An Act To Correct Inconsistencies and Ambiguities in the Maine Guaranteed Access Reinsurance Association Act
Maine Legislature, Session 125, LD 1702
Committee Amendment CA_A_H847 (House)
Amends: 24-A MRSA §2736-C, 24-A MRSA §3955, 24-A MRSA §3957, 24-A MRSA §3958, 24-A MRSA §3961

COMMITTEE AMENDMENT "A" to H.P. 1254, L.D. 1702, Bill, "An Act To 
Correct Inconsistencies and Ambiguities in the Maine Guaranteed Access Reinsurance 
Association Act" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. 1. 24-A MRSA §2736-C, sub-§3, as amended by PL 2011, c. 90, Pt. B, §6 
and affected by § 1 0, is further amended to read: 
3. Guaranteed issuance and 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 aRd may ae reiftsm:ed through the 
Maifte Guarantees Aeeess Reiftsm:anee Assoeiatioft estaalishes pursuaflt to ehapter 
M-A. Oft or after July 1,2012, eO'ferage 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 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" An to HoP 0 1254, L.Do 1702 
(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 subparagraph 
may not enroll individuals residing within the area subject to denial of coverage 
or groups or subgroups within that area for a period of 180 days after the date of 
the first denial of coverage. 
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 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. 
E. A As part of the application process for individual health coverage, a carrier fftajI' 
evaitlate the health starns of shall require an individual for purposes of desigFIating 
that individtlai for reinstlfance throtlgh the Maine Gliaranteed Access Reinstlfance 
Association established in chapter 54 A. Por individtlai health plans isstled on or 
after Ally 1, 2012, the carrier shall tlse to complete the health statement developed by 
the Board of Directors of the Maine Guaranteed Access Reinsurance Association 
pursuant to section 3955, subsection 1, paragraph E to make a designation and may 
not tlse any other method to determine the health starns of an individtlal. Por ptlrposes 
of this stlbsection, "health statement" means any information intended to inform the 
carrier or an instlfance prodtlcer acting on behalf of a carrier of the health starns of an 
efH'ollee or prospective efH'ollee in an indiv=idtlal health plan. A carrier may not deny 
coverage or refuse to renew or cancel an individual health plan on the basis of an 
individual's complete or incomplete health statement, claims history or risk scores or 
on the basis of any omission of material information from a health statement or 
misrepresentation of an individual's health status. The rejection of an application for 
individual health coverage by a carrier because an individual has not submitted a 
completed health statement is not a denial of coverage for the purposes of this 
paragraph. 
Sec. 2. 24-A MRSA §3955, sub-§l, ~E, as enacted by PL 2011, c. 90, Pt. B, §8, 
is amended to read: 
E. Develop a health statement to be used by a member instlrer to designate a resident 
in evaluating a person for designation for reinsurance pursuant to section 3959.!. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "R" to H.P. 1254, L.D. 1702 
Protected health information included in a health statement submitted to the 
association that is covered by the federal Health Insurance Portability and 
Accountability Act of 1996, Public Law 104-191, 110 Stat. 1936 or covered by 
chapter 24 remains confidential and is not open to public inspection; and 
Sec. 3. 24-A MRSA §3957, sub-§5, ~, as enacted by PL 2011, c. 90, Pt. B, §8, 
is repealed. 
Sec.4. 24-A MRSA §3958, sub-§l, ~A, as enacted by PL 2011, c. 90, Pt. B, §8, 
is amended to read: 
A. +he Beginning July 1, 2012, the association may Hot shall reimburse a member 
insurer for claims incurred with respect to elaims of a person designated for 
reinsurance by the member insurer pursuant to section 3959 ttflti.l or 3961 after the 
insurer has incurred an initial level of claims for that person of $7,500 for covered 
benefits in a calendar year. In addition, the insurer is responsible for 10% of the next 
$25,000 of claims paid during a calendar year. 
