An Act To Repeal the Provisions in the Insurance Laws Governing Guaranteed Issue and Community Rating
Maine Legislature, Session 125, LD 0410
Committee: Insurance and Financial Services
Sponsors: DAVIS, SAVIELLO, CRAFTS, FREDETTE, GIFFORD, JOHNSON, PRESCOTT, TIMBERLAKE, WATERHOUSE, THIBODEAU
Amends: 5 MRSA §12004-G, 24-A MRSA §423-E, 24-A MRSA §2736-C, 24-A MRSA §2808-B, 24-A MRSA §4202-A, 24-A MRSA §4212, 24-A MRSA §4222-B

Legislative Document 
No. 410 
H.P. 328 
House of Representatives, February 8, 2011 
An Act To Repeal the Provisions in the Insurance Laws Governing 
Guaranteed Issue and Community Rating 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative DAVIS of Sangerville. 
Cosponsored by Senator SAVIELLO of Franklin and 
Representatives: CRAFTS of Lisbon, FREDETTE of Newport, GIFFORD of Lincoln, 
JOHNSON of Greenville, PRESCOTT of Topsham, TIMBERLAKE of Turner, 
WATERHOUSE of Bridgton, Senator: THIBODEAU of Waldo. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §12004-G, sub-§14-F, as enacted by PL 2007, c. 629, Pt. A, §1, 
is repealed. 
Sec. 2.  24-A MRSA §423-E, as enacted by PL 2007, c. 629, Pt. A, §2, is repealed. 
Sec. 3.  24-A MRSA §2736-C, sub-§1, ¶B, as enacted by PL 1993, c. 477, Pt. C, 
§1 and affected by Pt. F, §1, is repealed. 
Sec. 4.  24-A MRSA §2736-C, sub-§2, ¶A, as amended by PL 1993, c. 547, §3, 
is further amended to read: 
A.  A carrier issuing an individual health plan after December 1, 1993 must file the 
carrier's community rate and any formulas and factors used to adjust that rate with the 
superintendent prior to issuance of any individual health plan. 
Sec. 5.  24-A MRSA §2736-C, sub-§2, ¶B, as amended by PL 2007, c. 629, Pt. 
A, §3, is further amended to read: 
B.  A carrier may not vary the premium rate due to the gender, health status, 
occupation or industry, claims experience or policy duration of the individual. 
Sec. 6.  24-A MRSA §2736-C, sub-§2, ¶C, as amended by PL 2001, c. 410, Pt. 
A, §1 and affected by §10, is further amended to read: 
C.  A carrier may vary the premium rate due to gender, health status, age, occupation 
or industry, geographic area, smoking status and family membership.  A change in 
the premium rate is not permitted on the basis of changes in health status after the 
policy is issued. Renewal of an individual health plan is guaranteed pursuant to 
section 2850-B.  The superintendent may adopt rules setting forth appropriate 
methodologies regarding rate discounts based on smoking status.  Rules adopted 
pursuant to this paragraph are routine technical rules as defined in Title 5, chapter 
375, subchapter II-A 2-A. 
Sec. 7.  24-A MRSA §2736-C, sub-§2, ¶D, as amended by PL 2007, c. 629, Pt. 
A, §4, is repealed. 
Sec. 8.  24-A MRSA §2736-C, sub-§2, ¶E, as amended by PL 1999, c. 44, §1 
and affected by §2, is further amended to read: 
E.  A separate community premium rate may be established for individuals eligible 
for Medicare Part A without paying a premium; however, this rate may not be applied 
if both the Medicare eligibility date and the issue date are prior to July 1, 2000. 
Sec. 9.  24-A MRSA §2736-C, sub-§2, ¶F, as amended by PL 2007, c. 629, Pt. 
M, §4, is repealed. 
Sec. 10.  24-A MRSA §2736-C, sub-§2, ¶G, as enacted by PL 2007, c. 629, Pt. 
A, §5, is repealed. 
Sec. 11.  24-A MRSA §2736-C, sub-§2, ¶H, as enacted by PL 2007, c. 629, Pt. 
A, §6, is repealed. 
Sec. 12.  24-A MRSA §2736-C, sub-§2, ¶I is enacted to read: 
I.  A carrier that offered individual health plans prior to January 1, 2012 may close its 
individual book of business sold prior to January 1, 2012 and may establish a separate 
rate for individuals applying for coverage under an individual health plan on or after 
January 1, 2012. 
Sec. 13.  24-A MRSA §2736-C, sub-§2-A, as enacted by PL 2007, c. 629, Pt. A, 
§7, is repealed. 
Sec. 14.  24-A MRSA §2736-C, sub-§3, as corrected by RR 2001, c. 1, §30, is 
amended to read: 
3.  Guaranteed renewal.  Carriers providing individual health plans must meet the 
following requirements on issuance and renewal. 
