An Act To Enable the Dirigo Health Program To Be Self-administered
Maine Legislature, Session 123, LD 0431
Committee: Health and Human Services
Sponsors: CONOVER, BRYANT, HARLOW, EDMONDS, BRAUTIGAM, CUMMINGS, MILLER, PINGREE, BRANNIGAN, MITCHELL, SULLIVAN
Amends: 5 MRSA §12004-G, 22 MRSA §3174-D, 24-A MRSA §6903, 24-A MRSA §6904, 24-A MRSA §6905, 24-A MRSA §6908, 24-A MRSA §6909, 24-A MRSA §6910, 24-A MRSA §6916

Legislative Document 
No. 431 
H.P.347 
House of Representatives, January 29, 2007 
An Act To Enable the Dirigo Health Program To Be Self-
administered 
Reference to the Committee on Health and Human Services suggested and ordered printed. 
Presented by Representative CONOVER of Oakland. 
17/~1?1.~ 
MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by Representatives: BRYANT of Windham, HARLOW of Portland, President 
EDMONDS of Cumberland and Representatives: BRAUTIGAM of Falmouth, Speaker 
CUMMINGS of Portland, MILLER of Somervi11e, PINGREE of North Haven, Senators: 
BRANNIGAN of Cumberland, MITCHELL of Kennebec, SULLIVAN of York. 
Pnnted on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 5 MRSA §12004-G, sub-§14-D, as enacted by PL 2003, c. 469, Pt. A, 
§3, is amended to read: 
14-D. 
Health Care 
Board of Difeetsfs 
Trustees of Dirigo 
Health 
$100 per diem and 
expenses 
24-AMRSA 
§6904 
Sec. 2. 22 MRSA §3174-DD, as amended by PL 2005, c. 400, Pt. C, §2, is further 
amended to read: 
§3174-DD. Dirigo health coverage 
The department may contract with one or more health insurance carriers or the Dirigo 
Health Self-administered Plan established pursuant to Title 24-A, section 6981 to 
purchase Dirigo Health Program coverage for MaineCare members who seek to enroll 
through their employers pursuant to Title 24-A, section 6910, subsection 4, paragraph B. 
A MaineCare member who enrolls in the Dirigo Health Program as a member of an 
employer group receives full MaineCare benefits through the Dirigo Health Program. 
The benefits are delivered through the employer-based health plan, subject to nominal 
cost sharing as permitted by 42 United States Code, Section 13960(2003) and additional 
coverage provided under contract by the department. 
Sec. 3. 24-A MRSA §6903, sub-§l, as enacted by PL 2003, c. 469, Pt. A, §8, is 
amended to read: 
1. Board. "Board" means the Board of Difeetsfs Trustees of Dirigo Health, as 
established in section 6904. 
Sec. 4. 24-A MRSA §6904, as enacted by PL 2003, c. 469, Pt. A, §8, is amended 
to read: 
§6904. Board of Trustees of Dirigo Health 
Dirigo Health operates under the supervision of ft the Board of Difeetsfs Trustees of 
Dirigo Health established in accordance with this section. 
1. Appointments. The board consists of ~ .2 voting members and J. i ex officio, 
nonvoting members as follows. 
A. The ~ .2 voting members of the board must be appointed by the Governor, subject 
to review by the joint standing committee of the Legislature having jurisdiction over 
health insurance matters and confirmation by the Senate. 
B. The J. i ex officio, nonvoting members of the board are: 
\. 
(1) The Commissioner of Professional and Financial Regulation or the 
commissioner's designee; 
(2) The director of the Governor's Office of Health Policy and Finance or the 
director of a successor agency; aad 
(3) 
The Commissioner of Administrative and Financial Services or the 
commissioner's designee~; and 
(4) The Treasurer of State or the treasurer's designee. 
2. Qualifieatioos of votiog membeFS. VotiRg mem8ers of the 80are: 
A. Must ","aye lrnowleege of aRe e*f;lerieRse iR ORe or more of the followiRg areas: 
0 
( 1) Health sare purehasiRg; 
(2) Health iRsuraRee; 
(3) MaiReCare; 
(4) Health polie~r aRe law; 
(5) State maRagemeRt ane 8Ueget; or 
(6) Health eare fiRltReiRg; aRd 
B. Exeept as provided iR this paFagraph, m~r Rot be: 
7 
(1) 
A represeRtati'+'e or employee of llfl iRsuraRee eamer authori~ed to do 
busiRess iR this State; 
(2) A represeRtatiYe or employee of a health SaFe pro ... ider operatiRg iR this State; 
er 
(3) Affiliated with a health or health related organi~tioR regulated by State 
GO·/ernmeRt. 