The assoeiatioH shall reimburse 
iHsurers for elaims !'laid amount of reimbursement is 90% of the amount incurred 
between $7,500 and $32,500 and 100% of the amount incurred in excess of $32,500 
for claims incurred in that calendar year with respect to that person. For calendar 
year 2012, only claims incurred on or after July 1 st are considered in determining the 
member insurer's reimbursement. The association may annually adjust the initial 
level of claims and the maximum limit to be retained by the insurer to reflect 
increases in costs and utilization within the standard market for individual health 
plans within the State. The adjustments may not be less than the annual change in the 
Consumer Price Index for medical care services unless the superintendent approves a 
lower adjustment factor as requested by the association. 
Sec. 5. 24-A MRSA §3958, sub-§2, as enacted by PL 2011, c. 90, Pt. B, §8, is 
amended to read: 
2. Premium rates. The association, as part of the plan of operation under section 
3953, subsection 3, shall establish a methodology for determining premium rates to be 
charged member insurers to reinsure persons eligible for coverage under this chapter. 
The methodology must include a system for classification of persons eligible for coverage 
that reflects the types of case characteristics used by insurers for individual health plans 
pursuant to section 2736-C, together with any additional rating factors the association 
determines to be appropriate. The methodology must provide for the development of 
base reinsurance premium rates, subject to approval of the superintendent, set at levels 
that reasoHably Ilfl!'lroximate gross flremiums charged for individual health !'llans and that 
are adjusted to refleet retentioH levels required under this Title, together with other funds 
available to the association, will be sufficient to meet the anticipated costs of the 
association. The association shall periodically review the methodology established under 
this subsection and may make changes to the methodology as needed with the approval of 
the superintendent. The association may consider adjustments to the premium rates 
charged for reinsurance to reflect the use of effective cost containment and managed care 
arrangements by an insurer. 
Sec. 6. 24-A MRS A §3959, as enacted by PL 2011, c. 90, Pt. B, §8, is amended to 
read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" An to H.P. 1254, L.D. 1702 
§3959. Designation for reinsurance 
1. Designation. The association shall provide reinsurance to a member insurer for 
persons a person designated for reinsurance by a member insurer using tfle health 
statement developed ay tfle aoard pursuant to section 3955, suasection 1, paragraph F.,Jf 
the designation was made: 
A. By using the health statement developed by the board pursuant to section 3955, 
subsection 1, paragraph E or by using the person's claims history or risk scores or any 
other reasonable means; 
B. As a mandatory designation pursuant to subsection 2 on the basis of the existence 
or history of any medical or health condition on the list developed by the board 
pursuant to subsection 2; or 
C. On the basis of an omission of material information from the health statement 
developed by the board pursuant to section 3955, subsection 1, paragraph E or 
misrepresentation of the person's health status on the health statement. 
2. Mandatory designation. The board shall develop a list of medical or health 
conditions for which a person is automatically must be designated for reinsurance Qu 
member insurer. 
A person who demonstrates If a person's health statement, claims 
history or risk scores demonstrate the existence or history of any medical or health 
conditions on the list developed by the board may not ae required to complete the lolealtfl 
statement specified in suasection I at the time the plan is issued or when the person is 
added to the plan, the member insurer shall designate the person for reinsurance. The 
board may amend the list from time to time as appropriate. 
3. Enrolling additional persons. A member insurer may designate a person for 
reinsurance pursuant to this section when the person is added to an individual health plan. 
4. Designation effective date and premium. The designation of a person for 
reinsurance is effective as of the effective date of the primary coverage provided by the 
member insurer, except that the earliest effective date for any reinsurance is July 1, 2012. 
A member insurer's premium for reinsurance begins to accrue as of the effective date of 
the designation. 
Sec. 7. 24-A MRSA §3961, sub-§l, as enacted by PL 2011, c. 90, Pt. B, §8, is 
amended to read: 
1. 
Reimbursement. 
