States Code, Chapter 7, subchapter XVI. 
6. Producer. "Producer" means a person who is licensed to sell medical insurance 
in this State. 
7. 
Program. 
"Program" means the Maine Individual Reinsurance Program 
established in section 3903. 
8. Reinsurer. "Reinsurer" means an insurer from whom a person providing medical 
insurance for a resident procures insurance for itself with the insurer with respect to all or 
part of the medical insurance risk of the person. "Reinsurer" includes an insurer that 
provides employee benefits excess insurance. 
9. Resident. "Resident" has the same meaning as in section 2736-C, subsection 1, 
paragraph C-2. 
§3903. Maine Individual Reinsurance Program 
1. Program established. The Maine Individual Reinsurance Program is established 
as a nonprofit legal entity. 
2. 
Board of directors. 
The program IS governed by a board of directors III 
accordance with this subsection. 
A. The board consists of 14 members appointed pursuant to this paragraph: 
(1) Eight members appointed by the superintendent, of whom: 
(a) Four must be chosen from the general public and may not be 
associated with the medical profession, a hospital or an insurer; 
eb) One must represent medical care providers; 
ec) One must represent producers; 
(d) 
One must represent a statewide aSSOcIatIOn representing small 
businesses that receives the majority of its funding from persons and 
businesses in the State; and 
(e) One must represent Dirigo Health; 
(2) Three members appointed by insurers belonging to the program, at least 2 of 
whom are domestic insurers; and 
(3) Three ex officio, nonvoting members, 2 of whom are Legislators who serve 
as the Senate and House chairs of the joint standing committee of the Legislature 
having jurisdiction over health insurance matters, or the Legislators' designees, 
and one of whom is the director of the Governor's Office of Health Policy and 
Finance, or the Governor's designee. 
B. Members of the board serve 3-year terms. 
C. The board shall elect one of its members as chair. 
D. Board-members may be reimbursed from funds of the program for actual and 
necessary expenses incurred by them as members but may not otherwise be 
compensated for their services. 
3. Plan of operation; rules. The board shall adopt by rule a plan of operation, 
articles and bylaws in accordance with the requirements of this chapter within 90 days 
after the initial appointment of members of the board pursuant to subsection 2. 
Rules 
adopted 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 in that member's official capacity as a 
member of the board. 
5. Staff assistance. Upon request from the board, the bureau and other appropriate 
agencies of State Government must provide staff assistance to the board during 
implementation ofthe program as necessary and appropriate. 
§3904. Liability and indemnification 
1. Liability. The board and any employees of the program may not be held liable for 
any obligations of the program. A cause of action may not arise against the program; the 
board, its agents or its employees; any insurer belonging to the program 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 in its bylaws or rules may provide for 
indemnification of, and legal representation for, its members and employees of the 
program. 
§3905. Duties and powers of the board 
1. Duties. The board shall: 
A. . Establish administrative and accounting procedures for the operation of the 
program; 
B. 
Establish procedures under which participants in the program may have 
grievances reviewed by an impartial body and reported to the board; 
C. Select a program administrator in accordance with section 3906; 
D. Establish procedures for the handling and accounting of program assets; and 
E. 
Establish· procedures for determining reinsurance amounts in accordance with 
section 3907. 
2. Powers. The board 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, including the authority, with the approval of the 
superintendent, to enter into contracts with similar organizations in other states for 
the joint performance of common administrative functions or with persons or other 
organizations for the performance of administrative functions; 
C. Sue or be sued; 
D. Take any legal actions necessary to avoid the payment of improper claims against 
the program or the coverage provided by or through the program, to recover any 
amounts erroneously or improperly paid by the program, to recover any amounts paid 
by the program as a result of mistake of fact or law or to recover other amounts due 
the program; 
E. Appoint appropriate legal, actuarial and other committees as necessary to provide 
technical assistance and any other functions within the authority of the program; 
F. Borrow money to effect the purposes of the program. Any notes or other evidence 
of indebtedness of the program not in default must be legal investments for insurers 
and may be carried as admitted assets; 
G. Establish rules, conditions and procedures for reinsuring risks of insurers under 
the program in accordance with section 3907; 
H. 
Provide for reinsurance of risks incurred by the program. The provision of 
reinsurance may not subject the program to any of the capital or surplus 
requirements, if any, otherwise applicable to reinsurers; 
I. Apply for funds or grants from public or private sources, including federal grants 
provided to qualified high-risk reinsurance plans; and 
J. 
Establish and adopt such rules as are necessary and proper to implement this 
chapter. 
Rules adopted pursuant to this paragraph are routine technical rules as 
defined in Title 5, chapter 375, subchapter 2-A. 
3. Additional duties and powers. The superintendent may by rule establish powers 
and duties of the program in addition to those set out in subsection 2 and may adopt such 
rules as are necessary and proper to implement this chapter. Rules adopted pursuant to 
this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter 
2-A. 
4. Review for solvency. The superintendent shall review the operations of the 
program after the first year and thereafter at least every 3 years to determine its solvency. 
5. 
Annual report. 
The program shall report annually to the joint standing 
committee of the Legislature having jurisdiction over health insurance matters by March 
15th. The report must include information on the number and value of claims reinsured 
by the program and the financial solvency and the administrative expenses of the 
program. 
6. Audit. The program must be audited every year by an independent auditor. A 
copy of the audit must be provided to the superintendent and to the joint standing 
committee ofthe Legislature having jurisdiction over health insurance matters. 
§3906. Selection of program administrator 
1. Selection of program administrator. The board shall select an appropriate entity 
through a competitive bidding process to administer the program. 
2. Contract with program administrator. The program administrator selected 
pursuant to subsection 1 is contracted for a period of 3 years. At least one year prior to 
the expiration of each 3-year period of service by the program administrator, the board 
shall invite all insurers, including the current program administrator, to submit bids to 
serve as the program administrator for the succeeding 3-year period. The selection of the 
program administrator for the succeeding period must be made at least 6 months prior to 
the expiration of the current 3-year period. 
