Senate Bill 1800c1
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Florida Senate - 1999 CS for SB 1800
By the Committee on Banking and Insurance; and Senator Latvala
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1 A bill to be entitled
2 An act relating to health insurance; creating
3 the Florida Health Endowment Association as a
4 nonprofit entity to provide insurance coverage
5 to individuals whose health insurance has been
6 involuntarily terminated for reasons other than
7 nonpayment of premiums; providing for the
8 association to be governed by a board of
9 directors; providing membership of the board;
10 providing terms of office; providing for the
11 board members to be reimbursed for expenses;
12 providing immunity from liability for board
13 members and employees of the association;
14 requiring the board to adopt a plan and rules
15 to administer the act; providing additional
16 duties of the board; requiring that the board
17 report to the Governor and Legislature each
18 year; specifying the powers of the board;
19 providing definitions; providing eligibility
20 criteria; providing exceptions; requiring the
21 board to select a plan administrator;
22 specifying the period of service of the
23 administrator; providing duties of the
24 administrator; providing for payment of the
25 administrator for expenses; requiring that the
26 plan offer a renewable policy that provides
27 specified coverage; requiring that the plan
28 offer major medical expense coverage similar to
29 that provided by the state group health
30 insurance program; providing for covered
31 expenses; providing for premiums, deductibles,
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1 and coinsurance; requiring that the board
2 establish premium schedules; providing for
3 payment of coverage if the costs exceed the
4 deductible within a policy year; providing an
5 exclusion for preexisting conditions under
6 specified circumstances; providing for other
7 sources of insurance to be primary; providing a
8 cause of action for the association for the
9 recovery of benefits; providing that the
10 provision of health insurance is not an
11 entitlement; providing for coverage to be
12 insured by the Florida Health Endowment
13 Association; authorizing the board to contract
14 with insurers for disease management services;
15 providing tax credits for insurance companies
16 that contribute to the Florida Health Endowment
17 Association; providing for unused tax credits
18 to be claimed by a transferee; providing for
19 the plan to be terminated if it becomes
20 financially infeasible; repealing ss. 627.648,
21 627.6482, 627.6484, 627.6486, 627.6487,
22 627.64871, 627.6488, 627.6489, 627.649,
23 627.6492, 627.6494, 627.6496, 627.6498, Florida
24 Statutes; providing an appropriation; providing
25 a contingent effective date.
26
27 Be It Enacted by the Legislature of the State of Florida:
28
29 Section 1. Florida Health Endowment Association.--
30 (1) There is created a nonprofit legal entity to be
31 known as the "Florida Health Endowment Association."
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1 (2)(a) The association shall operate subject to the
2 supervision and approval of a five-member board of directors.
3 The board of directors shall be composed as follows:
4 1. The Secretary of Health, or his or her designee
5 from the Department of Health, who shall be the chairperson of
6 the board.
7 2. The Insurance Commissioner, or his or her designee
8 from the Department of Insurance.
9 3. The Governor shall appoint three members as
10 follows:
11 a. One representative of policyholders who is not
12 associated with the medical profession or a hospital.
13 b. One representative of the health insurance
14 industry.
15 c. One member of the public.
16
17 The administrator of the plan, or his or her affiliate, may
18 not be a member of the board. Any board member appointed may
19 be removed and replaced by his or her appointor at any time
20 without cause.
21 (b) All board members, including the chairperson,
22 shall be appointed to staggered 3-year terms beginning on a
23 date established in the plan of operation.
24 (c) The board of directors may employ persons to
25 perform the administrative and financial transactions and
26 responsibilities of the association and to perform other
27 necessary and proper functions not prohibited by law.
28 (d) Board members may be reimbursed from moneys of the
29 association for actual and necessary expenses incurred by them
30 as members, but may not otherwise be compensated for their
31 services.
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1 (e) There is no liability on the part of, and no cause
2 of action of any nature shall arise against, any employee of
3 the association, member of the board of directors of the
4 association, or a representative of the Department of Health
5 for any act or omission taken by them in the performance of
6 their powers and duties under this act, unless such act or
7 omission by such person is in intentional disregard of the
8 rights of the claimant.
9 (f) Meetings of the board are subject to section
10 286.011, Florida Statutes.