A.  Coverage must be guaranteed to all residents of this State other than those eligible 
without paying a premium for Medicare Part A.  On or after January 1, 1998, 
coverage must be guaranteed to all legally domiciled federally eligible individuals, as 
defined in section 2848, regardless of the length of time they have been legally 
domiciled in this State.  Except for federally eligible individuals, coverage need not 
be issued to an individual whose coverage was terminated for nonpayment of 
premiums during the previous 91 days or for fraud or intentional misrepresentation of 
material fact during the previous 12 months.  When a managed care plan, as defined 
by section 4301-A, provides coverage a carrier may: 
 (1) Deny coverage to individuals who neither live nor reside within the approved 
service area of the plan for at least 6 months of each year; and 
 (2)  Deny coverage to individuals 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 paragraph 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. 
B.  Renewal is guaranteed, pursuant to section 2850-B. 
C.    A carrier is exempt from the guaranteed issuance requirements of paragraph A 
provided that the following requirements are met. 
 (1)  The carrier does not issue or deliver any new individual health plans on or 
after the effective date of this section; 
 (2)  If any individual health plans that were not issued on a guaranteed 
renewable basis are renewed on or after December 1, 1993, all such policies must 
be renewed by the carrier and renewal must be guaranteed after the first such 
renewal date; and 
 (3)  The carrier complies with the rating practices requirements of subsection 2. 
D.  Notwithstanding paragraph A, carriers Carriers offering supplemental coverage 
for the Civilian Health and Medical Program for the Uniformed Services, 
CHAMPUS, are not required to issue this coverage if the applicant for insurance does 
not have CHAMPUS coverage. 
Sec. 15.  24-A MRSA §2736-C, sub-§9, as enacted by PL 1995, c. 570, §7, is 
amended to read: 
9.  Exemption for certain associations.  The superintendent may exempt a group 
health insurance policy or group nonprofit hospital or medical service corporation 
contract issued to an association group, organized pursuant to section 2805-A, from the 
requirements of subsection 3, paragraph A; subsection 6, paragraph A; and subsection 8 
if: 
A.  Issuance and renewal Renewal of coverage under the policy or contract is 
guaranteed to all members of the association who are residents of this State and to 
their dependents; 
B.  Rates for the association comply with the premium rate requirements of 
subsection 2 or are established on a nationwide basis and substantially comply with 
the purposes of this section, except that exempted associations may be rated 
separately from the carrier's other individual health plans, if any; 
C.  The group's anticipated loss ratio, as defined in subsection 5, is at least 75%; 
D.  The association's membership criteria do not include age, health status, medical 
utilization history or any other factor with a similar purpose or effect; 
E.  The association's group health plan is not marketed to the general public; 
F.  The association does not allow insurance agents or brokers to market association 
memberships, accept applications for memberships or enroll members, except when 
the association is an association of insurance agents or brokers organized under 
section 2805-A; 
G.  Insurance is provided as an incidental benefit of association membership and the 
primary purposes of the association do not include group buying or mass marketing 
of insurance or other goods and services; and 
H.  Granting an exemption to the association does not conflict with the purposes of 
this section. 
Sec. 16.  24-A MRSA §2808-B, sub-§1, ¶B, as enacted by PL 1991, c. 861, §2, 
is repealed. 
Sec. 17.  24-A MRSA §2808-B, sub-§2, ¶B, as amended by PL 1993, c. 477, Pt. 
B, §1 and affected by Pt. F, §1, is further 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 eligible group or members of the group. 
Sec. 18.  24-A MRSA §2808-B, sub-§2, ¶C, as amended by PL 2001, c. 410, Pt. 
A, §3 and affected by §10, is further amended to read: 
C.  A carrier may vary the premium rate due to gender, health status, age, occupation 
or industry, geographic area, family membership, smoking status, participation in 
wellness programs and group size.  A change in the premium rate is not permitted on 
the basis of changes in health status after the policy is issued. Renewal of a small 
group health plan is guaranteed pursuant to section 2850-B.  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 2-A. 
Sec. 19.  24-A MRSA §2808-B, sub-§2, ¶D, as amended by PL 2001, c. 410, Pt. 
A, §4 and affected by §10, is repealed. 
Sec. 20.  24-A MRSA §2808-B, sub-§2, ¶D-1, as amended by PL 2001, c. 410, 
Pt. A, §5 and affected by §10, is repealed. 
Sec. 21.  24-A MRSA §2808-B, sub-§2, ¶D-2, as reallocated by RR 1997, c. 1, 
§22, is amended to read: 
D-2.  Notwithstanding the requirements of paragraph D, rates Rates with respect to 
employees whose work site is not in this State may be based on area adjustment 
factors appropriate to that location. 
Sec. 22.  24-A MRSA §2808-B, sub-§2, ¶E, as amended by PL 2001, c. 258, Pt. 