3. Duties of program administrator. The program administrator selected pursuant 
to subsection 1 shall: 
A. Perform all administrative functions relating to the program; 
B. Submit regular reports to the board regarding the operation of the program. The 
frequency, content and form of the reports must be as determined by the board; 
C. Following the close of each calendar year, determine reinsurance premiums, the 
amount of collections from the premium tax on health maintenance organizations 
pursuant to Title 36, section 2521-D, the expenses of administration pertaining to the 
reinsurance operations of the program and the incurred losses of the year and report 
this information to the superintendent; and 
D. Pay reinsurance amounts as provided for in the plan of operation under section 
3903, subsection 3. 
4. 
Payment to program administrator. The program administrator selected 
pursuant to subsection 1 must be paid, as provided in the contract of the program under 
subsection 2, for the program administrator's direct and indirect expenses incurred in the 
performance of the program administrator's services. As used in this subsection, "direct 
and indirect expenses" includes that portion of the audited administrative costs, printing 
expenses, management expenses, building overhead expenses and other actual operating 
and administrative expenses of the program administrator that are approved by the board 
as allocable to the administration of the program and included in the specifications of a 
bid under subsection 2. 
§3907. Reinsurance; premium rates 
1. Reinsurance amount. Any insurer offering an individual health insurance plan 
pursuant to section 2736-C must be reinsured by the program to the level of coverage 
provided in this subsection, beginning on January 1, 2009, and is liable to the program for 
the reinsurance premium rate established in accordance with subsection 2. 
A. The program may not reimburse an insurer with respect to claims of an insured 
individual until the insurer has incurred a certain level of claims for covered benefits 
in a calendar year for that individual, in an amount and level to be determined by the 
board by June 1, 2008 and then annually thereafter. The total amount of claims 
projected to be reinsured for all individuals each calendar year and the projected 
administrative expenses for the program must be equal to the sum of projected 
revenue from the premiums tax on health maintenance organizations pursuant to Title 
36, section 2521-0 plus the reinsurance premiums collected pursuant to subsection 2. 
The program may annually adjust the initial amount and level of claims to reflect 
increases in costs and utilization within the standard market for health plans within 
the State. The adjustments may not be less than the annual change in the medical 
component of the Consumer Price Index, as reported by the United States Department 
of Labor, Bureau of Labor Statistics, unless the superintendent approves a lower 
adjustment factor as requested by the program, and may not be more than the 
projected revenue from the premiums tax on health maintenance organizations 
pursuant to Title 36, section 2521-0 plus the reinsurance premiums collected 
pursuant to subsection 2. 
2. Premium rates. The program, as part of the plan of operation under section 
3903, subsection 3, shall establish a methodology for determining premium rates to be 
charged insurers offering individual health plans pursuant to section 2736-C. 
The 
program shall review at least biannually the methodology established under this 
1 
subsection and mav make changes to the methodology as needed with the approval of the 
superintendent. The program shall consider adjustments to the premium rates charged for 
reinsurance to reflect the use of effective cost containment and managed care 
arrangements by an insurer. 
§3908. Actions against program or members based upon joint or collective actions 
Participation in the program, 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 program or any insurer 
belonging to the program. 
Sec. E-7. 24-A MRSA c. 87, sub-c. 3, as amended, is repealed. 
Sec. E-S. 36 MRSA §2513, first ~, as amended by PL 2005, c. 218, §30, is 
further amended to read: 
Every health maintenance organization that has been issued a certificate of authority 
under Title 24-A, section 4204 and every insurance company or association that does 
business or collects premiums or assessments including annuity considerations in the 
State, including surety companies and companies engaged in the business of credit 
insurance or title insurance, shall, for the privilege of doing business in this State, and in 
addition to any other taxes imposed for such privilege pay a tax upon all gross direct 
premiums including annuity considerations, whether in cash or otherwise, on contracts 
written on risks located or resident in the State for insurance of life, annuity, fire, casualty 
and other risks at the rate of 2% a year. Every surplus lines insurer that does business or 
collects premiums in the State shall, for the privilege of doing business in this State, and 
in addition to any other taxes imposed for such privilege, pay a tax upon all gross direct 
premiums, whether in cash or otherwise, on contracts written on risks located or resident 
in the State at the rate of 3% a year. The tax must be paid by the insurer's licensed 
producer with surplus lines authority pursuant to Title 24-A, section 2016. For purposes 
of this section, the term "annuity considerations" includes amounts paid to an insurance 
company when received for the purchase of a contract that may result in an annuity, even 
when the annuitization never occurs or does not occur until some time in the future and 
the amounts are in the meantime applied to an investment vehicle other than an annuity. 
This section does not apply to mutual fire insurance companies under section 2517 or to 
captive insurance companies incorporated under the laws of another state. 
Sec. E-9. 36 MRSA §2513, as amended by PL 2005, c. 218, §30, 1S further 
amended by adding at the end a ne,v .aragraph to read: 
Notwithstanding any other provision ot law, a health maintenance organization is not 
eligible for any credit against the tax imposed by this section other than the credit allowed 
by section 2530. 
Sec. E-I0. 36 MRSA §251S, as amended by PL 1997, c. 435, §4, is further 
amended to read: 
§2518. Neglect to make return; assessment; failure to pay 
If any insurance company, health maintenance organization, captive insurance 
company or association fails to pay on demand a tax assessed under section 141, 
subsection 2, paragraph C, the State Tax Assessor 
shall certify that failure to the 
Superintendent of Insurance who shall give notice to the company or association that it 
may not do any more business in the State. Whoever, after such notice, does business for 
such company or association is guilty of a Class E crime. 
