Senate Bill 1294

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    Florida Senate - 1999                                  SB 1294

    By Senator Holzendorf





    2-1251-99

  1                      A bill to be entitled

  2         An act relating to the "Employee Health Care

  3         Access Act"; amending s. 627.6699, F.S.;

  4         modifying definitions; requiring small employer

  5         carriers to begin to offer and issue all small

  6         employer benefit plans on a specified date;

  7         deleting the requirement that basic and

  8         standard small employer health benefit plans be

  9         issued; providing additional requirements for

10         determining premium rates for benefit plans;

11         providing for applicability of the act to plans

12         provided by small employer carriers that are

13         insurers or health maintenance organizations

14         notwithstanding the provisions of certain other

15         specified statutes under specified conditions;

16         providing an effective date.

17

18  Be It Enacted by the Legislature of the State of Florida:

19

20         Section 1.  Paragraphs (n) and (v) of subsection (3),

21  paragraph (c) of subsection (5), and paragraphs (b) and (d) of

22  subsection (6) of section 627.6699, Florida Statutes, 1998

23  Supplement, are amended to read:

24         627.6699  Employee Health Care Access Act.--

25         (3)  DEFINITIONS.--As used in this section, the term:

26         (n)  "Modified community rating" means a method used to

27  develop carrier premiums which spreads financial risk across a

28  large population and allows adjustments for age, gender,

29  family composition, tobacco usage, and geographic area as

30  determined under paragraph (5)(j), claims experience, health

31  status, or duration of coverage as permitted under

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    Florida Senate - 1999                                  SB 1294
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  1  subparagraph (6)(b)6., and administrative and acquisition

  2  expenses as permitted under subparagraph (6)(b)7 paragraph

  3  (5)(k).

  4         (v)  "Small employer" means, in connection with a

  5  health benefit plan with respect to a calendar year and a plan

  6  year, any person, sole proprietor, self-employed individual,

  7  independent contractor, firm, corporation, partnership, or

  8  association that is actively engaged in business, has its

  9  principal place of business in this state, employed an average

10  of at least 2 1 but not more than 50 eligible employees on

11  business days during the preceding calendar year of which a

12  majority were employed within this state, and employs at least

13  2 employees 1 employee on the first day of the plan year, and

14  is not formed primarily for purposes of buying health

15  insurance, if a bona fide employer-employee relationship

16  exists.  For purposes of this section, a sole proprietor, an

17  independent contractor, or a self-employed individual that

18  employed an average of at least one but not two or more

19  eligible employees on business days during the preceding

20  calendar year is considered a small employer only for purposes

21  of renewal of coverage on or after July 1, 1999, if all of the

22  conditions and criteria established in this section are met.

23         (5)  AVAILABILITY OF COVERAGE.--

24         (c)  Every small employer carrier must, as a condition

25  of transacting business in this state:

26         1.  Beginning July 1, 1999 January 1, 1994, offer and

27  issue all small employer health benefit plans on a

28  guaranteed-issue basis to every eligible small employer, with

29  3 to 50 eligible employees, that elects to be covered under

30  such plan, agrees to make the required premium payments, and

31  satisfies the other provisions of the plan. A rider for

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    Florida Senate - 1999                                  SB 1294
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  1  additional or increased benefits may be medically underwritten

  2  and may only be added to the standard health benefit plan.

  3  The increased rate charged for the additional or increased

  4  benefit must be rated in accordance with this section.

  5         2.  Beginning April 15, 1994, offer and issue basic and

  6  standard small employer health benefit plans on a

  7  guaranteed-issue basis to every eligible small employer, with

  8  one or two eligible employees, which elects to be covered

  9  under such plan, agrees to make the required premium payments,

10  and satisfies the other provisions of the plan.  A rider for

11  additional or increased benefits may be medically underwritten

12  and may only be added to the standard health benefit plan.