11 (3) The board of directors of the association shall
12 adopt a plan pursuant to this act and submit its articles,
13 bylaws, and operating rules to the Department of Health for
14 approval. If the board of directors fails to adopt such plan
15 and suitable articles, bylaws, and operating rules within 180
16 days after the appointment of the board, the department shall
17 adopt rules to implement this act, and such rules shall remain
18 in effect until superseded by a plan and articles, bylaws, and
19 operating rules submitted by the board of directors and
20 approved by the department.
21 (4) The board of directors of the association shall:
22 (a) Establish administrative and accounting procedures
23 for the operation of the association.
24 (b) Contract with an actuary to evaluate the pool of
25 insureds in the plan and monitor the financial status of the
26 Florida Health Endowment Trust Fund. The actuary shall
27 recommend to the board the opening and closing of the plan,
28 which must be based on an analysis of the trust fund; the
29 income of the trust fund; and any premiums, deductibles, and
30 coinsurance paid to the association.
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1 (c) Establish eligibility requirements for individuals
2 participating in the plan to ensure an actuarially sound
3 insurance pool.
4 (d) Establish procedures under which applicants and
5 participants in the plan may have grievances reviewed by an
6 impartial body and reported to the board.
7 (e) Select an administrator in accordance with section
8 4 of this act.
9 (f) Require that all policy forms issued by the
10 association conform to standard forms developed by the
11 association. The forms shall be approved by the Department of
12 Insurance.
13 (g) Develop and implement a program to publicize the
14 existence of the plan, the eligibility requirements for the
15 plan, and the procedures for enrollment in the plan, and
16 maintain public awareness of the plan.
17 (h) Design and employ cost-containment measures and
18 requirements that shall include, but are not limited to,
19 preadmission certification, any out-of-state health care, home
20 health care, hospice care, negotiated purchase of medical and
21 pharmaceutical supplies, and individual case management.
22 (i) Contract with preferred provider organizations and
23 health maintenance organizations giving due consideration to
24 the preferred provider organizations. If cost-effective and
25 available in the county where the policyholder resides, the
26 board, upon application or renewal of a policy, shall place a
27 high-risk individual, as established under section 5 of this
28 act, with the plan case manager who shall determine the most
29 cost-effective quality care system or health care provider and
30 shall place the individual in such system or with such health
31 care provider. If cost-effective and available in the county
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1 where the policyholder resides, the board, with the consent of
2 the policyholder, may place a low-risk or medium-risk
3 individual, as established under section 5 of this act, with
4 the plan case manager who may determine the most
5 cost-effective quality care system or health care provider and
6 shall place the individual in such system or with such health
7 care provider. Prior to and during the implementation of case
8 management, the plan case manager shall obtain input from the
9 policyholder, parent, guardian, and health care providers.
10 (j) Employ a case manager or managers to supervise and
11 manage the medical care or coordinate the supervision and
12 management of the medical care of specified individuals. The
13 case manager, with the approval of the board, shall have final
14 approval over the case management for any specific individual.
15 (k) Appoint an executive director to serve as the
16 chief administrative and operational officer of the board and
17 to perform other duties assigned to him or her by the board.
18 (l) Administer the Florida Health Endowment Trust Fund
19 in a manner that is sufficiently actuarially sound to defray
20 the obligations of the program. The board shall annually
21 evaluate or cause to be evaluated the actuarial soundness of
22 the fund. If the board perceives a need for additional assets
23 in order to preserve actuarial soundness, the board may adjust
24 the benefits of the plan to ensure such soundness.
25 (m) Establish a comprehensive investment plan with the
26 approval of the State Board of Administration. The
27 comprehensive investment plan must specify the investment
28 policies to be used by the board in administering the fund.
29 The board may place assets of the fund in savings accounts or
30 use the fund to purchase fixed or variable life insurance or
31 annuity contracts, securities, evidence of indebtedness, or
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1 other investment products pursuant to the comprehensive
2 investment plan and in such proportions as are designated or
3 approved under the investment plan. Such insurance, annuity,
4 savings, or investment products must be underwritten and
5 offered in compliance with the applicable federal and state
6 laws and rules by persons who are authorized by applicable
7 federal and state authorities. Within the comprehensive
8 investment plan, the board may authorize investment vehicles,
9 or products incident thereto, as are available or offered by
10 qualified companies or persons.