Sec. E-U. 36 MRSA §2521-A, first~, as amended by PL 2005, c. 218, §31, is 
further amended to read: 
Every insurance company, health maintenance organization, captive insurance 
company, association, producer or attorney-in-fact of a reciprocal insurer subject to the 
tax as imposed by this chapter shall on or before the last day of each April, the 25th day 
of each June and the last day of each October file with the State Tax Assessor on forms 
prescribed by the State Tax Assessor assessor a return for the quarter ending the last day 
of the preceding month, except for the month of June, which is for the quarter ending 
June 30th. These returns may be on an estimated basis, as long as each April and June 
installment equals at least 35% of the total tax paid for the preceding calendar year or 
35% of the total tax to be paid for the current calendar year. The remaining installments 
must equal 15% of the total tax to be paid for the preceding calendar year or 15% of the 
total tax to be paid for the current year. An authorized company official shall affirm 
which elective is selected. Such elective can not be changed during the current calendar 
year. The final return must be filed on or before March 15th covering the prior calendar 
year. Notwithstanding this paragraph, a health maintenance organization, with regard to 
the tax imposed by this chapter on premiums received during the last quarter of calendar 
year 2007 must report and pay 100% of the tax by March 15, 2008. All subsequent 
reports and payments by a health maintenance organization must be based on the 
estimated basis determined in accordance with this section except that for 2008 the 
estimated reports and payments must be based on the tax that would have applied to the 
total premiums received by the taxpayer in calendar year 2007 had it been subject for the 
entire year to the tax imposed by this chapter. 
Sec. E-12. 36 MRS A §2521-D is enacted to read: 
§2521-D. Applications ofrevenues 
1. Credited to suspense account. Revenues derived from the tax imposed by this 
chapter on health maintenance organizations must be credited to a General Fund suspense 
account. 
2. Transfers in 2008. On or before the last day of each month of calendar year 
2008, the State Controller shall transfer 85% of the revenues credited to the suspense 
account under subsection 1 during the month to the Dirigo Health Enterprise Fund 
established by Title 24-A, section 6915 and 15% of the revenues credited to the suspense 
account to the General Fund. When the General Fund has received $1,250,000 for the 
fiscal year ending June 30, 2008, all subsequent suspense fund revenues must be credited 
to the Dirigo Health Enterprise Fund, but only up to and including the transfer due by 
June 30, 2008. 
3. Transfers in 2009 and thereafter. On or before the last day of each month of 
calendar year 2009 and of each calendar year thereafter, the State Controller shall transfer 
85% of the revenues credited to the suspense account under subsection 1 during the 
month to the individual reinsurance plan established by Title 24-A, chapter 54 and 15% 
of the revenues credited to the suspense account to the General Fund. When the General 
Fund has received $1,500,000 for the fiscal year ending June 30, 2009 and for each fiscal 
year thereafter, all subsequent suspense fund revenues must be credited to the individual 
reinsurance plan, but only up to and including the transfer due by June 30th of each fiscal 
year. 
Sec. E-13. 36 MRSA §5102, sub-§6, as amended by PL 2001, c. 439, Pt. D, §1 
and affected by §9, is further amended to read: 
6. Corporation. "Corporation" means any business entity subject to income taxation 
as a corporation under the laws ofthe United States, except the following: 
A. A corporation that is subject to tax under chapter 357 or that would be subject to 
tax under chapter 357 if the insurance business conducted by such corporation were 
conducted in this State; 
B. A corporation subject to tax under section 5206; or 
C. A business entity referred to in Title 24-A, section 1157, subsection 5, paragraph 
B, subparagraph (1). 
For pHrposes of this sHbseetion, a eorporation deseribed in paragraph l't is an "insHranee 
eompany," and a health maintenanee organization to the extent operated Hnder aHthority 
of a eertifieate issHed by the SHperintendent of Insmanee pmsuant to Title 24 l\, seetion 
4204 is a "Maine health maintenanee organization." NOhyithstanding paragraph A, an 
insHfanee eompany is subjeet to the tax imposed by this Part with respeet to ineome it 
reeeiYes from a Maine health maintenanee organization, exeept '""here the Maine health 
maintenanee organization is separately organized and subj eet to ineome tal,ation. The 
pro'lisions of this Part pertaining to the taxation and reporting obligations of a unitary 
business, ineluding seetion 5200, seetion 5220, sHbseetion 5 and seetion 5244, apply to 
the ineome, faetors and affiliations of an insmanee eompany arising from a Maine health 
maintenanee organization as though the Maine health maintenanee organization were a 
separate eorporation, bHt do not otherwise apply to sueh insHfanee eompany. 
Sec. E-14. 36 MRSA §5256, sub-§l, as amended by PL 1995, c. 281, §32 and 
affected by §43, is further amended to read: 
1. General. For purposes of the tax imposed by this Part, a taxpayer's taxable year is 
the same as the taxpayer's taxable year for federal income tax purposes. Notwithstanding 
this subsection, the taxable year of a health maintenance organization that has a taxable 
year for federal income tax purposes that begins on or before September 30, 2007 and 
ends after September 30, 2007 ends for purpo~es of the ta:~ imposed bv this Part on 
September 30, 2007, and the health maintenance organiz.~liofl. __ §t1all compute the tax for 
the resulting short taxable year in accordance with subsection 2. For purposes of tllis 
subsection, "health maintenance organization" means a health Ill.<lintenance organization 
that has been issued a certificate of authoritYJ:!pder Title 2:t:b~cction 4204. 
Sec. E-15. Application. Those sections of this Part that amend the Maine Revised 
Statutes, Title 36, sections 2513, 2518 and 2521-A and enact Title 36, section 2521-D 
apply to prenliums collected on or after October 1, 2007. That section of this Part that 
amends Title 36, section 5102, subsection 6 applies to tax years beginning on or after 
October 1, 2007. 
Sec. E-16. Staggered terms. Notwithstanding the Maine Revised Statutes, Title 
24-A, section 3903, of those original members of the board of directors of the Maine 
Individual Reinsurance Program appointed by the Superintendent of Insurance, 3 
members serve for a term of one year, 3 members for a term of 2 years and 2 members for 
a term of 3 years. Of those original members appointed by insurers, one member serves 
for a term of one year, one member serves for a term of 2 years and one member serves 
for a term of 3 years. The appointing authority shall designate the period of service of 
each initial appointee at the time of appointment. 
Sec. E-17. Contingent repeal; report; certification. The Maine Revised 
Statutes, Title 24-A, chapter 54 is repealed if the percentage certified by the 
Superintendent of Insurance for any carrier pursuant to subsection 3 is greater than the 
percentage reported by the superintendent pursuant to subsection 1. 
1. Report by superintendent. By October 1, 2007, the Superintendent of Insurance 
shall report to the Joint Standing Committee on Insurance and Financial Services the 
percentage by which individual health insurance rates would be less than those that would 
lObe applicable in the absence of the reinsurance requirements set forth in this Part, using a 
model based upon generally accepted actuarial principles. 
