Senate Bill 1800c2
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Florida Senate - 1998 CS for CS for SB 1800
By the Committees on Health Care, Banking and Insurance and
Senator Diaz-Balart
317-1947-98
1 A bill to be entitled
2 An act relating to health insurance; amending
3 s. 222.21, F.S.; exempting moneys paid into a
4 Roth individual retirement account from
5 creditors' claims; amending s. 222.22, F.S.;
6 exempting moneys paid into a Medical Savings
7 Account from attachment, garnishment, or legal
8 process; amending s. 627.410, F.S.; exempting
9 certain policies from rating requirements;
10 amending s. 627.6425, F.S.; specifying
11 exceptions to guaranteed renewability of
12 individual health insurance policies; amending
13 s. 627.6487, F.S.; redefining the term
14 "eligible individual" for purposes of
15 guaranteed-issuance of an individual health
16 insurance policy; amending s. 627.6498, F.S.;
17 requiring the Department of Insurance to
18 annually establish standard risk rates for
19 purposes of determining premium rates of
20 coverage issued by the Florida Comprehensive
21 Health Association; amending s. 627.6571, F.S.;
22 specifying exceptions to guaranteed
23 renewability of group health insurance
24 policies; amending s. 627.6675, F.S.; requiring
25 the Department of Insurance to annually
26 establish standard risk rates for purposes of
27 determining maximum premiums for conversion
28 policies; revising standards for renewal of
29 converted insurance policies; requiring the
30 insurer to mail certain information to a person
31 eligible for a converted policy, upon request;
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1 creating s. 627.6685, F.S.; requiring health
2 insurers and health maintenance organizations
3 to include in their plans that offer mental
4 health coverage certain mental health benefits
5 that are not less favorable than those for
6 medical or surgical benefits covered by the
7 plan; defining terms; providing exemptions;
8 limiting applicability of this section;
9 amending s. 627.6699, F.S.; redefining the term
10 "health benefit plan" as used in the Employee
11 Health Care Access Act; amending s. 627.674,
12 F.S.; revising the minimum standards for
13 Medicare Supplement policies; amending s.
14 627.6741, F.S.; revising requirements for
15 insurers to issue, cancel, nonrenew, and
16 replace Medicare supplement policies;
17 restricting preexisting-condition exclusions;
18 authorizing the Department of Insurance to
19 adopt rules governing guaranteed issue of
20 Medicare supplement coverage for continuously
21 covered individuals; amending s. 627.9403,
22 F.S.; specifying the provisions of the
23 Long-term Care Insurance Act that apply to
24 limited benefit policies; amending s. 627.9404,
25 F.S.; defining the terms "limited benefit
26 policy" and "qualified long-term care limited
27 benefit insurance policy"; amending s.
28 627.9407, F.S.; revising the requirements for
29 exclusion of coverage for preexisting
30 conditions for long-term care policies;
31 requiring limited-benefit policies to contain a
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1 disclosure statement regarding their
2 qualification for favorable tax treatment;
3 amending s. 627.94073, F.S.; revising the
4 notice requirement for long-term care policies
5 regarding the right to designate a secondary
6 person to receive notice of lapse of coverage;
7 amending s. 641.225, F.S.; increasing surplus
8 requirements for health maintenance
9 organizations; amending s. 641.285, F.S.;
10 increasing deposit requirements for health
11 maintenance organizations; revising exceptions;
12 amending s. 641.26, F.S.; requiring health
13 maintenance organizations to file certain
14 reports with the Department of Insurance;
15 requiring that health maintenance organizations
16 provide additional information upon the request
17 of the department; amending s. 641.31074, F.S.;
18 revising requirements for guaranteed
19 renewability of a health maintenance
20 organization contract; amending s. 641.3111,
21 F.S.; requiring health maintenance organization
22 contracts to provide for an extension of
23 benefits upon termination of the contract;
24 amending s. 641.316, F.S.; revising the amount
25 of the bond that a fiscal intermediary services
26 organization is required to maintain;
27 specifying certain additional requirements and
28 conditions for the bond and the intermediary;
29 amending s. 641.3922, F.S.; revising the method
30 for establishing the maximum premium for
31 converted contracts issued by health
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1 maintenance organizations; revising the
2 exceptions to guaranteed renewability of
3 converted health maintenance organization
4 contracts; requiring a health maintenance
5 organization to mail certain information to a
6 person eligible for a converted contract;
7 amending s. 641.495, F.S.; exempting from
8 licensure under part I of ch. 395, F.S.,
9 certain beds of a health maintenance
10 organization; providing an effective date.
11
12 Be It Enacted by the Legislature of the State of Florida:
13
14 Section 1. Paragraph (a) of subsection (2) of section
15 222.21, Florida Statutes, is amended to read:
16 222.21 Exemption of pension money and retirement or
17 profit-sharing benefits from legal processes.--
18 (2)(a) Except as provided in paragraph (b), any money
19 or other assets payable to a participant or beneficiary from,
20 or any interest of any participant or beneficiary in, a
21 retirement or profit-sharing plan that is qualified under s.
22 401(a), s. 403(a), s. 403(b), s. 408, s. 408A, or s. 409 of
23 the Internal Revenue Code of 1986, as amended, is exempt from
24 all claims of creditors of the beneficiary or participant.
25 Section 2. Section 222.22, Florida Statutes, is
26 amended to read:
27 222.22 Exemption of moneys in the Prepaid
28 Postsecondary Education Expense Trust Fund and in a Medical
29 Savings Account from legal process.--
30 (1) Moneys paid into or out of the Prepaid
31 Postsecondary Education Expense Trust Fund by or on behalf of
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1 a purchaser or qualified beneficiary pursuant to an advance
2 payment contract made under s. 240.551, which contract has not
3 been terminated, are not liable to attachment, garnishment, or
4 legal process in the state in favor of any creditor of the
5 purchaser or beneficiary of such advance payment contract.
6 (2) Moneys paid into or out of a Medical Savings
7 Account by or on behalf of a person depositing money into such
8 account or a qualified beneficiary are not liable to
9 attachment, garnishment, or legal process in the state in
10 favor of any creditor of such person or beneficiary of such
11 Medical Savings Account.
12 Section 3. Subsection (6) of section 627.410, Florida
13 Statutes, is amended to read:
14 627.410 Filing, approval of forms.--
15 (6)(a) An insurer shall not deliver or issue for
16 delivery or renew in this state any health insurance policy
17 form until it has filed with the department a copy of every
18 applicable rating manual, rating schedule, change in rating
19 manual, and change in rating schedule; if rating manuals and
20 rating schedules are not applicable, the insurer must file
21 with the department applicable premium rates and any change in
22 applicable premium rates.
23 (b) The department may establish by rule, for each
24 type of health insurance form, procedures to be used in
25 ascertaining the reasonableness of benefits in relation to
26 premium rates and may, by rule, exempt from any requirement of
27 paragraph (a) any health insurance policy form or type thereof
28 (as specified in such rule) to which form or type such
29 requirements may not be practically applied or to which form
30 or type the application of such requirements is not desirable
31 or necessary for the protection of the public. With respect to
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1 any health insurance policy form or type thereof which is
2 exempted by rule from any requirement of paragraph (a),
3 premium rates filed pursuant to ss. 627.640 and 627.662 shall
4 be for informational purposes.
5 (c) Every filing made pursuant to this subsection
6 shall be made within the same time period provided in, and
7 shall be deemed to be approved under the same conditions as
8 those provided in, subsection (2).
9 (d) Every filing made pursuant to this subsection,
10 except disability income policies and accidental death
11 policies, shall be prohibited from applying the following
12 rating practices:
13 1. Select and ultimate premium schedules.
14 2. Premium class definitions which classify insured
15 based on year of issue or duration since issue.
16 3. Attained age premium structures on policy forms
17 under which more than 50 percent of the policies are issued to
18 persons age 65 or over.
19 (e) Except as provided in subparagraph 1., an insurer
20 shall continue to make available for purchase any individual
21 policy form issued on or after October 1, 1993. A policy form
22 shall not be considered to be available for purchase unless
23 the insurer has actively offered it for sale in the previous
24 12 months.
25 1. An insurer may discontinue the availability of a
26 policy form if the insurer provides to the department in
27 writing its decision at least 30 days prior to discontinuing
28 the availability of the form of the policy or certificate.
29 After receipt of the notice by the department, the insurer
30 shall no longer offer for sale the policy form or certificate
31 form in this state.
