An Act To Provide Affordable Health Insurance for Municipal and School Employees through Competition
Maine Legislature, Session 125, LD 0844
Committee: Insurance and Financial Services
Sponsors: DILL, BLISS, HASKELL, KRUGER, MORRISON
Amends: 5 MRSA §285, 20-A MRSA §1001, 24 MRSA §2307-C, 24-A MRSA §2803-B, 24-A MRSA §4224-B

Legislative Document 
No. 844 
H.P. 641 
House of Representatives, March 3, 2011 
An Act To Provide Affordable Health Insurance for Municipal and 
School Employees through Competition 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative DILL of Cape Elizabeth. 
Cosponsored by Senator BLISS of Cumberland and 
Representatives: HASKELL of Portland, KRUGER of Thomaston, MacDONALD of 
Boothbay, MORRISON of South Portland. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §285, sub-§1, ¶E-1 is enacted to read: 
E-1.  Any member of the Maine Municipal Association or the Maine Education 
Association and any employee of a school administrative unit or municipality if the 
school board or municipality elects to participate in the group health plan under this 
section; 
Sec. 2.  5 MRSA §285, sub-§1-B, as repealed and replaced by PL 2005, c. 636, 
Pt. A, §1, is repealed. 
Sec. 3.  20-A MRSA §1001, sub-§14, as amended by PL 2001, c. 588, §§8 and 9, 
is further amended to read: 
14.  Insurance purchase by competitive bidding.  Except as otherwise provided by 
waiver, a school board shall oversee the purchasing of insurance by competitive bidding, 
including a school board in a municipal school unit in which school insurance and 
municipal insurance are purchased as a package through competitive bidding by the 
municipal government.  On each insurance policy, a competitive bid must be sought at 
least once every 5 years.  To take advantage of commercial package policies in the 
marketplace, a school board shall group qualifying lines of insurance into a single 
competitive bid process.  Each policy secured by competitive bidding must be issued with 
a 3-year policy term or, if this is not possible, a commitment for 3 one-year policy terms 
must be secured with an option for 2 additional one-year policy terms, subject to annual 
review and adjustment. 
A.  The requirement of competitive bidding may be waived by a school board when: 
(1)  In the opinion of the school board, an emergency exists that requires the 
immediate procurement of insurance.  The emergency may include the premature 
cancellation of an existing policy or acquisition of a risk that can not be added to 
an existing policy, including the signing of a lease.  However, at the next renewal 
of the policy, procurement of insurance is subject to competitive bidding; 
(2)  After reasonable investigation by the school board, it appears that the 
required insurance is procurable from only one source; 
(3)  It appears to be in the best interest of the school board to negotiate for the 
procurement of an excess insurance line; or 
(4)  The line of insurance is workers' compensation or an employee benefit such 
as life, or disability or health insurance in accordance with subsection 5; or.  The 
requirement of competitive bidding may not be waived for the procurement of 
health insurance. 
(5)  The school board is in a municipal school unit and school insurance and 
municipal insurance are purchased as a package through competitive bidding by 
the municipal government. 
B.  A registry of bidders must be maintained by the school board.  Invitations to bid 
or proposals must be sent to a registry of bidders on file with the school board.  
Insurance agents or brokers licensed by the Bureau of Insurance and risk pools 
authorized under Title 24-A or Title 30-A, chapter 117 desiring to have their names 
entered on a registry of bidders shall submit to the school board in writing a request 
for such action.  The name of a bidder entered in a registry who fails to submit a bid 
on 3 consecutive proposals or invitations to bid may be removed from the registry at 
the discretion of the school board. 