A RORpraetieiRg health SaFe praetitioRer, retired or fermer health SaFe admiRistrator or 
retiree or former emplo~'ee of a health iRsuranse samer is Rot prohibited from beiRg 
eORsideree fer 80aFd membership as 10Rg as that perSOR is Rot sUfFeRtly affiliated 
'Nith a health or health related orgaRi~tioR. 
2-A. Qualifications of voting members. Voting members of the board must be 
qualified in accordance with this subsection. 
A. Six of the voting members of the board must have knowledge of and experience 
in one or more of the following areas: 
(1) Health care purchasing; 
(2) Health insurance; 
(3) MaineCare; 
(4) Health policy and law; 
(5) State management and bUdgeting; 
(6) Health care financing; 
(7) Labor or consumer advocacy: and 
(8) Marketing. 
B. 
Three of the voting members of the board must have knowledge of and 
experience in one or more ofthe following areas: 
(1) Accounting; 
(2) Banking; 
0) Securities; and 
(4) Insurance. 
c. Except as provided in this paragraph, a voting member of the board may not be: 
(1) A representative or employee of a health insurance carrier authorized to do 
business in this State; 
(2) A representative or employee of a health care provider operating in this State; 
(3) Affiliated with a health or health-related organization regulated by State 
Government; or 
(4) A representative or employee of Dirigo Health. 
A nonpracticing health care practitioner, retired or former health care administrator or 
retired or former employee of a health insurance carrier is not prohibited from being 
considered for board membership as long as that person is not currently affiliated 
with a health or health-related organization. 
3. Terms of office. Voting members serve 3-year terms. Voting members may serve 
up to 2 consecutive terms. Of the initial appointees, one member serves an initial term of 
one year, 2 members serve initial terms of 2 years and 2 members serve initial terms of 3 
years. The Governor shall fill any vacancy for an unexpired term in accordance with 
subsections 1 and 2- 2-A. Members reaching the end of their terms may serve until 
replacements are named. 
4. Chair. The Governor shall appoint one of the voting members as the chair of the 
board. 
5. Quorum. +Iwee Five voting members of the board constitute a quorum. 
6. Affirmative vote. An affirmative vote of ~ ~ members is required for any action 
taken by the board. 
7. Compensation. A member of the board must be compensated according to the 
provisions of Title 5, section 12004-G, subsection l4-D; a member must receive 
compensation whenever that member fulfills any board duties in accordance with board 
bylaws. 
8. Meetings. The board shall meet at least 4 times a year at regular intervals 
monthly and may also meet at other times at the call of the chair or the executive director. 
All meetings of the board are public proceedings within the meaning of Title 1, chapter 
13, subchapter 1. 
Sec. 5. 24-A MRSA §6905, as enacted by PL 2003, c. 469, Pt. A, §8, is repealed 
and the following enacted in its place: 
§6905. Limitation on liability 
1. Indemnification of Dirigo Health employees. An employee of Dirigo Health is 
not subject to any personal liability for having acted within the course and scope of 
membership or employment to carry out any power or duty under this chapter. Dirigo 
Health shall indemnify any member of the board and any employee of Dirigo Health 
against expenses actually and necessarily incurred by that member or employee in 
connection with the defense of any action or proceeding in which that member or 
employee is made a party by reason of past or present authority with Dirigo Health. 
2. Limitation on liability of board members. The personal liability of a member of 
the board is governed by Title 18-B, section 1010. 
Sec. 6. 24-A MRSA §6908, sub-§2, ~, as amended by PL 2005, c. 400, Pt. C, 
§6, is further amended to read: 
E. 