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1 2. An insurer that discontinues the availability of a
2 policy form pursuant to subparagraph 1. shall not file for
3 approval a new policy form providing similar benefits as the
4 discontinued form for a period of 5 years after the insurer
5 provides notice to the department of the discontinuance. The
6 period of discontinuance may be reduced if the department
7 determines that a shorter period is appropriate.
8 3. The experience of all policy forms providing
9 similar benefits shall be combined for all rating purposes.
10 Section 4. Paragraph (a) of subsection (3) of section
11 627.6425, Florida Statutes, is amended to read:
12 627.6425 Renewability of individual coverage.--
13 (3)(a) In any case in which an insurer decides to
14 discontinue offering a particular policy form for health
15 insurance coverage offered in the individual market, coverage
16 under such form may be discontinued by the insurer only if:
17 1. The insurer provides notice to each covered
18 individual provided coverage under this policy form in the
19 individual market of such discontinuation at least 90 days
20 prior to the date of the nonrenewal discontinuation of such
21 coverage;
22 2. The insurer offers to each individual in the
23 individual market provided coverage under this policy form the
24 option to purchase any other individual health insurance
25 coverage currently being offered by the insurer for
26 individuals in such market in the state; and
27 3. In exercising the option to discontinue coverage of
28 this policy form and in offering the option of coverage under
29 subparagraph 2., the insurer acts uniformly without regard to
30 any health-status-related factor of enrolled individuals or
31 individuals who may become eligible for such coverage.
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1 Section 5. Subsection (3) of section 627.6487, Florida
2 Statutes, is amended to read:
3 627.6487 Guaranteed availability of individual health
4 insurance coverage to eligible individuals.--
5 (3) For the purposes of this section, the term
6 "eligible individual" means an individual:
7 (a)1. For whom, as of the date on which the individual
8 seeks coverage under this section, the aggregate of the
9 periods of creditable coverage, as defined in s. 627.6561(5)
10 and (6), is 18 or more months; and
11 2.a. Whose most recent prior creditable coverage was
12 under a group health plan, governmental plan, or church plan,
13 or health insurance coverage offered in connection with any
14 such plan; or
15 b. Whose most recent prior creditable coverage was
16 under an individual plan issued by a health insurer or health
17 maintenance organization, which coverage is terminated due to
18 the insurer or health maintenance organization becoming
19 insolvent or discontinuing the offering of all individual
20 coverage in the state, or due to the insured no longer living
21 in the service area of the insurer or health maintenance
22 organization that provides coverage through a network plan;
23 (b) Who is not eligible for coverage under:
24 1. A group health plan, as defined in s. 2791 of the
25 Public Health Service Act;
26 2. A conversion policy under s. 627.6675 or s.
27 641.3921;
28 3. Part A or part B of Title XVIII of the Social
29 Security Act; or
30
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1 4. A state plan under Title XIX of such act, or any
2 successor program, and does not have other health insurance
3 coverage;
4 (c) With respect to whom the most recent coverage
5 within the coverage period described in paragraph (1)(a) was
6 not terminated based on a factor described in s.
7 627.6571(2)(a) or (b), relating to nonpayment of premiums or
8 fraud, unless such nonpayment of premiums or fraud was due to
9 acts of an employer or person other than the individual;
10 (d) Who, having been offered the option of
11 continuation coverage under a COBRA continuation provision or
12 under s. 627.6692, elected such coverage; and
13 (e) Who, if the individual elected such continuation
14 provision, has exhausted such continuation coverage under such
15 provision or program.
16 Section 6. Paragraph (a) of subsection (4) of section
17 627.6498, Florida Statutes, is amended to read:
18 627.6498 Minimum benefits coverage; exclusions;
19 premiums; deductibles.--
20 (4) PREMIUMS, DEDUCTIBLES, AND COINSURANCE.--
21 (a) The plan shall provide for annual deductibles for
22 major medical expense coverage in the amount of $1,000 or any
23 higher amounts proposed by the board and approved by the
24 department, plus the benefits payable under any other type of
25 insurance coverage or workers' compensation. The schedule of
26 premiums and deductibles shall be established by the
27 association. With regard to any preferred provider arrangement
28 utilized by the association, the deductibles provided in this
29 paragraph shall be the minimum deductibles applicable to the
30 preferred providers and higher deductibles, as approved by the
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1 department, may be applied to providers who are not preferred
2 providers.
3 1. Separate schedules of premium rates based on age
4 may apply for individual risks.
5 2. Rates are subject to approval by the department.
6 3. Standard risk rates for coverages issued by the
7 association shall be established by the department, pursuant
8 to s. 627.6675(3) association, subject to approval by the
9 department, using reasonable actuarial techniques, and shall
10 reflect anticipated experience and expenses of such coverages
11 for standard risks.
12 4. The board shall establish separate premium
13 schedules for low-risk individuals, medium-risk individuals,
14 and high-risk individuals and shall revise premium schedules
15 annually pursuant to this section for each 6-month policy
16 period beginning January 1999 1992. For the calendar year 1991
17 and thereafter, No rate shall exceed 200 percent of the
18 standard risk rate for low-risk individuals, 225 percent of
19 the standard risk rate for medium-risk individuals, or 250
20 percent of the standard risk rate for high-risk individuals.
21 For the purpose of determining what constitutes a low-risk
22 individual, medium-risk individual, or high-risk individual,
23 the board shall consider the anticipated claims payment for
24 individuals based upon an individual's health condition.
25 Section 7. Paragraphs (a) and (b) of subsection (3) of
26 section 627.6571, Florida Statutes, are amended to read:
27 627.6571 Guaranteed renewability of coverage.--
28 (3)(a) An insurer may discontinue offering a
29 particular policy form of group health insurance coverage
30 offered in the small-group market or large-group market only
31 if:
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1 1. The insurer provides notice to each policyholder
2 provided coverage of this form in such market, and to
3 participants and beneficiaries covered under such coverage, of
4 such discontinuation at least 90 days prior to the date of the
5 nonrenewal discontinuation of such coverage;
6 2. The insurer offers to each policyholder provided
7 coverage of this form in such market the option to purchase
8 all, or in the case of the large-group market, any other
9 health insurance coverage currently being offered by the
10 insurer in such market; and
11 3. In exercising the option to discontinue coverage of
12 this form and in offering the option of coverage under
13 subparagraph 2., the insurer acts uniformly without regard to
14 the claims experience of those policyholders or any
15 health-status-related factor that relates to any participants
16 or beneficiaries covered or new participants or beneficiaries
17 who may become eligible for such coverage.
18 (b)1. In any case in which an insurer elects to
19 discontinue offering all health insurance coverage in the
20 small-group market or the large-group market, or both, in this
21 state, health insurance coverage may be discontinued by the
22 insurer only if:
23 a. The insurer provides notice to the department and
24 to each policyholder, and participants and beneficiaries
25 covered under such coverage, of such discontinuation at least
26 180 days prior to the date of the discontinuation of such
27 coverage; and
28 b. All health insurance issued or delivered for
29 issuance in this state in such market markets is discontinued
30 and coverage under such health insurance coverage in such
31 market is not renewed.
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1 2. In the case of a discontinuation under subparagraph
2 1. in a market, the insurer may not provide for the issuance
3 of any health insurance coverage in the market in this state
4 during the 5-year period beginning on the date of the
5 discontinuation of the last insurance coverage not renewed.
6 Section 8. Subsection (3), paragraph (b) of subsection
7 (7), and subsection (17) of section 627.6675, Florida
8 Statutes, are amended to read:
9 627.6675 Conversion on termination of
10 eligibility.--Subject to all of the provisions of this
11 section, a group policy delivered or issued for delivery in
12 this state by an insurer or nonprofit health care services
13 plan that provides, on an expense-incurred basis, hospital,
14 surgical, or major medical expense insurance, or any
15 combination of these coverages, shall provide that an employee
16 or member whose insurance under the group policy has been
17 terminated for any reason, including discontinuance of the
18 group policy in its entirety or with respect to an insured
19 class, and who has been continuously insured under the group
20 policy, and under any group policy providing similar benefits
21 that the terminated group policy replaced, for at least 3
22 months immediately prior to termination, shall be entitled to
23 have issued to him or her by the insurer a policy or
24 certificate of health insurance, referred to in this section
25 as a "converted policy." An employee or member shall not be
26 entitled to a converted policy if termination of his or her
27 insurance under the group policy occurred because he or she
28 failed to pay any required contribution, or because any
29 discontinued group coverage was replaced by similar group
30 coverage within 31 days after discontinuance.
