9.__Health benefit plan.__"Health benefit plan" means any of the health benefit plans authorized by the alliance for purchase by alliance members.

10.__Participating carrier.__"Participating carrier" means an eligible carrier under section 3406 that contracts with the alliance.

11.__Participating consumer. "Participating consumer" means an enrolled individual or an enrolled employee.

12.__Participating employer. "Participating employer" means an employer, or an association meeting the requirements set forth in Title 24-A, section 2805-A, that meets the eligibility requirements established pursuant to section 3405 and that purchases health care coverage through the alliance on behalf of its employees or association members.

13.__Producer.__"Producer" means a producer or independent producer licensed to do business in the State under Title 24-A, chapter 16.

14.__Superintendent. "Superintendent" means the Superintendent of the Bureau of Insurance.

§3402.__Jurisdiction of bureau

Nothing in this chapter is intended to conflict with or limit the duties and powers granted to the superintendent under the laws of this State.__The board and alliance established under this chapter shall report to the bureau any suspected or alleged violations of this chapter.__Violations of this chapter are subject to the full range of regulatory actions, processes and remedies available to the superintendent in dealing with other entities that the superintendent may regulate.

§3403.__Maine Community Purchasing Alliance established

The Maine Community Purchasing Alliance is established as a nonprofit, nonrisk-bearing corporation licensed pursuant to this chapter to purchase health care coverage on behalf of its alliance members.__The alliance may not be considered a state agency or instrumentality of the State for any purpose.__The State may not borrow or otherwise appropriate funds from the alliance.

1.__Alliance board of directors.__The alliance operates under the supervision of a board of directors that consists of 11 voting members and 2 nonvoting members.

A.__Ten of the voting board members must be designated as follows.__Five members must represent participating consumers.__The remaining 5 must represent participating employers.__One employer member must represent a self- employed business.__One employer member must represent a public employer.__One employer member must represent a business with fewer than 100 employees.__One employer member must represent a business with 100 to 999 employees.__One employer member must represent a business with 1,000 or more employees.

(1)__Initially the Governor shall appoint the 10 voting board members who must represent participating consumers and employers, subject to review by the joint standing committee of the Legislature having jurisdiction over insurance matters and confirmation by the Legislature.__For the purpose of the initial appointment, a person represents a consumer or group of employers if that person is eligible to participate as a consumer or as a member of that group of employers.

(2)__After the initial term, the 10 board members designated pursuant to this paragraph must be elected by alliance members.__The board shall establish procedures in its bylaws governing the election of board members and maintaining the distribution of consumer and employer representatives.__For the purpose of this section, except for the initial appointment, a person represents a consumer if that person is elected by participating consumers.__For the purpose of this section, except for the initial appointment, a person represents a group of employers if that person is elected by participating employers from that employer group.__To be eligible to vote, a participating employer must contribute a minimum of 50% of the premium cost toward the purchase of health care coverage for its employees.__The board may set a higher minimum employer contribution as a voting eligibility requirement for participating employers.

B.__The 10 board members shall choose the 11th voting board member.__The appointed members shall choose the 11th member prior to the adoption of the board's bylaws.

C.__The Commissioner of Human Services is an ex officio nonvoting member of the board.

D.__The executive director of the alliance is an ex officio nonvoting member of the board.

E.__A person may not be a board member if that person or a member of that person's household is currently employed as or by, is a consultant for, is a member of the board of directors of or is affiliated with an agent or representative of a carrier, producer, health care provider or other entity having an interest in board decisions distinct from the interest of alliance members.__Prior to appointment or election to the board, potential board members shall disclose to those appointing or electing any other personal financial interest the potential board member has in an entity having an interest in board decisions distinct from the interest of the alliance members.__Board members may not accept gifts or any other financial gain from any carrier, agent, health care provider or other entity having an interest in board decisions distinct from the interest of alliance members.__This paragraph does not preclude a board member from purchasing coverage from a carrier.

F.__All board members must be knowledgeable about health care financing and delivery systems.

2.__Bylaws.__The board shall adopt bylaws that govern the operation of the alliance.__The bylaws must include procedures for the election of board members consistent with the terms set forth in this section.