Arrange the provision of Dirigo Health Program benefit coverage to eligible 
individuals and eligible employees through contracts with one or more qualified 
bidders in accordance with section 6910 or through the Dirigo Health Self-
administered Plan authorized pursuant to section 6981 ~ 
Sec. 7. 24-A MRSA §6908, sub-§13, as reallocated by PL 2005, c. 683, Pt. B, 
§20, is amended to read: 
13. Report; jurisdiction. Dirigo Health shall report twice annually, once in January 
and once during the last month of the regular legislative session, to the joint standing 
committee of the Legislature having jurisdiction over insurance and financial services 
matters on the Dirigo Health Program and budget. Minutes of meetings of the Board of 
Direetors Trustees of Dirigo Health must be provided to each member of the joint 
standing committees of the Legislature having jurisdiction over insurance and financial 
services matters, health and human services matters and appropriations and financial 
affairs. 
Sec. 8. 24-A MRSA §6909, sub-§2, ,A, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
A. Serve as the liaison between the board of direetors and Dirigo Health and serve as 
secretary and treasurer to the board~ 
Sec. 9. 24-A MRSA §6910, sub-§l, as amended by PL 2005, c. 400, Pt. C, §8, is 
further amended to read: 
1. Dirigo Health Program. Dirigo Health shall arrange for the provision of health 
benefits coverage through the Dirigo Health Program not later than October 1,2004. The 
Dirigo Health Program must comply with all relevant requirements of this Title. Dirigo 
Health Program coverage may be offered by health insurance carriers that apply to the 
board and meet qualifications described in this section and any additional qualifications 
set by the board or may be provided through the Dirigo Health Self-administered Plan 
pursuant to section 6981. 
Sec. 10. 24-A MRSA §6916 is enacted to read: 
§6916. Marketing and sale of Dirigo Health Program; qualifications of insurance 
producers 
1. 
Qualifications of insurance producers. 
An insurance producer licensed 
pursuant to chapter 16 may solicit, negotiate and sell insurance products offered by or 
through the Dirigo Health Program if the following conditions are met prior to any such 
solicitation, negotiation or sale: 
A. The producer is authorized by the superintendent to solicit, negotiate and sell 
insurance products for the health line of business: 
B. The producer has successfully completed all training offered and required by the 
Dirigo Health Program for the solicitation, negotiation and sale of Dirigo Health 
Program insurance products, including any continuing training offered and required 
by the Dirigo Health Program: 
C. 
The producer provides the carrier or carriers with which the Dirigo Health 
Program has contracted to underwrite and provide Dirigo Health Program coverage a 
current certificate from the Dirigo Health Program certifying the successful 
completion of all training offered and required by the Dirigo Health Program: and 
D. 
The producer successfully completes all training specific to the sale of Dirigo 
Health Program insurance products offered and required by the carrier or carriers 
contracting with the Dirigo Health Program to underwrite and provide Dirigo Health 
Program coverage, including any continuing training offered and required by such 
carrier or carriers. 
2. 
Annual certification required. Training pursuant to subsection 1 must be 
completed annually, and any certificate establishing successful completion of training is 
valid for one year from the date of issuance. If a producer fails to obtain certification 
following the expiration of the prior year's certification, the producer may not continue to 
solicit, negotiate and sell insurance products offered by or through the Dirigo Health 
Program. 
3. Carrier appointment not required. Notwithstanding any other provision of law, 
an insurance producer licensed pursuant to chapter 16 who complies with this section 
may solicit, negotiate and sell insurance products offered by or through the Dirigo Health 
Program without being appointed by the carrier or carriers contracting with the Dirigo 
Health Program to underwrite and provide Dirigo Health Program coverage. A producer 
may not solicit, negotiate or sell insurance products offered by or through the Dirigo 
Health Program if the producer is not in compliance with this subsection. 
Notwithstanding section 1445, the carrier or carriers contracting with the Dirigo Health 
Program to underwrite and provide Dirigo Health Program coverage are not liable for the 
actions of an insurance producer who has not been appointed to solicit, negotiate and sell 
insurance products offered by or through the Dirigo Health Program. 
Sec. 11. 24-A MRSA c. 87, sub-c. 4 is enacted to read: 
SUBCHAPTER 4 
DIRIGO HEALTH SELF-ADMINISTERED PLAN 
§6981. Dirigo Health Self-administered Plan 
Notwithstanding section 6910, subsection 2, Dirigo Health may provide access to 
health benefits coverage by establishing the Dirigo Health Self-administered Plan, 
referred to in this subchapter as "the self-administered plan," pursuant to this section. 