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1 (3) CONVERSION PREMIUM; EFFECT ON PREMIUM RATES FOR
2 GROUP COVERAGE.--
3 (a) The premium for the converted policy shall be
4 determined in accordance with premium rates applicable to the
5 age and class of risk of each person to be covered under the
6 converted policy and to the type and amount of insurance
7 provided. However, the premium for the converted policy may
8 not exceed 200 percent of the standard risk rate as
9 established by the department, pursuant to this subsection
10 Florida Comprehensive Health Association, adjusted for
11 differences in benefit levels and structure between the
12 converted policy and the policy offered by the Florida
13 Comprehensive Health Association.
14 (b) Actual or expected experience under converted
15 policies may be combined with such experience under group
16 policies for the purposes of determining premium and loss
17 experience and establishing premium rate levels for group
18 coverage.
19 (c) The department shall annually determine standard
20 risk rates, using reasonable actuarial techniques and
21 standards adopted by the department by rule. The standard risk
22 rates must be determined as follows:
23 1. Standard risk rates for individual coverage must be
24 determined separately for indemnity policies, preferred
25 provider/exclusive provider policies, and health maintenance
26 organization contracts.
27 2. The department shall survey insurers and health
28 maintenance organizations representing at least an 80 percent
29 market share, based on premiums earned in the state for the
30 most recent calendar year, for each of the categories
31 specified in subparagraph 1.
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1 3. Standard risk rate schedules must be determined,
2 computed as the average rates charged by the carriers
3 surveyed, giving appropriate weight to each carrier's
4 statewide market share of earned premiums.
5 4. The rate schedule shall be determined from analysis
6 of the one county with the largest market share in the state
7 of all such carriers.
8 5. The rate for other counties must be determined by
9 using the weighted average of each carrier's county factor
10 relationship to the county determined in subparagraph 4.
11 6. The rate schedule must be determined for different
12 age brackets and family-size brackets.
13 (7) INFORMATION REQUESTED BY INSURER.--
14 (b) The converted policy may provide that the insurer
15 may refuse to renew the policy or the coverage of any person
16 only for one or more of the following reasons:
17 1. Either the benefits provided under the sources
18 referred to in subparagraphs (a)1. and 2. for the person or
19 the benefits provided or available under the sources referred
20 to in subparagraph (a)3. for the person, together with the
21 benefits provided by the converted policy, would result in
22 overinsurance according to the insurer's standards on file
23 with the department.
24 2. The converted policyholder fails to provide the
25 information requested pursuant to paragraph (a).
26 3. Fraud or intentional material misrepresentation in
27 applying for any benefits under the converted policy.
28 4. Eligibility of the insured person for coverage
29 under Medicare or under any other state or federal law
30 providing for benefits similar to those provided by the
31 converted policy.
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1 4.5. Other reasons approved by the department.
2 (17) NOTIFICATION.--A notification of the conversion
3 privilege shall be included in each certificate of coverage.
4 The insurer shall mail an election and premium notice form,
5 including an outline of coverage, on a form approved by the
6 department, within 14 days after an individual who is eligible
7 for a converted policy gives notice to the insurer that the
8 individual is considering applying for the converted policy or
9 otherwise requests such information. The outline of coverage
10 must contain a description of the principal benefits and
11 coverage provided by the policy and its principal exclusions
12 and limitations, including, but not limited to, deductibles
13 and coinsurance.
14 Section 9. Section 627.6685, Florida Statutes, is
15 created to read:
16 627.6685 Mental health coverage.--
17 (1) DEFINITIONS.--As used in this section, the term:
18 (a) "Aggregate lifetime limit" means, with respect to
19 benefits under a group health plan or health insurance
20 coverage, a dollar limitation on the total amount that may be
21 paid with respect to such benefits under the plan or health
22 insurance coverage with respect to an individual or other
23 coverage unit.
24 (b) "Annual limit" means, with respect to benefits
25 under a group health plan or health insurance coverage, a
26 dollar limitation on the total amount of benefits that may be
27 paid with respect to such benefits in a 12-month period under
28 the plan or health insurance coverage with respect to an
29 individual or other coverage unit.
30 (c) "Medical or surgical benefits" means benefits with
31 respect to medical or surgical services, as defined under the
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1 terms of the plan or coverage, but does not include mental
2 health benefits.
3 (d) "Mental health benefits" means benefits with
4 respect to mental health services, as defined under the terms
5 of the plan or coverage, but does not include benefits with
6 respect to treatment of substance abuse or chemical
7 dependency.
8 (e) "Health insurance coverage" means coverage
9 provided by an authorized insurer or by a health maintenance
10 organization.
11 (2) BENEFITS.--
12 (a)1. In the case of a group health plan, or health
13 insurance coverage offered in connection with such a plan,
14 which provides both medical and surgical benefits and mental
15 health benefits:
16 a. If the plan or coverage does not include an
17 aggregate lifetime limit on substantially all medical and
18 surgical benefits, the plan or coverage may not impose any
19 aggregate lifetime limit on mental health benefits.
20 b. If the plan or coverage includes an aggregate
21 lifetime limit on substantially all medical and surgical
22 benefits, the plan or coverage must:
23 (I) Apply that applicable lifetime limit both to the
24 medical and surgical benefits to which it otherwise would
25 apply and to mental health benefits and not distinguish in the
26 application of such limit between such medical and surgical
27 benefits and mental health benefits; or
28 (II) Not include any aggregate lifetime limit on
29 mental health benefits which is less than that applicable
30 lifetime limit.
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1 c. For any plan or coverage that is not described in
2 sub-subparagraph a. or sub-subparagraph b. and that includes
3 no or different aggregate lifetime limits on different
4 categories of medical and surgical benefits, the department
5 shall establish rules under which sub-subparagraph b. is
6 applied to such plan or coverage with respect to mental health
7 benefits by substituting for the applicable lifetime limit an
8 average aggregate lifetime limit that is computed taking into
9 account the weighted average of the aggregate lifetime limits
10 applicable to such categories.
11 2. In the case of a group health plan, or health
12 insurance coverage offered in connection with such a plan,
13 which provides both medical and surgical benefits and mental
14 health benefits:
15 a. If the plan or coverage does not include an annual
16 limit on substantially all medical and surgical benefits, the
17 plan or coverage may not impose any annual limit on mental
18 health benefits.
19 b. If the plan or coverage includes an annual limit on
20 substantially all medical and surgical benefits, the plan or
21 coverage must:
22 (I) Apply that applicable annual limit both to medical
23 and surgical benefits to which it otherwise would apply and to
24 mental health benefits and not distinguish in the application
25 of such limit between such medical and surgical benefits and
26 mental health benefits; or
27 (II) Not include any annual limit on mental health
28 benefits which is less than the applicable annual limit.
29 c. For any plan or coverage that is not described in
30 sub-subparagraph a. or sub-subparagraph b. and that includes
31 no or different annual limits on different categories of
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1 medical and surgical benefits, the department shall establish
2 rules under which sub-subparagraph b. is applied to such plan
3 or coverage with respect to mental health benefits by
4 substituting for the applicable annual limit an average annual
5 limit that is computed taking into account the weighted
6 average of the annual limits applicable to such categories.
7 (b) This section may not be construed:
8 1. As requiring a group health plan, or health
9 insurance coverage offered in connection with such a plan, to
10 provide any mental health benefits; or
11 2. In the case of a group health plan, or health
12 insurance coverage offered in connection with such a plan,
13 which provides mental health benefits, as affecting the terms
14 and conditions, including cost-sharing, limits on numbers of
15 visits or days of coverage, and requirements relating to
16 medical necessity, relating to the amount, duration, or scope
17 of mental health benefits under the plan or coverage, except
18 as specifically provided in paragraph (a) with respect to
19 parity in the imposition of aggregate lifetime limits and
20 annual limits for mental health benefits.
21 (3) EXEMPTIONS.--
22 (a) This section does not apply to any group health
23 plan, or group health insurance coverage offered in connection
24 with a group health plan, for any plan year of a small
25 employer as defined in s. 627.6699.
26 (b) This section does not apply with respect to a
27 group health plan, or health insurance coverage offered in
28 connection with a group health plan, if the application of
29 this section to such plan or coverage results in an increase
30 in the cost under the plan or for such coverage of at least 1
31 percent.
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1 (4) SEPARATE APPLICATION TO EACH OPTION OFFERED.--For
2 any group health plan that offers a participant or beneficiary
3 two or more benefit-package options under the plan, the
4 requirements of this section apply separately with respect to
5 each such option.
6 (5) DURATION.--This section does not apply to benefits
7 for services furnished on or after September 30, 2001.
