C. A carrier may vary the premium rate due to family membership.

D. A carrier may vary the premium rate due to age, smoking status, occupation or industry, and geographic area only under the following schedule and within the listed percentage bands up to 10% above or below the community rate filed by the carrier.

(1) For all policies, contracts or certificates that are executed, delivered, issued for delivery, continued or renewed in this State between December 1, 1993 and July 14, 1994, the premium rate may not deviate above or below the community rate filed by the carrier by more than 50%.

(2) For all policies, contracts or certificates that are executed, delivered, issued for delivery, continued or renewed in this State between July 15, 1994 and July 14, 1995, the premium rate may not deviate above or below the community rate filed by the carrier by more than 33%.

(3) For all policies, contracts or certificates that are executed, delivered, issued for delivery, continued or renewed in this State after July 15, 1995, the premium rate may not deviate above or below the community rate filed by the carrier by more than 20%.

E. A separate community rate may be established for individuals eligible for Medicare Part A without paying a premium; however, this rate may not be applied if both the Medicare eligibility date and the issue date are prior to July 1, 2000.

Sec. A-3. 24-A MRSA §2808-B, sub-§1, ¶B, as enacted by PL 1991, c. 861, §2, is amended to read:

B. "Community rate" means the rate to be charged to all eligible groups for small group health plans prior to any adjustments pursuant to subsection 2, paragraphs B-1, C and D.

Sec. A-4. 24-A MRSA §2808-B, sub-§2, ¶B, as amended by PL 1993, c. 477, Pt. B, §1 and affected by Pt. F, §1, is further amended to read:

B. A carrier may not vary the premium rate due to the gender, health status, claims experience or policy duration of the eligible group or members of the group.

Sec. A-5. 24-A MRSA §2808-B, sub-§2, ¶B-1 is enacted to read:

B-1. A carrier may not vary the premium rate due to the health status of the eligible group or members of the group except as permitted under this paragraph.

(1)__A carrier may vary the premium rate up to 30% below the community rate filed by the carrier for an eligible group or members of the group based on a member's maintenance of a healthy lifestyle.

(2)__A carrier may vary the premium rate up to 30% above the community rate filed by the carrier for an eligible group or members of the group based on a member's failure to maintain a healthy lifestyle.

The superintendent shall adopt rules setting forth the appropriate factors a carrier may consider in determining whether a member of a group maintains a healthy lifestyle.__ These factors include, but are not limited to, smoking status, obesity, alcoholism or substance abuse and management of chronic conditions, including diabetes and high blood pressure. Rules adopted pursuant to this paragraph are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.

Sec. A-6. 24-A MRSA §2808-B, sub-§2, ¶D, as amended by PL 1997, c. 445, §14 and affected by §32, is further amended to read:

D. A carrier may vary the premium rate due to age, smoking status, occupation or industry, and geographic area only under the following schedule and within the listed percentage bands up to 10% above or below the community rate filed by the carrier.

(1) For all policies, contracts or certificates that are executed, delivered, issued for delivery, continued or renewed in this State between July 15, 1993 and July 14, 1994, the premium rate may not deviate above or below the community rate filed by the carrier by more than 50%.

(2) For all policies, contracts or certificates that are executed, delivered, issued for delivery, continued

or renewed in this State between July 15, 1994 and July 14, 1995, the premium rate may not deviate above or below the community rate filed by the carrier by more than 33%.

(3) For all policies, contracts or certificates that are executed, delivered, issued for delivery, continued or renewed in this State after July 15, 1995, the premium rate may not deviate above or below the community rate filed by the carrier by more than 20%, except as provided in paragraph D-1.

Sec. A-7. 24-A MRSA §2808-B, sub-§2, ¶D-1, as enacted by PL 1997, c. 445, §14 and affected by §32, is repealed.

Sec. A-8. 24-A MRSA §2808-B, sub-§2, ¶D-2, as reallocated by RR 1997, c. 1, §22, is amended to read:

D-2. Notwithstanding the requirements of paragraph D, rates Rates with respect to employees whose work site is not in this State may be based on area adjustment factors appropriate to that location.

PART B

Sec. B-1. Department of Human Services to apply for waiver. By January 1, 2002, the Department of Human Services shall apply to the United States Department of Health and Human Services, Health Care Financing Administration for a waiver to permit funding under the Medicaid program to allow comprehensive coverage of all residents up to 100% of the official federal nonfarm income poverty line. The Department of Human Services may adopt rules required to implement the waiver program in accordance with this section. Rules adopted pursuant to this section are major substantive rules as defined in the Maine Revised Statutes, Title 5, chapter 375, subchapter II-A.

PART C

Sec. C-1. 36 MRSA §5219-U is enacted to read:

§5219-U. Credit for employee health benefits paid

1.__Credit allowed.__A taxpayer constituting an employing unit is allowed a credit to be computed as provided in this section against the tax imposed by this Part, subject to the limitations contained in subsections 3 and 4.__The credit equals 10% of the amount exceeding $1000 paid for employee health

benefits under a health benefit plan during the taxable year for which the credit is allowed for each qualifying employee.

2.__Definitions.__As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A.__"Employee health benefits" means health benefits and health insurance costs allowable as deductions to the employer under Section 105 of the Code, paid by the taxpayer on behalf of the taxpayer's employees for the benefit of the employees and the employees' dependents.