11 (n) Solicit proposals and contract, pursuant to
12 section 287.057, Florida Statutes, for a trustee services firm
13 to select and supervise investment programs on behalf of the
14 board. The goals of the board in selecting a trustee services
15 firm shall be to obtain the highest standards of professional
16 trustee services, to allow all qualified firms interested in
17 providing such services equal consideration, and to provide
18 such services to the state at no cost and to the purchasers at
19 the lowest cost possible. The trustee services firm must agree
20 to meet the obligations of the board to qualified
21 beneficiaries if moneys in the fund fail to offset the
22 obligations of the board as a result of imprudent selection or
23 supervision of investment programs by such firm. Evaluations
24 of proposals submitted under this paragraph must include, but
25 not be limited to, the following criteria:
26 1. Adequacy of trustee services for supervising and
27 managing the program, including current operations and staff
28 organization and commitment of management to the proposal.
29 2. Capability to execute plan responsibilities within
30 time and regulatory constraints.
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1 3. Past experience in trustee services and current
2 ability to maintain regular and continuous interactions with
3 the board, records administrator, and product provider.
4 4. The minimum purchaser participation assumed within
5 the proposal and any additional requirements of purchasers.
6 5. Adequacy of technical assistance and services
7 proposed for the staff.
8 6. Adequacy of a management system for evaluating and
9 improving overall trustee services to the plan.
10 7. Adequacy of facilities, equipment, and electronic
11 data processing services.
12 8. Detailed projections of administrative costs of
13 trustee services, including the amount and type of insurance
14 coverage, and detailed projections of total costs.
15 (o) Make a report to the Governor, the President of
16 the Senate, the Speaker of the House of Representatives, and
17 the Minority Leaders of the Senate and the House of
18 Representatives not later than October 1 of each year. The
19 report must summarize the activities of the plan for the
20 12-month period ending December 31 of the previous year,
21 including then-current data and estimates as to net written
22 and earned premiums, the expense of administration, the paid
23 and incurred losses for the year, the financial status of the
24 Florida Health Endowment Trust Fund, and any recommendations
25 by the actuary for the opening or closing of the plan. The
26 report shall also include analysis and recommendations for
27 legislative changes regarding utilization review, quality
28 assurance, an evaluation of the administrator of the plan,
29 access to cost-effective health care, and the cost-containment
30 and case-management policy and recommendations concerning the
31 opening of enrollment.
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1 (p) Establish a plan of operation which must include
2 the assumption of all liabilities of the Florida Comprehensive
3 Health Association and the transition of its remaining
4 policyholders into the plan.
5 (5) The board of directors of the association shall
6 have the powers necessary or proper to carry out the
7 provisions of this act, including, but not limited to, the
8 power to:
9 (a) Adopt an official seal and rules.
10 (b) Exercise powers granted to insurers under the laws
11 of this state.
12 (c) Sue or be sued.
13 (d) Make and execute contracts and other necessary
14 instruments.
15 (e) Prepare or contract for a performance audit of the
16 administrator of the association.
17 (f) Invest funds not required for immediate
18 disbursement.
19 (g) Appear in its own behalf before boards,
20 commissions, or other governmental agencies.
21 (h) Hold, buy, and sell any instruments, obligations,
22 securities, and property determined appropriate by the board.
23 (i) Restrict the number of participants in the plan
24 based on actuarial estimates. However, any person denied
25 participation solely on the basis of such restriction shall be
26 granted priority on a first-come, first-served basis for
27 participation in the succeeding years in which the plan is
28 reopened for participants.
29 (j) Contract for necessary goods and services; employ
30 necessary personnel; and engage the services of private
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1 consultants, actuaries, managers, legal counsel, and auditors
2 for administrative or technical assistance.
3 (k) Solicit and accept gifts, grants, loans, and other
4 aids from any source or participate in any other way in any
5 government program to carry out the purposes of this section.
6 (l) Require and collect administrative fees and
7 charges in connection with any transaction and impose
8 reasonable penalties, including default, for delinquent
9 payments or for entering into the plan on a fraudulent basis.
10 (m) Procure insurance against any loss in connection
11 with the property, assets, and activities of the fund or the
12 board.
13 (n) Establish other policies, procedures, and criteria
14 to implement and administer this section.
15 (o) Adopt procedures to govern contract dispute
16 proceedings between the board and its vendors.
17 Section 2. Definitions.--As used in sections 1-8, the
18 term:
19 (1) "Association" means the Florida Health Endowment
20 Association created in section 1.
21 (2) "Board" means the board of directors of the
22 association.
