An Act To Clarify and Update the Laws Related to Life and Health Insurance
Maine Legislature, Session 124, LD 1180
Committee: Insurance and Financial Services
Sponsors: TREAT, FOSSEL
Amends: 24-A MRSA §2823-A, 24 MRSA §2321, 24-A MRSA §2735-A, 24-A MRSA §2736, 24-A MRSA §2, 24-A MRSA §2159-C, 24-A MRSA §2834-C, 24-A MRSA §2849-B, 24-A MRSA §2849, 24-A MRSA §2701, 24-A MRSA §280, 24-A MRSA §2501

Legislative Document 
No. 1180 
H.P. 821 
House of Representatives, March 25,2009 
An Act To Clarify and Update the Laws Related to Life and Health 
Insurance 
Submitted by the Department of Professional and FinaIi.cial Regulation pursuant to Joint 
Rule 204. 
Reference ~othe Committee on Insurance and Financial Services suggested and ordered 
printed. 
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Presented by Representative TREAT of Hallowell. 
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111· 7lltU~( 
MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by Representatives: FOSSEL of Alna, PRIEST ofBnmswick. 
Prinh:cl 011 rt':CYclc!..l pLlper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec.' A-I. 24:'A MRS A §5002-B, sub':§l, ~A, as amended by PL 2003, c: 157, 
§ 1, is further amel1ded to read: 
. 
A. That person, including a person entitled to Medicare benefits due to disability, has 
been covered under a policy that supplemented benefits under Medicare or has been 
covered Ulider a Medicare Advantage plan with no gap in coverage greater than 90 
days beginning with .the person's open enrollment period. A policy supplementing 
benefits payable under Medicare may include an individual health policy, a group 
health plan, a Medicare supplement poliey or other coverage issued by the same or a 
different carrier. 
PART B 
Sec. B-1. 24-AMRSA §2713-A, as enacted by PL 1989, c. 556, Pt. D, §2, is 
amended to read: 
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§2713.-A. -Explanation and notice to parent 
If the insured is a minor under 18 years of age covered as a dependent child, and if 
the insurer is so requested by a parent of the insured who is not Davin!!: the Dremiums on 
the Bolkv, the insurer shall provide that parent with: 
1. Payment or denial of claim. An explanation of the payment or denial of any 
claim filed on behalf of the insured ffI-i.fl&; except to the extent that the insured has the 
rightto withhold consent and does not affirmatively consentto notifying the parent; 
2. Change in terms. and conditions. An explanation of any proposed change in the 
terms and conditions of the policy; or 
3. Notice of lapse. Reasonable notice that the policy may lapse, but only if the 
parent has provided the.insurer with the address at which the parent may be notified. 
In addition, any parent who is able to provide the information necessary for the· 
insurer to process a' claim sfiaI-I. must be permitted to authorize the filing of any claims 
under the policy. 
. 
Sec. B-2. 24-A MRSA §2823-A, as enacted by PL 1989, c. 556, Pt. D, §3, is 
amended to read: 
§2823-A. Explanation and notice to parent. 
. If the insured is a minor under 18 years of age covered as a dependent child, and if 
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the insurer is so requested by either of the minor's parents a parent of the insured, the 
insurer shall provide that parent with: 
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1. Payment or denial of claim .. An explanation of the payment or denial of any 
claim filed on behalf of the insured ffl-i:A.ef, except to the extent that the insured has the 
right to withhold consent and does not affirmatively consent to riotifying the parent; 
2. Change in terms 'and conditions. An explanation of any proposed change in the 
terms and conditions of the policy; or 
3. Notice of lapse. Reasonable notice that the policy may lapse, but only if the 
parent has provided the insurer with the address at which the parent may be notified. 
In addition, any par.ent who is able to provide the information necessary for the 
insurer to process a claim sfla.l-I- must be permitted to authorize the filing of any claims 
under the policy. 
