Sec. 1. 22 MRSA §3174-T, sub-§2, śC, as reallocated by RR 1997, c. 2, §46, is amended by adding at the end a new paragraph to read:

C. All children resident in the State are eligible except a child who:

(1) Is eligible for coverage under the Medicaid program;

(2) Is covered under a group health insurance plan or under health insurance, as defined in Section 2791 of the federal Public Health Service Act, 42 United States Code, Section 300gg(c) (Supp. 1997);

(3) Is a member of a family that is eligible under Title 5, section 285 for health coverage under the state employee health insurance program;

(4) Is an inmate in a public institution or a patient in an institution for mental diseases; or

(5) Within the 3 months prior to application for coverage under the Cub Care program, was insured or otherwise provided coverage under an employer-based health plan for which the employer paid 50% or more of the cost for the child's coverage, except that this subparagraph does not apply if:

(a) The cost to the employee of coverage for the family exceeds 10% of the family's income;

(b) The parent lost coverage for the child because of a change in employment, termination of coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, COBRA, of the Employee Retirement Income Security Act of 1974, as amended, 29 United States Code, Sections 1161 to 1168 (Supp. 1997) or termination for a reason not in the control of the employee; or

(c) The department has determined that grounds exist for a good-cause exception.

Notwithstanding this paragraph, a child may not be deemed ineligible for coverage under the Cub Care program solely because the child is covered under a privately provided catastrophic insurance policy or contract designed to supplement coverage under the Cub Care program.