0 
1. Establishment. Dirigo Health may provide access to health benefits coverage 
through the self-administered plan subject to the requirements of this section. The board 
may make a determination that Dirigo Health will provide access to health benefits 
coverage through the self-administered plan after the board evaluates competitive bids for 
health benefits coverage for self-administered and fully underwritten health benefits 
coverage. 
If the board determines that Dirigo Health will provide access to health 
coverage through the self-administered plan as authorized under this section, the board 
shaH submit a report explaining the reasons for the decision to the joint standing 
committee of the Legislature having jurisdiction over health insurance matters within 30 
days of the decision. Upon receipt of a report from the board, the chairs of the joint 
standing committee of the Legislature having jurisdiction over health insurance matters 
may call a meeting of the committee. Following receipt of such a report, the joint 
standing committee of the Legislature having jurisdiction over health insurance matters 
may report out legislation to the next regular or special session of the Legislature relating 
to the establishment of the self-administered plan. 
2. Cooperative agreements. Dirigo Health may enter into voluntary cooperative 
agreements with a public purchaser for purchasing purposes and administrative functions. 
If a cooperative agreement is entered into pursuant to this subsection, the self-
administered plan and any public purchaser shall maintain separate and distinct risk pools 
and reserves and may not commingle risk pools or reserve funds under any 
circumstances. For the purposes of this subsection, "public purchaser" means an entity 
that purchases health coverage in whole or in part with public funds, including, but not 
limited to, the state employee health insurance program, the University of Maine System, 
the Maine Community College System, the Maine Education Association benefits trust, 
the Maine School Management Association benefits trust and municipal and county 
governments. For the purposes of this subsection, "public purchaser" does not mean the 
Department of Health and Human Services, Office of MaineCare Services except fot 
cooperative agreements for the purchasing of pharmaceuticals pursuant to Title 5, section 
2031. 
3. 
Additional responsibilities of board. 
In addition to the duties and 
responsibilities set out in sections 6908 and 69 I 0, the board is authorized to: 
A. Operate the self-administered plan pursuant to a trust instrument in accordance 
with Title 18-B; 
B. Develop, maintain and modify a business plan for the self-administered plan as 
appropriate in consultation with the executive director; 
C. Establish an operating budget for the self-administered plan subject to legislative 
approval in the biennial budget process in accordance with section 6908, subsection 
~ 
D. Ensure the ongoing fiscal integrity and stability of the self-administered plan in 
accordance with subsections 5 and 11 and monitor statistics provided by the 
executive director relating to the number of plan enrollees, working rates, utilization 
of benefits, operating costs and reimbursement for losses related to excess or stop 
loss coverage; 
E. Establish administrative and accounting procedures in accordance with section 
6908, subsection 2, paragraph A and develop financial statements that are consistent 
with generally accepted accounting principles; 
F. Obtain necessary contracts for services, including, but not limited to, actuarial 
services, accounting services, auditing services, investment advice and counsel and 
custodial services for financial assets in accordance with subsection 4; 
G. 
Take any actions necessary to comply with federal and state Medicaid rules 
regarding Dirigo Health plan members eligible for MaineCare; 
H. 
Take any actions necessary to comply with federal Medicaid managed care 
organization contract requirements as provided in 42 Code of Federal Regulations, 
Part 438 (2002); and 
I. Have and exercise all powers necessary and appropriate to carry out the purposes 
of this section. 
4. Services. If the board determines that Dirigo Health will provide access to health 
coverage through the self-administered plan pursuant to subsection 2, the board shall 
contract for the following services through a competitive bidding process unless the 
requirement for competitive bidding is waived pursuant to Title 5, section 1825-B, 
subsection 2 or a carrier contracted by Dirigo Health to fully underwrite health benefits 
coverage terminates that contract. 
A. The board shall secure the services of an actuary for technical advice on matters 
regarding the operation of the self-administered plan in accordance with this 
paragraph. The board shall contract for actuarial services after a competitive bidding 
process at least every 3 years and may award a bid only to an actuary who is a 
member in good standing of the American Academy of Actuaries or a successor 
organization. The contract must require the actuary to: 
(1) Act as a technical advisor to the board on matters regarding the operation of 
the self-administered plan in accordance with this paragraph; 
(2) Certify the amounts of the benefits paid and payable under this section; 
• 
QL..Analyze the year's operations and results and the eXmlri~nce of the self: 
administered plan; 
(4) 
Determine appropriate actuarial assumptions for recommendation to the 
board; and 
(5) 
Determine the appropriate level of reserves needed to sustain the self-
administered plan and pay benefits. 
