Senate Bill 2356

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    Florida Senate - 1999                                  SB 2356

    By Senator Campbell





    33-1004-99

  1                      A bill to be entitled

  2         An act relating to the State Group Insurance

  3         Program; amending s. 20.22, F.S.; clarifying

  4         provisions relating to operation of the

  5         Division of State Group Insurance; deleting a

  6         prohibition that the Florida State Group

  7         Insurance Council may not participate in

  8         granting or denying a license or permit issued

  9         by the division; amending s. 110.123, F.S.;

10         revising and adding definitions; providing for

11         Career Service exemptions in the Division of

12         State Group Insurance; clarifying and

13         correcting references; clarifying requirements

14         for contracting with health maintenance

15         organizations; updating provisions relating to

16         agency payment of premiums for certain

17         employees injured or killed in the line of

18         duty, to conform to existing law; providing

19         conditions under which confidential medical

20         records of state employees, former state

21         employees, and their dependents may be

22         released; providing the division with a right

23         of reimbursement; amending s. 110.12315, F.S.;

24         revising, clarifying, and reorganizing

25         provisions relating to the state employees'

26         prescription drug program; increasing

27         copayments; amending s. 110.1232, F.S.,

28         relating to health insurance coverage for

29         certain state retirees; conforming references;

30         amending s. 110.1234, F.S., relating to

31         Medicare supplement coverage for state

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  1         retirees; conforming a reference; creating s.

  2         110.1239, F.S.; providing for protection of

  3         state employee health insurance benefits;

  4         amending s. 110.161, F.S., relating to the

  5         State Employees Pretax Benefits Program Act;

  6         correcting references and updating provisions;

  7         amending s. 110.205, F.S.; conforming

  8         provisions to changes made by the act;

  9         providing for the designation of Senior

10         Management Service positions; amending s.

11         768.76, F.S.; providing that benefits received

12         under the state group health self-insurance

13         plan are not a collateral source of indemnity;

14         providing that certain HMO's are not considered

15         a collateral source of indemnity; providing an

16         effective date.

17

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

19

20         Section 1.  Paragraphs (a) and (e) of subsection (5) of

21  section 20.22, Florida Statutes, are amended to read:

22         20.22  Department of Management Services.--There is

23  created a Department of Management Services.

24         (5)(a)  The Florida State Group Insurance Council is

25  created within the Division of State Group Insurance for the

26  purpose of providing joint and coordinated oversight of the

27  operation and administration of the state group insurance

28  program.  The council shall consist of the state budget

29  director; an individual from the private sector with an

30  extensive health administration background, appointed by the

31  Governor; a member of the Florida Senate, appointed by the

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  1  President of the Senate; a member of the Florida House of

  2  Representatives, appointed by the Speaker of the House of

  3  Representatives; a representative of the State University

  4  System, appointed by the Board of Regents; the State Insurance

  5  Commissioner or his designee; the director of the Division of

  6  Retirement; and two representatives of employees and retirees,

  7  appointed by the Governor. Members of the council appointed by

  8  the Governor shall be appointed to serve terms of 4 years

  9  each.  Each member of the council shall serve until a

10  successor is appointed.  Additionally, The director of the

11  Division of State Group Employee Insurance shall be a

12  nonvoting member of the council.

13         (e)  The council or a member thereof may not enter into

14  the day-to-day operation of the Division of State Group

15  Insurance and is specifically prohibited from taking part in:

16         1.  The awarding or termination of contracts.

17         2.  The selection of a consultant or contractor or the

18  prequalification of any individual consultant or contractor.

19  However, the council may recommend to the director standards

20  and policies governing the procedure for selection and

21  prequalification of consultants and contractors.

22         3.  The employment, promotion, demotion, suspension,

23  transfer, or discharge of any division personnel.

24         4.  The granting, denial, suspension, or revocation of

25  any license or permit issued by the division.

26         Section 2.  Subsection (2), paragraphs (a), (e), and

27  (h) of subsection (3), paragraphs (a) and (e) of subsection

28  (4), and subsections (5) and (9) of section 110.123, Florida

29  Statutes, 1998 Supplement, are amended, and subsection (12) is

30  added to that section, to read:

31         110.123  State group insurance program.--

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  1         (2)  DEFINITIONS.--As used in this section, unless the

  2  context otherwise requires, the term:

  3         (a)  "Department" means the Department of Management

  4  Services.

  5         (b)  "Division" means the Division of State Group

  6  Insurance in the department.

  7         (c)  "Enrollee" means all state officers and employees,

  8  retired state officers and employees, and surviving spouses of

  9  deceased state officers and employees, and terminated

10  employees or individuals with continuation coverage who are

11  enrolled in an insurance plan offered by the state group

12  insurance program.

13         (d)  "Full-time state employees" includes all full-time

14  employees of all branches or agencies of state government

15  holding salaried positions and paid by state warrant or from

16  agency funds, and employees paid from regular salary

17  appropriations for 8 months' employment, including university

18  personnel on academic contracts, but in no case shall "state

19  employee" or "salaried position" include persons paid from

20  other-personal-services (OPS) funds.

21         (e)  "Health maintenance organization" or "HMO" means

22  an entity certified under part I of chapter 641.

23         (f)  "Health plan member" means any person

24  participating in the state group health insurance plan or in a

25  health maintenance organization plan under the state group

26  insurance program, including enrollees and covered dependents

27  thereof.

