CODING: Words stricken are deletions; words underlined are additions.





                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    

                            CHAMBER ACTION
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10                                                                

11  Senator Lee moved the following amendment:

12

13         Senate Amendment (with title amendment) 

14         On page 5, after line 31,

15

16  insert:

17         Section 2.  Subsection (1) of section 627.6645, Florida

18  Statutes, is amended and subsection (5) is added to that

19  section to read:

20         627.6645  Notification of cancellation, expiration,

21  nonrenewal, or change in rates.--

22         (1)  Every insurer delivering or issuing for delivery a

23  group health insurance policy under the provisions of this

24  part shall give the policyholder at least 45 days' advance

25  notice of cancellation, expiration, nonrenewal, or a change in

26  rates.  Such notice shall be mailed to the policyholder's last

27  address as shown by the records of the insurer.  However, if

28  cancellation is for nonpayment of premium, only the

29  requirements of subsection (5) this section shall not apply.

30  Upon receipt of such notice, the policyholder shall forward,

31  as soon as practicable, the notice of expiration,

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1  cancellation, or nonrenewal to each certificateholder covered

 2  under the policy.

 3         (5)  If cancellation is due to nonpayment of premium,

 4  the insurer may not retroactively cancel the policy to a date

 5  prior to the date that notice of cancellation was provided to

 6  the policyholder unless the insurer mails notice of

 7  cancellation to the policyholder prior to 45 days after the

 8  date the premium was due. Such notice must be mailed to the

 9  policyholder's last address as shown by the records of the

10  insurer and may provide for a retroactive date of cancellation

11  no earlier than midnight of the date that the premium was due.

12         Section 3.  Section 627.6675, Florida Statutes, 1998

13  Supplement, is amended to read:

14         627.6675  Conversion on termination of

15  eligibility.--Subject to all of the provisions of this

16  section, a group policy delivered or issued for delivery in

17  this state by an insurer or nonprofit health care services

18  plan that provides, on an expense-incurred basis, hospital,

19  surgical, or major medical expense insurance, or any

20  combination of these coverages, shall provide that an employee

21  or member whose insurance under the group policy has been

22  terminated for any reason, including discontinuance of the

23  group policy in its entirety or with respect to an insured

24  class, and who has been continuously insured under the group

25  policy, and under any group policy providing similar benefits

26  that the terminated group policy replaced, for at least 3

27  months immediately prior to termination, shall be entitled to

28  have issued to him or her by the insurer a policy or

29  certificate of health insurance, referred to in this section

30  as a "converted policy." A group insurer may meet the

31  requirements of this section by contracting with another

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1  insurer, authorized in this state, to issue an individual

 2  converted policy, which policy has been approved by the

 3  department under s. 627.410. An employee or member shall not

 4  be entitled to a converted policy if termination of his or her

 5  insurance under the group policy occurred because he or she

 6  failed to pay any required contribution, or because any

 7  discontinued group coverage was replaced by similar group

 8  coverage within 31 days after discontinuance.

 9         (1)  TIME LIMIT.--Written application for the converted

10  policy shall be made and the first premium must be paid to the

11  insurer, not later than 63 days after termination of the group

12  policy. However, if termination was the result of failure to

13  pay any required premium or contribution and such nonpayment

14  of premium was due to acts of an employer or policyholder

15  other than the employee or certificateholder, written

16  application for the converted policy must be made and the

17  first premium must be paid to the insurer not later than 63

18  days after notice of termination is mailed by the insurer or

19  the employer, whichever is earlier, to the employee's or

20  certificateholder's last address as shown by the record of the

21  insurer or the employer, whichever is applicable. In such case

22  of termination due to nonpayment of premium by the employer or

23  policyholder, the premium for the converted policy may not

24  exceed the rate for the prior group coverage for the period of

25  coverage under the converted policy prior to the date notice

26  of termination is mailed to the employee or certificateholder.

27  For the period of coverage after such date, the premium for

28  the converted policy is subject to the requirements of

29  subsection (3).