C.  "Competitive bidding" means the following multistep process. 
(1)  At least 4 months before the expiration date of the policy for which bids are 
being solicited, a prequalification questionnaire, referred to in this paragraph as 
the "questionnaire," must be developed by the school board for the purpose of 
prequalifying bidders.  The questionnaire must contain at a minimum: 
(a)  Questions on the bidder's insurance knowledge, educational background, 
licensing, errors and omissions insurance, experience with public entities, 
experience with school systems and number of years in business.  The 
questionnaire must state that qualified bidders must be insurance agents or 
brokers licensed by the Bureau of Insurance or duly authorized risk pools 
under Title 24-A or Title 30-A, chapter 117; 
(b)  The evaluation criteria and relative scoring weights to be applied in the 
prequalification evaluation process; 
(c)  A statement that bidders are subject to prescreening and may not 
approach an insurer or reinsurer until given permission by the school board to 
do so since markets are allocated by the school board.  The questionnaire 
must state that failure to comply with this restriction automatically 
disqualifies the bidder.  The questionnaire must state that the school board 
reserves the option to require a personal interview at any time in the process; 
and 
(d)  The address and contact person to which the questionnaire must be 
submitted and the opening date and time, which may not be less than 3 1/2 
months from the expiration date of the policy or policies being sought.  The 
questionnaire must state that:  all proposals are publicly opened at the date, 
time and place noted; a questionnaire received after the date and time 
specified is rejected, but retained and not evaluated or considered further; and 
proposals are not available for inspection until after the bid is awarded.  The 
questionnaire must state that the school board reserves the right to reject a 
questionnaire and does not accept responsibility for costs incurred by a 
bidder in the preparation of a questionnaire.  The questionnaire must state 
that bidders are notified of the outcome in writing no later than 10 days after 
the closing date. 
(2)  In the same time frame, the school board shall approve a request for 
proposal, referred to in this paragraph as the "proposal."  The proposal must 
contain at a minimum: 
(a)  The line or lines of insurance for which bids are being solicited and a 
clear definition of minimum coverage required, minimum limits required, 
deductibles, policy forms and endorsements required and policy term 
required.  If coverage identical to the expiring coverage is being sought, a 
copy of the expiring policy or policies and all endorsements may be enclosed 
to meet this requirement; 
(b)  Basic underwriting information, such as named insured, mailing address, 
nature of risk, actual locations, schedules of buildings, business personal 
property, vehicles or any other property for which insurance is being sought, 
if applicable; 
(c)  At least a 3-year and preferably a 5-year company-generated loss run; 
(d)  A clear definition of the services, if any, required of both the bidder and 
the insurer; 
(e)  The minimum A.M. Best rating and financial size category acceptable to 
the school board; 
(f)  The evaluation criteria and relative scoring weights to be applied to the 
proposal.  Cost of the insurance coverage must be included in the evaluation 
criteria and must be given a minimum of 50% of the total weight of all 
criteria; 
(g)  The address and contact person to which a bid must be submitted and the 
bid opening date and time.  The proposal must state that:  all proposals are 
publicly opened at the date, time and place noted; bids received after the date 
and time specified are rejected, but retained and not evaluated or considered 
further; and proposals are not available for inspection until after the bid is 
awarded.  The proposal must state that the school board reserves the right to 
reject a bid and does not accept responsibility for costs incurred by a bidder 
in the preparation of a proposal.  The proposal must state that all bidders are 
notified of the outcome in writing no later than 20 days after the bid closing 
date; 
(h)  The name, address and optionally a facsimile number of a school board 
contact person to whom written questions may be addressed.  The proposal 
must state that the school board will reply to questions submitted in writing 
before a specified deadline with copies of the questions and answers to be 
provided in writing to all bidders; and 
(i)  A statement that the successful bidder must present an insurance binder to 
the school board within 5 days of the award and no later than the expiration 
date of the existing policy.  Failure to do so disqualifies the award and the 
award is then made to the next highest-rated bidder who was in compliance 
with the proposal.  The proposal must state that all decisions regarding the 
award are final. 