2. Filing by carriers. Each carrier providing individual health plans in the State 
must file no later than September 1, 2008 the percentage by which its rates for January 1, 
2009 and thereafter will be less than that which would be applicable in the absence of the 
reinsurance requirements set forth in this Part. 
3. Certification by superintendent. The Superintendent of Insurance shall review 
the filings for all carriers submitted pursuant to subsection 2 and shall certify whether for 
each carrier the percentage is at least equal to that reported in accordance with subsection 
by the superintendent on October 1, 2007. No later than November 1, 2008, the 
superintendent shall submit the certification to the Joint Standing Committee on 
Insurance and Financial Services and shall forward a copy of the certification to the 
Office of the Revisor of Statutes. 
PART F 
Sec. F-l. 22 MRS A §1721 is enacted to read: 
§1721. Voluntary restraint 
1. Voluntary restraint. To control the rate of growth of the costs of hospital 
services, each hospital licensed under chapter 405 may voluntarily restrain cost increases 
and consolidated operating margins in accordance with this section. Each hospital shall 
annually report to the joint standing committee of the Legislature having jurisdiction over 
health and human services matters regarding its efforts made pursuant to this section. 
The targets and methodology apply to each hospital's fiscal year beginning on or after 
July 1,2008. 
A. Each hospital may voluntarily hold its consolidated operating margin to no more 
than 3%. For purposes of this section, a hospital's consolidated operating margin is 
calculated by dividing its consolidated operating income by its total consolidated 
operating revenue. 
B. Each hospital may voluntarily restrain its increase in its expense per casemix-
adjusted inpatient and volume-adjusted outpatient discharge to no more than 110% of 
the forecasted increase in the hospital market basket index for the coming federal 
fiscal year, as published in the Federal Register, when the federal Centers for 
Medicare and Medicaid Services publishes the Medicare program's hospital inpatient 
prospective payment system rates for the coming federal fiscal year. For purposes of 
this paragraph, the measure of a hospital's expense per casemix-adjusted inpatient and 
volume-adjusted outpatient discharge is calculated by: 
(1) Calculating the hospital's total hospital-only expenses; 
(2) Subtracting from the hospital's total hospital-only expenses the amount of the 
hospital's bad debt; 
(3) Subtracting from the amount reached in subparagraph (2) the hospital taxes 
paid to the State during the hospital's fiscal year; and 
(4) Dividing the amount reached in subparagraph (3) by the product of: 
(a) The number of inpatient discharges, adjusted by the all payer case mix 
index for the hospital; and 
(b) The ratio of total gross patient service revenue to gross inpatient service 
revenue. 
For the purposes of this paragraph, a hospital's total hospital-only expenses include 
any item that is listed on the hospital's Medicare cost report as a subprovider, such as 
a psychiatric unit or rehabilitation unit, and does not include nonhospital cost centers 
shown on the hospital's Medicare cost report, such as home health agencies, nursing 
facilities, swing beds, skilled nursing facilities and hospital-owned physician 
practices. For purposes of this paragraph, a hospital's bad debt is as defined and 
reported in the hospital's Medicare cost report and as submitted to the Maine Health 
Data Organization pursuant to Title 22, chapter 1683. 
PART G 
Sec. G-l. 24-A MRSA §6908, suh-§l, ~K, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
K. Provide staff support and other assistance to the Maine Quality Forum established 
in section 6951, including assigning a director and other staff as needed to conduct 
the work of the Maine Quality Forum; aM 
Sec. G-2. 24-A MRSA §6908, suh-§l, ~, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
L. In accordance with the limitations and restrictions of this chapter, cause any of its 
powers or duties to be carried out by one or more organizations organized, created or 
operated under the laws of this State.,.; 
Sec. G-3. 24-A MRS A §6908, suh-§l, ~ 
is enacted to read: 
M. Establish and administer grant, subsidy and facilitation programs designed to 
assist providers and health care practitioners in the development, enhancement and 
maintenance of quality improvement infrastructure and processes. Dirigo Health may 
solicit and collect contributions to fund these programs; and 
PARTH 
Sec. H-l. 24-A MRSA §2808-B, sub-§l, ~E, as amended by PL 1997, c. 777, 
Pt. B, §2, is further amended to read: 
E. "Late enrollee" means an eligible employee or dependent who requests enrollment 
in a small group health plan following the initial minimum 30-day enrollment period 
provided under the terms of the plan, except that, an eligible employee or dependent 
is not considered a late enrollee if the eligible employee or dependent meets the 
requirements of section 2849-B, subsection 3, paragraph A, B, C-l ef~ D or E. 
Sec. H-2. 24-A MRS A §2849-B, sub-§3, ~C-l, as amended by PL 2005, c. 683, 
Pt. A, §42, is further amended to read: 
C-l. That person was covered by the Cub Care program under Title 22, section 
3174-T, and the request for replacement coverage is made while coverage is in effect 
or within 30 days from the termination of coverage; ef 
Sec. H-3. 24-A MRS A §2849-B, sub-§3,~, as enacted by PL 1995, c. 332, Pt. 
F, §5, is amended to read: 
D. That person was previously ineligible for coverage and the request for enrollment 
is made within 30 days of the date the person becomes eligible~~ 
Sec. H-4. 24-A MRSA §2849-B, sub-§3, ~E is enacted to read: 
E. That person is eligible for MaineCare under Title 22, section 3174 and is eligible 
for a premium payment by MaineCare for a group health plan pursuant to rules 
adopted by the Department of Health and Human Services. 
PART I 
Sec. 1-1. 24-A MRSA c. 87, sub-c. 4 is enacted to read: 
SUBCHAPTER 4 
MAINE HEALTH CARE SHARED RESPONSIBILITY 
§6991. Contribution requirement established 
For the purpose of increasing access to health care and more equitably distributing 
the rising costs of health care provided to uninsured residents of this State, an employer 
and individual health care shared responsibility contribution requirement is established 
under this subchapter to provide a fair and reasonable method for sharing health care 
costs with employers who do not offer their employees health care coverage and with 
individuals who do not have health care coverage. 