13  The increased rate charged for the additional or increased

14  benefit must be rated in accordance with this section.

15         2.3.  Offer to eligible small employers the standard

16  and basic health benefit plans.  This subparagraph does not

17  limit a carrier's ability to offer other health benefit plans

18  to small employers if the standard and basic health benefit

19  plans are offered and rejected.

20         (6)  RESTRICTIONS RELATING TO PREMIUM RATES.--

21         (b)  For all small employer health benefit plans that

22  are subject to this section and are issued by small employer

23  carriers on or after January 1, 1994, premium rates for health

24  benefit plans subject to this section are subject to the

25  following:

26         1.  Small employer carriers must use a modified

27  community rating methodology in which the premium for each

28  small employer must be determined solely on the basis of the

29  eligible employee's and eligible dependent's gender, age,

30  family composition, tobacco use, or geographic area as

31  determined under paragraph (5)(j), and in which the premium

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    Florida Senate - 1999                                  SB 1294
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  1  may be adjusted as permitted by subparagraphs 6. and 7

  2  paragraph (5)(k).

  3         2.  Rating factors related to age, gender, family

  4  composition, tobacco use, or geographic location may be

  5  developed by each carrier to reflect the carrier's experience.

  6  The factors used by carriers are subject to department review

  7  and approval.

  8         3.  Small employer carriers may not modify the rate for

  9  a small employer for 12 months from the initial issue date or

10  renewal date, unless the composition of the group changes or

11  benefits are changed.

12         4.  Carriers participating in the alliance program, in

13  accordance with ss. 408.700-408.707, may apply a different

14  community rate to business written in that program.

15         5.  Any adjustments in rates for claims experience,

16  health status, and duration of coverage may not be charged to

17  individual employees or dependents. For a small employer's

18  policy, such adjustments may not result in a rate for the

19  small employer which deviates more than 25 percent from the

20  carrier's approved rate. Any such adjustment must be applied

21  uniformly to the rates charged for all employees and

22  dependents of the small employer. A small employer carrier may

23  make an adjustment to a small employer's renewal premium, not

24  to exceed 15 percent annually, due to the claims experience,

25  health status, or duration of coverage of the employees or

26  dependents of the small employer.

27         6.  A small employer carrier may make an adjustment to

28  a small employer's premium based on administrative and

29  acquisition expense differences resulting from the size of the

30  group. Group size administrative and acquisition expense

31  factors may be developed by each carrier to reflect the

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    Florida Senate - 1999                                  SB 1294
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  1  carrier's experience and are subject to department review and

  2  approval.

  3         7.  A small employer carrier rating methodology may

  4  include separate rating categories for one dependent child,

  5  for two dependent children, and three or more dependent

  6  children for family coverage of employees having a spouse and

  7  dependent children or employees having dependent children

  8  only.

  9         (d)  Notwithstanding s. 627.401(2), this section and

10  ss. 627.410 and 627.411 apply to any health benefit plan

11  provided by a small employer carrier that is an insurer, and

12  this section and s. 641.31 apply to any health benefit

13  provided by a small employer carrier that is a health

14  maintenance organization that provides coverage to one or more

15  employees of a small employer regardless of where the policy,

16  certificate, or contract is issued or delivered, if the health

17  benefit plan covers employees or their covered dependents who

18  are residents of this state.

19         Section 2.  This act shall take effect July 1, 1999.

20

21            *****************************************

22                          SENATE SUMMARY

23    Amends the "Employee Health Care Access Act." Modifies
      definitions. Requires small employer carriers to begin to
24    offer and issue all small employer benefit plans on July
      1, 1999. Deletes requirement that basic and standard
25    small employer health benefit plans be issued. Provides
      additional requirements for determining premium rates for
26    benefit plans. Provides for applicability of the act to
      plans provided by small employer carriers that are
27    insurers or health maintenance organizations
      notwithstanding the provisions of certain other specified
28    statutes under specified conditions.

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