(3)  Each bidder on the registry of bidders must be provided with a questionnaire 
and proposal 4 months before the expiration of the policy or policies being 
sought.  Each bidder must complete and return the questionnaire before the stated 
date and time as specified in the questionnaire.  In addition, a bidder must state in 
the order of preference the insurers they prefer to solicit on the school board's 
behalf.  The school board shall then have 3 persons independently review a 
questionnaire on the basis of the established criteria.  The reviewers shall 
document the scoring and select all qualified bidders, but no more than the 5 
highest-rated, to participate further in the process. 
(4)  The school board shall allocate to each selected bidder at least one insurer 
from which to solicit a bid.  This market allocation must be made on the basis of 
awarding the bidder's first choice to the bidder.  If there is a conflict, an 
incumbent broker is given preference over the school board's incumbent insurer.  
Allocation is then made on the basis of highest-qualifying score.  Once market 
allocation is complete, a new bid closing date must be set for 30 days before the 
policy expiration date for submission of insurer bids. 
(5)  The school board shall have 3 persons independently review each submitted 
bid on the basis of the established criteria.  The reviewers shall document the 
scoring and substantive information that supports the scoring and make the award 
decision.  Interviews may be considered within the review.  Award must be made 
to the highest-rated proposal that conforms to the proposal.  Tie scores must be 
resolved on the basis of factors considered by the school board to serve the best 
interests of the school system.  Minor negotiations not affecting the bid price 
more than 5% after notice of award are allowed and, if agreement can not be 
reached, the proposal may be rejected and the award made to the next highest-
rated bidder who is in compliance with the proposal.  Written records must be 
kept by each person reviewing or ranking proposals.  The award of the bid must 
then be announced publicly.  All bidders must be notified in writing no later than 
days after the award is made.  The successful bidder shall submit, in accordance 
with the proposal, a written binder of insurance within 5 days of the award and no 
later than the expiration date of the expiring policy.  All decisions regarding 
awards are final. 
Sec. 4.  24 MRSA §2307-C is enacted to read: 
§2307-C.  Information concerning school administrative unit's experience rating 
Notwithstanding any provisions of law governing confidentiality, a nonprofit hospital 
or medical service organization shall provide information concerning a school 
administrative unit's own experience and claims history as a member covered under a 
group policy or contract to that school administrative unit at that unit's own request and to 
any municipality in the unit if the municipality so requests. 
Sec. 5.  24-A MRSA §2803-B is enacted to read: 
§2803-B.  Information concerning school administrative unit's experience rating 
Notwithstanding any provisions of law governing confidentiality, an insurer shall 
provide information concerning a school administrative unit's own experience and claims 
history as a member covered under a group policy or contract to that school 
administrative unit at that unit's own request and to any municipality in the unit if the 
municipality so requests. 
Sec. 6.  24-A MRSA §4224-B is enacted to read: 
§4224-B.  Information concerning school administrative unit's experience rating 
Notwithstanding any provisions of law governing confidentiality, a health 
maintenance organization shall provide information concerning a school administrative 
unit's own experience and claims history as a member covered under a group policy or 
contract to that school administrative unit at that unit's own request and to any 
municipality in the unit if the municipality so requests. 
SUMMARY 
This bill removes the waiver of competitive bidding available to school boards for 
health insurance.  It requires that school boards purchase health insurance for employees 
through competitive bidding, including in school units in which municipal and school 
insurance is purchased as a package by municipal government. 
The bill requires that insurers, nonprofit hospital and medical service organizations 
and health maintenance organizations provide a school administrative unit with 
information concerning the unit's own experience rating and claims history as a member 
covered under a group policy or contract at the unit's request or at the request of any 
municipality in the unit. 
The bill also makes members of the Maine Municipal Association and members of 
the Maine Education Association eligible to participate in the group health plan for state 
employees and makes employees of school administrative units and municipalities 
eligible to participate in the plan if their school boards or municipalities elect to 
participate in the plan.