§6992. Employers' health care shared responsibility contribution 
1. Assessment. Beginning July 1, 2008, the Board of Directors of Dirigo Health 
shall assess, and certain employers shall pay, an employer health care shared 
responsibility contribution for each full-time equivalent uncovered employee. 
2. Rulemaking. The board, in consultation with representatives from the business, 
labor, economic development, taxation, consumer, insurance and health care communities 
along with other interested stakeholders, shall develop rules and definitions necessary to 
implement this section. Rules adopted pursuant to this subsection must include, but are 
not limited to, rules establishing: 
A. The parameters of the employer health care shared responsibility requirements; 
B. The size and number of employers affected; 
C. The amount of contributions owed by employers who do not provide coverage to 
their employees. Contributions pursuant to this paragraph may be established using a 
sliding scale; 
D. The method of collecting assessments; and 
E. The definition of "uncovered employee. " 
In developing rules under this subsection, the board shall consider equity among 
employers and the impact on the business climate in this State. Rules adopted pursuant to 
this subsection are major substantive rules as defined in Title 5, chapter 375, subchapter 
2-A. 
3. Funds deposited. Contributions collected under this section must be deposited 
into the Dirigo Health Enterprise Fund established under section 6915. 
§6993. Individual health care shared responsibility contribution 
1. Assessment. Beginning January 1, 2009, the board shall assess an individual 
health care shared responsibility contribution on certain residents of the State, 18 years of 
age and older, who meet the income financial eligibility threshold established by the 
board and who do not obtain and maintain minimum acceptable health care coverage. 
2. Rulemaking. The board, in consultation with representatives from the business, 
labor, economic development, taxation, consumer, insurance and health care communities 
along with other interested stakeholders, shall develop rules and definitions necessary to 
implement this secti<-'n. Rules adopted pursuant to this subsection must include, but are 
not limited to, rules establishing: 
A. The parameters of the individual health care shared responsibility requirement; 
B. The individual income financial threshold; 
C. The amount of contributions owed by uncovered individuals; 
D. The method of collecting assessments; and 
E. The definition of "minimum acceptable health eare coverage. " 
Rules adopted pursuant to this subsection are major substantive rules as defined in Title 
5, chapter 375, subchapter 2-A. 
3. Funds deposited. Contributions collected under this section must be deposited 
into the Dirigo Health Enterprise Fund established under section 6915. 
§6994. Rulemaking 
In addition to the rules adopted pursuant to sections 6992, subsection 2 and section 
6993, subsection 2, the board shall adopt any other necessary rules to implement this 
subchapter. Rules adopted pursuant to this section are routine technical rules as defined 
in Title 5, chapter 375, subchapter 2-A. 
PART J 
Sec. J-l. 24-A MRSA §2S0S-B, sub-§4, ~A, as corrected by RR 2001, c. 1, §32, 
is amended to read: 
A. Any small group health plan offered to any eligible group or subgroup must be 
offered to all eligible groups that meet the carrier's minimum participation 
requirements, which may not exceed 75o/o;-te of all eligible employees and their 
dependents in those groups. In determining compliance with minimum participation 
requirements, eligible employees and their dependents who have existing health care 
coverage may not be considered in tHe ealeulation. MaineCare is not considered 
existing health care coverage for the purposes of this paragraph. If an employee 
declines coverage because the employee has other coverage, any dependents of that 
employee who are not eligible under the employee's other coverage are eligible for 
coverage under the small group health plan. A carrier may deny coverage under a 
managed care plan, as defined by section 430 I-A: 
(1) To employers who have no employees who live, reside or work within the 
approved service area of the plan; and 
(2) 
To employers if the carrier has demonstrated to the superintendent's 
satisfaction that: 
(a) The carrier does not have the capacity to deliver services adequately to 
additional enrollees within all or a designated part of its service area because 
of its obligations to existing enrollees; and 
(b) The carrier is applying this provision uniformly to individuals and groups 
without regard to any health-related factor. 
A carrier that denies coverage in accordance with this subparagraph may not 
enroll individuals residing within the area subject to denial of coverage, or groups 
or subgroups within that area for a period of 180 days after the date of the first 
denial of coverage. 
Sec. J-2. 24-A MRSA §6903, sub-§6, as enacted by PL 2003, c. 469, Pt. A, §8, 
is amended to read: 
6. 
Eligible employee. 
"Eligible employee" means an employee of an eligible 
business who works at least ~ 10 hours per week for that eligible business. "Eligible 
employee" does not include an employee who works on a temporary or substitute basis or 
who does not work more than 26 weeks annually. 
Sec. J-3. 24-A MRSA §6908, sub-§l, ~ 
is enacted to read: 
N. Provide subsidies for eligible enrollees for health benefit products it approves that 
are offered by multiple licensed health insurance carriers in the State. 
Sec. J-4. 24-A MRSA §6910, sub-§3, as amended by PL 2005, c. 400, Pt. C, §8, 
is further amended to read: 
3. Carrier participation requirements. To qualify as a carrier of Dirigo Health 
Program coverage, a health insurance carrier must: 
A. Provide the comprehensive health services and benefits as determined by the 
board, including a standard benefit package that meets the requirements for mandated 
coverage for specific health services, specific diseases and for certain providers of 
health services under Title 24 and this Title and any supplemental benefits the board 
wishes to make available; and 
B. Ensure that: 
(1) Providers contracting with a carrier contracted to provide coverage to plan 
enrollees do not charge plan enrollees or 3rd parties for covered health care 
services in excess of the amount allowed by the carrier the provider has 
contracted with, except for applicable copayrnents, deductibles or coinsurance or 
as provided in section 4204, subsection 6; 
(2) Providers contracting with a carrier contracted to provide coverage to plan 
enrollees do not refuse to provide services to a plan enrollee on the basis of 
health status, medical condition, previous insurance status, race, color, creed, age, 
national origin, citizenship status, gender, sexual orientation, disability or marital 
status. This subparagraph may not be construed to require a provider to furnish 
medical services that are not within the scope of that provider's license; and 
(3) Providers contracting with a carrier contracted to provide coverage to plan 
enrollees are reimbursed at the negotiated reimbursement rates between the 
carrier and its provider network. 