3.__Terms of office. The terms of the voting board members are staggered.__For the initially appointed members of the board, the terms of office are as follows:__Three members serve one-year terms; 3 members serve 2-year terms; and 4 members serve 3-year terms.__Of the initial appointees, no 3 consumer representatives may have the same term length.__The 10 appointed members shall determine the initial term of the 11th voting member.__After the initial appointment of members, voting board members serve 3-year terms.__Board members may serve a maximum of 2 consecutive terms.

4.__Officers.__The Governor shall appoint the first chair of the board.__Subsequently, the members of the board shall elect the chair.__A member chosen as chair serves as chair for a length of time equal to that member's term.

5.__Meetings.__The board shall meet at times and places as it determines necessary to operate the alliance in accordance with this section.__To the extent that it does not interfere with the alliance's effectiveness at performing its purchasing functions, including, but not limited to, planning negotiation strategy, negotiating with carriers and settling personnel matters, the board shall conduct meetings open to alliance members.

6.__Standard of performance.__The board shall discharge its duties with the care, skill, prudence and diligence as that of prudent directors acting in a similar enterprise and with a similar purpose.

7.__Personal liability.__The members of the board and officers or employees of the alliance are not liable personally, either jointly or severally, for any debt or obligation created or incurred by the alliance.

8.__Powers and duties.__The board has the powers and duties set forth in section 3404 regarding operation of the alliance.

9.__Compensation.__Board members are entitled to compensation for expenses only.

§3404.__Powers and duties of the board

The board has the following powers and duties.

1.__Contracts with carriers.__The board may enter into contracts with eligible carriers to provide health care coverage to enrollees.

2.__Contracts with independent contractors.__The board may contract with qualified, independent contractors for services necessary to carry out the powers and duties of the alliance.__ Unless permission is granted specifically by the board, an independent contractor hired by the alliance may not release, publish or otherwise use any information to which the independent contractor has access under its contract.__Except with the express written approval of the board, an entity may not act, directly or through an affiliated person, both as a participating carrier and an independent contractor under contract to the alliance.

3.__Contracts generally.__The board may enter into any contracts necessary to carry out the powers and duties of this chapter.

4.__Legal action.__The board may sue or be sued, including taking any action necessary for securing legal remedies for, on behalf of or against the alliance, alliance members, any board member or other parties subject to this chapter.

5.__Executive director; staff.__The board shall appoint an executive director to serve as the chief operating officer of the alliance and to perform those duties delegated to the executive director by the board.__The executive director serves at the pleasure of the board.__The executive director may employ other staff as needed to administer the alliance, subject to the personnel policies established by the board.

6.__Premium assessment.__The board may assess alliance members a reasonable assessment for costs incurred or anticipated in connection with the operation of the alliance.

7.__Advisory committees.__The board may appoint advisory committees that may include persons with expertise in health benefits management and representatives of participating carriers, consumer groups and health care providers necessary to carry out the purposes of this chapter.

8.__Reports and record. The board shall prepare an annual report on the operations of the alliance that must include annual internal and independent audits and an accounting of all outside revenue received by the board.__The board shall submit the annual report to the Governor, the joint standing committee of the Legislature having jurisdiction over insurance matters and the State Auditor no later than January 15th of each year.

9.__Grants.__The board may receive and accept grants, funds or anything of value from any public or private agency and receive and accept contributions from any legitimate source of money, property, labor or any other thing of value.__However, the board may not accept grants from any carrier, agent or health care provider or other person or entity that might have a financial interest in the decisions of the board.

10.__Risk selection. The board may not use health status as a condition of participation in the alliance.

11.__Other powers. The board may carry out all other powers and responsibilities granted or imposed by this chapter.

§3405.__Operation of the alliance

The board shall establish and implement standards and procedures for the operation of the alliance, including, but not limited to, the following.

1.__Eligibility of carriers.__The board shall establish conditions and procedures for determining the eligibility of carriers, including, but not limited to, those conditions set forth in section 3406.

