Sec. 1. 24-A MRSA §2807-B is enacted to read:

§2807-B.__Small employer groups

A group of small employers may be insured under a policy issued to an association of small employers or to a trust or to the trustees of a fund established, created or maintained for the benefit of members of one or more associations of small employers. Notwithstanding any other provision of this Title, an association or association of small employers may be formed pursuant to this section for no other purpose than that of obtaining insurance.__For purposes of this section, "small employer" means an employer with 100 or fewer employees.__The policy is subject to the following requirements.

1.__Authorization.__The policy may insure members of the association or associations of small employers, employees thereof or employees of members or one or more of the preceding or all of any class or classes thereof for the benefit of persons other than the employees' employer.

2.__Premiums.__The premium for the policy must be paid from funds contributed by the association or associations or by small employer members, or by both, or from funds contributed by the covered persons or from both the covered persons and the association, associations or small employer members.

3.__Eligibility.__Except as provided in subsection 4, a policy on which no part of the premium is to be derived from funds contributed by the covered persons specifically for their insurance must insure all eligible persons, except those who reject that coverage in writing.

4__Exclusion or limitation.__Except as provided in section 2736-C, section 2808-B and chapter 36, an insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.

Sec. 2. 24-A MRSA §2808, first ¶, as repealed and replaced by PL 1981, c. 147, §8, is amended to read:

Group health insurance offered to a resident of this State under a group health insurance policy issued to a group other than one described in sections 2804 to 2807-A 2807-B is subject to the following requirements.