Sec. B-3. 24-A MRS A §4222-B, sub-§22 is enacted to read: 
1222. Sections 2713-A and 2823-A, relating to explanation and notice to parents, apply 
to health maintenance organizations. 
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PART C 
Sec. C-l. 24 MRSA§2321, sub-§l, as amended by PL 2003, c. 428,.Pt. F, §1, is 
further amended to read: 
1. 
Filing of rate information. 
Every nonprofit hospital and medical service 
organization shall file with the superintendent every rate, rating formula and every 
modification of any ~f the foregoing that it proposes to use in connectionwj1:h individltal 
health insurance contracts, group Medicare supplement contracts as definediinTitle 24-A, 
chapter 67, group nursing home or long-term care contracts as defined in:Title 24-A, 
chapter 68 or 68-A, and certain group contracts included within the,definition of 
"individual health plan" in Title 24-A, section 2736-C, subsection 1, par.agraph C. Every 
filing under this subsection must state the effective date of the filing. Everffiling under 
this subsection must be made not less than 60 days it~ advance of the stated.:.effective date 
unless the 60-day requirement is waived'by the superintendent for a period of time not to 
exceed 30 days. 
In the case of a filing . that meets the criteria in :subsection 4, the 
sllperintendent may sllspend the effective date for a longer period not to exceed 30 days 
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from the date the organization satisfactorily responds to any reasO!mbJe discovel)l 
I'BAlIOstS. 
Sec, C-2. 24 MRSA §2321, sub-§4, as amended by PL 2001, :C. -432, §2, IS 
repealed. 
Sec. C-3. 24 MRSA §2321, sub-§5, as amended by PL 2001:,.c;432, §3, IS 
repealed. 
Sec. C-4. 24-A MRSA §2735-A, sub-§l, as enact~d by PL 2001..,'£>432, §4, is 
amended to read: 
1. Notice of rate filing or rate increase on existing policies. A-n:;m ...... 't:l-nffering 
individual health plans as defined in section 2736-C mllst provide wr.itten.ITl.l:1!:ire:bytirst 
class mail of a rate filing to all affected policyholders at least 60 days before the effective 
date of any proposed increase in premium rates or any proposed rating formula, 
classification of risks or modification of any formula or classification of risks. The notice 
must also inform policyholders of their right to request a hearing pursuant to section 229 
or a special rate hearing pursuant to section 2736, subsection II or Title 24, section 2321, 
subsection 5 .. The notice must show the proposed rate and state that the rate is subject to 
regulatory approval. The superintendent may not take final action on a rate filing until 40 
days after the date notice is mailed by an insurer. An increase in premium rates may not 
be implenlented until 60 days after the notice is provided or until the effective date under 
section 2736, whichever is later. 
Sec. C-5. 24-A MRSA §2736, sub-§l, as amended by PL 2003, c. 428, Pt. F, §2, 
is further amended to read: 
. 
1. Filing of rate information. Every insurer shall file with the superintendent every 
rate, rating formula, classification of risks and every modification of any fOIlTIula or 
IS 
classification that it proposes to use in connection with individual health insurance 
poliCies andceliain group policies specified in section 2701. Every such filing must state 
the effective date of the filing. Every such filing must be made not less than 60 days in 
advance of the stated effective date, unless the 60-day requirement is waived by the 
superintendent, and the effective date may be suspended by the superintendent for a 
period of time not to exceed 30 days. In the case of a filing that meets the criteria in 
subsection 3, the superintendent may suspend the effective date for a longer period not to 
e)weed 30 days from the date the organization satisfactorily responds to any reasonable 
rliSGAV8rV rBOH8stS. 
Sec. C-6. 24-A MRS A §2736, sub-§3, as amended by PL 2007, c. 629, Pt. M, 
§ I, is repealed. 
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Sec. C-7. 24-A MRS A §2736, sub':'§4, as amended by PL 2007, c. 629, Pt. M, 
§2, is repealed. 