B. 
The board shall secure the services of one or more fiduciaries or registered 
investment advisors through negotiated contractual arrangements. The contract must 
require the fiduciary or registered investment advisor to: 
(1) Invest and reinvest the funds in accordance with appropriate financial and 
trust standards; 
(2) Advise the board as to reasonable investment philosophy; and 
(3) Submit regular reports of investments and changes to the boar~. 
C. The board shall contract with an appropriate financial institution for custodial 
services for the securities and other investment assets of the self-administered plan. 
The contract must require the custodian to meet financial safeguards and other 
qualifications determined by the board, including restrictions on the manner in which 
deposits and withdrawals of funds are completed. 
D. When the self-administered plan is established, the board shall purchase, through 
contracts from one or more 3rd-party administrators or any organization necessary to 
administer and provide a health plan, a policy or policies or a contract to provi4e the 
benefits specified by this section. The purchase of policies by the board I1NSt be 
accomplished by use of a written contract for a term determined by the board. 
The board may contract for any other applicable services necessary to comply with 
federal law. 
5. Administration. The following provisions govern the administration of the self-
administered plan. 
A. The assets and liabilities of the self-administered plan are solely the assets and 
liabilities of Dirigo Health. 
B. 
The actuary under contract with the board pursuant to subsection 4 shall 
determine: 
(I) The appropriate level of reserves estimated to be sufficient to pay claims and 
administrative costs according to subsection 11, paragraph B; 
(2) Whether the program is operating on an actuarially sound basis and any 
recommendations based on that determination; 
(3) 
A rate structure for the self-administered plan, including working rates 
actuarially sufficient to pay anticipated claims for the current claims year as well 
as to provide sufficient reserves for incurred but not reported claims; 
(4) 
Recommendations as to the purchase of excess or stop loss insurance 
including suggested attachment levels and limits; and 
(5) Recommendations as to the need for a security deposit or surety bond to 
protect against insolvency. 
The actuary shall annually present information to the board on the determinations 
made pursuant to this paragraph as well as the method of distribution of any 
accumulations above the reserves including use of excess reserves to moderate the 
working rates. 
C. 
Upon receipt of the initial presentation and recommendations of the actuary 
pursuant to paragraph B and annually thereafter, the board shall submit that 
presentation to the superintendent for review. The superintendent shall review the 
actuary's presentation and provide comments to the board. 
6. Audits; financial statements. The board shall arrange for an annual audit of its 
financial statements by an independent certified public accounting firm. Within 30 days 
of the completion of the audit, a copy of the audited financial statements must be 
distributed to the Legislature in the same manner as required by section 6908, subsection 
4. A copy of the audited financial statements must also be made available for public 
inspection. 
7. Public entity. The self-administered plan is a public entity for the purposes of 42 
Code of Federal Regulations, Section 438.116. 
8. 
Health benefit coveraee. Health benefits coverage provided under the self-
W:lministered plan in accordance with this subchapter must be comprehensive and include 
a low deductible plan option for enrollees in the Dirigo Health Program. 
9. Application of certain insurance provisions. The self-administered plan must 
meet or exceed the following requirements in the same manner as when health benefits 
coverage is provided by a health insurance carrier: 
A. The requirements for rating practices pursuant to section 2736-C, subsection 2 
and section 2808-B, subsection 2; 
B. The requirements for guaranteed issuance pursuant to section 2736-C, subsection 
and section 2808-B, subsection 4; 
C. The requirements for guaranteed renewal pursuant to section 2736-C, subsection 
.and section 2808-B, subsection 4 subject to the limitations of available funds 
maintained by the self-administered plan in accordance with subsection 11; 
D. 
The requirements for continuity of coverage, coverage of late enrollees and 
preexisting condition exclusions pursuant to chapter 36; 
E. The requirements for mandated coverage of specific health care services and for 
specific diseases and for certain providers of health care services pursuant to Title 24 
and this Title; and 
F. The requirements for the benefits. rights and protections for individuals enrolled 
in health plans pursuant to chapter 56-A and Bureau of Insurance Rule Chapter 850. 