23 (3) "Case management" means the specific supervision
24 and management of the medical care provided or prescribed for
25 a specific individual, which may include the use of health
26 care providers designated by the plan case manager.
27 (4) "Department" means the Department of Health.
28 (5) "Medicaid" means the medical assistance program
29 authorized by Title XIX of the Social Security Act, 42 U.S.C.
30 s. 1396 et seq., and regulations thereunder, as administered
31 in this state by the agency.
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1 (6) "Medicare" means coverage under both parts A and B
2 of Title XVII of the Social Security Act, 42 U.S.C. ss. 1395
3 et seq., as amended.
4 (7) "Plan case manager" means the person or persons
5 employed by the association to supervise and manage or
6 coordinate with the administrator the supervision and
7 management of the medical care provided or prescribed for a
8 specific individual.
9 (8) "Plan of operation" means the articles, bylaws,
10 and operating rules and procedures adopted by the board
11 pursuant to section 1 of this act.
12 (9) "Plan" means the comprehensive health insurance
13 plan adopted by the association.
14 (10) "Resident" means a person who is legally
15 domiciled in this state.
16 Section 3. Eligibility.--
17 (1) Except as provided in subsection (2), any
18 individual person, who has been for the previous year and
19 continues to be a resident of the state, shall be eligible for
20 plan coverage if evidence is provided of:
21 (a) A notice of rejection or refusal to issue
22 substantially similar insurance for health reasons by an
23 insurer licensed to do business in this state; or
24 (b) A refusal by an insurer to issue insurance except
25 at a rate exceeding the plan rate.
26
27 A rejection or refusal by an insurer offering only stop-loss,
28 excess-of-loss, or reinsurance coverage with respect to the
29 applicant shall be sufficient evidence under this subsection.
30 (2) The board or administrator shall require
31 verification of residency and shall require any additional
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1 information or documentation or statements under oath, when
2 necessary to determine residency upon initial application and
3 for the entire term of the policy.
4 (3) The board shall promulgate a list of medical or
5 health conditions for which a person is eligible for plan
6 coverage without applying for health insurance pursuant to
7 subsection (1). Persons who demonstrate the existence or
8 history of any medical or health conditions on the list
9 promulgated by the board shall not be required to provide the
10 evidence specified in subsection (1). The list shall be
11 effective on the first day of the operation of the plan and
12 may be amended as appropriate.
13 (4) Any resident dependent unmarried child of the
14 insured is eligible from the moment of birth, provided that no
15 other coverage is available. Subject to the provisions of s.
16 627.6041, such coverage shall terminate at the end of the
17 premium period in which the child marries, ceases to be a
18 dependent of the insured, or attains the age of 19, whichever
19 occurs first. However, if the child is a full-time student at
20 an accredited institution of higher learning, the coverage may
21 continue while the child remains unmarried and a full-time
22 student, but not beyond the premium period in which the child
23 reaches age 23.
24 (5) A person is ineligible for coverage under the plan
25 if:
26 (a) The person has or obtains health insurance
27 coverage substantially similar to or more comprehensive than a
28 plan policy, or would be eligible to have coverage if the
29 person elected to obtain it.
30 (b) The person is an inmate or resident of a public
31 institution or correction facility; or
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1 (c) The person's premiums are paid for or reimbursed
2 under any government-sponsored program or by any government
3 agency or health care provider, except as an agency or health
4 care provider.
5 (d) The person has received $500,000 in covered
6 benefits that have been paid out pursuant to the plan.
7 (e) The person is eligible, on the date of issue of
8 coverage under the plan, for substantially similar coverage
9 under another contract or policy, unless such coverage is
10 provided pursuant to the Consolidated Omnibus Budget
11 Reconciliation Act of 1985, Pub. L. No. 99-272, 100 Stat. 82
12 (1986) (COBRA), as amended, and scheduled to end at a time
13 certain and the person meets all other requirements of
14 eligibility. Coverage provided by the association shall be
15 secondary to any coverage provided by an insurer pursuant to
16 COBRA.
17 (f) The person is currently eligible for health care
18 benefits under Florida's Medicaid program, unless he or she:
19 1. Has an illness or disease that requires supplies or
20 medication that are covered by the plan but are not included
21 in the benefits or coverage under Florida's Medicaid program;
22 and
23 2. Is not receiving health care benefits or coverage
24 under Florida's Medicaid program.