30         (2)  EVIDENCE OF INSURABILITY.--The converted policy

31  shall be issued without evidence of insurability.

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1         (3)  CONVERSION PREMIUM; EFFECT ON PREMIUM RATES FOR

 2  GROUP COVERAGE.--

 3         (a)  The premium for the converted policy shall be

 4  determined in accordance with premium rates applicable to the

 5  age and class of risk of each person to be covered under the

 6  converted policy and to the type and amount of insurance

 7  provided.  However, the premium for the converted policy may

 8  not exceed 200 percent of the standard risk rate as

 9  established by the department, pursuant to this subsection.

10         (b)  Actual or expected experience under converted

11  policies may be combined with such experience under group

12  policies for the purposes of determining premium and loss

13  experience and establishing premium rate levels for group

14  coverage.

15         (c)  The department shall annually determine standard

16  risk rates, using reasonable actuarial techniques and

17  standards adopted by the department by rule. The standard risk

18  rates must be determined as follows:

19         1.  Standard risk rates for individual coverage must be

20  determined separately for indemnity policies, preferred

21  provider/exclusive provider policies, and health maintenance

22  organization contracts.

23         2.  The department shall survey insurers and health

24  maintenance organizations representing at least an 80 percent

25  market share, based on premiums earned in the state for the

26  most recent calendar year, for each of the categories

27  specified in subparagraph 1.

28         3.  Standard risk rate schedules must be determined,

29  computed as the average rates charged by the carriers

30  surveyed, giving appropriate weight to each carrier's

31  statewide market share of earned premiums.

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1         4.  The rate schedule shall be determined from analysis

 2  of the one county with the largest market share in the state

 3  of all such carriers.

 4         5.  The rate for other counties must be determined by

 5  using the weighted average of each carrier's county factor

 6  relationship to the county determined in subparagraph 4.

 7         6.  The rate schedule must be determined for different

 8  age brackets and family size brackets.

 9         (4)  EFFECTIVE DATE OF COVERAGE.--The effective date of

10  the converted policy shall be the day following the

11  termination of insurance under the group policy.

12         (5)  SCOPE OF COVERAGE.--The converted policy shall

13  cover the employee or member and his or her dependents who

14  were covered by the group policy on the date of termination of

15  insurance.  At the option of the insurer, a separate converted

16  policy may be issued to cover any dependent.

17         (6)  OPTIONAL COVERAGE.--The insurer shall not be

18  required to issue a converted policy covering any person who

19  is or could be covered by Medicare.  The insurer shall not be

20  required to issue a converted policy covering a person if

21  paragraphs (a) and (b) apply to the person:

22         (a)  If any of the following apply to the person:

23         1.  The person is covered for similar benefits by

24  another hospital, surgical, medical, or major medical expense

25  insurance policy or hospital or medical service subscriber

26  contract or medical practice or other prepayment plan, or by

27  any other plan or program.

28         2.  The person is eligible for similar benefits,

29  whether or not actually provided coverage, under any

30  arrangement of coverage for individuals in a group, whether on

31  an insured or uninsured basis.

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1         3.  Similar benefits are provided for or are available

 2  to the person under any state or federal law.

 3         (b)  If the benefits provided under the sources

 4  referred to in subparagraph (a)1. or the benefits provided or

 5  available under the sources referred to in subparagraphs (a)2.

 6  and 3., together with the benefits provided by the converted

 7  policy, would result in overinsurance according to the

 8  insurer's standards.  The insurer's standards must bear some

 9  reasonable relationship to actual health care costs in the

10  area in which the insured lives at the time of conversion and

11  must be filed with the department prior to their use in

12  denying coverage.

13         (7)  INFORMATION REQUESTED BY INSURER.--

14         (a)  A converted policy may include a provision under

15  which the insurer may request information, in advance of any

16  premium due date, of any person covered thereunder as to

17  whether:

18         1.  The person is covered for similar benefits by

19  another hospital, surgical, medical, or major medical expense

20  insurance policy or hospital or medical service subscriber

21  contract or medical practice or other prepayment plan or by

22  any other plan or program.

