CHAPTER 400
S.P. 379 - L.D. 1217
An Act to Create Uniform Underwriting Standards for Determining Eligibility for Certain Group Policies
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 24-A MRSA §2808-B, sub-§1, ¶D, as repealed and replaced by PL 1997, c. 445, §12 and affected by §32, is amended to read:
D. "Eligible group" means any person, firm, corporation, partnership, association or subgroup engaged actively in a business that employed an average of 50 or fewer eligible employees during the preceding calendar year, more of whom are employed within this State than in any other state.
(1) If an employer was not in existence throughout the preceding calendar year, the determination must be based on the average number of employees that the employer is reasonably expected to employ on business days in the current calendar year.
(2) In determining the number of eligible employees, companies that are affiliated companies or that are eligible to file a combined tax return for purposes of state taxation are considered one employer.
(3) An employer qualifies as an eligible group for 2-person coverage if the employer provides a carrier with the following information demonstrating that the employer's business and employees meet the minimum qualifications for group coverage in paragraph C:
(a) A copy of the most recent quarterly combined filing for income tax withholding and unemployment contributions, Form 941/CN1-ME;
(b) For an employee claimed to be an employee eligible for group coverage whose name is not listed on Form 941/CN1-ME, a copy of the employer's payroll records for the most recent 3 months showing tax withholding or a wage report from a payroll company showing wages paid to that employee for the most recent quarter with tax withholding;
(c) If an employer is exempt from filing Form 941/CN1-ME for group coverage, documentation of that exemption and a copy of the employer's payroll records for the most recent 3 months showing tax withholding or a wage report from a payroll company showing wages paid to that employee for the most recent quarter with tax withholding; or
(d) If the name of the business owner or employee does not appear on Form 941/CN1-ME, a copy of one of the following:
(i) Federal income tax Form Schedule C or Schedule F;
(ii) Federal income tax Form 1120S, Schedule K-1;
(iii) Federal income tax Form 1065, Schedule K-1;
(iv) A workers' compensation insurance audit or evidence of a waiver of benefits under Title 39-A;
(v) A description of operations in a commercial general liability insurance policy or equivalent insurance policy providing coverage for the business; or
(vi) A signature card from a financial institution or credit union authorizing the employee to sign checks on a business checking or share draft account that is at least 6 months old; a notarized affidavit from the employer describing the duties of the employee and the average number of hours worked by the employee and attesting that the employer is not defrauding the carrier and is aware of the consequences of committing fraud or making a material misrepresentation to the carrier, including a loss of coverage and benefits; and, if the group coverage is purchased through a producer, a notarized affidavit from the producer affirming the producer's belief that the employer qualifies as an eligible group for coverage.
In determining if a new business or a business that adds an owner or a new employee to payroll during the course of a year qualifies as an eligible group for 2-person coverage under this subparagraph, the employer must submit an affidavit stating that all employees meet the criteria in this subparagraph and that the documentation and forms required under this subparagraph will be provided to the carrier when payroll records become available, when ownership distribution forms become available or the first renewal date of the coverage, whichever date is earlier. A false affidavit or misrepresentation on an affidavit submitted by an employer may result in the loss of group coverage and repayment of claims paid. This subparagraph may not be construed to prohibit a carrier from recognizing an employer as an eligible group if the employer has not produced the documentation required in this subparagraph.
Sec. 2. Application. This Act applies only to an employer applying for group health insurance coverage as a 2-person group on or after October 1, 2001.
Effective September 21, 2001, unless otherwise indicated.
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