25 (5) Coverage shall cease:
26 (a) On the date a person is no longer a resident of
27 this state;
28 (b) On the date a person requests coverage to end;
29 (c) Upon the death of the covered person;
30 (d) On the date state law requires cancellation of the
31 policy; or
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1 (e) At the option of the plan, 30 days after the plan
2 makes any inquiry concerning the person's eligibility or place
3 of residence to which the person does not reply.
4 (6) All eligible persons who are classified as
5 high-risk individuals shall, upon application or renewal,
6 agree to be placed in a case-management system when it is
7 determined by the board and the plan case manager that such
8 system will be cost-effective and provide quality care to the
9 individual.
10 (7) The coverage of any person who ceases to meet the
11 eligibility requirements of this section may be terminated
12 immediately. If such person again becomes eligible for
13 subsequent coverage under the plan, any previous claims
14 payments shall be applied towards the $500,000 lifetime
15 maximum benefit and any limitation relating to preexisting
16 conditions in effect at the time such person again becomes
17 eligible shall apply to such person.
18 Section 4. Administrator.--
19 (1) The board shall select an administrator, through a
20 competitive bidding process, to administer the plan. The board
21 shall evaluate bids submitted under this subsection based on
22 criteria established by the board, which criteria must
23 include:
24 (a) The administrator's proven ability to handle
25 individual accident and health insurance.
26 (b) The extent to which the administrator has
27 developed a network of health care providers for providing
28 managed health care on a statewide basis.
29 (c) The efficiency of the administrator's
30 claims-paying procedures.
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1 (d) An estimate of total charges for administering the
2 plan.
3 (2) The administrator shall serve for a period of 3
4 years. At least 1 year prior to the expiration of each 3-year
5 period of service by an administrator, the board shall invite
6 all insurers, including the current administering insurer, to
7 submit bids to serve as the administrator for the succeeding
8 3-year period. The selection of the administrator for the
9 succeeding period must be made at least 6 months prior to the
10 end of the current 3-year period.
11 (3) The administrator shall:
12 (a) Perform all eligibility and administrative
13 claims-payment functions relating to the plan, as prescribed
14 by the board.
15 (b) Pay an agent's referral fee as established by the
16 board to each insurance agent who refers an applicant to the
17 plan, if the applicant's application is accepted. The selling
18 or marketing of plans is not limited to the administrator or
19 its agents. However, any agent must be selected by the board
20 and licensed by the Department of Insurance to sell health
21 insurance in this state. The referral fees shall be paid by
22 the administrator from moneys received as premiums for the
23 plan.
24 (c) Establish a premium-billing procedure for
25 collecting premiums from insured persons. Billings shall be
26 made periodically as determined by the board.
27 (d) Perform all necessary functions to assure timely
28 payment of benefits under the plan, including:
29 1. Making available information relating to the proper
30 manner of submitting a claim for benefits under the plan and
31 distributing forms upon which submissions are made.
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1 2. Evaluating the eligibility of each claim for
2 payment under the plan.
3 3. Notifying each claimant, within the time limits
4 prescribed by law, as to insurers after receiving a properly
5 completed and executed proof of loss whether the claim is
6 accepted, rejected, or compromised.
7 (e) Submit regular reports to the board regarding the
8 operation of the plan. The frequency, content, and form of the
9 reports shall be determined by the board.
10 (f) Following the close of each calendar year,
11 determine net premiums, reinsurance premiums less
12 administrative expense allowance, and the expense of
13 administration pertaining to the reinsurance operations of the
14 association.
15 (g) Pay claims expenses from the premium payments
16 received from or on behalf of covered persons under the plan.
17 If the payments by the administrator for claims expenses
18 exceed the portion of premiums allocated by the board for
19 payment of claims expenses, the board shall provide the
20 administrator with additional funds for payment of claims
21 expenses to the extent that such funds are available.
22 (4)(a) The administrator shall be paid, as provided in
23 the contract of the association, for its direct and indirect
24 expenses incurred in the performance of its services.
25 (b) As used in this subsection, the term "direct and
26 indirect expenses" includes that portion of the audited
27 administrative costs, printing expenses, claims administration
28 expenses, management expenses, building overhead expenses, and
29 other actual operating and administrative expenses of the
30 administering insurer which are approved by the board as
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1 allocable to the administration of the plan and included in
2 the bid specifications.