28         (g)(f)  "Part-time state employee" means any employee

29  of any branch or agency of state government paid by state

30  warrant from salary appropriations or from agency funds, and

31  who is employed for less than the normal full-time workweek

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  1  established by the department or, if on academic contract or

  2  seasonal or other type of employment which is less than

  3  year-round, is employed for less than 8 months during any

  4  12-month period, but in no case shall "part-time" employee

  5  include a person paid from other-personal-services (OPS)

  6  funds.

  7         (h)(g)  "Retired state officer or employee" or

  8  "retiree" means any state officer or state employee who

  9  retires under a state retirement system or a state optional

10  annuity or retirement program or is placed on disability

11  retirement, and who was insured under the state group

12  insurance program at the time of retirement, and who begins

13  receiving retirement benefits immediately after retirement

14  from state office or employment.

15         (i)(h)  "State agency" or "agency" means any branch,

16  department, or agency of state government.

17         (j)  "State-contracted HMO" means any health

18  maintenance organization under contract with the division to

19  participate in the state group insurance program.

20         (k)(i)  "State group health insurance plan" or "state

21  plan" means the state self-insured health insurance plan

22  offered to state officers and employees, retired state

23  officers and employees, and surviving spouses of deceased

24  state officers and employees pursuant to this section.

25         (l)(j)  "State group insurance program" or "programs"

26  means the package of insurance plans offered to state officers

27  and employees, retired state officers and employees, and

28  surviving spouses of deceased state officers and employees

29  pursuant to this section, including the state group health

30  insurance plan, health maintenance organization plans, and

31  other plans required or authorized by this section.

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  1         (m)(k)  "State officer" means any constitutional state

  2  officer, any elected state officer paid by state warrant, or

  3  any appointed state officer who is commissioned by the

  4  Governor and who is paid by state warrant.

  5         (n)(l)  "Surviving spouse" means the widow or widower

  6  of a deceased state officer, full-time state employee,

  7  part-time state employee, or retiree if such widow or widower

  8  was covered as a dependent under the state group health

  9  insurance plan or a health maintenance organization plan

10  established pursuant to this section at the time of the death

11  of the deceased officer, employee, or retiree.  "Surviving

12  spouse" also means any widow or widower who is receiving or

13  eligible to receive a monthly state warrant from a state

14  retirement system as the beneficiary of a state officer,

15  full-time state employee, or retiree who died prior to July 1,

16  1979.  For the purposes of this section, any such widow or

17  widower shall cease to be a surviving spouse upon his or her

18  remarriage.

19         (3)  STATE GROUP INSURANCE PROGRAM.--

20         (a)  The Division of State Group Insurance is created

21  within the Department of Management Services, to be headed by

22  a director who shall be appointed by the Governor and

23  confirmed by the Senate.  The division shall be a separate

24  budget entity, and the director shall be its agency head for

25  all purposes.

26         1.  The director and assistant director are exempt from

27  the Career Service System as provided under s. 110.205(2)(i).

28  In addition to the 20 policymaking positions allocated to the

29  Department of Management Services, under s. 110.205(2)(m), the

30  director, as agency head, may designate as being exempt from

31  the Career Service System a maximum of 10 positions determined

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  1  by the director to have policymaking or managerial

  2  responsibilities comparable to such positions.

  3         2.  The Department of Management Services shall provide

  4  administrative support and service to the division to the

  5  extent requested by the director. The division shall not be

  6  subject to control, supervision, or direction by the

  7  Department of Management Services in any manner, including,

  8  but not limited to, personnel, purchasing, transactions

  9  involving real or personal property, and budgetary matters,

10  except to the extent as provided in this chapter and chapters

11  216, 255, 282, and 287 for agencies of the executive branch.

12         (e)1.  Notwithstanding the provisions of chapter 287

13  and the authority of the department, for the purpose of

14  protecting the health of, and providing medical services to,

15  state employees participating in the state group insurance

16  program Employees' Health Self-Insurance Plan, the Division of

17  State Group Insurance may contract to retain the services of

18  professional administrators for the state group insurance

19  program Employees' Health Self-Insurance Plan.  The division

20  agency shall follow good purchasing practices of state

21  procurement to the extent practicable under the circumstances.

22         2.  Each vendor in a major procurement, and any other

23  vendor if the division deems it necessary to protect the

24  state's financial interests, shall, at the time of executing

25  any contract with the division, post an appropriate bond with

26  the division in an amount determined by the division to be

27  adequate to protect the state's interests but not higher than

28  the full amount estimated to be paid annually to the vendor

29  under the contract.

30         3.  Each major contract entered into by the division

31  pursuant to this section shall contain a provision for payment

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  1  of liquidated damages to the division for material

  2  noncompliance by a vendor with a contract provision. The

  3  division may require a liquidated damages provision in any

  4  contract if the division deems it necessary to protect the

  5  state's financial interests.

  6         4.  The provisions of s. 120.57(3) apply to the

  7  division's contracting process, except:

  8         a.  A formal written protest of any decision, intended

  9  decision, or other action subject to protest shall be filed

10  within 72 hours after receipt of notice of the decision,

11  intended decision, or other action.

12         b.  As an alternative to any provision of s. 120.57(3),

13  the division may proceed with the bid selection or contract

14  award process if the director of the division department sets

15  forth, in writing, particular facts and circumstances which

16  demonstrate the necessity of continuing the procurement

17  process or the contract award process in order to avoid a

18  substantial disruption to the provision of any scheduled

19  insurance services.