E, §4, is further amended to read: 
E.    The superintendent may authorize a carrier to establish a separate community 
premium rate for an association group organized pursuant to section 2805-A or a 
trustee group organized pursuant to section 2806, as long as association group 
membership or eligibility for participation in the trustee group is not conditional on 
health status, claims experience or other risk selection criteria and all small group 
health plans offered by the carrier through that association or trustee group: 
(1)  Are otherwise in compliance with the premium rate requirements of this 
subsection; and 
(2)  Are offered on a guaranteed issue basis to all eligible employers that are 
members of the association or are eligible to participate in the trustee group 
except that a professional association may require that a minimum percentage of 
the eligible professionals employed by a subgroup be members of the association 
in order for the subgroup to be eligible for issuance or renewal of coverage 
through the association.  The minimum percentage must not exceed 90%.  For 
purposes of this subparagraph, "professional association" means an association 
that: 
(a)  Serves a single profession that requires a significant amount of education, 
training or experience or a license or certificate from a state authority to 
practice that profession; 
(b)  Has been actively in existence for 5 years; 
(c)  Has a constitution and bylaws or other analogous governing documents; 
(d)  Has been formed and maintained in good faith for purposes other than 
obtaining insurance; 
(e)  Is not owned or controlled by a carrier or affiliated with a carrier; 
(g)  Has a least 1,000 members if it is a national association; 200 members if 
it is a state or local association; 
(h)  All members and dependents of members are eligible for coverage 
regardless of health status or claims experience; and 
(i)  Is governed by a board of directors and sponsors annual meetings of its 
members. 
Producers may only market association memberships, accept applications for 
membership or sign up members in the professional association where the individuals 
are actively engaged in or directly related to the profession represented by the 
professional association. 
Sec. 23.  24-A MRSA §2808-B, sub-§2, ¶H is enacted to read: 
H.  A carrier that offered small group health plans prior to January 1, 2012 may close 
its small group book of business sold prior to January 1, 2012 and may establish a 
separate rate for small groups applying for coverage under a small group health plan 
on or after January 1, 2012. 
Sec. 24.  24-A MRSA §2808-B, sub-§2-A, as amended by PL 2009, c. 244, Pt. 
C, §7 and c. 439, Pt. D, §1, is further amended to read: 
2-A.  Rate filings.  A carrier offering small group health plans shall file with the 
superintendent the community rates for each plan and every rate, rating formula and 
classification of risks and every modification of any formula or classification that it 
proposes to use. 
A.  Every filing must state the effective date of the filing.  Every 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.  The effective date may be suspended 
by the superintendent for a period of time not to exceed 30 days.  
B.    A filing and all supporting information, except for protected health information 
required to be kept confidential by state or federal statute and except for descriptions 
of the amount and terms or conditions or reimbursement in a contract between an 
insurer and a 3rd party, are public records notwithstanding Title 1, section 402, 
subsection 3, paragraph B and become part of the official record of any hearing held 
pursuant to subsection 2-B, paragraph B or F. 
C.  Rates for small group health plans must be filed in accordance with this section 
and subsections 2-B and 2-C for premium rates effective on or after July 1, 2004, 
except that the filing of rates for small group health plans are not required to account 
for any payment or any recovery of that payment pursuant to subsection 2-B, 
paragraph D and former section 6913 for rates effective before July 1, 2005. 
Sec. 25.  24-A MRSA §2808-B, sub-§2-B, ¶D, as amended by PL 2007, c. 629, 
Pt. M, §8, is repealed. 
Sec. 26.  24-A MRSA c. 54, as amended, is repealed. 
Sec. 27.  24-A MRSA §4202-A, sub-§10, ¶B, as amended by PL 1993, c. 645, 
Pt. A, §5, is further amended to read: 
B.    Is compensated, except for reasonable copayments, for basic health care services 
to enrolled participants solely on a predetermined periodic rate basis, except that the 
organization is not prohibited from having a provision in a group contract allowing an 
adjustment of premiums based upon the actual health services utilization of the 
enrollees covered under the contract, and except that such a contract may not be sold 
to an eligible group subject to the community rating requirements of section 2808-B; 
Sec. 28.  24-A MRSA §4212, sub-§2, ¶C, as enacted by PL 1995, c. 332, Pt. O, 
§6, is amended to read: 
C.    When the provisions of the State's community rating law are applicable, as 
provided by section 2736-C, subsection 3, paragraph B and section 2808-B, 
subsection 4, paragraph B; or 
Sec. 29.  24-A MRSA §4222-B, sub-§3, as enacted by PL 1995, c. 332, Pt. O, §8, 
is amended to read: 
3.     The requirements of sections 2736-C and 2808-B, community rating law, apply 
to health maintenance organizations, except that a health maintenance organization is not 
required to offer coverage or accept applications from an eligible group or individual 
located outside the health maintenance organization's approved service area. 
Sec. 30.  Application.  The requirements of this Act apply to all policies, contracts 
and certificates executed, delivered, issued for delivery, continued or renewed in this 
State on or after January 1, 2012.  For purposes of this Act, all contracts are deemed to be 
renewed no later than the next yearly anniversary of the contract date. 
SUMMARY 
This bill repeals the laws governing guaranteed issue and community rating for 
individual health insurance. The bill also repeals the laws governing community rating in 
the small group health insurance market. 
The bill applies to all individual and small group health insurance policies, 
certificates and contracts issued or renewed on or after January 1, 2012.