2.__Report cards.__The board shall develop a uniform format for report cards to be prepared and provided by participating carriers.__The report cards must include data necessary for evaluation of the performance of participating carriers and their provider networks by consumers, providers, employers and the board, including, but not limited to, information on consumer satisfaction, service utilization and the cost of the health benefit plan over time.__In formulating the report card format, the board shall use standards based on and consistent with existing state and national health care data collection initiatives and shall take into account the feasibility and cost- effectiveness of those standards.__The board shall also develop standards and procedures for reviewing and auditing the report cards before publication and distribution to current and potential alliance members.

3.__Eligibility of employers and participating consumers.__The board shall establish conditions for enrollment and participation, including payment of premiums.__For employers, including the self-employed, these conditions must include, but are not limited to, assurances that, for each employer, all employees or an entire class or classes of employees are enrolled in the alliance.__The board shall also set a minimum employer contribution for employer participation.

4.__Enrollment procedures. The board shall establish standard enrollment procedures, including, but not limited to, ongoing enrollment for those joining the alliance, procedures that allow participating consumers to change participating carriers for good cause and annual open enrollment for participating consumers that desire to change health benefit plans or participating carriers without good cause.__The board shall provide that each participating consumer may enroll in any health benefit plan offered by any participating carrier, so long as the carrier provides coverage where that participating consumer lives.__The board shall establish rules for reenrollment within 90 days if coverage was terminated involuntarily.__The board shall define "involuntary termination" to include loss of coverage resulting from job loss, divorce and other causes, and to exclude termination for nonpayment and other causes, as it considers appropriate.__For other than involuntary termination, the board may deny reenrollment for a period of up to 12 months.

5.__Quality performance reports.__The board shall develop uniform standards for the collection of data to be provided by participating carriers.__The board shall collect data necessary for evaluating the performance of participating carriers and their provider networks.__The board may develop methods of quality analysis for analyzing the data for use within quality performance reports. The board may use the reports for determining the qualifications of plans.__The board shall use standards based on and consistent with existing state and national health care data collection initiatives and shall take into account the feasibility and cost-effectiveness of those standards.__To the extent feasible, the board shall use the quality performance reports to work with participating carriers and their provider networks to improve the quality and cost- effectiveness of the care provided.__The board may consult a quality improvement foundation designated by an independent state health data organization to assist the board in the evaluation of the quality and appropriateness of care for participating providers.__At its discretion, the board may publish all or part of the quality performance reports.

6.__Collection of premium; payment of rates.__The board shall establish procedures for the collection of premiums from participating employers, from enrolled employees, as necessary, and from enrolled individuals.__To the extent feasible, the board shall allow participating consumers to pay through a voluntary automatic payment system.__The board shall pay contracted rates to participating carriers on a monthly basis or as otherwise provided by mutual agreement.

7.__Administrative and accounting procedures.__The board shall establish administrative and accounting procedures for operating the alliance and for providing services to alliance members.

8.__Risk pools.__The board shall develop standards for classifying groups of participating consumers into risk pools.__ The risk pools may include one or more risk pools for enrolled employees and their dependents and a risk pool for enrolled individuals and their dependents.__No later than January 1, 2003, the board shall determine whether to merge the risk pools.__Each year after the year 2003 that the risk pools remain separate, the board shall reassess the value of maintaining separate risk pools.

9.__Risk adjustment.__The board may establish a procedure for adjusting payments within each risk pool to participating carriers if the board finds that some carriers have a significantly disproportionate share of high-risk or low-risk enrollees.

10.__Ombudsman services.__The board shall establish procedures for assisting enrollees in resolving problems associated with enrollment, coverage and other disputes arising between the carrier and the enrollee that are not otherwise resolved by available grievance procedures.

11.__Marketing; marketing materials.__The board shall develop standards for reviewing and approving marketing materials offered to alliance members by participating carriers.__The board shall establish procedures for distributing marketing information to alliance members and potential alliance members.