,Sec. C-S. 24-A MRSA §2S0S-B, sub-§2-A, ~A, as enacted by PL 2003, c. 469, 
Pt. E, § 16, is amended to r~ad: 
A. Every filing must state the effective date of the filing. Every filing must be made 
J 
not less than 60 days in advance of the stated effective date,' unless the 60-day 
requirement is waived by the superintendent. The effective date may be suspended 
by the superintendent for a period of time not to exceed 30 days. In the case of a 
filing that meets the criteria in subsection 2 g, paragraph E, the superintendent may' 
suspend the effective date for a longer period not to mweed 30 days from the date the 
carrier satisfactorily responds to any reasonable discovel)' requests 
Sec. C-9. 24-A MRSA §2S0S-B, sub-§2~B, ~, as enacted by PL 2003, c. 469, 
Pt. E, § 16, is repealed. 
Sec. C-IO. 24-A MRS A §2S0S-B, sub-§2-B, ~, as amended by PL 2007, c. 
629, Pt. M, §9, is· repealed.· 
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PARTD 
Sec. D-l. 24-A MRSA §2159-C, sub-§l, GjJD is enacted to read: 
D. "Carrier" means an insurer, nonprofit hospital and medical service organization or 
health maintenance organization.' 
. 
Sec. D-2. 24-A MRSA §2159-C, sub-§2, as enacted by PL 1997, c. 677, §2, is 
repealed and the following enacted in its place: 
2. Discrimination in health, hospital and dental insurance. A carrier that issues 
individual or group hospital, health or dental insurance is subject to the requirements of 
this subsection. This subsection does not apply to acCidental injury, specified disease, 
hospital indemnity, disability, long-term care and other limited' benefit health insurance 
policies and contracts. 
A. A carrier may not discriminate against an individual or eligible dependent on the 
basis of genetic information or the refusal to submit to a' genetic test or make 
available the results of a genetic test or on the basis that the individual or eligible 
dependent received a genetic test or genetiC counseling in the issuance, withholding, 
extension or renewal of a):\y hospital confinement or other health insurance, as 
defined by the superintendent, by rule, or in the 'fixi,ng of the rates, terms or 
conditions for insurance, or in the issuance or acceptance of any application for 
ll1surance. 
B. Except as provided in this paragraph, a carrier may nat request or require an 
individual to undergo a genetic test. 
. 
(l) Nothing in this subsection limits the authority of a health care professional 
who is providing health care services to' an individual to request that that 
individual undergo a genetic test. 
(2) A carrier may request, but not 'require, that an individual undergo a genetic 
test if the conditions described in this subparagraph are met: 
(a) The request is made pursuant to research that complies with 45 Code of 
Federal Regulations, Pa11 46 or equivalent federal regulations and any 
'applicable state or local laws, rules or regulations for the protection of human 
subjects in research; 
(b) The carrier clearly indicates to the individual to whom the request is 
made, or in the case of a minor child to the legal guardian of the individual, 
that compliance with the request is voluntary and noncompliance will have 
no effect on enrollment status or premium or contribution amounts; 
(c) Genetic information collected or acquired under this subparagraph is not 
used for purposes of determining eligibility for benefits, computing premium 
or contribution amounts, applying any preexisting condition exclusion or any 
other activities related to the creation, renewal or replacement of a health 
insurance contract; and· 
Cd) The carrier complies with all applicable federal laws and regulations. 
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C. A carrier may not request, require or purchase genetic information for purposes of 
determining eligibility for benefits, ,computing premium or contribution amounts, 
applying any preexisting condition exclusion or any ,other activities related to the 
creation, renewal or replacement of a health insurance contract. 
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D., A carrier may not reques't, require or purchase genetic information with respect to 
an individual prior to the individual's enrollment under, the plan or coverage in 
connection with the enrollment. 
. 