Notwithstanding any statute or common law to the contrary, an individual enrolled in 
the self-administered plan may maintain a cause of action against the self-
• 
administered plan subject to the requirements of section 4313. This paragraph is a 
waiver of the State's defense of immunity under Title 14, chapter 741. 
The self-administered plan may not enter into any contract with a 3rd-party administrator, 
carrier or other organization to administer and provide health coverage that has not 
demonstrated compliance with all applicable state laws. 
10. Self-administered plan not an insurer. The self-administered plan is not an 
insurer, reciprocal insurer or joint underwriting association under the laws of the State. 
The administration of the self-administered plan by the board does not constitute doing 
the business of insurance. 
11. Reserves. This subsection applies to reserves of the self-administered plan. 
A. The Dirigo Health Reserve is created as an account within the Dirigo Health 
Enterprise Fund, as established pursuant to section 6915, for the deposit of reserves 
as required by paragraph B. 
B. The self-administered plan shall maintain a reserve at least equal to the sum of: 
(1) 
An amount estimated by a qualified actuary under subsection 5 to be 
necessary to pay claims and administrative costs for the assumed risk for 2 112 
months; and 
(2) The amount determined annually by a qualified actuary under subsection 5 to 
be necessary to fund the unpaid portion of ultimate expected losses, including 
incurred but not reported claims, and related expenses incurred in the provision 
of benefits for eligible participants, less any credit, as determined by a qualified 
actuary, for excess or stop loss insurance. 
C. The Dirigo Health Reserve must be adjusted on a quarterly basis in order to 
maintain a reserve at least equal to the amount determined in paragraph B. 
D. 
The Dirigo Health Reserve is capitalized by money from the Dirigo Health 
Enterprise Fund, as established pursuant to section 6915, and any other 
fund 
advanced for initial operating expenses, monthly enrollee payments, any funds 
received from any public or private source, legislative appropriations, payments from 
state departments and agencies and such other means as the Legislature may approve. 
All money in the Dirigo Health Reserve is deemed to be the commingled assets of all 
covered enrollees and may be used only for the purposes of this section. 
12. Stop loss insurance. The board may purchase excess or stop loss insurance for 
the self-administered plan, with attachment levels and limits as recommended by a 
qualified actuary pursuant to subsection 5. If the board is unable to purchase excess or 
stop loss insurance at the recommended attachment levels and limits, the board does not 
have the authority to establish a self-administered plan as provided in this section. 
13. Marketing and distribution. The board may contract for the marketing and 
distribution of the self-administered plan in accordance with the requirements of this 
subsection. Any entity or individual that contracts with the self-administered plan shall 
successfully complete all training offered by Dirigo Health for the solicitation, 
negotiation and sale of health benefits coverage. Training must be completed annually, 
I 
and any certificate establishing successful completion of training is valid for one year 
from the date of issuance. If an entity or individual fails to obtain certification following 
the expiration of the prior year's certification, the entity or individual may not continue to 
solicit, negotiate and sell health benefits coverage under the self-administered plan. 
14. 
Provider reimbursement. 
In any contract with a 3rd-party administrator, 
carrier or other organization to administer and provide health coverage to enrollees of the 
self-administered plan, the board shall ensure that: 
A. Providers contracting to provide health coverage to plan enrollees are reimbursed 
at a rate comparable to current market reimbursement rates among commercial 
carriers in the State; 
II 
B. Providers contracting to provide health coverage to plan enrollees are paid in a 
timely manner in accordance with the same requirements that would be required 
under state law for health insurance carriers pursuant to section 2436; and 
C. If the self-administered plan fails to pay for health care services as set forth in the 
contract, providers are governed by the standards required pursuant to section 4204, 
subsection 6. 
This paragraph does not prohibit a provider from collecting or 
attempting to collect from a plan enrollee any amount for services not normally 
payable to the self-administered plan, including any applicable copayments and 
deductibles. 
15. No liability for plan enrollees. This section does not create any liability on the 
part of eligible employers, eligible employees or eligible individuals enrolled in Dirigo 
Health in the event that the self-administered plan becomes insolvent or fails to pay 
claims. 