20         (h)1.  A person eligible to participate in the state

21  group health insurance program plan may be authorized by rules

22  adopted by the division, in lieu of participating in the state

23  group health insurance plan, to exercise an option to elect

24  membership in a health maintenance organization plan which is

25  under contract with the state in accordance with criteria

26  established by this section and by said rules.  The offer of

27  optional membership in a health maintenance organization plan

28  permitted by this paragraph may be limited or conditioned by

29  rule as may be necessary to meet the requirements of state and

30  federal laws.

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  1         2.  The division shall contract with health maintenance

  2  organizations seeking to participate in the state group

  3  insurance program through issuance of a request for proposal

  4  or by contract negotiation based upon a premium and a minimum

  5  benefit package as follows:

  6         a.  A minimum benefit package to be provided by a

  7  participating HMO shall include: physician services; inpatient

  8  and outpatient hospital services; emergency medical services,

  9  including out-of-area emergency coverage; diagnostic

10  laboratory and diagnostic and therapeutic radiologic services;

11  mental health, alcohol, and chemical dependency treatment

12  services meeting the minimum requirements of state and federal

13  law; skilled nursing facilities and services; prescription

14  drugs; and other benefits as may be required by the division.

15  Additional services may be provided subject to the contract

16  between the division and the HMO.

17         b.  A uniform schedule for deductibles and copayments

18  may be established for all participating HMOs.

19         c.  Based upon the minimum benefit package and

20  copayments and deductibles contained in sub-subparagraphs a.

21  and b., the division shall issue a request for proposal for,

22  or enter into contract negotiations with, any or all HMOs

23  which are interested in participating in the state group

24  insurance program. Upon receipt of all proposals, the division

25  may, as it deems appropriate, enter into contract negotiations

26  with HMOs submitting bids. As part of the request for proposal

27  process, The division may require detailed financial data from

28  each HMO which participates in the bidding or contract

29  negotiation process for the purpose of determining the

30  financial stability of the HMO.

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  1         d.  In determining which HMOs to contract with, the

  2  division shall, at a minimum, consider:  each proposed

  3  contractor's previous experience and expertise in providing

  4  prepaid health benefits; each proposed contractor's historical

  5  experience in enrolling and providing health care services to

  6  participants in the state group insurance program; the cost of

  7  the premiums; the plan's ability to adequately provide service

  8  coverage and administrative support services as determined by

  9  the division; plan benefits in addition to the minimum benefit

10  package; accessibility to providers; and the financial

11  solvency of the plan. Nothing shall preclude the division from

12  negotiating regional or statewide contracts with one or more

13  health maintenance organization plans when this is

14  cost-effective and when the division determines that this

15  approach is cost-effective and that the plan or plans have has

16  the best overall benefit package for the service areas

17  involved.  However, no HMO shall be eligible for a contract if

18  the HMO's retiree Medicare premium exceeds the retiree rate as

19  set by the division for the state group health insurance plan.

20         e.  The division may limit the number of HMOs that it

21  contracts with in each service area based on the nature of the

22  bids the division receives, the number of state employees in

23  the service area, or and any unique geographical

24  characteristics of the service area. The division shall

25  establish by rule service areas throughout the state.

26         f.  All persons participating in the state group

27  insurance program who are required to contribute towards a

28  total state group health premium shall be subject to the same

29  dollar contribution regardless of whether the enrollee enrolls

30  in the state group health insurance plan or in an HMO plan.

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  1         3.  The division is authorized to negotiate and to

  2  contract with specialty psychiatric hospitals for mental

  3  health benefits, on a regional basis, for alcohol, drug abuse,

  4  and mental and nervous disorders. The division may establish,

  5  subject to the approval of the Legislature pursuant to

  6  subsection (5), any such regional plan upon completion of an

  7  actuarial study to determine any impact on plan benefits and

  8  premiums.

  9         4.  In addition to contracting pursuant to subparagraph

10  2., the division shall enter into contract with any HMO to

11  participate in the state group insurance program which:

12         a.  Serves greater than 5,000 recipients on a prepaid

13  basis under the Medicaid program;

14         b.  Does not currently meet the 25 percent

15  non-Medicare/non-Medicaid enrollment composition requirement

16  established by the Department of Health and Human Services

17  excluding participants enrolled in the state group insurance

18  program;

19         c.  Meets the minimum benefit package and copayments

20  and deductibles contained in sub-subparagraphs 2.a. and b.;

21         d.  Is willing to participate in the state group

22  insurance program at a cost of premiums that is not greater

23  than 95 percent of the cost of HMO premiums accepted by the

24  division in each service area; and

25         e.  Meets the minimum surplus requirements of s.

26  641.225.

27

28  The division is authorized to contract with HMOs that meet the

29  requirements of sub-subparagraphs a. through d. prior to the

30  open enrollment period for state employees.  The division is

31  not required to renew the contract with the HMOs as set forth

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  1  in this paragraph more than twice. Thereafter, the HMOs shall

  2  be eligible to participate in the state group insurance

  3  program only through the request for proposal process

  4  described in subparagraph 2.

  5         5.  All enrollees in the state group health insurance

  6  plan or any health maintenance organization plan shall have

  7  the option of changing to any other health plan which is

  8  offered by the state within any open enrollment period

  9  designated by the division. Open enrollment shall be held at

10  least once each calendar year.