8 (6) CONFLICTING PROVISIONS.--The provisions of this
9 section prevail over any conflicting provision of s. 627.668.
10 Section 10. Paragraph (k) of subsection (3) of section
11 627.6699, Florida Statutes, is amended to read:
12 627.6699 Employee Health Care Access Act.--
13 (3) DEFINITIONS.--As used in this section, the term:
14 (k) "Health benefit plan" means any hospital or
15 medical policy or certificate, hospital or medical service
16 plan contract, or health maintenance organization subscriber
17 contract. The term does not include accident-only, specified
18 disease, individual hospital indemnity, credit, dental-only,
19 vision-only, Medicare supplement, long-term care, or
20 disability income insurance; similar supplemental plans
21 provided under a separate policy, certificate, or contract of
22 insurance, which cannot duplicate coverage under an underlying
23 health plan and are specifically designed to fill gaps in the
24 underlying health plan, coinsurance, or deductibles; coverage
25 issued as a supplement to liability insurance; workers'
26 compensation or similar insurance; or automobile
27 medical-payment insurance.
28 Section 11. Paragraphs (a) and (d) of subsection (2)
29 and subsection (3) of section 627.674, Florida Statutes, are
30 amended to read:
31 627.674 Minimum standards; filing requirements.--
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1 (2)(a) The department must adopt rules establishing
2 minimum standards for Medicare supplement policies that, taken
3 together with the requirements of this part, are no less
4 comprehensive or beneficial to persons insured or covered
5 under Medicare supplement policies issued, delivered, or
6 issued for delivery in this state, including certificates
7 under group or blanket policies issued, delivered, or issued
8 for delivery in this state, than the standards provided in 42
9 U.S.C. Section 1395ss, or the most recent version of the NAIC
10 Model Regulation To Implement the NAIC Medicare Supplement
11 Insurance Minimum Standards Model Act adopted by the National
12 Association of Insurance Commissioners on July 31, 1991, or
13 the Omnibus Budget Reconciliation Act of 1990 (Pub. L. No.
14 101-508).
15 (d) For policies issued on or after January 1, 1991,
16 the department may adopt rules to establish minimum policy
17 standards to authorize the types of policies specified by 42
18 U.S.C. Section 1395ss(p)(2)(C) and any optional benefits to
19 facilitate policy comparisons.
20 (3) A policy may not be filed with the department as a
21 Medicare supplement policy unless the policy meets or exceeds,
22 either in a single policy or, in the case of nonprofit health
23 care services plans, in one or more policies issued in
24 conjunction with one another, the requirements of 42 U.S.C.
25 Section 1395ss, or the most recent version of the NAIC
26 Medicare Supplement Insurance Minimum Standards Model Act,
27 adopted by the National Association of Insurance Commissioners
28 on July 31, 1991, and the Omnibus Budget Reconciliation Act of
29 1990 (Pub. L. No. 101-508).
30 Section 12. Section 627.6741, Florida Statutes, is
31 amended to read:
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1 627.6741 Issuance, cancellation, nonrenewal, and
2 replacement.--
3 (1) An insurer issuing Medicare supplement policies in
4 this state shall offer the opportunity of enrolling in a
5 Medicare supplement policy, without conditioning the issuance
6 or effectiveness of the policy on, and without discriminating
7 in the price of the policy based on, the medical or health
8 status or receipt of health care by the individual:
9 (a) To any individual who is 65 years of age or older
10 and who resides in this state, upon the request of the
11 individual during the 6-month period beginning with the first
12 month in which the individual has attained 65 years of age and
13 is enrolled in Medicare part B; or
14 (b) To any individual who is 65 years of age or older
15 and is enrolled in Medicare part B, who resides in this state,
16 upon the request of the individual during the 2-month period
17 following termination of coverage under a group health
18 insurance policy.;
19
20 A Medicare supplement policy issued to an individual under
21 paragraph (a) or paragraph (b) may not exclude benefits based
22 on a pre-existing condition if the individual has a continuous
23 period of creditable coverage, as defined in s. 627.6561(5),
24 of at least 6 months as of the date of application for
25 coverage.
26
27 the opportunity of enrolling in a Medicare supplement policy,
28 without conditioning the issuance or effectiveness of the
29 policy on, and without discriminating in the price of the
30 policy based on, the medical or health status or receipt of
31 health care by the individual.
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1 (2) For both individual and group Medicare supplement
2 policies:
3 (a) An insurer shall neither cancel nor nonrenew a
4 Medicare supplement policy or certificate for any reason other
5 than nonpayment of premium or material misrepresentation.
6 (b) If it is not replacing an existing policy, a
7 Medicare supplement policy shall not limit or preclude
8 liability under the policy for a period longer than 6 months
9 because of a health condition existing before the policy is
10 effective. The policy may not define a preexisting condition
11 more restrictively than a condition for which medical advice
12 was given or treatment was recommended by or received from a
13 physician within 6 months before the effective date of
14 coverage.
15 (c) If a Medicare supplement policy or certificate
16 replaces another Medicare supplement policy or certificate or
17 creditable coverage as defined in s. 627.6561(5) a group
18 health insurance policy or certificate, the replacing insurer
19 shall waive any time periods applicable to preexisting
20 conditions, waiting periods, elimination periods, and
21 probationary periods in the new Medicare supplement policy for
22 similar benefits to the extent such time was spent under the
23 original policy, subject to the requirements of s.
24 627.6561(6)-(11).
25 (3) For group Medicare supplement policies:
26 (a) If a group Medicare supplement insurance policy is
27 terminated by the group policyholder and not replaced as
28 provided in paragraph (c), the insurer shall offer
29 certificateholders an individual Medicare supplement policy.
30 The insurer shall offer the certificateholder at least the
31 following choices:
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1 1. An individual Medicare supplement policy that
2 provides for continuation of the benefits contained in the
3 group policy.
4 2. An individual Medicare supplement policy that
5 provides only the benefits required to meet the minimum
6 standards.
7 (b) If membership in a group is terminated, the
8 insurer shall:
9 1. Offer the certificateholder conversion
10 opportunities specified in paragraph (a); or
11 2. At the option of the group policyholder, offer the
12 certificateholder continuation of coverage under the group
13 policy.
14 (c) If a group Medicare supplement policy is replaced
15 by another group Medicare supplement policy purchased by the
16 same policyholder, the succeeding insurer shall offer coverage
17 to all persons covered under the old group policy on its date
18 of termination. Coverage under the new group policy may not
19 result in any exclusion for preexisting conditions that would
20 have been covered under the group policy being replaced.
21 (4) If a policy is canceled, the insurer must return
22 promptly the unearned portion of any premium paid. If the
23 insured cancels the policy, the earned premium shall be
24 computed by the use of the short-rate table last filed with
25 the state official having supervision of insurance in the
26 state where the insured resided when the policy was issued.
27 If the insurer cancels, the earned premium shall be computed
28 pro rata. Cancellation shall be without prejudice to any
29 claim originating prior to the effective date of the
30 cancellation.
31
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1 (5) The department shall by rule prescribe standards
2 relating to the guaranteed issue of coverage, without
3 exclusions for preexisting conditions, for continuously
4 covered individuals consistent with the provisions of 42
5 U.S.C. Section 1395ss(s)(3).
6 Section 13. Section 627.9403, Florida Statutes, is
7 amended to read:
8 627.9403 Scope.--The provisions of this part shall
9 apply to long-term care insurance policies delivered or issued
10 for delivery in this state, and to policies delivered or
11 issued for delivery outside this state to the extent provided
12 in s. 627.9406, by an insurer, a fraternal benefit society as
13 defined in s. 632.601, a health care services plan as defined
14 in s. 641.01, a health maintenance organization as defined in
15 s. 641.19, a prepaid health clinic as defined in s. 641.402,
16 or a multiple-employer welfare arrangement as defined in s.
17 624.437. A policy which is advertised, marketed, or offered as
18 a long-term care policy and as a Medicare supplement policy
19 shall meet the requirements of this part and the requirements
20 of ss. 627.671-627.675 and, to the extent of a conflict, be
21 subject to the requirement that is more favorable to the
22 policyholder or certificateholder. The provisions of this
23 part shall not apply to a continuing care contract issued
24 pursuant to chapter 651 and shall not apply to guaranteed
25 renewable policies issued prior to October 1, 1988. Any
26 limited benefit policy that limits coverage to care in a
27 nursing home or to one or more lower levels of care required
28 or authorized to be provided by this part or by department
29 rule must meet all requirements of this part that apply to
30 long-term care insurance policies, except s. 627.9407(3)(c),
31 (9), (10)(f), and (12), and s. 627.94073(2) s. 627.9407(3)(c)
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1 and (9). If the limited benefit policy does not provide
2 coverage for care in a nursing home, but does provide coverage
3 for one or more lower levels of care, the policy shall also be
4 exempt from the requirements of s. 627.9407(3)(d).