:E. If a carrier obtains genetic information incidental to the requesting, requiring or 
purchasing of other information concerning an individual, the request, requirement or 
purchase is not considered a violation of paragraph D if the request, requirement or 
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purchase is not in violation of paragraph C. 
F. A reference in this subsection to genetic information concerning an individual 
includes: 
(1) With respect'to an individual who is a pregnant woman, genetic information 
of any fetus carried by that individual; and 
(2) 
With respect to an individual using an assisted reproductive technology, 
genetic information of any embryo legally held by the individual., 
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PARTE 
Sec.E:"1. 24-A MRSA §2834-C is enacted to read: ' 
§2834-C. Compliance with federal law 
1. Application. This section applies to all group and blanket medical insurance 
policies issued by nonprofit hospital or medical service organizations, insurers or health 
maintenance organizations except hospital indemnity, specified accident, specified 
disease and long-term care policies. 
2. Requirement. p'olicies subject to this, section must comply with the federal 
Children's, Health Insurance Program Reauthorization Act of 2009, Section 311 
concerning special enrollment periods in case' of termination of coverage under a 
Medicaid pl~m or a state child health plan or eligibility for assistance in the purchase of 
employment-based coverage. 
Sec. E-2. 24-A MRS A §2849, sub-§3, CjfC, as amended by PL 1997, c. 370, Pt. 
B, §2, is further amended to read: 
C. To the extent that benefits '""ould have 'been payable under a prior contnict or 
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policy if the prior contract or policy were still in effect, impose Impose a preexisting 
,condition exciusion period or waiting period on that person; except as provided in 
this section; or. 
Sec. E-3.24-AMRSA §2849, sub-§3-A is enacted to read: 
3-A. 
Persons subject to a preexisting condition exclusion. 
Notwithstanding 
subsection 3, paragraph C, an insurer or health maintenance organization may impose a 
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preexisting condition exclusion period on a person who was subject to a preexisting 
condition exclusion under the replaced contract or policy. The preexisting condition 
exclusion period under the replacement policy"or contract must end no later tha~ the date 
the preexisting condition exclusion period would have ended under the replaced contract 
or policy, 
Sec. E-4. 24-A MRSA §2849-B, sub-§3~A is enacted to read:· 
3-A. Prohibition against discontinuity in group policies. 'Except as provided in 
this section, in a group policy subject to this section, the insurer or health maintenance 
organization shall, for any person described in subsection 2, waive any medical 
underwriting or preexisting conditions exclus·ion. The succeeding policy is not required to 
duplicate. any benefits covered by the prior contract or policy. 
Sec. E-S. 24-A MRSA §2849~B, sub-§3-B is enacted to read: ... 
3-B. 
Persons subject to a preexisting condition exclusion. 
Notwithstanding 
subsection 3-A, an insurer or health maintenance organization may impose a preexisting 
condition exclusion period on a person who was subject to a preexisting condition 
exclusion under the prior contract or policy. The preexisting condition exclusion period 
under the succeeding policy or contract must end no later than the date the preexisting 
condition exclusion period would have ended under the prior contract or policy. 
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Sec. E-6. 24-A MRSA §2849-B, sub-§4, as amended by PL 2007, c. J 99, Pt. A, 
§5, is further amended to read: 
4. Prohibition against discontinuity in individual and blanket policies. Except as 
provided ill this section, in an individual, group or blanket policy subject to this section, 
the insurer or health maintenance organization must, for any person described in 
·subsection 2, waive any medical underwriting or preexisting conditions exclusion to the 
extent that benefits would have been payable under a prior contract or policy if the prior 
contract or policy were still in effect or to the extent that benefits would have been 
payai:>le under the prior contract or policy if not for the operation of a lifetime limit on all 
benefits. The succeeding policy is not required to duplicate any benefits covered by the 
prior contract or policy. 
Sec. E-7. 24-A MRS A §2850, sub-§2, ~A, as amended by PL 1999, c. 256, Pt. 