11         6.  Any HMO participating in the state group insurance

12  program shall, upon the request of the division, submit to the

13  division standardized data for the purpose of comparison of

14  the appropriateness, quality, and efficiency of care provided

15  by the HMO. Such standardized data shall include:  membership

16  profiles; inpatient and outpatient utilization by age and sex,

17  type of service, provider type, and facility; and emergency

18  care experience. Requirements and timetables for submission of

19  such standardized data and such other data as the division

20  deems necessary to evaluate the performance of participating

21  HMOs shall be adopted by rule.

22         7.  The division shall, after consultation with

23  representatives from each of the unions representing state and

24  university employees, establish a comprehensive package of

25  insurance benefits including, but not limited to, supplemental

26  health and life coverage, dental care, long-term care, and

27  vision care to allow state employees the option to choose the

28  benefit plans which best suit their individual needs.

29         a.  Based upon a desired benefit package, the division

30  shall issue a request for proposal for health insurance

31  providers interested in participating in the state group

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  1  insurance program, and the division shall issue a request for

  2  proposal for insurance providers interested in participating

  3  in the non-health-related components of the state group

  4  insurance program.  Upon receipt of all proposals, the

  5  division may enter into contract negotiations with insurance

  6  providers submitting bids or negotiate a specially designed

  7  benefit package. Insurance providers offering or providing

  8  supplemental coverage as of May 30, 1991, which qualify for

  9  pretax benefit treatment pursuant to s. 125 of the Internal

10  Revenue Code of 1986, with 5,500 or more state employees

11  currently enrolled may be included by the division in the

12  supplemental insurance benefit plan established by the

13  division without participating in a request for proposal,

14  submitting bids, negotiating contracts, or negotiating a

15  specially designed benefit package.  These contracts shall

16  provide state employees with the most cost-effective and

17  comprehensive coverage available; however, no state or agency

18  funds shall be contributed toward the cost of any part of the

19  premium of such supplemental benefit plans.

20         b.  Pursuant to the applicable provisions of s.

21  110.161, and s. 125 of the Internal Revenue Code of 1986, the

22  division shall enroll in the pretax benefit program those

23  state employees who voluntarily elect coverage in any of the

24  supplemental insurance benefit plans as provided by

25  sub-subparagraph a.

26         c.  Nothing herein contained shall be construed to

27  prohibit insurance providers from continuing to provide or

28  offer supplemental benefit coverage to state employees as

29  provided under existing agency plans.

30         (4)  PAYMENT OF PREMIUMS; CONTRIBUTION BY STATE;

31  LIMITATION ON ACTIONS TO PAY AND COLLECT PREMIUMS.--

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  1         (a)  Except as provided in paragraph (e) with respect

  2  to law enforcement officers, correctional, and correctional

  3  probation officers, and firefighters, legislative

  4  authorization through the appropriations act is required for

  5  payment by a state agency of any part of the premium cost of

  6  participation in any group insurance plan.  However, the state

  7  contribution for full-time employees or part-time permanent

  8  employees shall continue in the respective proportions for up

  9  to 6 months for any such officer or employee who has been

10  granted an approved parental or medical leave of absence

11  without pay.

12         (e)  No state contribution for the cost of any part of

13  the premium shall be made for retirees or surviving spouses

14  for any type of coverage under the state group insurance

15  program. However, any state agency that employs a full-time

16  law enforcement officer, correctional officer, or correctional

17  probation officer who is killed or suffers catastrophic injury

18  in the line of duty as provided in s. 112.19, or a full-time

19  firefighter who is killed or suffers catastrophic injury in

20  the line of duty as provided in s. 112.191, on or after July

21  1, 1980, as a result of an act of violence inflicted by

22  another person while the officer is engaged in the performance

23  of law enforcement duties or as a result of an assault against

24  the officer under riot conditions shall pay the entire premium

25  of the state group health insurance plan for the employee's

26  surviving spouse until remarried, and for each dependent child

27  of the employee, subject to the conditions and limitations set

28  forth in s. 112.19 or s. 112.191, as applicable until the

29  child reaches the age of majority or until the end of the

30  calendar year in which the child reaches the age of 25 if:

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  1         1.  At the time of the employee's death, the child is

  2  dependent upon the employee for support; and

  3         2.  The surviving child continues to be a dependent for

  4  support, or the surviving child is a full-time or part-time

  5  student and is dependent for support.

  6         (5)  DIVISION OF STATE GROUP INSURANCE; POWERS AND

  7  DUTIES.--The division is responsible for the administration of

  8  the state group insurance program.  The division shall

  9  initiate and supervise the program as established by this

10  section and shall adopt such rules as are necessary to perform

11  its responsibilities.  To implement this program, the division

12  shall, with prior approval by the Legislature:

13         (a)  Determine the benefits to be provided and the

14  contributions to be required for the state group insurance

15  program. Such determinations, whether for a contracted plan or

16  a self-insurance plan pursuant to paragraph (c), do not

17  constitute rules within the meaning of s. 120.52 or final

18  orders within the meaning of s. 120.52. Any physician's fee

19  schedule used in the health and accident plan shall not be

20  available for inspection or copying by medical providers or

21  other persons not involved in the administration of the

22  program. However, in the determination of the design of the

23  program, the division shall consider existing and

24  complementary benefits provided by the Florida Retirement

25  System and the Social Security System.

26         (b)  Prepare, in cooperation with the Department of

27  Insurance, the specifications necessary to implement the

28  program.