Health insurance carriers that seek to qualify to provide Dirigo Health Program coverage 
fffilSt may also qualify as health plans in Medicaid. 
Sec. J-S. 24-A MRS A §6910, sub-§4, ,s, as amended by PL 2005, c. 400, Pt. 
C, §8, is further amended to read: 
B. Dirigo Health shall contract with eligible businesses seeking assistance from 
Dirigo Health in arranging for health benefits coverage by the Dirigo Health Program 
for their employees and dependents as set out in this paragraph. 
(1) 
Dirigo Health may establish contract and other reporting forms and 
procedures necessary for the efficient administration of contracts. 
(2) Dirigo Health shall collect payments from participating employers and plan 
enrollees to cover the cost of: 
(a) The Dirigo Health Program for enrolled employees and dependents in 
contribution amounts determined by the board; 
(b) 
Dirigo Health's quality assurance, disease prevention, disease 
management and cost-containment programs; 
(c) Dirigo Health's administrative services; and 
(d) Other health promotion costs. 
(3) Dirigo Health shall establish the minimum required contribution levels,.-Het 
to exceed 60%, to be paid by employers toward the aggregate payment in 
subparagraph (2) and establish an equivalent minimum amount to be paid by 
employers or plan enrollees and their dependents who are enrolled in MaineCare. 
The minimum required contribution level to be paid by employers must be 
prorated for employees that work less than the number of hours of a full-time 
equivalent employee as determined by the employer. 
Dirigo Health may 
establish a separate minimum contribution level to be paid by employers toward 
coverage for dependents of the employers' enrolled employees. 
(4) Dirigo Health shall require participating employers to certify that at least 
75% of their eligible employees that work 30 hours or more per week and who do 
not have other creditable coverage, not including MaineCare enrollees, are 
enrolled in the Dirigo Health Program and that the employer group otherwise 
meets the minimum participation requirements specified by section 2808-B, 
subsection 4, paragraph A. 
(5) Dirigo Health shall reduce the payment amounts for plan enrollees eligible 
for a subsidy under section 6912 accordingly. Dirigo Health shall return any 
payments made by plan enrollees also enrolled in MaineCare to those enrollees. 
(6) Dirigo Health shall require participating employers to pass on any subsidy in 
section 6912 to the plan enrollee qualifying for the subsidy, up to the amount of 
payments made by the plan enrollee. 
(7) Dirigo Health may establish other criteria for participation. 
(8) Dirigo Health may limit the number of participating employers. 
(9) Dirigo Health may provide participating employers assistance to adopt and 
maintain a payroll deduction program to facilitate the payment of health benefit 
plan premium payments by employees to benefit from deductibility of gross 
income under 26 United States Code, Section 125. 
Sec. J-6. 24-A MRS A §6912, sub-§4, as enacted by PL 2003, c. 469, Pt. A, §8, 
is repealed. 
PART K 
Sec. K-l. 24-A MRSA §423-D, sub-§3 is enacted to read: 
3. Report by superintendent. The superintendent shall report each year to the joint 
standing committee of the Legislature having jurisdiction over insurance matters on the 
number of previously uninsured individuals in this State who have enrolled during that 
year in any health insurance product regulated by the bureau, which information is 
collected pursuant to rules adopted under this section. 
PARTL 
Sec. L-l. 24-A MRSA §2736, sub-§3, ~, as amended by PL 2003, c. 469, Pt. 
E, §9, is repealed. 
Sec. L-2. 24-A MRSA §2839-B, sub-§2, as enacted by PL 2003, c. 469, Pt. E, 
§ 1 7, is amended to read: 
2. 
Annual filing. 
Every carrier offering group health insurance specified in 
subsection 1 shall annually file with the superintendent on or before April 30th a 
certification signed by a member in good standing of the American Academy of 
Actuaries or a successor organization that the carrier's rating methods and practices are in 
accordance with generally accepted actuarial principles and with the applicable actuarial 
standards of practice as promulgated by an actuarial standards board. The filing must 
also certify that the carrier has included in its experience any savings offset payments or 
recovery of those savings offset payments consistent with former section 6913 or section 
6913-A. The filing also must state the number of policyholders, certificate holders and 
dependents, as of the close of the preceding calendar year, enrolled in large group health 
insurance plans offered by the carrier. A filing and supporting information are public 
records except as provided by Title 1, section 402, subsection 3. 
Sec. L-3. 24-A MRSA §6908, sub-§l, ,A, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
A. Take any legal actions necessary or proper to recover or collect savings offset 
payments provided in section 6913-A due Dirigo Health or that are necessary for the 
proper administration of Dirigo Health; 
Sec. L-4. 24-A MRSA §6908, sub-§2,~, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
B. Collect the savings offset payments provided in former section 6913 or section 
6913-A; 
Sec. L-S. 24-A MRSA §6913, as amended by PL 2007, c. 1, Pt. X, §§ 1 and 2 and 
affected by §3, is repealed. 
Sec. L-6. 24-A MRSA §6913-A is enacted to read: 
§6913-A. Surcharge 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Hospital" means an acute care health care facility: 
(1) With permanent inpatient beds planned, organized, operated and maintained 
to offer for a continuing period of time facilities and services for the diagnosis 
and treatment of illness, injury and deformity; 
(2) With a governing board and an organized medical staff offering continuous 
24-hour professional nursing care; 
(3) With a plan to provide emergency treatment 24 hours a day and including 
other services as defined in rules of the Department of Health and Human 
Services relating to licensure of general and specialty hospitals; and 
(4) That is licensed under Title 22, chapter 405 as a general hospital, specialty 
hospital or critical access hospital. 
For purposes of this paragraph, "hospital" does not include a nursing home or a 
publicly owned specialty hospital. 
