House Bill 0903e1
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CS/HB 903, First Engrossed
1 A bill to be entitled
2 An act relating to the Employee Health Care
3 Access Act; amending s. 627.6699, F.S.;
4 revising a definition; revising and updating
5 provisions requiring small employer carriers to
6 offer and issue certain health benefit plans;
7 providing additional restrictions on premium
8 rates for certain health benefit plans;
9 providing an effective date.
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11 Be It Enacted by the Legislature of the State of Florida:
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13 Section 1. Paragraph (n) of subsection (3), paragraph
14 (c) of subsection (5) and paragraphs (b) and (d) of subsection
15 (6) of section 627.6699, Florida Statutes, 1998 Supplement,
16 are amended to read:
17 627.6699 Employee Health Care Access Act.--
18 (3) DEFINITIONS.--As used in this section, the term:
19 (n) "Modified community rating" means a method used to
20 develop carrier premiums which spreads financial risk across a
21 large population and allows adjustments for age, gender,
22 family composition, tobacco usage, and geographic area as
23 determined under paragraph (5)(j), claims experience, health
24 status, or duration of coverage as permitted under
25 subparagraph (6)(b)5. and administrative and acquisition
26 expenses as permitted under subparagraph (6)(b)6 (5)(k).
27 (5) AVAILABILITY OF COVERAGE.--
28 (c) Every small employer carrier must, as a condition
29 of transacting business in this state:
30 1. Beginning July January 1, 1999 1994, offer and
31 issue all small employer health benefit plans on a
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CS/HB 903, First Engrossed
1 guaranteed-issue basis to every eligible small employer, with
2 2 3 to 50 eligible employees, that elects to be covered under
3 such plan, agrees to make the required premium payments, and
4 satisfies the other provisions of the plan. A rider for
5 additional or increased benefits may be medically underwritten
6 and may only be added to the standard health benefit plan.
7 The increased rate charged for the additional or increased
8 benefit must be rated in accordance with this section.
9 2. Beginning August 1, 1999 April 15, 1994, offer and
10 issue basic and standard small employer health benefit plans
11 on a guaranteed-issue basis, during a 31-day open enrollment
12 period of August 1 through August 31 of each year, to every
13 eligible small employer, with less than one or two eligible
14 employees, which small employer is not formed primarily for
15 the purposes of buying health insurance, which elects to be
16 covered under such plan, agrees to make the required premium
17 payments, and satisfies the other provisions of the plan.
18 Coverage provided pursuant to this subparagraph shall begin on
19 October 1 of the same year as the date of enrollment, unless
20 the small employer carrier and the small employer mutually
21 agree to a different date. A rider for additional or increased
22 benefits may be medically underwritten and may only be added
23 to the standard health benefit plan. The increased rate
24 charged for the additional or increased benefit must be rated
25 in accordance with this section. For purposes of this
26 subparagraph, a person, his or her spouse, and his or her
27 dependent children shall constitute a single eligible employee
28 if such person and spouse are employed by the same small
29 employer.
30 3. Offer to eligible small employers the standard and
31 basic health benefit plans.
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CS/HB 903, First Engrossed
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2 This paragraph subparagraph does not limit a carrier's ability
3 to offer other health benefit plans to small employers if the
4 standard and basic health benefit plans are offered and
5 rejected.
6 (6) RESTRICTIONS RELATING TO PREMIUM RATES.--
7 (b) For all small employer health benefit plans that
8 are subject to this section and are issued by small employer
9 carriers on or after January 1, 1994, premium rates for health
10 benefit plans subject to this section are subject to the
11 following:
12 1. Small employer carriers must use a modified
13 community rating methodology in which the premium for each
14 small employer must be determined solely on the basis of the
15 eligible employee's and eligible dependent's gender, age,
16 family composition, tobacco use, or geographic area as
17 determined under paragraph (5)(j) and in which the premium may
18 be adjusted as permittted by subparagraphs 6. and 7 (5)(k).
19 2. Rating factors related to age, gender, family
20 composition, tobacco use, or geographic location may be
21 developed by each carrier to reflect the carrier's experience.
22 The factors used by carriers are subject to department review
23 and approval.
24 3. Small employer carriers may not modify the rate for
25 a small employer for 12 months from the initial issue date or
26 renewal date, unless the composition of the group changes or
27 benefits are changed.
28 4. Carriers participating in the alliance program, in
29 accordance with ss. 408.700-408.707, may apply a different
30 community rate to business written in that program.
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CS/HB 903, First Engrossed
1 5. Any adjustments in rates for claims experience,
2 health status, and duration of coverage may not be charged to
3 individual employees or dependents. For a small employer's
4 policy, such adjustments may not result in a rate for the
5 small employer which deviates more than 15 percent from the
6 carrier's approved rate. Any such adjustment must be applied
7 uniformly to the rates charged for all employees and
8 dependents of the small employer. A small employer carrier may
9 make an adjustment to a small employer's renewal premium, not
10 to exceed 10 percent annually, due to the claims experience,
11 health status, or duration of coverage of the employees or
12 dependents of the small employer. A small employer carrier may
13 not make an adjustment which exceeds 5 percent to a small
14 employer's renewal premium due to health status. Semiannually,
15 small group carriers shall report information on forms adopted
16 by rules by the department to enable the department to monitor
17 the relationship of aggregate adjusted premiums actually
18 charged policyholders by each carrier to the premiums that
19 would have been charged by application of the carrier's
20 approved modified community rates. If the aggregate premium
21 resulting from the application of such adjustment exceeds the
22 premium that would have been charged by application of the
23 approved modified community rate by 5 percent for the current
24 reporting period, the carrier shall limit the application of
25 such adjustments to only minus adjustments beginning not more
26 than 60 days after the report is sent to the department. For
27 any subsequent reporting period, if the total aggregate
28 adjusted premium actually charged does not exceed by 5 percent
29 the premium that would have been charged by application of the
30 approved modified community rate, the carrier may apply both
31 plus and minus adjustments.
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CS/HB 903, First Engrossed
1 6. A small employer carrier may provide a credit to a
2 small employer's premium based on administrative and
3 acquisition expense differences resulting from the size of the
4 group. Group size administrative and acquisition expense
5 factors may be developed by each carrier to reflect the
6 carrier's experience and are subject to department review and
7 approval.
8 7. A small employer carrier rating methodology may
9 include separate rating categories for one dependent child,
10 for two dependent children, and three or more dependent
11 children for family coverage of employees having a spouse and
12 dependent children or employees having dependent children
13 only. A small employer carrier may have fewer, but not
14 greater, numbers of categories for dependent children than
15 those specified in this subparagraph.
16 8. Small employer carriers may not use a composite
17 rating methodology to rate a small employer with fewer than 10
18 employees. For the purposes of this subparagraph a "composite
19 rating methodology" means a rating methodology that averages
20 the impact of the rating factors for age and gender in the
21 premiums charged to all of the employees of a small employer.
22 (d) Notwithstanding s. 627.401(2), this section and
23 ss. 627.410 and 627.411 apply to any health benefit plan
24 provided by a small employer carrier that is an insurer, and
25 this section and s. 641.31 apply to any health benefit
26 provided by a small employer carrier that is a health
27 maintenance organization, that provides coverage to one or
28 more employees of a small employer regardless of where the
29 policy, certificate, or contract is issued or delivered, if
30 the health benefit plan covers employees or their covered
31 dependents who are residents of this state.
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CS/HB 903, First Engrossed
1 Section 2. This act shall take effect July 1, 1999.
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