29         (c)  Contract on a competitive proposal basis with an

30  insurance carrier or carriers, or professional administrator,

31  determined by the Department of Insurance to be fully

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  1  qualified, financially sound, and capable of meeting all

  2  servicing requirements.  Alternatively, the division may

  3  self-insure any plan or plans contained in the state group

  4  insurance program subject to approval based on actuarial

  5  soundness by the Department of Insurance.  The division may

  6  contract with an insurance company or professional

  7  administrator qualified and approved by the Department of

  8  Insurance to administer such plan. Before entering into any

  9  contract, the division shall advertise for competitive

10  proposals, and such contract shall be let upon the

11  consideration of the benefits provided in relationship to the

12  cost of such benefits. In determining which entity to contract

13  with, the division shall, at a minimum, consider:  the

14  entity's previous experience and expertise in administering

15  group insurance programs of the type it proposes to

16  administer; the entity's ability to specifically perform its

17  contractual obligations in this state and other governmental

18  jurisdictions; the entity's anticipated administrative costs

19  and claims experience; the entity's capability to adequately

20  provide service coverage and sufficient number of experienced

21  and qualified personnel in the areas of claims processing,

22  recordkeeping, and underwriting, as determined by the

23  division; the entity's accessibility to state employees and

24  providers; the financial solvency of the entity, using

25  accepted business sector measures of financial performance.

26  The division may contract for medical services which will

27  improve the health or reduce medical costs for employees who

28  participate in the state group insurance plan.

29         (d)  With respect to the state group health insurance

30  plan, be authorized to require copayments with respect to all

31  providers under the plan.

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  1         (e)  Have authority to establish a voluntary program

  2  for comprehensive health maintenance, which may include health

  3  educational components and health appraisals.

  4         (f)  With respect to any contract with an insurance

  5  carrier or carriers or professional administrator entered into

  6  by the division, require that the state and the enrollees be

  7  held harmless and indemnified for any financial loss caused by

  8  the failure of the insurance carrier or professional

  9  administrator to comply with the terms of the contract.

10         (g)  With respect to any contract with an insurance

11  carrier or carriers, or professional administrator entered

12  into by the division, require that the carrier or professional

13  administrator provide written notice to individual enrollees

14  if any payment due to any health care provider of the enrollee

15  remains unpaid beyond a period of time as specified in the

16  contract.

17         (h)  Have authority to establish a voluntary group

18  long-term care program or other programs to be funded on a

19  pretax contribution basis or on a posttax contribution basis,

20  as the division determines.

21         (i)  Beginning November 1, 1998, and for the 1998-1999

22  fiscal year only, continue to process health insurance claims

23  for the 1996 and 1997 calendar years, subject to the review

24  and approval process provided in s. 216.177. This paragraph is

25  repealed on July 1, 1999.

26

27  Final decisions concerning enrollment, the existence of

28  coverage, or covered benefits under the state group health

29  insurance program plan shall not be delegated or deemed to

30  have been delegated by the division.

31

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  1         (9)  PUBLIC RECORDS LAW; EXEMPTION.--Patient medical

  2  records and medical claims records of state employees, former

  3  state employees, and their eligible covered dependents in the

  4  custody or control of the state group insurance program are

  5  confidential and exempt from the provisions of s. 119.07(1).

  6  Such records shall not be furnished to any person other than

  7  the affected state employee or former state employee or his or

  8  her the employee's legal representative, except that such

  9  records may be released under the following circumstances:

10         (a)1.  Records may be furnished to any person upon

11  written authorization of the affected state employee or former

12  state employee., but

13         2.  Records may be furnished in any civil or criminal

14  action, unless otherwise prohibited by law, upon the issuance

15  of a subpoena from a court of competent jurisdiction and

16  proper notice to the state employee, former state employee, or

17  his or her the employee's legal representative by the party

18  seeking such records.

19         3.  Upon the issuance of a subpoena from a court of

20  competent jurisdiction, relevant records may be furnished

21  without prior written authorization or notice as provided for

22  under subparagraphs 1. and 2., under the following

23  circumstances:

24         a.  Patient records may be released to the court, or to

25  the legal representative of any affected party, when an

26  affected health care provider is named as a defendant in a

27  medical negligence action or there is reasonable expectation

28  that such health care provider will be so named. However, the

29  names and other identifying information relative to affected

30  patients or employees or former employees must be redacted

31  prior to such release.

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  1         b.  Patient records may be released to the Department

  2  of Business and Professional Regulation or the Agency for

  3  Health Care Administration, or to a probable cause panel of

  4  the appropriate regulatory board, in disciplinary proceedings

  5  involving health care practitioners, or investigations,

  6  prosecutions, or appeals related thereto, when it is alleged

  7  that a practitioner has excessively or inappropriately

  8  prescribed any controlled substance specified under chapter

  9  893 or that a practitioner has practiced his or her profession

10  below that level of care, skill, and treatment required, in

11  violation of any professional practice act.

12         (b)  Subject to the provisions and requirements of s.

13  626.989, patient records may be released to the Department of

14  Insurance, Division of Insurance Fraud, to assist the

15  department or its division in investigating the suspected

16  commission of any fraudulent insurance act or any other act or

17  practice that, upon conviction, would constitute a felony or a

18  misdemeanor under the Florida Insurance Code or under s.

19  817.234.

20         (c)  Patient records may be released to a law

21  enforcement agency investigating the suspected commission of

22  an illegal act by a person other than the affected patient, or

23  conducting any prosecution or appeal related thereto, if such

24  act would, upon conviction, constitute a felony under state

25  law.

26         (d)  In the event that the affected state employee or

27  former state employee dies,

28         1.  His or her patient records may be released to the

29  administrator, executor, curator, or personal representative

30  of his or her estate, upon written request thereof.