12.__Health benefit plans.__Subject to the insurance laws of this State, the board shall establish no more than 10 health benefit plans that may be sold within the alliance.__At least one health benefit plan must offer coverage equivalent to the state employee health plan as defined under Title 5, section 285.__At least one health benefit plan must be a fee-for-service policy.__ For at least one fee-for-service health benefit plan, there must be an actuarially equivalent managed care health benefit plan.__ The alliance may establish supplemental benefit plans that may be offered through the alliance.__The supplemental plans may cover services not covered in the health benefit plans.

13.__Underserved areas.__The board shall develop standards for designating underserved and rural populations and shall develop standards for determining when a carrier has made all best efforts to extend its service area to and improve access for those populations.__When applicable, all best efforts include good faith negotiation with providers serving underserved and rural populations.

14.__Producers.__The board may establish relationships with producers to facilitate the purchase of health care coverage through the alliance.__The board may offer training and information programs to educate producers on alliance operations and products.

§3406.__Eligible carriers

1.__Qualifications.__To be eligible as a participating carrier, a carrier must be able to demonstrate the following operating characteristics to the board's satisfaction.

A.__The carrier must be licensed by the bureau as authorized to operate in this State.

B.__The carrier must have the ability to provide alliance enrollees with adequate capacity and reasonable access to covered services in any part of the State where that carrier is authorized to do business.

C.__The carrier must have established grievance procedures in accordance with Title 24-A, chapter 56-A.

D.__If the carrier does not have a license to operate in all parts of this State, the carrier must have demonstrated that it has made all best efforts to extend its service area to, and improve access for, rural and underserved populations designated by the board.

E.__The carrier must have the ability, to the satisfaction of the board, to provide the data necessary for reviewing the quality and appropriateness of the care provided.

2.__Selection of carriers.__In evaluating which eligible carriers may participate in the alliance, the board shall consider, in addition to other factors it considers relevant, the following factors:

A.__Pricing and competitiveness of each bid from a carrier;

B.__The effect of contracting with additional carriers on the administrative costs of the alliance and on alliance members, the efficiency of the alliance and the competitiveness of the premiums that will be paid to participating carriers; and

C.__Evidence of quality of care and consumer satisfaction.

3.__Participation.__A participating carrier shall:

A.__Offer one or more standardized health benefit plans authorized by the board pursuant to section 3405, subsection 12;

B.__Provide for collection and reporting to the alliance of information on the effectiveness and outcomes of the health benefit plan in providing selected services;

C.__Accept and renew each health benefit plan with respect to each participating consumer, except in the following cases:

(1)__Nonpayment of the required premiums;

(2)__Willful or deliberate fraud or material misrepresentation by the alliance member; and

(3)__Election by the participating carrier to terminate its contract with the alliance.__The carrier shall provide to the alliance, the bureau and to affected participating consumers, notice of the carrier's decision to terminate its contract with the alliance at least 180 days prior to the nonrenewal of any health benefit plan;

D.__Comply with all rules regarding rating, underwriting, claims handling, sales, solicitation, licensing, fair marketing, unfair trade practices and other provisions in this Title and Title 24-A established by the alliance or adopted by the bureau;

E.__Consistent with the standards set forth in paragraph C, enroll and disenroll participating consumers and dependents as directed by the alliance or its designee;

F.__Agree not to offer lower premium prices to nonmembers of the alliance for the actuarial equivalent of any health benefit plan that the carrier sells to participating consumers; and

G.__Comply with any other requirement established by the board pursuant to this chapter or pursuant to the contract between the alliance and the participating carrier.

4.__Failure to maintain compliance. The board may suspend or revoke the eligibility of any carrier that fails to maintain compliance with the requirements listed in this section.

§3407.__Producer commissions

Commissions paid to a producer for coverage purchased through the alliance must be collected by the producer directly from the purchaser of the producer's services and may not be considered part of the premium collected by the alliance.__A producer may not be paid a commission calculated as a percentage of actual premium cost.__The producer may be paid a commission calculated as a percentage of average premium cost for the relevant enrollment period.__The board shall determine an average premium cost for the relevant enrollment period.

§3408.__Effective date

This chapter takes effect January 1, 2002.

SUMMARY

This bill establishes a purchasing alliance to allow small employers and uninsured individuals access to health insurance on an aggregate group basis.