23         2.  The person is covered for similar benefits under

24  any arrangement of coverage for individuals in a group,

25  whether on an insured or uninsured basis.

26         3.  Similar benefits are provided for or are available

27  to the person under any state or federal law.

28         (b)  The converted policy may provide that the insurer

29  may refuse to renew the policy or the coverage of any person

30  only for one or more of the following reasons:

31         1.  Either the benefits provided under the sources

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1  referred to in subparagraphs (a)1. and 2. for the person or

 2  the benefits provided or available under the sources referred

 3  to in subparagraph (a)3. for the person, together with the

 4  benefits provided by the converted policy, would result in

 5  overinsurance according to the insurer's standards on file

 6  with the department.

 7         2.  The converted policyholder fails to provide the

 8  information requested pursuant to paragraph (a).

 9         3.  Fraud or intentional misrepresentation in applying

10  for any benefits under the converted policy.

11         4.  Other reasons approved by the department.

12         (8)  BENEFITS OFFERED.--

13         (a)  An insurer shall not be required to issue a

14  converted policy that provides benefits in excess of those

15  provided under the group policy from which conversion is made.

16         (b)  An insurer shall offer the benefits specified in

17  s. 627.668 and the benefits specified in s. 627.669 if those

18  benefits were provided in the group plan.

19         (c)  An insurer shall offer maternity benefits and

20  dental benefits if those benefits were provided in the group

21  plan.

22         (9)  PREEXISTING CONDITION PROVISION.--The converted

23  policy shall not exclude a preexisting condition not excluded

24  by the group policy. However, the converted policy may provide

25  that any hospital, surgical, or medical benefits payable under

26  the converted policy may be reduced by the amount of any such

27  benefits payable under the group policy after the termination

28  of covered under the group policy. The converted policy may

29  also provide that during the first policy year the benefits

30  payable under the converted policy, together with the benefits

31  payable under the group policy, shall not exceed those that

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1  would have been payable had the individual's insurance under

 2  the group policy remained in force.

 3         (10)  REQUIRED OPTION FOR MAJOR MEDICAL

 4  COVERAGE.--Subject to the provisions and conditions of this

 5  part, the employee or member shall be entitled to obtain a

 6  converted policy providing major medical coverage under a plan

 7  meeting the following requirements:

 8         (a)  A maximum benefit equal to the lesser of the

 9  policy limit of the group policy from which the individual

10  converted or $500,000 per covered person for all covered

11  medical expenses incurred during the covered person's

12  lifetime.

13         (b)  Payment of benefits at the rate of 80 percent of

14  covered medical expenses which are in excess of the

15  deductible, until 20 percent of such expenses in a benefit

16  period reaches $2,000, after which benefits will be paid at

17  the rate of 90 percent during the remainder of the contract

18  year unless the insured is in the insurer's case management

19  program, in which case benefits shall be paid at the rate of

20  100 percent during the remainder of the contract year.  For

21  the purposes of this paragraph, "case management program"

22  means the specific supervision and management of the medical

23  care provided or prescribed for a specific individual, which

24  may include the use of health care providers designated by the

25  insurer.  Payment of benefits for outpatient treatment of

26  mental illness, if provided in the converted policy, may be at

27  a lesser rate but not less than 50 percent.

28         (c)  A deductible for each calendar year that must be

29  $500, $1,000, or $2,000, at the option of the policyholder.

30         (d)  The term "covered medical expenses," as used in

31  this subsection, shall be consistent with those customarily

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1  offered by the insurer under group or individual health

 2  insurance policies but is not required to be identical to the

 3  covered medical expenses provided in the group policy from

 4  which the individual converted.

 5         (11)  ALTERNATIVE PLANS.--The insurer shall, in

 6  addition to the option required by subsection (10), offer the

 7  standard health benefit plan, as established pursuant to s.

 8  627.6699(12). The insurer may, at its option, also offer

 9  alternative plans for group health conversion in addition to

10  the plans required by this section.