31

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  1         2.  The patient records of a covered eligible dependent

  2  who is the adult subject of such records may be released to

  3  such covered eligible dependent, upon written request thereof.

  4         3.  The patient records of a covered eligible dependent

  5  who is the minor subject of such records maybe released to the

  6  parent or legal guardian of such covered eligible dependent,

  7  or to his or her legal representative, upon written request

  8  thereof.

  9         (e)  Records may be released for statistical purposes,

10  and for purposes of research and study, provided that names

11  and other identifying information relative to affected

12  patients or employees or former employees have been redacted

13  prior to release.

14         (f)  Information in patient records may be disclosed to

15  appropriate medical authorities in a medical emergency, but

16  only to the extent necessary to protect the health or life of

17  a named person or group of persons.

18         (g)  The prohibition against release of confidential

19  and exempt information as provided in this subsection does not

20  apply to the use of such information for purposes directly

21  connected with the administration of the state group insurance

22  program.

23

24  Except as otherwise expressly provided by written

25  authorization of the affected state employee or former state

26  employee under subparagraph (a)1., information used, released,

27  or disclosed under this subsection remains confidential and

28  exempt from the provisions of s. 119.07(1). Patient records

29  obtained under this subsection for use in investigations,

30  disciplinary proceedings, administrative hearings, or civil or

31  criminal actions and appeals related thereto, or for use in

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  1  any other legal proceedings, must not be made available to the

  2  public as a part of the record of such proceedings, but must

  3  remain confidential and exempt from the provisions of s.

  4  119.07(1). Violators are subject to the penalties set forth in

  5  s. 119.10.

  6         (12)  THIRD-PARTY BENEFITS; REIMBURSEMENT RIGHTS.--If

  7  any health plan member accepts payment for medical services or

  8  supplies from the state plan or a state-contracted HMO, it is

  9  the intent of the Legislature that the division shall have a

10  right of reimbursement, in accordance with s. 768.76, from any

11  judgment or settlement proceeds recovered from a third party

12  liable to the health plan member in regard to such medical

13  services or supplies. In seeking recovery of payments for

14  covered services and supplies in accordance with the

15  reimbursement rights provided in this subsection, the division

16  may, in its discretion, agree to settlements that reduce the

17  recovery amount.

18         (c)  Not later than October 1, 1992, the Department of

19  Management Services shall implement a prescription utilization

20  review program. All pharmacies dispensing medicines to members

21  of the State Group Health Insurance Plan and their dependents

22  shall be required to make records available for prescription

23  utilization this review by the Division of State Group

24  Insurance as a condition of participation in the State Group

25  Health Insurance Plan.

26         Section 3.  Subsection (1) and paragraphs (a) and (c)

27  of subsection (2) of section 110.12315, Florida Statutes, are

28  amended to read:

29         110.12315  Prescription drug program.--

30         (1)  Under the state employees' prescription drug

31  program, copayments must be made as follows:

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  1         (a)  Seventeen-dollar Fifteen-dollar copayment for

  2  brand name drug with card;

  3         (b)  Six-dollar Five-dollar copayment for generic drug

  4  with card;

  5         (c)  Fifteen-dollar Five-dollar copayment for generic

  6  mail order drug;

  7         (d)  Forty-dollar Fifteen-dollar copayment for brand

  8  name mail order drug.

  9

10  There shall be a 30-day supply limit for prescription card

11  purchases; there shall be a 90-day supply limit for mail order

12  or mail order prescription drug purchases.

13         (2)(a)  Notwithstanding provisions of statute or agency

14  administrative rules that may have been enacted or adopted

15  prior to April 8, 1992, the Division of State Group Insurance,

16  in making provision for reimbursement for prescription

17  medicines dispensed to members of the State Group Health

18  Insurance Plan and their dependents, shall allow prescriptions

19  written by health care providers under the plan to be filled

20  by any licensed pharmacy pursuant to contractual

21  claims-processing provisions.  Retail pharmacies participating

22  in this program shall be reimbursed at a uniform rate and

23  subject to uniform conditions, according to the terms and

24  conditions of the plan established by the Division of State

25  Group Insurance and relevant provisions of the annual General

26  Appropriations Act and implementing legislation. For drugs

27  purchased at retail pharmacies not participating in this

28  program, claimants shall be reimbursed at a uniform rate and

29  subject to uniform conditions, according to the terms and

30  conditions of the plan established by the Division of State

31  Group Insurance and relevant provisions of the annual General

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  1  Appropriations Act and implementing legislation. Nothing in

  2  this section shall be construed as prohibiting a mail order

  3  prescription drug program distinct from the service provided

  4  by retail pharmacies.

  5         Section 4.  Section 110.1232, Florida Statutes, is

  6  amended to read:

  7         110.1232  Health insurance coverage for persons retired

  8  under state-administered retirement systems before January 1,

  9  1976, and for spouses.--Notwithstanding any provisions of law

10  to the contrary, the Division of State Group Insurance shall

11  provide health insurance coverage under in the state group

12  Health insurance program Plan for persons who retired before

13  prior to January 1, 1976, under any of the state-administered

14  retirement systems and who are not covered by social security

15  and for the spouses and surviving spouses of such retirees who

16  are also not covered by social security.  Such health

17  insurance coverage shall provide the same benefits as provided

18  to other retirees who are entitled to participate under s.

19  110.123. The claims experience of this group shall be

20  commingled with the claims experience of other members covered

21  under s. 110.123.

