Opinion ID: 809108
Heading Depth: 2
Heading Rank: 3

Heading: The Trust's Past Treatment of Loss Information

Text: The Trust has structured itself, as well as its relationships with insurers, to keep the Plan's loss information confidential. Since the Trust's formation in 1993, its Trust Agreement has provided, in relevant part: Fiduciary Authority. The Trustees shall have absolute discretion and authority to make all fiduciary decisions, plan provision interpretations and constructions, and other determinations under this Trust and any plans maintained under the Trust, except as specifically delegated to the Plan Administrator in writing; including, without limitation, decisions relating to the use and dissemination (if any) of the participant -8- claims experience data under any plan maintained under the Trust. Additionally, since 2005, the Trust's Group Agreements with Anthem have included the following confidentiality clause: All experience data relative to the [Trust] and its subgroups is owned by the Trust, and that data will not be released, either directly or indirectly, by Anthem without prior written consent of the Trust, and the Trust can withhold its permission for any reason it deems appropriate. Additionally, Anthem agrees not to utilize data relating to specific active subgroups for standalone rating purposes. In accordance with these provisions, the Trust has always considered the experience ratings and claims history of individual school districts to be a proprietary, confidential trade secret. The information is not conveyed to anyone outside of Anthem (including to members of the Trust itself), and the Trust has undertaken reasonable efforts to ensure the information's confidentiality by neither collecting it nor allowing Anthem to use or release it.2 A driving force behind these efforts at maintaining confidentiality is to prevent actuarially desirable districts from acquiring the information and leaving the community-rated plan for less expensive individual coverage, thereby increasing the monthly 2 The loss information is collected and maintained not by the Trust, but by the insurer. The Trust's only role with respect to the loss information is in preserving its confidentiality by precluding third-party access. -9- costs for the Plan's remaining members (or, alternatively, forcing the Trust to expend additional resources from its reserve fund to pay down the resulting rate increases). Prior to the passage of L.D. 1326, the Trust was able to do exactly that, denying multiple school district requests for loss information over the years by virtue of the fact that the Trust, and not the individual school districts, was always the primary policyholder. See 1995 Me. Laws, Ch. 71 (requiring disclosure of loss information concerning a group health insurance policy or contract only to its policyholder). Generally, group insurers in Maine require at least two years of aggregate loss information from an employer in order to provide a quote. Thus, without access to loss information, school districts cannot meaningfully explore insurance options outside those offered by the Trust. Following the enactment of L.D. 1326, at least one district has already submitted a renewed request to Anthem. In the absence of an injunction, it is apparent that school districts will continue to request access in order to obtain competing quotes based on that loss information. Depending on the quotes and the terms of each district's collective bargaining agreement, this process may or may not result in some districts withdrawing their employees from the Plan. In most cases, if not all of them, negotiating changes to the respective collective -10- bargaining agreements is a lengthy process that may take months, if not years, to complete.