5 Section 14. Section 627.9404, Florida Statutes, is
6 amended to read:
7 627.9404 Definitions.--For the purposes of this part:
8 (1) "Long-term care insurance policy" means any
9 insurance policy or rider advertised, marketed, offered, or
10 designed to provide coverage on an expense-incurred,
11 indemnity, prepaid, or other basis for one or more necessary
12 or medically necessary diagnostic, preventive, therapeutic,
13 curing, treating, mitigating, rehabilitative, maintenance, or
14 personal care services provided in a setting other than an
15 acute care unit of a hospital. Long-term care insurance shall
16 not include any insurance policy which is offered primarily to
17 provide basic Medicare supplement coverage, basic hospital
18 expense coverage, basic medical-surgical expense coverage,
19 hospital confinement indemnity coverage, major medical expense
20 coverage, disability income protection coverage, accident only
21 coverage, specified disease or specified accident coverage, or
22 limited benefit health coverage.
23 (2) "Applicant" means:
24 (a) In the case of an individual long-term care
25 insurance policy, the person who seeks to contract for
26 benefits.
27 (b) In the case of a group long-term care insurance
28 policy, the proposed certificateholder.
29 (3) "Certificate" means any certificate issued under a
30 group long-term care insurance policy, which policy has been
31 delivered or issued for delivery in this state.
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1 (4) "Chronically ill" means certified by a licensed
2 health care practitioner as:
3 (a) Being unable to perform, without substantial
4 assistance from another individual, at least two activities of
5 daily living for a period of at least 90 days due to a loss of
6 functional capacity; or
7 (b) Requiring substantial supervision for protection
8 from threats to health and safety due to severe cognitive
9 impairment.
10 (5) "Cognitive impairment" means a deficiency in a
11 person's short-term or long-term memory, orientation as to
12 person, place, and time, deductive or abstract reasoning, or
13 judgment as it relates to safety awareness.
14 (6) "Licensed health care practitioner" means any
15 physician, nurse licensed under chapter 464, or
16 psychotherapist licensed under chapter 490 or chapter 491, or
17 any individual who meets any requirements prescribed by rule
18 by the department.
19 (7) "Limited benefit policy" means any policy that
20 limits coverage to care in a nursing home or to one or more
21 lower levels of care required or authorized to be provided by
22 this part or by department rule.
23 (8)(7) "Maintenance or personal care services" means
24 any care the primary purpose of which is the provision of
25 needed assistance with any of the disabilities as a result of
26 which the individual is a chronically ill individual,
27 including the protection from threats to health and safety due
28 to severe cognitive impairment.
29 (9)(8) "Policy" means any policy, contract, subscriber
30 agreement, rider, or endorsement delivered or issued for
31
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1 delivery in this state by any of the entities specified in s.
2 627.9403.
3 (10) "Qualified long-term care limited benefit
4 insurance policy" means an accident and health insurance
5 contract as defined in s. 7702B of the Internal Revenue Code
6 and all applicable sections of this part.
7 (11)(9) "Qualified long-term care services" means
8 necessary diagnostic, preventive, curing, treating,
9 mitigating, and rehabilitative services, and maintenance or
10 personal care services which are required by a chronically ill
11 individual and are provided pursuant to a plan of care
12 prescribed by a licensed health care practitioner.
13 (12)(10) "Qualified long-term care insurance policy"
14 means an accident and health insurance contract as defined in
15 s. 7702B of the Internal Revenue Code.
16 Section 15. Paragraph (a) of subsection (4) of section
17 627.9407, Florida Statutes, is amended, and subsection (13) is
18 added to that section, to read:
19 627.9407 Disclosure, advertising, and performance
20 standards for long-term care insurance.--
21 (4) PREEXISTING CONDITION.--
22 (a) A long-term care insurance policy or certificate,
23 other than a policy or certificate issued to a group referred
24 to in s. 627.9405(1)(a), may not use a definition of
25 "preexisting condition" which is more restrictive than the
26 following: "Preexisting condition" means the existence of
27 symptoms which would cause an ordinarily prudent person to
28 seek diagnosis, care, or treatment, or a condition for which
29 medical advice or treatment was recommended by or received
30 from a provider of health care services within 6 months
31 preceding the effective date of coverage of an insured person.
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1 (13) ADDITIONAL DISCLOSURE.--A limited benefit policy
2 qualified under s. 7702B of the Internal Revenue Code must
3 include a disclosure statement within the policy and within
4 the outline of coverage that the policy is intended to be a
5 qualified limited benefit insurance contract. A limited
6 benefit policy that is not intended to be a qualified limited
7 benefit insurance contract must include a disclosure statement
8 within the policy and within the outline of coverage that the
9 policy is not intended to be a qualified limited benefit
10 insurance contract. The disclosure must be prominently
11 displayed and must read as follows: "This limited benefit
12 insurance policy is not intended to be a qualified limited
13 benefit insurance contract. You need to be aware that benefits
14 received under this policy may create unintended, adverse
15 income tax consequences to you. You may want to consult with a
16 knowledgeable individual about such potential income tax
17 consequences."
18 Section 16. Subsection (2) of section 627.94073,
19 Florida Statutes, is amended to read:
20 627.94073 Notice of cancellation; grace period.--
21 (2) A long-term care policy may not be canceled for
22 nonpayment of premium unless, after expiration of the grace
23 period in subsection (1), and at least 30 days prior to the
24 effective date of such cancellation, the insurer has mailed a
25 notification of possible lapse in coverage to the policyholder
26 and to a specified secondary addressee if such addressee has
27 been designated in writing by name and address by the
28 policyholder. For policies issued or renewed on or after
29 October 1, 1996, the insurer shall notify the policyholder, at
30 least once every 2 years, of the right to designate a
31 secondary addressee. The applicant has the right to designate
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1 at least one person who is to receive the notice of
2 termination, in addition to the insured. Designation shall not
3 constitute acceptance of any liability on the third party for
4 services provided to the insured. The form used for the
5 written designation must provide space clearly designated for
6 listing at least one person. The designation shall include
7 each person's full name and home address. In the case of an
8 applicant who elects not to designate an additional person,
9 the waiver shall state: "Protection against unintended
10 lapse.--I understand that I have the right to designate at
11 least one person other than myself to receive notice of lapse
12 or termination of this long-term care limited benefit
13 long-term care insurance policy for nonpayment of premium. I
14 understand that notice will not be given until 30 days after a
15 premium is due and unpaid. I elect NOT to designate any person
16 to receive such notice." Notice shall be given by first class
17 United States mail, postage prepaid, and notice may not be
18 given until 30 days after a premium is due and unpaid. Notice
19 shall be deemed to have been given as of 5 days after the date
20 of mailing.
21 Section 17. Subsections (1) and (2) of section
22 641.225, Florida Statutes, are amended to read:
23 641.225 Surplus requirements.--
24 (1) Each health maintenance organization shall at all
25 times maintain a minimum surplus in an amount that which is
26 the greater of $1,500,000, $500,000 or 10 percent of total
27 liabilities, or 2 percent of total annualized premium. All
28 health maintenance organizations that which have a valid
29 certificate of authority before October 1, 1998 1988, or an
30 entity described in subsection (3), and that which do not meet
31
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1 the minimum surplus requirement, shall increase their surplus
2 as follows:
3
4 Date Amount
5
6 September 30, 1998 1989 $800,000, $200,000 or 10 6 percent
7 of total liabilities, or 1 percent
8 of annualized premium, whichever is
9 greater
10
11 September 30, 1999 1990 $1,150,000, $350,000 or 10 8
12 percent of total liabilities, or
13 1.25 percent of annualized premium,
14 whichever is greater
15
16 September 30, 2000 1991 $1,500,000, $500,000 or 10 percent
17 of total liabilities, or 2 percent
18 of annualized premium, whichever is
19 greater
20
21 (2) The department shall not issue a certificate of
22 authority, except as provided in subsection (3), unless the
23 health maintenance organization has a minimum surplus in an
24 amount which is the greater of:
25 (a) $1,500,000;
26 (a)(b) Ten percent of their total liabilities based on
27 their startup actuarial projection as set forth in this part;
28 or
29 (b) Two percent of their total projected premiums
30 based on their startup projection as set forth in this part;
31 or
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1 (c) $1,500,000, $500,000 plus all startup losses,
2 excluding profits, projected to be incurred on their startup
3 actuarial projection until the projection reflects statutory
4 net profits for 12 consecutive months.