C.__"Employing unit" has the same meaning as in Title 26, section 1043.

D.__"Health benefit plan" means a plan that includes comprehensive coverage for inpatient and outpatient hospital services; physicians' surgical and medical services; laboratory and x-ray services; and well-baby and well-child care, including age-appropriate immunizations.

E.__"Qualifying employee" means a resident of the State whose average hourly wage is below 1/50 of the State's average annual weekly wage as calculated by the Department of Labor.

3.__Qualifications.__A taxpayer may claim the credit allowed by this section only for those periods during which the following conditions are met:

A.__The taxpayer maintains a health benefit plan that is available to all of the taxpayer's qualifying employees who have been employed for 30 days or more on a schedule that exceeds either 25 hours per week or 1000 hours per year; and

B.__The taxpayer submits documentation from an insurer of the portion of the cost of benefits that qualifies for a credit under this section attributable to coverage of qualifying employees and their dependents.

4.__Limitations; carry-over.__The amount of the credit that may be used by a taxpayer for a taxable year may not exceed 50% of the state income tax otherwise due under this Part for that year.__The unused portion of any credit may be carried over to the following year or years for a period not to exceed 2 years.__ The credit allowable under this section may not be carried back to prior years.

PART D

Sec. D-1. 5 MRSA §12004-E, sub-§4 is enacted to read:

4.__Standard Small Legislative 24-A MRSA

Group Health Plan Per Diem for §2808-C

Commission Public Members

Sec. D-2. 24-A MRSA §2808-C is enacted to read:

§2808-C.__Standard Small Group Health Plan Commission

1.__Definitions.__As used in this section, unless the context indicates otherwise, the following terms have the following meanings.

A. "Carrier" has the same meaning as in section 2808-B, subsection 1, paragraph A.

B. "Commission" means the Standard Small Group Health Plan Commission.

C. "Premium rate" has the same meaning as in section 2808-B, subsection 1, paragraph F.

D. "Small group health plan" has the same meaning as in section 2808-B, subsection 1, paragraph G.

E.__"Standard plan" has the same meaning as in section 2808- B, subsection 8, paragraph A.

2.__Establishment. The Standard Small Group Health Plan Commission, referred to in this section as the "commission," established by Title 5, section 12004-E, subsection 4, is composed of the following 3 members:

A.__The superintendent or the superintendent's designee; and

B.__Two members of the public, one member appointed by the President of the Senate and one member appointed by the Speaker of the House of Representatives.

Each public member of the commission is entitled to compensation pursuant to Title 5, chapter 379.__The commission shall meet from time to time as required to fulfill its responsibilities.__The bureau shall provide staff assistance to the commission.

3.__Duties. The commission shall define a minimum standard small group health plan in addition to the 2 plans defined by

rule by the superintendent under section 2808-B, subsection 8. The minimum standard plan must include the following terms:

A.__The plan must be offered by all carriers offering small group health plans in the State; and

B.__The plan's premium rate may not exceed 10% of the State's average annual wage.

Notwithstanding any other provision of law, the commission has the authority to define a minimum standard small group health plan that does not include certain or all health benefits mandated by state law if the exclusion of the mandated benefit or benefits is necessary to meet the requirement of paragraph B.

PART E

Sec. E-1. 22 MRSA §1578-B, sub-§2, as enacted by PL 1987, c. 687, is amended to read:

2. Prohibition. Except as provided in subsections 3 and 4, no student or school employee is allowed to use tobacco in the buildings or on the grounds of any elementary or secondary school while school is in session.

Sec. E-2. 22 MRSA §1578-B, sub-§5, as amended by PL 1993, c. 342, §4 and affected by §9, is further amended to read:

5. Public. Tobacco use by any member of the public, other than an employee or student, in school buildings and on school grounds is governed by chapter 262 prohibited.

SUMMARY

This bill does the following.

In Part A, the bill authorizes health insurance carriers to vary premium rates up to 10% above or below the community rate filed by a carrier based on age and eliminates the ability of carriers to vary the premium rate based on smoking status, geographic area or occupation and industry for individual and small group health plans. The bill also authorizes a carrier to vary the premium rate up to 30% above or below the community rate based on the ability of an individual to maintain a healthy lifestyle. The bill identifies the factors that may be considered by a carrier in determining whether an individual maintains a healthy lifestyle as smoking status, obesity, alcohol

or substance abuse and the management of chronic conditions such as diabetes and high blood pressure.

In Part B, the bill directs the Department of Human Services to apply for a waiver from the federal Department of Health and Human Services, Health Care Financing Administration to allow comprehensive coverage under Medicaid for residents of the State with an income up to 100% of the official federal nonfarm poverty line.

In Part C, the bill establishes a tax credit for employers that provide health benefits to their employees and their dependents. The bill allows a credit of 10% of the amount paid for health benefits in excess of $1,000 for each qualifying employee under a health benefit plan for the taxable year. The bill defines a "qualifying employee" as one whose hourly wage is below 1/50th of the State's average annual weekly wage.

In Part D, the bill establishes the Standard Small Group Health Plan Commission and directs the commission to define by rule a minimum standard small group health plan. The bill requires that the plan's premium not exceed 10% of the State's average annual wage.

In Part E, the bill bans smoking and other tobacco use by students, school employees and the public in school buildings and on school grounds.