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Maine employers disbanding health care captive

Posted On: Dec. 10, 2015 12:00 AM CST

The first of its kind, and reportedly only existing, captive formed to provide health care coverage for employer groups, announced Tuesday it is closing its doors at the end of the year.

The Maine Wellness Association Captive, MaineSense, is an employer-owned health insurance nonprofit in the state of Maine that was made possible due to a 2011 amendment to Maine's captive law that state's lawmakers passed because employers wanted to reduce health care costs for employees and provide a better health care system.

Justin Ward, executive vice president of Patient Advocates L.L.C., a health insurance plan administrator in Gray, Maine, that administered MaineSense confirmed that the captive health care coverage provider could not manage to remain operating in light of the unforeseen volume of frequency and large claims that were received since opening Jan. 1, 2012.

“They just couldn't get the numbers, and it wasn't viable,” Eric Cioppa superintendent of Maine's Bureau of Insurance said. “The employers were very experienced in writing self-insured worker comp programs, and they were not satisfied with the health insurance market and so they wanted to translate that experience into the health insurance market, but they had some significant claims that they hadn't anticipated.”

It was decided by board members of the Maine Wellness Association Captive a few months ago that they would need to shut down, according to Mr. Cioppa. The program's end date is scheduled for Dec. 31, but he said existing claims will be met. “They are responsible employers and they're going to follow through on paying all of their bills before they do away with the program. “

Business Insurance reported in 2014 that since its 2012 inception, MaineSense had grown to 50 employer members which provided health coverage to 4,500 employees and their dependents.