5 Section 18. Section 641.285, Florida Statutes, is
6 amended to read:
7 641.285 Insolvency protection.--
8 (1) Unless otherwise provided in this section, Each
9 health maintenance organization shall deposit with the
10 department cash or securities of the type eligible under s.
11 625.52, which shall have at all times a market value in the
12 amount set forth in this subsection. The amount of the
13 deposit shall be reviewed annually, or more often, as the
14 department deems necessary. The market value of the deposit
15 shall be a minimum of $300,000. the greater of:
16 (a) Twice its reasonably estimated average monthly
17 uncovered expenditures; or
18 (b) $100,000.
19 (2) If securities or assets deposited by a health
20 maintenance organization under this part are subject to
21 material fluctuations in market value, the department may, in
22 its discretion, require the organization to deposit and
23 maintain on deposit additional securities or assets in an
24 amount as may be reasonably necessary to assure that the
25 deposit will at all times have a market value of not less than
26 the amount specified under this section.
27 (a) If for any reason the market value of assets and
28 securities of a health maintenance organization held on
29 deposit in this state under this code falls below the amount
30 required, the organization shall promptly deposit other or
31 additional assets or securities eligible for deposit
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1 sufficient to cure the deficiency. If the health maintenance
2 organization has failed to cure the deficiency within 30 days
3 after receipt of notice thereof by registered or certified
4 mail from the department, the department may revoke the
5 certificate of authority of the health maintenance
6 organization.
7 (b) A health maintenance organization may, at its
8 option, deposit assets or securities in an amount exceeding
9 its deposit required or otherwise permitted under this code by
10 not more than 20 percent of the required or permitted deposit,
11 or $20,000, whichever is the larger amount, for the purpose of
12 absorbing fluctuations in the value of securities and assets
13 deposited and to facilitate the exchange and substitution of
14 securities and assets. During the solvency of the health
15 maintenance organization, any excess shall be released to the
16 organization upon its request. During the insolvency of the
17 health maintenance organization, any excess deposit shall be
18 released only as provided in s. 625.62.
19 (3) Whenever the department determines that the
20 financial condition of a health maintenance organization has
21 deteriorated to the point that the policyholders' or
22 subscribers' best interests are not being preserved by the
23 activities of a health maintenance organization, the
24 department may require such health maintenance organization to
25 deposit and maintain deposited in trust with the department
26 for the protection of the health maintenance organization's
27 policyholders, subscribers, and creditors, for such time as
28 the department deems necessary, securities eligible for such
29 deposit under s. 625.52 having a market value of not less than
30 the amount that the department determines is necessary, which
31 amount must not be less than $100,000 or greater than $2
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1 million. The deposit required under this subsection is in
2 addition to any other deposits required of a health
3 maintenance organization pursuant to subsections (1) and (2).
4 The department shall waive the deposit requirements set forth
5 in subsection (1) whenever it is satisfied that:
6 (a) The health maintenance organization has sufficient
7 surplus and an adequate history of generating net income to
8 assure its financial viability for the next year;
9 (b) The performance and obligations of the health
10 maintenance organization are guaranteed by a guaranteeing
11 organization of the type and subject to the same provisions as
12 outlined in s. 641.225; or
13 (c) The assets of the health maintenance organization
14 or its contracts with any insurer, health care provider,
15 governmental entity, or other person are reasonably sufficient
16 to assure the performance of the obligations of the
17 organization.
18 (4) All income from deposits shall belong to the
19 depositing health maintenance organization and shall be paid
20 to it as it becomes available. A health maintenance
21 organization that has made a securities deposit may withdraw
22 that deposit, or any part thereof, after making a substitute
23 deposit of cash or eligible securities or any combination of
24 these or other acceptable measures of equal amount and value.
25 (5)(a) The requirements of this section do not apply
26 to an applying or licensed health maintenance organization
27 which has a plan, approved by the department, for handling
28 insolvency which provides for continuation of benefits and
29 payments to unaffiliated providers for services rendered both
30 prior to and after insolvency for the duration of the contract
31 period for which payment has been made, except that benefits
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1 to members who are confined on the date of insolvency in an
2 inpatient facility shall be continued until their discharge.
3 This plan shall include at least one of the following:
4 1. Contracts of insurance or reinsurance on file with
5 the department that will protect subscribers in the event the
6 health maintenance organization is unable to meet its
7 obligations. Each agreement between the organization and an
8 insurer shall be subject to the laws of this state regarding
9 reinsurance. Each agreement and any modification thereto
10 shall be filed with and approved by the department. Each
11 agreement shall remain in full force and in effect until
12 replaced or for at least 90 days following written
13 notification to the department by registered mail of
14 cancellation or termination by either party. The department
15 shall be endorsed on the agreement as an additional insured
16 party;
17 2. Contractual arrangements with health care providers
18 that include a guarantee by the provider to continue providing
19 health care services to any subscriber of the health
20 maintenance organization, upon insolvency of the organization,
21 until the end of the contract period for which payment by or
22 on behalf of the subscriber has been made or the discharge of
23 the subscriber from an inpatient facility, whichever occurs
24 later; or
25 3. Other measures acceptable to the department.
26 (b) The department shall reduce the deposit
27 requirements specified in subsection (1) whenever the
28 department has determined that the health maintenance
29 organization has a plan for handling insolvency which
30 partially meets the requirements of this section. The amount
31
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1 of the deposit reduction shall be based on the extent to which
2 the organization meets the requirements of this section.
3 Section 19. Section 641.26, Florida Statutes, is
4 amended to read:
5 641.26 Annual report.--
6 (1) Every health maintenance organization shall,
7 annually within 3 months after the end of its fiscal year, or
8 within an extension of time therefor as the department, for
9 good cause, may grant, in a form prescribed by the department,
10 file a report with the department, verified by the oath of two
11 officers of the organization or, if not a corporation, of two
12 persons who are principal managing directors of the affairs of
13 the organization, properly notarized, showing its condition on
14 the last day of the immediately preceding reporting period.
15 Such report shall include:
16 (a) A financial statement of the health maintenance
17 organization filed on a computer diskette using a format
18 acceptable to the department.;
19 (b) A financial statement of the health maintenance
20 organization filed on forms acceptable to the department.;
21 (c) An audited financial statement of the health
22 maintenance organization, including its balance sheet and a
23 statement of operations for the preceding year certified by an
24 independent certified public accountant, prepared in
25 accordance with statutory accounting principles.;
26 (d) The number of health maintenance contracts issued
27 and outstanding and the number of health maintenance contracts
28 terminated.;
29 (e) The number and amount of damage claims for medical
30 injury initiated against the health maintenance organization
31 and any of the providers engaged by it during the reporting
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1 year, broken down into claims with and without formal legal
2 process, and the disposition, if any, of each such claim.;
3 (f) An actuarial certification that:
4 1. The health maintenance organization is actuarially
5 sound, which certification shall consider the rates, benefits,
6 and expenses of, and any other funds available for the payment
7 of obligations of, the organization.;
8 2. The rates being charged or to be charged are
9 actuarially adequate to the end of the period for which rates
10 have been guaranteed.;
11 3. Incurred but not reported claims and claims
12 reported but not fully paid have been adequately provided
13 for.; and
14 (g) A report prepared by the Certified Public
15 Accountant and filed with the department describing material
16 weaknesses in the health maintenance organization's internal
17 control structure as noted by the Certified Public Accountant
18 during the audit. The report must be filed with the annual
19 audited financial report as required in paragraph (c). The
20 health maintenance organization shall provide a description of
21 remedial actions taken or proposed to correct material
22 weaknesses, if the actions are not described in the
23 independent certified public accountant's report.
24 (h)(g) Such other information relating to the
25 performance of health maintenance organizations as is required
26 by the department.
27 (2) The department may require updates of the
28 actuarial certification as to a particular health maintenance
29 organization if the department has reasonable cause to believe
30 that such reserves are understated to the extent of materially
31 misstating the financial position of the health maintenance
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1 organization. Workpapers in support of the statement of the
2 updated actuarial certification must be provided to the
3 department upon request.
4 (3)(2) Every health maintenance organization shall
5 file quarterly, within 45 days after each of its quarterly
6 reporting periods, an unaudited financial statement of the
7 organization as described in paragraphs (1)(a) and (b). The
8 quarterly report shall be verified by the oath of two officers
9 of the organization, properly notarized.