B. "Payments subject to surcharge" means all amounts paid, directly or indirectly, by 
surcharge payors to hospitals for all hospital-only health services on or after the 
effective date of this paragraph, except that "payments subj ect to surcharge" does not 
include payments with respect to accidental injury, specified disease, hospital 
indemnity, dental, vision, disability income, long-term care, Medicare supplement or 
other limited benefit health insurance. "Payments subject to surcharge" may exclude 
amounts established in rules adopted by the board for which the costs and efficiency 
of billing a surcharge payor or enforcing collection of the surcharge from a surcharge 
payor would not be cost-effective. For the purposes of this paragraph, a hospital's 
hospital-only services include any item that is listed on the hospital's Medicare cost 
report as a subprovider and submitted to Maine Health Data Organization pursuant to 
Title 22, chapter 1683, such as a psychiatric unit or rehabilitation unit, and do not 
include nonhospital cost centers shown on the hospital's Medicare cost report, such as 
home health agencies, nursing facilities, swing beds, skilled nursing facilities and 
hospital-owned physician practices. 
C. 
"Publicly owned specialty hospital" means a publicly owned hospital that is 
primarily engaged in providing psychiatric services for the diagnosis, treatment and 
care of persons with mental illness and that is licensed as a specialty hospital by the 
Department of Health and Human Services. 
D. "Surcharge payor" means an individual or entity that pays for or arranges for the 
purchase of health care services provided by hospitals, except that "surcharge payor" 
does not include: 
(1) Any governmental entitv that pays for health care services provided under 
the Medicare program or Medicaid program, or beneficiaries or recipients under 
those programs; 
(2) 
Any federal governmental entity that pays for health care servIces, or 
beneficiaries or recipients under those programs; or 
(3) 
An insurance company or other entity for health care servIces provided 
pursuant to the Maine Workers' Compensation Act of 1992. 
2. 
Surcharge. 
Hospitals shall assess a surcharge on all payments subject to 
surcharge. The surcharge is distinct from any other amount paid by a surcharge payor for 
the services of the hospital. The surcharge amount equals the product of the surcharge 
percentage and amounts paid for those services by a surcharge payor. The board shall 
determine not later than April 1, 2008 and then annually by April 1 st thereafter the 
surcharge percentage through the following methodology: 
A. The board shall determine the actual total payments subject to surcharge in the 
preceding calendar year by all surcharge payors to all hospitals; 
B. The board shall determine the actual total incurred claims in the previous calendar 
year by the uninsured and the previously underinsured enrollees in the benefits plan 
offered by the Dirigo Health Program and MaineCare enrollees due to an expansion 
in MaineCare eligibility occurring after June 30, 2004, minus the portion of those 
claims that would have been paid prior to enrollment in the Dirigo Health Program or 
Mainecare; and 
C. 
The board shall determine the surcharge percentage by dividing the total in 
paragraph B by the total in paragraph A. 
The board may adopt any rules necessary to implement this subsection. Rules adopted 
pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
3. Billing. Beginning July 1, 2008, each hospital shall bill a surcharge payor an 
amount equal to the surcharge described in subsection 2 as a separate and identifiable 
amount distinct from any amount billed to or paid by a surcharge payor for hospital 
services. Each surcharge payor shall pay the surcharge amount to Dirigo Health, which 
amount must be pooled with other revenues of Dirigo Health in the Dirigo Health 
Enterprise Fund established in section 6915. 
4. 
Surcharge payor's liability. 
The board shall specify by rule appropriate 
mechanisms that provide for determination and payment of a surcharge payor's liability, 
including requirements for data to be submitted by surcharge payors and hospitals. A 
surcharge payor's liability, in the case of a transfer of ownership, must be assumed by the 
successor in interest to the surcharge payor. 
5. 
Failure to pay surchar2e payments. The board shall establish by rule an 
appropriate mechanism for enforcing a surcharge payor's liability to the Dirigo Health 
Enterprise Fund in the event that a surcharge payor does not make a scheduled payment 
under subsection 3, except that the board, for the purpose of administrative simplicity, 
may establish threshold liability amounts below which enforcement may be modified or 
waived. Such an enforcement mechanism must include an assessment of interest on the 
unpaid liability at a rate not to exceed an annual percentage rate of 18% and late fees or 
penalties at a rate not to exceed 5% per month. 
6. Demonstration of recovery of surcharge payments through reduction in bad 
debt and charity care. In accordance with the requirements of this subsection, every 
health insurance carrier and provider shall demonstrate that best efforts have been made 
to ensure that a carrier has recovered surcharge payments made pursuant to this section 
through negotiated reimbursement rates that reflect providers' reductions or stabilization 
in the cost of bad debt and charity care, as determined in subsection 2. 
A health insurance carrier shall use best efforts to ensure health insurance premiums 
reflect any such recovery of surcharge payments as those surcharge payments are 
reflected through incurred claims experience in accordance with subsection 7. 
7. Demonstration of offset. As provided in sections 2736-C, 2808-B and 2839-B, 
the claims experience used to determine any filed premiums or rating formula must 
reasonably reflect, in accordance with accepted actuarial standards, any reduction or 
avoidance of bad debt and charity care costs to providers in this State, as determined in 
subsection 2. 
8. 
Definition of "actual total 
incurred 
claims," 
"uninsured" 
and 
"underinsured"; rulemaking. The board shall adopt.Jllles est~blishing the definitions 
of the terms "actual total incurred claims," "uninsl!red~.1lnd "underinsured" for the 
purposes of calculating the surcharge percentage und,;r subsection 2. 
The board shall adopt other rules necessary to implement thts section. Rules adQ]2ted 
pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
9. Reports. The following reports are required in accordance with this subchapter. 
A. On a quarterly basis no less than 60 days from the end of each quarter, the board 
shall collect and report on the following: 
(1) The total enrollment in the Dirigo Health Program, including the number of 
enrollees previously underinsured or uninsured, the number of enrollees 
previously insured, the number of individual enrollees and the number of 
enrollees enrolled through small employers; 
(2) The number of new participating employers in the Dirigo Health Program; 
(3) The number of employers ceasing to offer coverage through the Dirigo 
Health Program; 
(4) The duration of employers participating in the Dirigo Health Program; and 
(5) 
A comparison of actual enrollees in the Dirigo Health Program to the 
projected enrollees. 
Sec. L-7. 24-A MRS A §6915, as amended by PL 2005, c. 386, Pt. D, §3, IS 
further amended to read: 
§6915. Dirigo Health Enterprise Fund 
The Dirigo Health Enterprise Fund is created as an enterprise fund for the deposit of 
any funds advanced for initial operating expenses, payments made by employers and 
individuals, any savings offset payments made pursuant to former section 6913 or section 
6913-A and any funds received from any public or private source. The fund may be used 
by Dirigo Health to exercise its powers and duties pursuant to this chapter. The fund may 
not lapse, but must be carried forward to carry out the purposes of this chapter. 