3 Section 5. Minimum benefits coverage; exclusions;
4 premiums; deductibles.--
5 (1) COVERAGE OFFERED.--
6 (a) The plan shall offer in an annually renewable
7 policy the coverage specified in this section for each
8 eligible person.
9 (b) If an eligible person is also eligible for
10 Medicare coverage, the plan may not pay or reimburse any
11 person for expenses paid by Medicare.
12 (c) Any person whose health insurance coverage is
13 involuntarily terminated for any reason other than nonpayment
14 of premium may apply for coverage under the plan. If such
15 coverage is applied for within 60 days after the involuntary
16 termination and if premiums are paid for the entire period of
17 coverage, the effective date of the coverage shall be the date
18 of termination of the previous coverage.
19 (d) Coverage provided to a person who is eligible for
20 Medicare benefits may not be issued as a Medicare supplement
21 policy as defined in section 627.672, Florida Statutes.
22 (2) BENEFITS.--
23 (a) The plan shall offer major medical expense
24 coverage to every eligible person, subject to limitations set
25 by the board. Major medical expense coverage offered under the
26 plan shall pay an eligible person's covered expenses, subject
27 to limits on the deductible and coinsurance payments
28 authorized under subsection (4), up to a lifetime limit of
29 $500,000 per covered individual. The maximum limit under this
30 paragraph may not be altered by the board, and no actuarially
31 equivalent benefit may be substituted by the board.
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1 (b) The plan shall provide that any policy issued to a
2 person eligible for Medicare shall be separately rated to
3 reflect differences in experience reasonably expected to occur
4 as a result of Medicare payments.
5 (3) COVERED EXPENSES.--The coverage to be issued by
6 the association shall, at a minimum, be patterned after the
7 standard individual health insurance plan approved by the
8 Department of Insurance.
9 (4) PREMIUMS, DEDUCTIBLES, AND COINSURANCE.--
10 (a) The plan shall provide for annual deductibles for
11 major medical expense coverage in the amount of $1,000 or any
12 higher amounts proposed by the board and approved by the
13 department, plus the benefits payable under any other type of
14 insurance coverage or workers' compensation. The schedule of
15 premiums and deductibles shall be established by the
16 association. With regard to any preferred provider arrangement
17 used by the association, the deductibles provided in this
18 paragraph shall be the minimum deductibles applicable to the
19 preferred providers and higher deductibles, as approved by the
20 department, may be applied to providers who are not preferred
21 providers.
22 1. Separate schedules of premium rates based on age
23 may apply for individual risks.
24 2. Rates are subject to approval by the department.
25 3. Standard risk rates for coverages issued by the
26 association shall be established under section 627.6675(3),
27 Florida Statutes.
28 4. The board shall establish separate premium
29 schedules for low-risk individuals, medium-risk individuals,
30 and high-risk individuals and shall revise premium schedules
31 annually beginning January 2000. A rate may not exceed 150
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1 percent of the standard risk rate for low-risk individuals,
2 200 percent of the standard risk rate for medium-risk
3 individuals, or 250 percent of the standard risk rate for
4 high-risk individuals. For the purpose of determining what
5 constitutes a low-risk individual, medium-risk individual, or
6 high-risk individual, the board shall consider the anticipated
7 claims payment for individuals based upon an individual's
8 health condition.
9 (b) If the covered costs incurred by the eligible
10 person exceed the deductible for major medical expense
11 coverage selected by the person in a policy year, the plan
12 shall pay in the following manner:
13 1. For individuals placed under case management, after
14 satisfaction of the deductible, the plan shall pay 90 percent
15 of the additional covered costs incurred by the person during
16 the policy year for the first $10,000, after which the plan
17 shall pay 100 percent of the covered costs incurred by the
18 person during the policy year.
19 2. For individuals using the preferred provider
20 network, after satisfaction of the deductible, the plan shall
21 pay 80 percent of the additional covered costs incurred by the
22 person during the policy year for the first $10,000, after
23 which the plan shall pay 90 percent of covered costs incurred
24 by the person during the policy year.
25 3. If the person does not use the case management
26 system or the preferred provider network, after satisfaction
27 of the deductible, the plan shall pay 60 percent of the
28 additional covered costs incurred by the person for the first
29 $10,000, after which the plan shall pay 70 percent of the
30 additional covered costs incurred by the person during the
31 policy year.