10 (4)(3) Any health maintenance organization that which
11 neglects to file an annual report or quarterly report in the
12 form and within the time required by this section shall
13 forfeit up to $1,000 for each day for the first 10 days during
14 which the neglect continues and shall forfeit up to $2,000 for
15 each day after the first 10 days during which the neglect
16 continues; and, upon notice by the department to that effect,
17 the organization's authority to enroll new subscribers or to
18 do business in this state shall cease while such default
19 continues. The department shall deposit all sums collected by
20 it under this section to the credit of the Insurance
21 Commissioner's Regulatory Trust Fund. The department shall not
22 collect more than $100,000 for each report.
23 (5)(4) Each authorized health maintenance organization
24 shall retain an independent certified public accountant,
25 hereinafter referred to in this section as "CPA," who agrees
26 by written contract with the health maintenance organization
27 to comply with the provisions of this part. The contract
28 shall state:
29 (a) The CPA shall provide to the HMO audited financial
30 statements consistent with this part.
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1 (b) Any determination by the CPA that the health
2 maintenance organization does not meet minimum surplus
3 requirements as set forth in this part shall be stated by the
4 CPA, in writing, in the audited financial statement.
5 (c) The completed work papers and any written
6 communications between the CPA firm and the health maintenance
7 organization relating to the audit of the health maintenance
8 organization shall be made available for review on a
9 visual-inspection-only basis by the department at the offices
10 of the health maintenance organization, at the department, or
11 at any other reasonable place as mutually agreed between the
12 department and the health maintenance organization. The CPA
13 must retain for review the work papers and written
14 communications for a period of not less than 6 years.
15 (d) The CPA shall provide to the department a written
16 report describing material weaknesses in the health
17 maintenance organizations's internal control structure as
18 noted during the audit.
19 (6)(5) To facilitate uniformity in financial
20 statements and to facilitate department analysis, the
21 department may by rule adopt the form for financial statements
22 of a health maintenance organization, including supplements as
23 approved by the National Association of Insurance
24 Commissioners in 1995, and may adopt subsequent amendments
25 thereto if the methodology remains substantially consistent,
26 and may by rule require each health maintenance organization
27 to submit to the department all or part of the information
28 contained in the annual statement in a computer-readable form
29 compatible with the electronic data processing system
30 specified by the department.
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1 (7) In addition to information called for and
2 furnished in connection with its annual or quarterly
3 statements, the health maintenance organization shall furnish
4 to the department as soon as reasonably possible such
5 information as to its transactions or affairs which, in the
6 department's opinion, may have a material effect on the health
7 maintenance organizations financial condition, as the
8 department may request in writing. All such information
9 furnished pursuant to the department's request must be
10 verified by the oath of two executive officers of the health
11 maintenance organization.
12 (8) Each health maintenance organization shall file
13 one copy of its annual statement convention blank in
14 electronic form, along with such additional filings as
15 prescribed by the department for the preceding year, with the
16 National Association of Insurance Commissioners. Each health
17 maintenance organization shall pay to the department a
18 reasonable fee to cover costs associated with the filing and
19 analysis of the documents by the National Association of
20 Insurance Commissioners.
21 Section 20. Paragraph (d) of subsection (2), and
22 paragraphs (a) and (b) of subsection (3) of section 641.31074,
23 Florida Statutes, are amended to read:
24 641.31074 Guaranteed renewability of coverage.--
25 (2) A health maintenance organization may nonrenew or
26 discontinue a contract based only on one or more of the
27 following conditions:
28 (d) The health maintenance organization is ceasing to
29 offer coverage in such a market in accordance with subsection
30 (3) and applicable state law.
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1 (3)(a) A health maintenance organization may
2 discontinue offering a particular contract form for group
3 coverage offered in the small group market or large group
4 market only if:
5 1. The health maintenance organization provides notice
6 to each contract holder provided coverage of this form in such
7 market, and participants and beneficiaries covered under such
8 coverage, of such discontinuation at least 90 days prior to
9 the date of the nonrenewal discontinuation of such coverage;
10 2. The health maintenance organization offers to each
11 contract holder provided coverage of this form in such market
12 the option to purchase all, or in the case of the large-group
13 market, any other health insurance coverage currently being
14 offered by the health maintenance organization in such market;
15 and
16 3. In exercising the option to discontinue coverage of
17 this form and in offering the option of coverage under
18 subparagraph 2., the health maintenance organization acts
19 uniformly without regard to the claims experience of those
20 contract holders or any health-status-related factor that
21 relates to any participants or beneficiaries covered or new
22 participants or beneficiaries who may become eligible for such
23 coverage.
24 (b)1. In any case in which a health maintenance
25 organization elects to discontinue offering all coverage in
26 the small group market or the large group market, or both, in
27 this state, coverage may be discontinued by the insurer only
28 if:
29 a. The health maintenance organization provides notice
30 to the department and to each contract holder, and
31 participants and beneficiaries covered under such coverage, of
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1 such discontinuation at least 180 days prior to the date of
2 the discontinuation of such coverage; and
3 b. All health insurance issued or delivered for
4 issuance in this state in such market is markets are
5 discontinued and coverage under such health insurance coverage
6 in such market is not renewed.
7 2. In the case of a discontinuation under subparagraph
8 1. in a market, the health maintenance organization may not
9 provide for the issuance of any health maintenance
10 organization contract coverage in the market in this state
11 during the 5-year period beginning on the date of the
12 discontinuation of the last insurance contract not renewed.
13 Section 21. Section 641.3111, Florida Statutes, is
14 amended to read:
15 641.3111 Extension of benefits.--
16 (1) Every group health maintenance contract shall
17 provide that termination of the contract by the health
18 maintenance organization shall be without prejudice to any
19 continuous loss which commenced while the contract was in
20 force, but any extension of benefits beyond the period the
21 contract was in force may be predicated upon the continuous
22 total disability of the subscriber and may be limited to
23 payment for the treatment of a specific accident or illness
24 incurred while the subscriber was a member. Such extension of
25 benefits may be limited to the occurrence of the earliest of
26 the following events:
27 (a) The expiration of 12 months.
28 (b) Such time as the member is no longer totally
29 disabled.
30 (c) A succeeding carrier elects to provide replacement
31 coverage without limitation as to the disability condition.
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1 (d) The maximum benefits payable under the contract
2 have been paid.
3 (2) For the purposes of this section, an individual is
4 totally disabled if the individual has a condition resulting
5 from an illness or injury which prevents an individual from
6 engaging in any employment or occupation for which the
7 individual is or may become qualified by reason of education,
8 training, or experience, and the individual is under the
9 regular care of a physician.
10 (3) In the case of maternity coverage, when not
11 covered by the succeeding carrier, a reasonable extension of
12 benefits or accrued liability provision is required, which
13 provision provides for continuation of the contract benefits
14 in connection with maternity expenses for a pregnancy that
15 commenced while the policy was in effect. The extension shall
16 be for the period of that pregnancy and shall not be based
17 upon total disability.
18 (4) Except as provided in subsection (1), no
19 subscriber is entitled to an extension of benefits if the
20 termination of the contract by the health maintenance
21 organization is based upon any event referred to in s.
22 641.3922(7)(a)-(g).
23 Section 22. Section 641.316, Florida Statutes, is
24 amended to read:
25 641.316 Fiscal intermediary services.--
26 (1) It is the intent of the Legislature, through the
27 adoption of this section, to ensure the financial soundness of
28 fiscal intermediary services organizations established to
29 develop, manage, and administer the business affairs of health
30 care professional providers such as medical doctors, doctors
31 of osteopathy, doctors of chiropractic, doctors of podiatric
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1 medicine, doctors of dentistry, or other health professionals
2 regulated by the Department of Health.
3 (2)(a) The term "fiduciary" or "fiscal intermediary
4 services" means reimbursements received or collected on behalf
5 of health care professionals for services rendered, patient
6 and provider accounting, financial reporting and auditing,
7 receipts and collections management, compensation and
8 reimbursement disbursement services, or other related
9 fiduciary services pursuant to health care professional
10 contracts with health maintenance organizations.
11 (b) The term "fiscal intermediary services
12 organization" means a person or entity which performs
13 fiduciary or fiscal intermediary services to health care
14 professionals who contract with health maintenance
15 organizations other than a fiscal intermediary services
16 organization owned, operated, or controlled by a hospital
17 licensed under chapter 395, an insurer licensed under chapter
18 624, a third-party administrator licensed under chapter 626, a
19 prepaid limited health service organization licensed under
20 chapter 636, a health maintenance organization licensed under
21 this chapter, or physician group practices as defined in s.
