The Florida Senate

641.3922  Conversion contracts; conditions.--Issuance of a converted contract shall be subject to the following conditions:

(1)  TIME LIMIT.--Written application for the converted contract shall be made and the first premium paid to the health maintenance organization not later than 63 days after such termination. However, if termination was the result of failure to pay any required premium or contribution and such nonpayment of premium was due to acts of an employer or group contract holder other than the employee or individual subscriber, written application for the contract must be made and the first premium must be paid not later than 63 days after notice of termination is mailed by the organization or the employer, whichever is earlier, to the employee's or individual's last address as shown by the record of the organization or the employer, whichever is applicable. In such case of termination due to nonpayment of premium by the employer or group contract holder, the premium for the converted contract may not exceed the rate for the prior group coverage for the period of coverage under the converted contract prior to the date notice of termination is mailed to the employee or individual subscriber. For the period of coverage after such date, the premium for the converted contract is subject to the requirements of subsection (3).

(2)  EVIDENCE OF INSURABILITY.--The converted contract shall be issued without evidence of insurability.

(3)  CONVERSION PREMIUM.--The premium for the converted contract shall be determined in accordance with premium rates applicable to the age and class of risk of each person to be covered under the converted contract and to the type and amount of coverage provided. However, the premium for the converted contract may not exceed 200 percent of the standard risk rate, as established by the office under s. 627.6675(3). The mode of payment for the converted contract shall be quarterly or more frequently at the option of the organization, unless otherwise mutually agreed upon between the subscriber and the organization.

(4)  EFFECTIVE DATE OF COVERAGE.--The effective date of the converted contract shall be the day following the termination of coverage under the group health maintenance contract. However, until application is made and the first premium is paid, the health maintenance organization may charge the subscriber, on a fee-for-service basis, for any services rendered to the subscriber after the date in which the subscriber ceases to be eligible under the group health maintenance contract. When application is made and the first premium is paid, the organization shall reimburse the subscriber for any payment made by the subscriber for covered services under the converted contract.

(5)  SCOPE OF COVERAGE.--The converted contract shall cover the subscriber or dependents who were covered by the group health maintenance contract on the date of termination of coverage. At the option of the health maintenance organization, a separate converted contract may be issued to cover any dependent.

(6)  OPTIONAL COVERAGE.--The health maintenance organization shall not be required to issue a converted contract covering any person if such person is or could be covered by Medicare, Title XVIII of the Social Security Act, as added by the Social Security Amendments of 1965, or as later amended or superseded. Furthermore, the health maintenance organization shall not be required to issue a converted health maintenance contract covering any person if:

(a)1.  The person is covered for similar benefits by another hospital, surgical, medical, or major medical expense insurance policy or hospital or medical service subscriber contract or medical practice or other prepayment plan or by any other plan or program;

2.  The person is eligible for similar benefits, whether or not covered therefor, under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis; or

3.  Similar benefits are provided for or are available to the person pursuant to or in accordance with the requirements of any state or federal law; and

(b)  A converted health maintenance contract may include a provision whereby the health maintenance organization may request information, in advance of any premium due date of a health maintenance contract, of any person covered thereunder as to whether:

1.  She or he is covered for similar benefits by another hospital, surgical, medical, or major medical expense insurance policy or hospital or medical service subscriber contract or medical practice or other prepayment plan or by any other plan or program;

2.  She or he is covered for similar benefits under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis; or

3.  Similar benefits are provided for or are available to the person pursuant to or in accordance with the requirements of any state or federal law.

(7)  REASONS FOR CANCELLATION; TERMINATION.--The converted health maintenance contract must contain a cancellation or nonrenewability clause providing that the health maintenance organization may refuse to renew the contract of any person covered thereunder, but cancellation or nonrenewal must be limited to one or more of the following reasons:

(a)  Fraud or intentional misrepresentation, subject to the limitations of s. 641.31(23), in applying for any benefits under the converted health maintenance contract;

(b)  Disenrollment for cause, after following the procedures outlined in s. 641.3921(4).

(c)  Willful and knowing misuse of the health maintenance organization identification membership card by the subscriber or the willful and knowing furnishing to the organization by the subscriber of incorrect or incomplete information for the purpose of fraudulently obtaining coverage or benefits from the organization.

(d)  Failure, after notice, to pay required premiums.

(e)  The subscriber has left the geographic area of the health maintenance organization with the intent to relocate or establish a new residence outside the organization's geographic area.

