Opinion ID: 809108
Heading Depth: 2
Heading Rank: 1

Heading: The Trust and Its Health Insurance Plan

Text: Since 1993, the Trust has provided health insurance to the bulk of Maine's public school employees and their dependents through a plan underwritten by various insurers, most recently Anthem Blue Cross Blue Shield of Maine (Anthem). The insurance plan (the Plan), which currently covers nearly 67,000 members from 99 percent of Maine's school districts, is community-rated; that is, the price of coverage is negotiated on the basis of groupwide utilization costs, and accounts for neither geographic variation nor an individual employer's demographic mix, prior utilization, or loss experience. This community-rated plan is designed in part to subsidize, through members who are actuarially favorable, the premiums paid by members who are actuarially less attractive to insurers. The Plan as designed economically benefits employees of educational institutions whose work forces are older or less healthy than other members of the group, or who reside in regions -- typically Northern and Eastern Maine -- with higher health care costs and, on average, lower salaries than their Southern Maine counterparts. The Plan is thus structured, in part, to help mitigate this disparity. -4- Eligibility for enrollment in the Plan is determined by the collective bargaining agreements negotiated between local bargaining units and individual employers, predominantly school districts. The employees of a given school district are eligible to participate in the Plan if the largest collective bargaining unit in that district is represented by the Maine Education Association (MEA), the statewide teachers' union that founded the Trust. Once eligibility has been established, the school board and the employees decide together, by a collaborative vote, whether the employees will be offered the Plan. Those who receive the offer and elect to enroll do so directly with the Plan's insurer, Anthem. The Trust has no contracts with individual educational institutions, and those institutions are not considered to be sponsors of the Plan. Rather, based on the amount agreed to in its own collective bargaining agreement, each school district pays to the Plan a percentage of its employees' health insurance premiums, and the employees are responsible for the remainder. For the most recent plan year for which there was evidence at the preliminary injunction hearing, the Plan's annual premium was nearly $370,000,000, resulting in an average monthly cost of approximately $460 per member. The Trust itself maintains a reserve fund that, according to its last available audit, held in excess of $87,000,000. The Trust uses the reserve fund to buy down -5- rate increases, thereby avoiding inflation in the monthly cost charged to Plan participants.