New Bulletin Revises Counting Methodology for Small and Large Group Markets in Maine

On July 23, 2019, the Bureau of Insurance published Bulletin 436, which supersedes Bulletin 409. According to the bulletin, whether a particular employer is considered "large" or "small" depends on the counting methodology; the bulletin withdraws previous guidance (issued under Bulletin 409) and reinstates the so-called "head count" methodology formerly used in Maine.

As background, Maine's small group health plan law applies to all employers with 50 or fewer eligible employees. By contrast, ACA and CMS rules require carriers offering small group health plans on the SHOP exchange to determine eligibility by using full-time equivalent (FTE) counting methodology for part-time employees. Thus, it would be possible for a business that has a significant number of employees, but only a few of them working enough hours to be eligible for coverage, to be a "small" employer under pre-ACA Maine law, but ineligible to participate in the SHOP exchange because it's a large employer under the ACA and CMS rules.

According to an example, if an employer has 10 full-time employees and 75 employees working 20 hours per week, it has 10 eligible employees but has 60 or more FTE employees. Use of the FTE methodology means that this employer is ineligible for community rated small group coverage and must be individually rated, even if there can never be more than 10 covered employees on the plan. According to the bulletin, it's unfair to both the employer and the carrier to require experience rating when the employer's risk pool is too small to generate any credible loss history — employers, producers, and carriers have all expressed concerns to the Bureau.

As a result, the Bureau is using its discretion to reinstate the old methodology, which accounts for part-time employees by including them if and only if they are eligible for coverage under the group health insurance policy. All employers with in-force policies are entitled to maintain that coverage until the end of the current policy term, if they choose, and carriers can honor all outstanding offers of small or large group coverage.

Except for employers with offers of new or renewal coverage outstanding or in progress, or employers applying for coverage through the SHOP exchange, carriers should transition at the earliest date (and no later than September 1, 2019) to consistent application of the "eligible employee" counting methodology for purposes of access to community-rated coverage under Maine's small group health plan law.

Bulletin 436 »