(f)  A dependent of the subscriber has reached the limiting age under the converted contract, subject to subsection (12); but the refusal to renew coverage shall apply only to coverage of the dependent, except in the case of handicapped children.

(g)  A change in marital status that makes a person ineligible under the original terms of the converted contract, subject to subsection (12).

(8)  BENEFITS OFFERED.--A health maintenance organization shall not be required to issue a converted contract which provides benefits in excess of those provided under the group health maintenance contract from which conversion is made. The converted health maintenance contract shall meet the requirements of law pertaining to health maintenance contracts and shall include a level of benefits for minimum services which is substantially similar to the level of benefits for these services included in the group health maintenance organization contract from which the termination is made.

(9)  PREEXISTING CONDITION PROVISION.--The converted health maintenance contract shall not exclude a preexisting condition not excluded by the group contract. However, the converted health maintenance contract may provide that any coverage benefits thereunder may be reduced by the amount of any coverage or benefits under the group health maintenance contract after the termination of the person's coverage or benefits thereunder. The converted health maintenance contract may also include provisions so that during the first coverage year the coverage or benefits under the converted contract, together with the coverage or benefits under the group health maintenance contract, shall not exceed those that would have been provided had the individual's coverage or benefits under the group contract remained in force and effect.

(10)  ALTERNATE PLANS.--The health maintenance organization shall offer a standard health benefit plan as established pursuant to s. 627.6699(12). The health maintenance organization may, at its option, also offer alternative plans for group health conversion in addition to those required by this section, provided any alternative plan is approved by the office or is a converted policy, approved under s. 627.6675 and issued by an insurance company authorized to transact insurance in this state. Approval by the office of an alternative plan shall be based on compliance by the alternative plan with the provisions of this part and the rules promulgated thereunder, applicable provisions of the Florida Insurance Code and rules promulgated thereunder, and any other applicable law.

(11)  RETIREMENT COVERAGE.--In the event that coverage would be continued under the group health maintenance contract on an employee following the employee's retirement prior to the time she or he is or could be covered by Medicare, the employee may elect, in lieu of such continuation of group coverage, to have the same conversion rights as would apply had her or his coverage terminated at retirement by reason of termination of employment or membership.

(12)  CONVERSION PRIVILEGE ALLOWED.--Subject to the conditions set forth above, the conversion privilege shall also be available:

(a)  To the surviving spouse, if any, at the death of the subscriber, with respect to the spouse and such children whose coverages under the group health maintenance contract terminate by reason of such death, otherwise to each surviving child whose coverage under the group health maintenance contract terminates by reason of such death or, if the group contract provides for continuation of dependents' coverages following the subscriber's death, at the end of such continuation;

(b)  To the former spouse whose coverage would otherwise terminate because of annulment or dissolution of marriage, if the former spouse is dependent for financial support;

(c)  To the spouse of the subscriber upon termination of coverage of the spouse, while the subscriber remains covered under the group health maintenance contract, by reason of ceasing to be a qualified family member under the group health maintenance contract, with respect to the spouse and such children whose coverages under the group health maintenance contract terminate at the same time; or

(d)  To a child solely with respect to herself or himself upon termination of the child's coverage by reason of ceasing to be a qualified family member under the group health maintenance contract or under any converted contract, if a conversion privilege is not otherwise provided above with respect to such termination.

(13)  GROUP COVERAGE IN LIEU OF INDIVIDUAL COVERAGE.--The health maintenance organization may elect to provide group health maintenance organization coverage through a group converted contract in lieu of the issuance of an individual converted contract.

(14)  NOTIFICATION.--A notification of the conversion privilege shall be included in each health maintenance contract and in any certificate or member's handbook. The organization shall mail an election and premium notice form, including an outline of coverage, on a form approved by the office, within 14 days after any individual who is eligible for a converted health maintenance contract gives notice to the organization that the individual is considering applying for the converted contract or otherwise requests such information. The outline of coverage must contain a description of the principal benefits and coverage provided by the contract and its principal exclusions and limitations, including, but not limited to, deductibles and coinsurance.

History.--ss. 44, 47, ch. 85-177; ss. 130, 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 491, ch. 97-102; s. 30, ch. 97-179; s. 27, ch. 98-159; s. 15, ch. 99-204; s. 9, ch. 99-275; s. 14, ch. 99-393; s. 1598, ch. 2003-261.