Sec. 12. 
New appointments to Board of Trustees of Dirigo Health; 
staggered terms. Notwithstanding the Maine Revised Statutes, Title 24-A, section 
6904, subsection 3, the terms of the 4 members added to the Board of Trustees of Dirigo 
Health pursuant to this Act must be staggered. The Governor shall appoint one member 
for a term of 1 year, one member for a term of 2 years and 2 members for terms of 3 
years. 
SUMMARY 
This bill expands the Dirigo Health Board of Directors from 5 to 9 members and 
renames it the Board of Trustees of Dirigo Health. The bill requires that 3 voting 
members of the board have expertise in accounting, banking, securities or insurance and 
adds the Treasurer of State as an ex officio, nonvoting member. The bill clarifies that 5 
members of the board constitute a quorum and that an affirmative vote of 5 members is 
needed for the board to take action. The bill extends the limitation on personal liability of 
trustees under the Maine Uniform Trust Code to the trustees of Dirigo Health. 
The bill permits licensed insurance producers with health authority to sell the Dirigo 
Health Program insurance products if the producer meets certain training requirements. 
Additionally, the bill exempts producers from the appointment requirement solely for 
purposes of selling the Dirigo Health Program insurance products and holds a carrier 
underwriting Dirigo Health Program coverage harmless from liability for any actions of 
such producers. 
The bill gives authority to Dirigo Health to provide access to health benefits coverage 
through the Dirigo Health Self-administered Plan after the board evaluates bids for self-
administered and fully insured benefits coverage. If the board makes the decision to 
provide coverage through the self-administered plan, the bill requires the board to report 
to the joint standing committee of the Legislature having jurisdiction over health 
insurance matters within 30 days of the decision. The bill also gives the committee the 
authority to report out legislation relating to the self-administered plan. 
If the Dirigo Health Self-administered Plan is established, the bill authorizes the 
board to enter into voluntary cooperative agreements with a public purchaser for 
purchasing and administrative functions only, but requires that the risk pools and reserves 
of the Dirigo Health Self-administered Plan and any public purchaser not be commingled. 
The bill expands the duties and responsibilities of the board with regard to the 
establishment and ongoing management of the self-administered plan. The bill requires 
the board to contract for services from actuaries, investment counsel, financial 
institutions, 3rd-party administrators and any other organization necessary to administer 
the plan. The bill requires an actuary under contract to the board to determine the 
appropriate level of reserves and administrative costs for the plan and the amount of stop 
loss insurance necessary, provide opinions regarding the actuarial soundness of the plan, 
develop a rate structure for the plan and report annually to the board. 
The bill requires the Dirigo Health Self-administered Plan to maintain reserves at 
least equal to the sum of the amount necessary to pay claims and administrative costs for 
the assumed risk for 2 1/2 months and the amount determined annually by a qualified 
actuary to be necessary to fund the unpaid portion of ultimate expected losses and related 
expenses incurred in the provision of benefits. The bill requires the reserve account to be 
adjusted on a quarterly basis and to be capitalized from any initial start~up funds 
transferred into the account by Dirigo Health, monthly enrollee payments, any funds 
received from any public or private source, legislative appropriations, payments from any 
state departments or agencies and any other means approved by the Legislature. The bill 
also authorizes the board to purchase excess or stop loss insurance at attachment limits 
and levels recommended by a qualified actuary and removes the authority to establish a 
self-administered plan in the event the board is unable to purchase that insurance. 
The bill requires any Dirigo Health Self-administered Plan health benefits coverage 
provided to be comprehensive and include a low deductible plan option for enrollees in 
the Dirigo Health Program. 
The bill requires the Dirigo Health Self-administered Plan to meet the same 
requirements of the Maine Insurance Code that would be required by state law if health 
benefits coverage were provided by a health insurance carrier for community rating, 
guaranteed issuance, guaranteed renewal, continuity of coverage and mandated benefits. 
The bill also requires that the self-administered plan extend the same benefits, rights and 
protections of the Maine Revised Statutes, Title 24-A, chapter 56-A and Bureau of 
Insurance Rule Chapter 850, including a limited right to sue the Dirigo Health Self-
I 
administered Plan. The bill specifically waives the State's defense of immunity under the 
Maine Tort Claims Act. 
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