Project Results

Public Policy Goal:

To stabilize and strengthen Maine's workers' compensation insurance market by authorizing pilot programs in the development and implementation of integrated health and workers' compensation insurance programs.

Project Objective:

To establish and evaluate projects that integrate occupational and non-occupational health benefits. Project parameters also provide for integration of occupational and non-occupational indemnity benefits and the evaluation of the costs and effectiveness of these projects.

Project Description:

This project involved the development of 24-hour coverage pilot projects, including the establishment of a planning task force; hiring of a consultant to expedite implementation and participation of vendors and purchasers; and setting up an evaluation program by researchers from the University of Southern Maine. Enabling legislation was enacted in 1993.

Key Findings or Accomplishments:

Only one 24 -hour pilot project was submitted to the Maine Department of Insurance for approval. That project never moved forward due to the change of ownership of one of the partners.

Benefits of this project were in the lessons learned about the road blocks encountered in establishing integrated occupational and non-occupational health coverage.
These were:

1. The pilot rules required employee consent for participation, impacting any potential administrative savings since an employer still had to offer a traditional plan as well as an integrated or coordinated plan;
2. ERISA issues made it difficult to determine whether the state or the federal government would have jurisdiction over an integrated occupational and non occupational plan;
3. The Maine AFL/CIO filed suit in Superior Court challenging the Bureau's rule to implement 24-hour coverage. The union opposed the manner in which the Bureau intended to implement the pilot 24-hour provision of the Maine statute;
4. Maine insurance rates decreased over the project period (decreasing 34%), making the idea of integrated coverage to reduce costs not as attractive to the market;
5. Legislative activity during the study period led potential participants to be skeptical that the pilot would continue, making them less willing to invest in a pilot;
6. An integrated product does not appear to reduce all the administrative burden for providers and carriers as occupational injuries are still required to be filed with the state and the providers and carriers would still be subject to the administrative rules and regulations of both the health and the workers' compensation regulators;
7. The challenges of mixing an occurrance based coverage (workers compensation) with a policy year coverage (health) and determining the proper pricing of the product requires special expertise and presented unique problems for the industry;
8. Training traditional health providers to the responsibilities and obligations of the workers' compensation system (disability evaluations and communication with the employer, etc.) requires some expenses for traditional health carriers thinking about providing integrated products; and
9. Coordinating fee-for-service and capitated provider payment plans creates more administration and required knowledge on the part of billing and accounting personnel.

Reports and Publications:

Maine's 24-Hour Coverage Pilot Project: Completed Grant Report to The Robert Wood Johnson Foundation