Sec. L-S. 
Savings offset payments calculated prior to effective date. 
Notwithstanding that section of this Part that repeals the Maine Revised Statutes, Title 
24-A, section 6913, any savings offset payment calculated and required under former 
Title 24-A, section 6913 prior to the effective date of this Part is due and payable in the 
same manner and subject to the same procedures set forth in former Title 24-A, section 
6913. 
Sec. L-9. Revisor's review; cross-references. The Revisor of Statutes shall 
review the Maine Revised Statutes and include in the errors and inconsistencies bill 
submitted to the Second Regular Session of the 123rd Legislature pursuant to Title 1, 
section 94 any sections necessary to correct and update any cross-references in the 
statutes to provisions of law repealed in this Act. 
SUMMARY 
This bill accomplishes the following. 
Part A requires all insurance carriers to offer a discount on premiums for nonsmokers 
and requires insurance carriers in the small and large group markets to offer a discount on 
premiums for participants in workplace wellness programs. This Part directs Dirigo 
Health's Maine Quality Forum to develop certification standards for eligible workplace 
wellness programs. 
Part B clarifies that all rate filings, as well as information and documentation used to 
support the filings, are public records. It also requires that carriers provide demonstrable 
proof and quantify the amount of any recovery of the savings offset payment until 
repealed or the surcharge through negotiations with health care providers as part of the 
filing. 
Part C requires a medical loss ratio of 78% in the individual market and requires 
approval from the Department of Professional and Financial Regulation, Bureau of 
Insurance for all rate filings in the small group market. This Part also requires carriers to 
refund the amount of the premium above the amount necessary to achieve a 78% loss 
ratio to policyholders in both the individual and small group markets. 
Part D extends the provision allowing carriers to lower premium costs by including 
financial incentives to members to use designated providers and gives the Superintendent 
of Insurance the authority to develop a financial incentive pilot program that allows 
companies to offer products in which consumers can choose to travel further for cost 
savings and better quality. 
Part E establishes a reinsurance plan for the individual health insurance market, 
effective January 2009. It preserves guaranteed issue, keeps all people in the same pool 
and provides reinsurance for all claims above a certain limit, reducing the community rate 
in the individual insurance market. It requires that all insurers in the individual market 
offer a plan that includes a $1,000 deductible, a prescription drug benefit not subject to a 
deductible and the option of no lifetime benefit maximum. 
It expands individual 
insurance market community rating bands for age and geography to plus or minus 33% in 
2008; in 2009, when the reinsurance program becomes effective, the bands may be 
adjusted to plus or minus 50% and by an additional 10% upward for variation in health 
status. 
If individual insurance market savings are not achieved in the rate-filings 
submitted by insurers to the Bureau of Insurance by September 1, 2008, the 2009 rating 
expanSIOns and the law establishing the individual reinsurance plan will not go into 
effect. 
Part E also provides that health maintenance organizations are subject to the tax 
imposed on insurance premiums beginning October 1, 2007, with 85% of the resulting 
revenue dedicated to the Dirigo Health Program for one year and then to the individual 
reinsurance plan in the Maine Revised Statutes, Title 24-A, chapter 54. The reinsurance 
program is also financed in part by reinsurance premiums paid by insurers in the 
individual market. Beginning October 1, 2007, health maintenance organizations will not 
be subject to the corporate income tax. This Part also amends the Maine corporate 
income tax law to provide that income received by an insurance company from a health 
maintenance organization that is not separately organized is also not subject to the 
corporate income tax. 
Part F makes permanent, beginning on or after July 1, 2008, the temporary voluntary 
cost containment targets on hospital consolidated operating margins and cost increases, 
which were initiated in Public Law 2003, chapter 469, Part F, section 1 and which 
otherwise would expire. 
Part Gallows Dirigo Health to administer grants and other subsidies to strengthen the 
State's health care quality improvement infrastructure. 
Part H allows persons who become eligible for premium assistance through 
MaineCare to enroll in their employer's group health care plan outside of the annual open 
enrollment period in order to allow MaineCare to pay eligible employees' premiums. 
Part I establishes a health care shared responsibility program to require certain 
employers and individuals who do not offer or take up health insurance to pay a fee 
toward coverage of the uninsured. This Part directs Dirigo Health, in consultation with 
representatives from the business, labor, economic development, taxation, consumer, 
insurance and health care communities along with other interested stakeholders, to adopt 
major substantive rules to implement this program and to address the concerns for 
affordability and fairness and the impact on the business climate. 
Part J disallows employers from counting MaineCare enrollees for purposes of 
determining the 75% of workforce eligibility for small group health plans, including 
DirigoChoice. This Part allows Dirigo Health to reduce the amount employers must 
contribute toward coverage to join DirigoChoice and also allows Dirigo Health, once the 
health care shared responsibility contribution requirement is implemented, to subsidize 
approved plans provided by multiple carriers. This Part also reduces from 20 to 10 the 
number of hours employees must work before being eligible for coverage under their 
employer's DirigoChoice plan. This Part allows Dirigo Health to assist employers in 
establishing payroll deduction systems that would help employees purchase health 
coverage with pre-tax dollars. 
Part K requires the Superintendent of Insurance to report yearly to the Legislature the 
numbers of previously uninsured individuals who have enrolled in any health insurance 
product regulated by the Bureau of Insurance. 
Part L replaces the savings offset payment with a surcharge. The surcharge is added 
to certain payments made to hospitals and is paid to Dirigo Health by an expanded group 
of payors, some of whom are now exempt from payment. The intent of this provision is 
to reduce the amount paid by each payor by sharing responsibility among a larger group 
of payors. The amount of the surcharge cannot exceed the actual total incurred claims 
paid in the preceding year for previously underinsured and uninsured individuals now 
covered through the program. The Board of Directors of Dirigo Health has the authority 
to exclude amounts established by rule for which the costs and efficiency of billing or 
enforcing collection from an individual would not be cost-effective.