22         Section 5.  Subsection (1) of section 110.1234, Florida

23  Statutes, is amended to read:

24         110.1234  Health insurance for retirees under the

25  Florida Retirement System; Medicare supplement and fully

26  insured coverage.--

27         (1)  The Division of State Group Insurance shall

28  solicit competitive bids from state-licensed insurance

29  companies to provide and administer a fully insured Medicare

30  supplement policy for all eligible retirees of a state or

31  local public employer. Such Medicare supplement policy shall

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  1  meet the provisions of ss. 627.671-627.675.  For the purpose

  2  of this subsection, "eligible retiree" means any public

  3  employee who retired from a state or local public employer who

  4  is covered by Medicare, Parts A and B. The division department

  5  shall authorize one company to offer the Medicare supplement

  6  coverage to all eligible retirees. All premiums shall be paid

  7  by the retiree.

  8         Section 6.  Section 110.1239, Florida Statutes, is

  9  created to read:

10         110.1239  State Group Health Insurance Plan; protection

11  of benefits.--

12         (1)  SHORT TITLE.--This section may be cited as the

13  "Florida Protection of State Employee Health Insurance

14  Benefits Act."

15         (2)  INTENT.--It is the intent of the Legislature that

16  the State Group Health Insurance Plan be managed,

17  administered, operated, and funded in such a manner as to

18  maximize the protection of state employee health insurance

19  benefits. Inherent in this intent is the recognition that the

20  health insurance liabilities attributable to the benefits

21  promised state employees should be fairly, orderly, and

22  equitably funded. Accordingly, this act establishes minimum

23  standards for the operation and funding of the State Group

24  Health Insurance Plan.

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

26         (a)  "Division" means the Division of State Group

27  Insurance of the Department of Management Services.

28         (b)  "State plan" means the State Group Health

29  Insurance Plan, the state self-insured health insurance plan

30  created pursuant to s. 110.123.

31         (4)  ACTUARIAL SOUNDNESS.--

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  1         (a)  The state plan shall be funded on a sound

  2  actuarial basis.

  3         (b)  The division shall annually submit to the Governor

  4  and Legislature a report that includes a statement prepared by

  5  an actuary who is a member of the Society of Actuaries or the

  6  American Academy of Actuaries as to the actuarial soundness of

  7  the plan. The report is due no later than January 1 following

  8  the close of the plan year and shall consist of, but not be

  9  limited to:

10         1.  A statement as to the adequacy of employer and

11  employee contribution rates in meeting levels of employee

12  benefits provided under the plan and changes, if any, needed

13  in such rates to achieve or preserve a level of funding deemed

14  adequate to enable payment through the indefinite future of

15  the benefit amounts prescribed by the state plan, which shall

16  include a valuation of present assets, based on statement

17  value, and prospective assets and liabilities of the system

18  and the extent of unfunded accrued liabilities, if any.

19         2.  A plan to amortize any unfunded liability and a

20  description of actions taken to reduce the unfunded liability.

21         3.  A description and explanation of actuarial

22  assumptions.

23         4.  A schedule illustrating the amortization of

24  unfunded liabilities, if any.

25         5.  A comparative review illustrating the level of

26  funds available to the state plan from rates, investment

27  income, and other sources realized over the period covered by

28  the report with the assumptions used.

29         6.  A statement by the actuary that the report is

30  complete and accurate and that in the actuary's opinion the

31

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  1  techniques and assumptions used are reasonable and meet the

  2  requirements and intent of this subsection.

  3         7.  Other factors or statements as may be required in

  4  order to determine the actuarial soundness of the state plan.

  5

  6  All assumptions used in the report shall be based on sound

  7  recognized actuarial principles.

  8         (5)  STATEMENTS OF ACTUARIAL IMPACT.--No proposed

  9  change in health insurance benefits provided under the state

10  plan may be implemented unless the division, prior to adoption

11  of the change by the Legislature, has issued a statement of

12  the actuarial impact of the proposed change, consistent with

13  the actuarial review, and has furnished a copy of such

14  statement to the Governor and the Legislature. Such statement

15  shall also indicate whether the proposed changes are in

16  compliance with this act.

17         (6)  RULES.--The Division of State Group Insurance is

18  authorized to adopt rules to carry out the provisions of this

19  section.

20         Section 7.  Subsections (5), (6), and (7) of section

21  110.161, Florida Statutes, are amended to read:

22         110.161  State employees; pretax benefits program.--

23         (5)  The Division of State Group Insurance shall

24  develop rules for the pretax benefits program, which shall

25  specify the benefits to be offered under the program, the

26  continuing tax-exempt status of the program, and any other

27  matters deemed necessary by the division department to

28  implement this section. The rules must be approved by a

29  majority vote of the Administration Commission.

30         (6)  The Division of State Group Insurance is

31  authorized to administer the establish a pretax benefits

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  1  program established for all employees so that whereby

  2  employees may would receive benefits that which are not

  3  includable in gross income under the Internal Revenue Code of

  4  1986.  The pretax benefits program: shall be implemented in

  5  phases.

  6         (a)  Phase one Shall allow employee contributions to

  7  premiums for the state health program and state life insurance

  8  to be paid on a pretax basis unless an employee elects not to

  9  participate.

10         (b)  Phase two Shall allow employees to voluntarily

11  establish expense reimbursement plans from their salaries on a

12  pretax basis to pay for qualified medical and dependent care

13  expenses, including premiums paid by employees for qualified

14  supplemental insurance.