A member insurer may seek reimbursement from the 
association and the association shall reimburse the member insurer with respect to a 
person insured through a member insurer's closed book of business to the extent claims 
made by a covered person on a calendar year aasis after July 1,2012 exceed the amounts 
otherwise are eligible for reimbursement pursuant to section 3958, subsection 1, 
paragraph A, if: 
A. The memaer ins1:lfer sold an individual health plan to the covered person aetween 
is insured under a policy sold on or after December 1, 1993 and in force as of July 1, 
2012, tfle individual health plan that was sold has aeen continuously renewed ay tfle 
covered person and the member insurer has closed its book of business for individual 
health plans sold between December 1, 1993 and July 1,2012; ana 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to H.P. 1254, L.D. 1702 
B. The member insurer is able to determine through the use of individual health 
statements, claims history, risk scores or any reasonable means that, betweeA 
DeeeFAher 1, 1993 emd July 1, 2012, vthile the persoA reeeived eoverage llader em 
iAdividllal health plaa isslled by the member iAsmer, the covered person wOllld have 
beeA desigaated currently qualifies for designation by the member insurer pursuant to 
section 3959, subsection I.,.; and 
C. The member insurer seeks to designate the covered person for reimbursement 
from the association by October 1, 2012. 
This subsection applies only to the individual health plans described and is not intended 
to limit the ability of a member insurer to designate a covered person for reinsurance 
pursuant to section 3959. 
Sec. 8. 24-A MRSA §3961, sub-§l-A is enacted to read: 
I-A. Premium. A member insurer seeking reimbursement under subsection 1 is 
liable to the association for reinsurance premium rates determined in accordance with 
section 3958, subsection 2.' 
SUMMARY 
This amendment replaces the bill and is the majority report of the committee. It 
makes technical corrections to address inconsistencies and ambiguities in the Maine 
Guaranteed Access Reinsurance Association Act. 
1. 
It clarifies that reimbursement is based on the calendar year in which the claim 
was incurred, except that the initial claim reimbursement period for the first year of the 
program is the period beginning July 1, 2012 and ending December 31, 2012. 
2. It allows a member insurer to designate a person for reinsurance through the use of 
claims history, risk scores and other reasonable means, in addition to the use of a health 
statement. It also allows a member insurer to designate a person for reinsurance in the 
event the person omitted material information from the health statement or 
misrepresented the person's health status on the health statement. 
It clarifies that a 
person's health statement, claims history or risk scores or the omission of material 
information from the health statement or misrepresentation of a person's health status may 
not be used by a carrier as a basis for denying, cancelling or refusing to renew an 
individual health plan. 
3. It allows a member insurer to designate a person for reinsurance if the person is 
added to a policy. 
4. It clarifies that protected health information obtained by the association that is 
confidential under federal and state law remains confidential and is not open to public 
inspection. 
5. It clarifies that the Maine Revised Statutes, Title 24-A, section 3961 applies to the 
closed book of business for individual health plans sold between December 1, 1993 and 
July 1,2012, and that reimbursement to member insurers with respect to closed books of 
business is subject to the same claims reimbursement periods and retention levels as open 
books of business. It also clarifies that Title 24-A, section 3961 is not intended to limit 
COMMITTEE AMENDMENT 
COMMITIEE AMENDMENT "A" to H.P. 1254, L.D. 1702 
the ability of a member insurer to designate a covered person for reinsurance pursuant to 
Title 24-A, section 3959. 
6. It requires a member insurer who seeks reimbursement with respect to a covered 
person who is in the member insurer's closed book of business for individual health plans 
to designate the member insurer for reinsurance by October 1,2012. 
7. It clarifies that member insurers are required to pay reinsurance premium rates 
with respect to covered persons designated under Title 24-A, section 3961. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Revised: 03/26/12 ;t:vac:.. 
LD 1702 
LR 2596(02) 
An Act To Correct Inconsistencies and Ambiguities in the Maine Guaranteed Access Reinsurance 
Fiscal Detail and Notes 
Association Act 
,\ 
Fiscal Note for Bill as Amended by Committee Amendment "A" L H 
.... ~4V 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Special Revenue Funds 
Any additional costs to the Department of Professional and Financial Regulation are expected to be minor and can be 
absorbed within existing budgeted resources. 
LR2596(02) - Fiscal Note - Page 1 of 1