L, §9, is further amended to read: 
A .. In a group contract,a preexisting condition exclusion may relate only to 
conditions for which medical advice, diagnol>is, care or treatment was recommended 
or received during the 6 months immediately preceding 6-month period ending on the 
earlier of the date of enrollment in the contract and the date of enrollment in a prior 
contract covering the same group if there· has not been a gap in coverage of greater 
than 90 days between contracts. An exclusion may not be imposed relating to 
pregnancy as a preexisting condition . 
PART :IF 
Sec. :IF-I. 24-A MRSA §2701, sub-§2, €jfC, as amended bY'PL 2005, c. 121, Pt. 
B, § 1, is further amended to read: 
C. Sections 2736, 2736-A, 2736-B and 2736-C apply to: 
. (I) Association groups as defined by section 2805-A, except associations of 
employers as to any employer silbgroups of the association group when the 
employer is a member of the group and provides coverage through the group as a 
bona fide employee benefit; 
(I-A) Credit union groups as defined by section 2807-A; and 
(2) Other groups as defined by section 2808, except emnlovee leasinQ' comnanies 
registered pursuant to Title 32, chapter 125.: 
. (a) Employee leasing companies registered pursuant to Title 32, chapter 125; 
and 
(b) As to any employer subgroups of the other group when the employer 
provides coverage to its employees through the group as. a bona fide 
employee benefit. 
Sec. :IF-2. 24-A MRSA §2S0S-B, sub-§l,~, as amended byPL 1997, c. 445, . 
§ 13 and affected by §32, is further amended to read: 
H. 
"Subgroup" means an employer with 50 or fewer employees within an 
association, a multiple employer trust, a private pui'chasing alliance or any similar 
subdivision of a larger group covered by a single group health policy or contract. For 
group policies issued to an employee leasing company as defined in Title 32, chapter 
125, each client having 50 or fewer employees is considered a separate subgroup. 
PART G 
Sec. G-L 24-A MRSA §2736, sub-§l, as amended by PL 2003, c. 428, Pt. F, §2, 
is further amended to read: 
1. Filing of rate information. Every insurer shall file witlt for approval by the 
superintendent every rate, rating formula, classification of risks and every modification of 
any formula or classification that it proposes to use in connection with individual health 
insurance policies and certain group policies specified in section 2701. Every such filing 
must state the effective date of the filing. Every such filing must be made not less than 
days in advance of the stated effective date, unless the 60-day requirement is waived 
by the supe'rintendent, and the effective date may be-suspended by the superintendent for 
a period of time not to exceed 30 days. In the case of a filing that meets the criteria in 
s.ubsection 3, the superintendent may suspend the effective date for a longer period not to 
exceed 30 days from the date the organization satisfactorily responds to any reasonable 
discovery requests. 
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Sec. G-2. 24-A MRSA §280S-B, sub-§2-B, Ef(A,. as amend-ed by PL 2007, c. 
629, Pt. M, §7, is fl11iher amended to read: 
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A. Rates subject to this subsection must be filed for approval by the superintendent. 
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 estirqated 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 75% of the aggregate premiums collected for 
those policies, as determined in accordance with accepted actuarial principles and 
practices and 011 the basis of incurred claims experience and earned premiums. For 
the purposes of this calculation, any payments paid pursu~nt to former section 6913 
must be treated as incurred claims. 
'PARTH 
Sec, H-1.' 24-A MRS A §2436, sub-§l, as amended by PL 1999, c. 256, Pi. 1, § 1, 
is fllliher amended to read: 
1. 