11         (12)  RETIREMENT COVERAGE.--If coverage would be

12  continued under the group policy on an employee following the

13  employee's retirement prior to the time he or she is or could

14  be covered by Medicare, the employee may elect, instead of

15  such continuation of group insurance, to have the same

16  conversion rights as would apply had his or her insurance

17  terminated at retirement by reason or termination of

18  employment or membership.

19         (13)  REDUCTION OF COVERAGE DUE TO MEDICARE.--The

20  converted policy may provide for reduction of coverage on any

21  person upon his or her eligibility for coverage under Medicare

22  or under any other state or federal law providing for benefits

23  similar to those provided by the converted policy.

24         (14)  CONVERSION PRIVILEGE ALLOWED.--The conversion

25  privilege shall also be available to any of the following:

26         (a)  The surviving spouse, if any, at the death of the

27  employee or member, with respect to the spouse and the

28  children whose coverages under the group policy terminate by

29  reason of the death, otherwise to each surviving child whose

30  coverage under the group policy terminates by reason of such

31  death, or, if the group policy provides for continuation of

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1  dependents' coverages following the employee's or member's

 2  death, at the end of such continuation.

 3         (b)  The former spouse whose coverage would otherwise

 4  terminate because of annulment or dissolution of marriage, if

 5  the former spouse is dependent for financial support.

 6         (c)  The spouse of the employee or member upon

 7  termination of coverage of the spouse, while the employee or

 8  member remains insured under the group policy, by reason of

 9  ceasing to be a qualified family member under the group

10  policy, with respect to the spouse and the children whose

11  coverages under the group policy terminate at the same time.

12         (d)  A child solely with respect to himself or herself

13  upon termination of his or her coverage by reason of ceasing

14  to be a qualified family member under the group policy, if a

15  conversion privilege is not otherwise provided in this

16  subsection with respect to such termination.

17         (15)  BENEFIT LEVELS.--If the benefit levels required

18  in subsection (10) exceed the benefit levels provided under

19  the group policy, the conversion policy may offer benefits

20  which are substantially similar to those provided under the

21  group policy in lieu of those required in subsection (10).

22         (16)  GROUP COVERAGE INSTEAD OF INDIVIDUAL

23  COVERAGE.--The insurer may elect to provide group insurance

24  coverage instead of issuing a converted individual policy.

25         (17)  NOTIFICATION.--A notification of the conversion

26  privilege shall be included in each certificate of coverage.

27  The insurer shall mail an election and premium notice form,

28  including an outline of coverage, on a form approved by the

29  department, within 14 days after an individual who is eligible

30  for a converted policy gives notice to the insurer that the

31  individual is considering applying for the converted policy or

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1  otherwise requests such information. The outline of coverage

 2  must contain a description of the principal benefits and

 3  coverage provided by the policy and its principal exclusions

 4  and limitations, including, but not limited to, deductibles

 5  and coinsurance.

 6         (18)  OUTSIDE CONVERSIONS.--A converted policy that is

 7  delivered outside of this state must be on a form that could

 8  be delivered in the other jurisdiction as a converted policy

 9  had the group policy been issued in that jurisdiction.

10         (19)  APPLICABILITY.--This section does not require

11  conversion on termination of eligibility for a policy or

12  contract that provides benefits for specified diseases, or for

13  accidental injuries only, disability income, Medicare

14  supplement, hospital indemnity, limited benefit,

15  nonconventional, or excess policies.

16         (20)  Nothing in this section or in the incorporation

17  of it into insurance policies shall be construed to require

18  insurers to provide benefits equal to those provided in the

19  group policy from which the individual converted, provided,

20  however, that comprehensive benefits are offered which shall

21  be subject to approval by the Insurance Commissioner.

22         Section 4.  Section 641.3108, Florida Statutes, is

23  amended to read:

24         641.3108  Notice of cancellation of contract.--

25         (1)  Except for nonpayment of premium or termination of

26  eligibility, no health maintenance organization may cancel or

27  otherwise terminate or fail to renew a health maintenance

28  contract without giving the subscriber at least 45 days'

29  notice in writing of the cancellation, termination, or

30  nonrenewal of the contract. The written notice shall state the

31  reason or reasons for the cancellation, termination, or

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1  nonrenewal.  All health maintenance contracts shall contain a

 2  clause which requires that this notice be given.