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1 4. For individuals placed under case management or
2 individuals using the preferred provider network, the maximum
3 out-of-pocket expense, after satisfaction of the deductible,
4 is limited to $10,000 per calendar year.
5 (c) All premiums, deductibles, and coinsurance paid to
6 the association shall be deposited with the Florida Health
7 Endowment Association.
8 (d) Notwithstanding the provisions of section 624.509,
9 Florida Statutes, premiums for coverage shall, as to the
10 association and participating insurers, be exempt from premium
11 taxation.
12 (5) PREEXISTING CONDITIONS.--An association policy may
13 contain provisions under which coverage is excluded during a
14 period of 12 months following the effective date of coverage
15 with respect to a given covered individual for any preexisting
16 condition, if:
17 (a) The condition manifested itself within 6 months
18 before the effective date of coverage; or
19 (b) Medical advice or treatment was recommended or
20 received within 6 months before the effective date of
21 coverage.
22 (6) OTHER SOURCES PRIMARY.--
23 (a) Any amounts paid or payable by Medicare or any
24 other governmental program or any other insurance, or
25 self-insurance maintained in lieu of otherwise statutorily
26 required insurance, may not be made or recognized as claims
27 under such policy or be recognized as or towards satisfaction
28 of applicable deductibles or out-of-pocket maximums or to
29 reduce the limits of benefits available.
30 (b) The association has a cause of action against a
31 participant for any benefits paid to the participant which
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1 should not have been claimed or recognized as claims because
2 of the provisions of this subsection or because the condition
3 is not covered.
4 (7) NONENTITLEMENT.--This section does not provide an
5 individual with an entitlement to health care services or
6 health insurance. No cause of action shall arise against the
7 state, the board, or a unit of local government for failure to
8 make health services or health insurance available under this
9 section.
10 (8) ISSUING OF POLICIES.--The coverage provided by
11 this plan shall be directly insured by the Florida Health
12 Endowment Association, and the policies shall be issued
13 through the administrator.
14 Section 6. Disease management services.--
15 (1) The association may contract with insurers to
16 provide disease management services for insurers that elect to
17 participate in the association disease management program.
18 (2) An insurer that elects to contract for such
19 services shall provide the association with all medical
20 records and claims information necessary for the association
21 to effectively manage the services.
22 (3) Moneys collected by the association for providing
23 disease management services shall be used by the association
24 to pay administrative expenses associated with the disease
25 management program and any remaining moneys shall be deposited
26 in the Florida Health Endowment Trust Fund.
27 Section 7. Tax credits.--
28 (1)(a) Any insurance company subject to premium tax
29 liability pursuant to section 624.509, Florida Statutes, who
30 makes a contribution to the Florida Health Endowment
31 Association shall earn a vested credit against premium tax
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1 liability equal to 100 percent of the contribution. Insurance
2 companies may use not more than 25 percentage points of the
3 vested premium tax credit, including any carryforward credits
4 under this act, per year beginning with premium tax filings
5 for calendar year 2001. Any premium tax credits not used in
6 any single year may be carried forward and applied against the
7 premium tax liabilities for subsequent calendar years.
8 (b) The credit to be applied against premium tax
9 liability in any single year may not exceed the premium tax
10 liability of the insurance company for that taxable year.
11 (c) An insurance company claiming a credit against
12 premium tax liability earned through an investment in the
13 Florida Health Endowment Association is not required to pay
14 any additional retaliatory tax levied under section 624.5091,
15 Florida Statutes, as a result of claiming such credit. Because
16 credits under this section are available to an insurance
17 company, section 624.5091, Florida Statutes, does not limit
18 such credit in any manner.
19 (2) The claim of a transferee of an insurance
20 company's unused premium tax credit shall be permitted in the
21 same manner and subject to the same provisions and limitations
22 of this act as the original insurance company. The term
23 "transferee" means any person who:
24 (a) Through the voluntary sale, assignment, or other
25 transfer of the business or control of the business of the
26 insurance company, including the sale or other transfer of
27 stock or assets by merger, consolidation, or dissolution,
28 succeeds to all or substantially all of the business and
29 property of the insurance company;
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1 (b) Becomes by operation of law or otherwise the
2 parent company or a wholly owned subsidiary of the insurance
3 company; or
4 (c) Directly or indirectly owns, whether through
5 rights, options, convertible interests, or otherwise,
6 controls, or holds power to vote 10 percent or more of the
7 outstanding voting securities or other ownership interest of
8 the insurance company.