A claim for payment of benefits under a policy or celiificate of insurance 
delivered 01: issued for delivery in this State is payable within 30 days after proof of loss 
is received by the insurer and asceliainment of the. loss is made either by written, 
agreement between the insurer and the insured or beneficiary or by filing with the insured 
or beneficiary of an award by arbitrators as provided for in the policy. For purposes of 
this section, uinsured or beneficiaryu includes a person to whom benefits have been 
assigned. A claim that is neither disputed nor paid within 30 days is overdue. If, during 
the 30 days, the insurer, in writing, notifies the insured or beneficiary that reasonable 
additional information is required, the undisputed claim is not overdue until 30 days 
following receipt by the insurer of the additional required information; except that tHe 
time period applicable to a standard fire policy and to that portion of a policy providing a 
com'bination of coverages, as described in section 3003, insuring against the peril of fire 
must be 60 days, as provided in section 3002.: 
A. The time period applicable to a standard fire policy and to that portion of a policy 
providing a combination of coverages, as described in section· 3003, insuring against 
the peril of fire must be 60 days, as provided in section 3002; and 
B. 
The time period applicable to individual life insurance must be 2 months as 
provided in section 2513. 
PART! 
Sec. 1-1. 24-A MRSA §2501, as amended by PL 1995, c. 375, Pt. C,§5, is further 
amended to read: 
. 
§2501. Scope of chapter 
This chapter applies only to contracts of life insurance and annuities, other than 
reinsurance, group life insurance and group annuities, except that section 2537 (seoarate 
accounts) also applies as to group life insurance and group annuity contracts.: 
1. Section 2537 also applies as to group life insurance and group annuity contracts; 
and 
2. Sections 2541 to 2551 apply to group annuities other than those exempted by 
section 2542. 
SUMMARY 
This bill protects those who switch from one Medicare supplement plan to another 
from losing protection against medical underwriting or preexisting condition exclusions if 
during a past period they were covered under a'Medicare Advantage plan rather than 
traditional Medicare with a Medicare supplement plan. 
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This bill expands the current law regarding notice to parents regarding coverage of 
' dependent children to apply to adult children as well as minors, as long as the adult child 
consents. It also makes the requirement applicable to health maintenance organizations. 
This bill repeals the provisions for special rate hearings on individual, small group, 
and Medicare supplement insurance. These provisions provide for shifting the burden of 
proof as to whether rates are excessive from the insurer to the Depaliment of Professional 
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and Financial Regulation, Bureau of Insurance or other party asserting they are excessive 
if celiain conditiohs are met. Under the bill, the burden of proof remains with the insurer. 
This bill amends and strengthens the law prohibiting discrimination in insurance 
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based on genetic information. The amendments conform state law to the federal Genetic 
Information NQ.ndiscrimination Act of2008. 
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This bill amends the State's continuity of coverage law with respect to group health 
insurance, to conform to the federal Health Insurance Portability and Accountability Act 
of 1996. 
The current law' waives medical underwriting and preexisting condition 
exclusions only to the extent that benefits wou Id have been payable under a prior contract 
or policy. As amended, medical underwriting and preexisting condition exclusions in 
group health insurance policies are waived entirely' in most cases as long as there was 
some prior coverage.', This bill also specifies, consistent with the federal Health Insurance 
POIiability and Accountability Act of 1996, that when a group policy is replaced by 
another group policy, the "look-back" period for preexisting exclusions is measured from 
the date of enrollment in the first policy. In addition, this bill adds a provision to the 
Maine Insurance Code to require compliance with the federal Children's Health Insurance 
Program Reauthorization Act of 2009, 'Section 31'1. 
This bill clarifies the applicability of individual and small group rating laws to group 
health insurance policies issued to associati'ons and other groups. Coverage of employees 
of small employers, including those covered through employee leasing companies, is 
subject to small group rating laws. 
Coverage ,of individuals not covered through 
employment is subject to individual rating laws. 
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This bill clarifies that rates for individual health insurance and celiain small group 
,health insurance are supject to approval by the Superintendeht of Insurance. Current law 
provides for disapproval of rates but ,does not explicitly refer to approval of rates. 
This bill clarifies that the period of time after which interest is payable on an 
individual life insurance claim is 2 months. 
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This bill clarifies that the Standard Nonforfeiture Law for Individual Deferred 
Annuities applies to certain group annuities. 
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