15         (c)  Phase two May also provide for the payment of such

16  premiums through a pretax payroll procedure as used in phase

17  one.  The Administration Commission and the Division of State

18  Group Insurance are directed to take all actions necessary to

19  preserve the tax-exempt status of the program.

20         (7)  The Legislature recognizes that a substantial

21  amount of the employer savings realized by the implementation

22  of a pretax benefits program will be the result of diminutions

23  in the state's employer contribution to the Federal Insurance

24  Contributions Act tax. There is hereby created the Pretax

25  Benefits Trust Fund in the Division of State Group Insurance.

26  Each agency shall transfer to the Pretax Benefits Trust Fund

27  the employer FICA contributions saved by the state as a result

28  of the implementation of the pretax benefits program

29  authorized pursuant to this section. Any moneys forfeited

30  pursuant to employees' salary reduction agreements to

31  participate in phase one or phase two of the program must also

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  1  be deposited in the Pretax Benefits Trust Fund. Moneys in the

  2  Pretax Benefits Trust Fund shall be used for the pretax

  3  benefits program, including its administration by the Division

  4  of State Group Insurance Department of Management Services or

  5  a third-party administrator.

  6         Section 8.  Paragraph (i) of subsection (2) of section

  7  110.205, Florida Statutes, is amended to read:

  8         110.205  Career service; exemptions.--

  9         (2)  EXEMPT POSITIONS.--The exempt positions which are

10  not covered by this part include the following, provided that

11  no position, except for positions established for a limited

12  period of time pursuant to paragraph (h), shall be exempted if

13  the position reports to a position in the career service:

14         (i)  The appointed secretaries, assistant secretaries,

15  deputy secretaries, and deputy assistant secretaries of all

16  departments; the executive directors, assistant executive

17  directors, deputy executive directors, and deputy assistant

18  executive directors of all departments; and the directors of

19  all divisions and those positions determined by the department

20  to have managerial responsibilities comparable to such

21  positions, which positions include, but are not limited to,

22  program directors, assistant program directors, district

23  administrators, deputy district administrators, the Director

24  of Central Operations Services of the Department of Children

25  Health and Family Rehabilitative Services, the assistant

26  director of the Division of State Group Insurance of the

27  Department of Management Services, and the State

28  Transportation Planner, State Highway Engineer, State Public

29  Transportation Administrator, district secretaries, district

30  directors of planning and programming, production, and

31  operations, and the managers of the offices specified in s.

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  1  20.23(3)(d)2., of the Department of Transportation.  Unless

  2  otherwise fixed by law, the department shall set the salary

  3  and benefits of these positions in accordance with the rules

  4  of the Senior Management Service.

  5         Section 9.  Subsection (2) of section 768.76, Florida

  6  Statutes, is amended to read:

  7         768.76  Collateral sources of indemnity.--

  8         (2)  For purposes of this section:

  9         (a)  "Collateral sources" means any payments made to

10  the claimant, or made on the claimant's behalf, by or pursuant

11  to:

12         1.  The United States Social Security Act, except Title

13  XVIII and Title XIX; any federal, state, or local income

14  disability act; or any other public programs providing medical

15  expenses, disability payments, or other similar benefits,

16  except those prohibited by federal law and those expressly

17  excluded by law as collateral sources.

18         2.  Any health, sickness, or income disability

19  insurance; automobile accident insurance that provides health

20  benefits or income disability coverage; and any other similar

21  insurance benefits, except life insurance benefits available

22  to the claimant, whether purchased by her or him or provided

23  by others.

24         3.  Any contract or agreement of any group,

25  organization, partnership, or corporation to provide, pay for,

26  or reimburse the costs of hospital, medical, dental, or other

27  health care services.

28         4.  Any contractual or voluntary wage continuation plan

29  provided by employers or by any other system intended to

30  provide wages during a period of disability.

31

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  1         (b)  Notwithstanding any other provision of this

  2  section, benefits received under Medicare, or any other

  3  federal program providing for a Federal Government lien on or

  4  right of reimbursement from the plaintiff's recovery, the

  5  Workers' Compensation Law, the Medicaid program of Title XIX

  6  of the Social Security Act, the state group health

  7  self-insurance plan administered under s. 110.123, or from any

  8  medical services program administered by the Department of

  9  Health and Rehabilitative Services shall not be considered a

10  collateral source. In addition, a health maintenance

11  organization participating in the state group insurance

12  program pursuant to state contract is not considered a

13  collateral source for benefits received by any claimant who,

14  with respect to such benefits, was covered by the health

15  maintenance organization plan as a participant under the state

16  group insurance program as defined in s. 110.123.

17         Section 10.  This act shall take effect July 1, 1999.

18

19            *****************************************

20                          SENATE SUMMARY

21    Revises various provisions relating to the State Group
      Insurance Program. Clarifies, updates, revises, and
22    reorganizes references and provisions relating to that
      program. Provides for Career Service exemptions in the
23    division. Conforms to existing law provisions relating to
      payment of premiums for certain employees injured or
24    killed in the line of duty. Provides for the designation
      of Senior Management Service positions. Revises and
25    clarifies the state employees' prescription drug program.
      Increases copayments. Provides conditions under which
26    confidential records of state employees, former state
      employees, and their dependents may be released. Provides
27    the division with a right of reimbursement under certain
      circumstances. Provides for the protection of state
28    employee health insurance benefits. Provides that
      benefits received under the state group health
29    self-insurance plan and HMOs are not a collateral source
      of indemnity. (See bill for details.)
30

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