22 455.654(3)(f) s. 455.236(3)(f).
23 (3) A fiscal intermediary services organization that
24 which is operated for the purpose of acquiring and
25 administering provider contracts with managed care plans for
26 professional health care services, including, but not limited
27 to, medical, surgical, chiropractic, dental, and podiatric
28 care, and which performs fiduciary or fiscal intermediary
29 services shall be required to secure and maintain a fidelity
30 bond in the minimum amount of 10 percent of the funds handled
31 by the intermediary in connection with its fiscal and
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1 fiduciary services during the prior year or $1 million,
2 whichever is less. The minimum bond amount shall be $50,000.
3 The fidelity bond shall protect the fiscal intermediary from
4 loss caused by the dishonesty of its employees and must remain
5 unimpaired for as long as the intermediary continues in
6 business in the state. $10 million. This requirement shall
7 apply to all persons or entities engaged in the business of
8 providing fiduciary or fiscal intermediary services to any
9 contracted provider or provider panel. The fidelity bond shall
10 provide coverage against misappropriation of funds by the
11 fiscal intermediary or its officers, agents, or employees;
12 must be posted with the department for the benefit of managed
13 care plans, subscribers, and providers; and must be on a form
14 approved by the department. The fidelity bond must be
15 maintained and remain unimpaired as long as the fiscal
16 intermediary services organization continues in business in
17 this state and until the termination of its registration.
18 (4) A fiscal intermediary services organization, as
19 described in subsection (3), shall secure and maintain a
20 surety bond on file with the department, naming the
21 intermediary as principal. The bond must be obtained from a
22 company authorized to write surety insurance in the state, and
23 the department shall be obligee on behalf of itself and third
24 parties. The penal sum of the bond may not be less than 5
25 percent of the funds handled by the intermediary in connection
26 with its fiscal and fiduciary services during the prior year
27 or $250,000, whichever is less. The minimum bond amount must
28 be $10,000. The condition of the bond must be that the
29 intermediary shall register with the department and shall not
30 misappropriate funds within its control or custody as a fiscal
31 intermediary or fiduciary. The aggregate liability of the
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1 surety for any and all breaches of the conditions of the bond
2 may not exceed the penal sum of the bond. The bond must be
3 continuous in form, must be renewed annually by a continuation
4 certificate, and may be terminated by the surety upon its
5 giving 30 days' written notice of termination to the
6 department.
7 (5)(4) A fiscal intermediary services organization may
8 not collect from the subscriber any payment other than the
9 copayment or deductible specified in the subscriber agreement.
10 (6)(5) Any fiscal intermediary services organization,
11 other than a fiscal intermediary services organization owned,
12 operated, or controlled by a hospital licensed under chapter
13 395, an insurer licensed under chapter 624, a third-party
14 administrator licensed under chapter 626, a prepaid limited
15 health service organization licensed under chapter 636, a
16 health maintenance organization licensed under this chapter,
17 or physician group practices as defined in s. 455.654(3)(f) s.
18 455.236(3)(f), must register with the department and meet the
19 requirements of this section. In order to register as a fiscal
20 intermediary services organization, the organization must
21 comply with ss. 641.21(1)(c) and (d) and 641.22(6). Should the
22 department determine that the fiscal intermediary services
23 organization does not meet the requirements of this section,
24 the registration shall be denied. In the event that the
25 registrant fails to maintain compliance with the provisions of
26 this section, the department may revoke or suspend the
27 registration. In lieu of revocation or suspension of the
28 registration, the department may levy an administrative
29 penalty in accordance with s. 641.25.
30
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1 (7)(6) The department shall adopt promulgate rules
2 necessary to administer implement the provisions of this
3 section.
4 Section 23. Subsections (3), (7), and (14) of section
5 641.3922, Florida Statutes, are amended to read:
6 641.3922 Conversion contracts; conditions.--Issuance
7 of a converted contract shall be subject to the following
8 conditions:
9 (3) CONVERSION PREMIUM.--The premium for the converted
10 contract shall be determined in accordance with premium rates
11 applicable to the age and class of risk of each person to be
12 covered under the converted contract and to the type and
13 amount of coverage provided. However, the premium for the
14 converted contract may not exceed 200 percent of the standard
15 risk rate, as established by the department under s.
16 627.6675(3) Florida Comprehensive Health Association and
17 adjusted for differences in benefit levels and structure
18 between the converted policy and the policy offered by the
19 Florida Comprehensive Health Association. The mode of payment
20 for the converted contract shall be quarterly or more
21 frequently at the option of the organization, unless otherwise
22 mutually agreed upon between the subscriber and the
23 organization.
24 (7) REASONS FOR CANCELLATION; TERMINATION.--The
25 converted health maintenance contract must contain a
26 cancellation or nonrenewability clause providing that the
27 health maintenance organization may refuse to renew the
28 contract of any person covered thereunder, but cancellation or
29 nonrenewal must be limited to one or more of the following
30 reasons:
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1 (a) Fraud or intentional material misrepresentation,
2 subject to the limitations of s. 641.31(23), in applying for
3 any benefits under the converted health maintenance contract;
4 (b) Eligibility of the covered person for coverage
5 under Medicare, Title XVIII of the Social Security Act, as
6 added by the Social Security Amendments of 1965, or as later
7 amended or superseded, or under any other state or federal law
8 providing for benefits similar to those provided by the
9 converted health maintenance contract, except for Medicaid,
10 Title XIX of the Social Security Act, as amended by the Social
11 Security Amendments of 1965, or as later amended or
12 superseded.
13 (b)(c) Disenrollment for cause, after following the
14 procedures outlined in s. 641.3921(4).
15 (c)(d) Willful and knowing misuse of the health
16 maintenance organization identification membership card by the
17 subscriber or the willful and knowing furnishing to the
18 organization by the subscriber of incorrect or incomplete
19 information for the purpose of fraudulently obtaining coverage
20 or benefits from the organization.
21 (d)(e) Failure, after notice, to pay required
22 premiums.
23 (e)(f) The subscriber has left the geographic area of
24 the health maintenance organization with the intent to
25 relocate or establish a new residence outside the
26 organization's geographic area.
27 (f)(g) A dependent of the subscriber has reached the
28 limiting age under the converted contract, subject to
29 subsection (12); but the refusal to renew coverage shall apply
30 only to coverage of the dependent, except in the case of
31 handicapped children.
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1 (g)(h) A change in marital status that makes a person
2 ineligible under the original terms of the converted contract,
3 subject to subsection (12).
4 (14) NOTIFICATION.--A notification of the conversion
5 privilege shall be included in each health maintenance
6 contract and in any certificate or member's handbook. The
7 organization shall mail an election and premium notice form,
8 including an outline of coverage, on a form approved by the
9 department, within 14 days after any individual who is
10 eligible for a converted health maintenance contract gives
11 notice to the organization that the individual is considering
12 applying for the converted contract or otherwise requests such
13 information. The outline of coverage must contain a
14 description of the principal benefits and coverage provided by
15 the contract and its principal exclusions and limitations,
16 including, but not limited to, deductibles and coinsurance.
17 Section 24. Subsection (12) is added to section
18 641.495, Florida Statutes, to read:
19 641.495 Requirements for issuance and maintenance of
20 certificate.--
21 (12) The provisions of part I of chapter 395 do not
22 apply to a health maintenance organization that, on or before
23 January 1, 1991, provides not more than 10 outpatient holding
24 beds for short-term and hospice-type patients in an ambulatory
25 care facility for its members, provided that such health
26 maintenance organization maintains current accreditation by
27 the Joint Commission on Accreditation of Health Care
28 Organizations, the Accreditation Association for Ambulatory
29 Health Care, or the National Committee for Quality Assurance.
30 Section 25. This act shall take effect January 1,
31 1999.
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1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 CS for Senate Bill 1800
3
4 Amends s. 222.21, F.S., to protect contributions to Roth
individual retirement accounts (IRAs) from creditors' claims.
5
Deletes a modification to the definition of "eligible
6 individual" regarding conversion policies under any other
state's law, federal law, or self-insurance plan (s. 627.6487,
7 F.S.)
8 Amends s. 627.6699, F.S., relating to the Employee Health Care
Access Act, to modify the definition of "health benefit plan"
9 to exclude from the definition plans that are supplemental to
major medical plans offered by an employer as part of an
10 employee benefit package.
11 Adds a definition of "qualified long-term care limited benefit
insurance policy" (s. 627.9404, F.S.) and operationalizes the
12 term (s.627.94073, F.S).
13 Incorporates various technical and conforming revisions.
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