Maine Notes Aetna to Refund Small Employers

Maine's Bureau of Insurance announced that Aetna Life Insurance Company, an insurer of Preferred Provider Organization (PPO) plans in Maine, will refund approximately $6.6 million to small employers as a result of Dirigo Health’s rate regulation in the small group health insurance market. The refund represents a portion of the premium paid by small employers from July 1, 2004 through June 30, 2007. “The law establishing Dirigo Health gives insurers of small groups the option to either submit rates for prior approval or guarantee that at least 78% of premiums collected will be paid out in claims,” stated acting Insurance Superintendent Eric Cioppa. “Insurers must review premiums and related medical costs on a rolling 36-month time frame. Those who choose the guarantee option and find they do not meet the targeted 78% must refund the difference to employers.” All the major insurers that offer small group coverage chose the guarantee option and returned at least 78% of premiums to policyholders. Most paid claims totaling 78% or more. Aetna Life met the 78% target through a combination of claim payments and premium refunds. Every year, insurers will have to review the prior three years of premium levels in comparison to related medical claims. If claims are less than 78% of premiums, further refunds will be required. The refunds do not include HMO plans issued by Aetna Health, which met the 78% target.