9 Section 8. Plan termination.--If the state determines
10 the plan to be financially infeasible, the state may
11 discontinue the plan. Any participants shall be entitled to
12 exercise the complete benefits for which he or she has
13 contracted. However, additional participants may not be
14 permitted to enter the plan.
15 Section 9. Section 627.648, Florida Statutes; section
16 627.6482, Florida Statutes, as amended by sections 224 and 292
17 of chapter 98-166, Laws of Florida; sections 627.6484 and
18 627.6486, Florida Statutes; section 627.6487, Florida
19 Statutes, as amended by section 5 of chapter 98-159, Laws of
20 Florida; sections 627.64871, 627.6488, 627.6489, 627.649, and
21 627.6496, Florida Statutes; and section 627.6498, Florida
22 Statutes, as amended by section 6 of chapter 98-159, Laws of
23 Florida, are repealed effective upon the opening of the plan
24 by the board. Sections 627.6492 and 627.6494, Florida
25 Statutes, are repealed January 1, 2000. Effective upon the
26 date of the opening of the plan, all individuals who have
27 insurance coverage issued by the Florida Comprehensive Health
28 Association on that date shall be issued insurance coverage
29 under the plan. The association shall assume all assets and
30 liabilities of the Florida Comprehensive Health Association.
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1 Section 10. The sum of $50 million is appropriated
2 from the General Revenue Fund to the Florida Health Endowment
3 Trust Fund.
4 Section 11. This act shall take effect July 1, 1999,
5 contingent upon the sum of $50 million being appropriated to
6 the Florida Health Endowment Trust Fund.
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1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 Senate Bill 1800
3
4 1. Clarifies that the designee of the Secretary of Health
be from the Department of Health and the designee of the
5 Insurance Commissioner be from the Insurance Department.
These members will serve on the board of the Florida
6 Health Endowment Association (FHEA).
7 2. Adds "Definitions" and "Eligibility" sections. The
"Definitions" section defines certain terms regarding
8 the structure and operation of the FHEA. Clarifies that
the Department of Health is the agency responsible for
9 approving all the FHEA articles, bylaws, and operating
rules.
10
The "Eligibility" section provides that a Florida
11 resident shall be eligible for the FHEA plan provided he
or she receives a notice of rejection or refusal to
12 issue substantially similar coverage for health reasons
by an insurer licensed to issue coverage in Florida, or
13 at rates higher than the FHEA plan rates. Verification
of residency is required. The board is given the
14 authority to provide exceptions to the eligibility
criteria by promulgating a list of medical or health
15 conditions which would guarantee eligibility for the
plan without applying and being rejected for coverage in
16 the standard market. Also, resident dependent unmarried
children of the insured are eligible, provided that no
17 other coverage is available.
18 Restrictions for eligibility are included: persons who
have or obtain substantially similar coverage (with the
19 exception of COBRA); residents of public institutions or
prisons, persons whose premiums are paid under any
20 government sponsored program; persons who have reached
the lifetime maximum of $500,000 in covered benefits; or
21 persons who are eligible for Medicaid, unless their
illness or disease requires supplies or medication which
22 are covered under the FHEA plan, but not covered under
Medicaid. The circumstances under which coverage will
23 cease are specified as are provisions for the use of a
case management system. Reentry into the FHEA is
24 allowed, though currently prohibited under the Florida
Comprehensive Health Association. However, a person
25 reentering would be subject to any new pre-existing
condition limitations in effect at the time and previous
26 claim payments would be applied to the $500,000 lifetime
maximum benefit limit.
27
3. Repeals all provisions under the Florida Comprehensive
28 Health Association (FCHA) effective January 1, 2000.
Provides that effective upon the opening of the
29 comprehensive health insurance plan adopted by the FHEA,
all individuals covered under FCHA shall be issued
30 insurance coverage under FHEA. Provides that FHEA will
assume all assets and liabilities of the FCHA. Deletes
31 the provision allowing an assessment against insurers
and health maintenance organizations for the operating
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1 losses of the FHEA.
2 4. Provides that $50 million is appropriated from the
General Revenue Fund to the Florida Health Endowment
3 Trust Fund (created by CS/SB 1802) and that the act
shall take effect contingent upon the $50 million being
4 appropriated to the Trust Fund.
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