An Act To Correct Inconsistencies and Ambiguities in the Maine Guaranteed Access Reinsurance Association Act
Maine Legislature, Session 125, LD 1702
Committee: Insurance and Financial Services
Sponsors: RICHARDSON
Amends: 24-A MRSA §3958, 24-A MRSA §3959, 24-A MRSA §3961

Legislative Document 
No. 1702 
H.P. 1254 
House of Representatives, December 23, 2011 
An Act To Correct Inconsistencies and Ambiguities in the Maine 
Guaranteed Access Reinsurance Association Act 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Received by the Clerk of the House on December 21, 2011.  Referred to the Committee on 
Insurance and Financial Services pursuant to Joint Rule 308.2 and ordered printed pursuant to 
Joint Rule 401. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative RICHARDSON of Warren. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  24-A MRSA §3958, sub-§1, ¶A, as enacted by PL 2011, c. 90, Pt. B, §8, 
is amended to read: 
A.  The Beginning January 1, 2012, the association may not reimburse a member 
insurer with respect to claims of a person designated for reinsurance by the member 
insurer pursuant to section 3959 until 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 association shall reimburse insurers for claims paid in excess of 
$32,500.  The claim reimbursement period is January 1st to December 31st and 
applies only to claims incurred in that same calendar year.  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. 2.  24-A MRSA §3959, as enacted by PL 2011, c. 90, Pt. B, §8, is amended to 
read: 
§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 the health 
statement developed by the board pursuant to section 3955, subsection 1, paragraph F. if 
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.  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.  Automatic designation.  The board shall develop a list of medical or health 
conditions for which a person is may be automatically designated for reinsurance.  A At 
the option of the member insurer, a person who demonstrates the existence or history of 
any medical or health conditions on the list developed by the board may is not be required 
to complete the health statement specified in subsection 1, paragraph A.  The board may 
amend the list from time to time as appropriate. 
3.  Change of policy or coverage; enrolling additional persons.  A member insurer 
may designate a person for reinsurance pursuant to this section when the person changes 
individual health plans or level of coverage under an individual health plan, including 
deductibles, or when another enrollee is added to an individual health plan. 
Sec. 3.  24-A MRSA §3961, sub-§1, 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 to the extent claims 
made by a covered person on a calendar year basis after July 1, 2012 exceed the amounts 
otherwise eligible for reimbursement pursuant to section 3958, subsection 1, paragraph A, 
if: 
A.  The member insurer sold an individual health plan to the covered person between 
December 1, 1993 and July 1, 2012, the individual health plan that was sold has been 
continuously renewed by the 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; and 
B.  The member insurer is able to determine through the use of individual health 
statements, claims history, risk scores or any reasonable means that, between 
December 1, 1993 and July 1, 2012, while the person received coverage under an 
individual health plan issued by the member insurer,  the covered person would have 
been designated by the member insurer pursuant to section 3959, subsection 1.  This 
paragraph is not intended to limit the ability of a member insurer to designate for 
reinsurance pursuant to section 3959 a currently covered person in the member 
insurer's open book of business for individual health plans; and 
C.  The member insurer seeks to designate the covered person for reimbursement 
from the association by October 1, 2012. 
SUMMARY 
This bill makes technical corrections to address inconsistencies and ambiguities in the 
Maine Guaranteed Access Reinsurance Association Act. 
1.  It clarifies that the initial claim reimbursement period for the first year of the 
program is the calendar year, beginning January 1, 2012 and ending December 31, 2012.  
All claims must be incurred in the same calendar year for which reimbursement is sought. 
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. 
3.  It clarifies that a member insurer has the option of designating a person for 
reinsurance based upon the existence or history of a medical or health condition that is on 
a list developed by the board for this purpose. 
4.  It allows a member insurer to designate a person for reinsurance if the person 
changes policies or benefit levels or adds new members to a policy. 
5.  It clarifies that the law is not intended to limit the ability of a member insurer to 
designate a currently covered person for reinsurance. 
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 
and who would have been designated for reinsurance by the member insurer to do so by 
October 1, 2012.