 3         (2)  If cancellation is due to nonpayment of premium,

 4  the health maintenance organization may not retroactively

 5  cancel the contract to a date prior to the date that notice of

 6  cancellation was provided to the subscriber unless the

 7  organization mails notice of cancellation to the subscriber

 8  prior to 45 days after the date the premium was due. Such

 9  notice must be mailed to the subscriber's last address as

10  shown by the records of the organization and may provide for a

11  retroactive date of cancellation no earlier than midnight of

12  the date that the premium was due.

13         (3)  In the case of a health maintenance contract

14  issued to an employer or person holding the contract on behalf

15  of the subscriber group, the health maintenance organization

16  may make the notification through the employer or group

17  contract holder, and, if the health maintenance organization

18  elects to take this action through the employer or group

19  contract holder, the organization shall be deemed to have

20  complied with the provisions of this section upon notifying

21  the employer or group contract holder of the requirements of

22  this section and requesting the employer or group contract

23  holder to forward to all subscribers the notice required

24  herein.

25         Section 5.  Subsection (1) of section 641.3922, Florida

26  Statutes, 1998 Supplement, is amended to read:

27         641.3922  Conversion contracts; conditions.--Issuance

28  of a converted contract shall be subject to the following

29  conditions:

30         (1)  TIME LIMIT.--Written application for the converted

31  contract shall be made and the first premium paid to the

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1  health maintenance organization not later than 63 days after

 2  such termination. However, if termination was the result of

 3  failure to pay any required premium or contribution and such

 4  nonpayment of premium was due to acts of an employer or group

 5  contract holder other than the employee or individual

 6  subscriber, written application for the contract must be made

 7  and the first premium must be paid not later than 63 days

 8  after notice of termination is mailed by the organization or

 9  the employer, whichever is earlier, to the employee's or

10  individual's last address as shown by the record of the

11  organization or the employer, whichever is applicable. In such

12  case of termination due to non-payment of premium by the

13  employer or group contract holder, the premium for the

14  converted contract may not exceed the rate for the prior group

15  coverage for the period of coverage under the converted

16  contract prior to the date notice of termination is mailed to

17  the employee or individual subscriber. For the period of

18  coverage after such date, the premium for the converted

19  contract is subject to the requirements of subsection (3).

20

21  (Redesignate subsequent sections.)

22

23

24  ================ T I T L E   A M E N D M E N T ===============

25  And the title is amended as follows:

26         On page 1, line 8, after the semicolon

27

28  insert:

29         amending s. 627.6645, F.S.; revising the notice

30         requirements for cancellation or nonrenewal of

31         a group health insurance policy; specifying

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                                                  SENATE AMENDMENT

    Bill No. CS/HB 903, 1st Eng.

    Amendment No.    





 1         conditions under which the insurer may

 2         retroactively cancel coverage due to nonpayment

 3         of premium; amending s. 627.6675, F.S.;

 4         revising the time limits for an employee or

 5         group member to apply for an individual

 6         converted policy when termination of group

 7         coverage is due to failure of the employer to

 8         pay the premium; revising the requirements for

 9         the premium for the converted policy; allowing

10         a group insurer to contract with another

11         insurer to issue an individual converted policy

12         under certain conditions; amending s. 641.3108,

13         F.S.; revising the notice requirements for

14         cancellation or nonrenewal of a health

15         maintenance organization contract; specifying

16         conditions under which the organization may

17         retroactively cancel coverage due to nonpayment

18         of premium; amending s. 641.3922, F.S.;

19         revising the time limits for an employee or

20         group member to apply for a converted contract

21         from a health maintenance organization when

22         termination of group coverage is due to failure

23         of the employer to pay the premium; revising

24         the requirements for the premium for the

25         converted contract;

26

27

28

29

30

31

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