Summary of Insurance Overhall, LD 1333
MANP, through its affiliation with Healey & Associates, a premier employee benefits and financial services broker that specializes in the nonprofit sector, provides members with access to comprehensive health and benefit programs. In addition to expert brokerage service to the nonprofit sector, Healey & Associates also provides information on the issues and trends that impact nonprofit employers. The following article is an initial summary of the recent overhaul of Maine’s insurance laws, LD 1333. A more in-depth analysis of its potential impact on Maine’s nonprofit employers will be made available at a later date.
Health Care Reform – L.D. 1333
“An act to modify rating practices for individual and small group health plans and to encourage value-based purchasing of health care services”
This bill represents one of the most significant overhauls of Maine insurance regulation since the 1990’s. It includes the sale of insurance across state lines, expansion of community rating bands, and conformity with the federal Patient Protection and Affordable Care Act (ACA).
As enacted, here are some of the changes L.D. 1333 will provide to Maine’s health insurance regulations:
- Expands the maximum community rate differential for individual health plans on the basis of age, phased in over a period of four years;
- Expands the maximum community rate differential for small group health plans (currently 2-50 employees) on the basis of age, phased in over a period of four years;
- Authorizes a maximum rate differential on the basis of smoking status;
- Adopts the federal ACA definition of minimum loss ratios, which requires carriers to spend a certain percentage of premium dollars on medical care versus administrative expenses;
- Establishes the Maine Guaranteed Access Plan (GAP) which would serve as a reinsurance fund for high cost individuals;
- Authorizes the sale of insurance across state lines in the individual market only. It limits the states to Massachusetts, New Hampshire, Connecticut and Rhode Island and does not take effect until 2014;
- Repeals “Rule 850”, which governs geographic access standards regarding the provision of care. This would authorize carriers to incent greater travel distances for health care services;
- Implements a “Wellness Tax Credit” for small businesses of 20 or fewer employees for the expense of developing, instituting and maintaining wellness programs in the amount of $100 per employee, up to a maximum of $2000;
- Authorizes the establishment of “captive” insurance companies by employers for the purpose of providing health insurance, not unlike group self insurance for workers’ compensation insurance.
- Captive insurers would be required to comply with Maine’s community rating and guarantee issue laws.
This Bill phases in changes over the next few years and it will be 2014 before we feel the full effects of the law.