Senate Bill 1300

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    Florida Senate - 2000                                  SB 1300

    By Senator Holzendorf





    2-296A-00

  1                      A bill to be entitled

  2         An act relating to the Employee Health Care

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

  4         modifying definitions; requiring small employer

  5         carriers to begin to offer and issue all small

  6         employer benefit plans on a specified date;

  7         deleting the requirement that basic and

  8         standard small employer health benefit plans be

  9         issued; providing additional requirements for

10         determining premium rates for benefit plans;

11         providing for applicability of the act to plans

12         provided by small employer carriers that are

13         insurers or health maintenance organizations

14         notwithstanding the provisions of certain other

15         specified statues under specified conditions;

16         providing an effective date.

17

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

19

20         Section 1.  Paragraph (n) of subsection (3), paragraph

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

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

23  amended to read:

24         627.6699  Employee Health Care Access Act.--

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

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

27  develop carrier premiums which spreads financial risk across a

28  large population and allows adjustments for age, gender,

29  family composition, tobacco usage, and geographic area as

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

31  status, or duration of coverage as permitted under

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    Florida Senate - 2000                                  SB 1300
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  1  subparagraph (6)(b)5.; and administrative and acquisition

  2  expenses as permitted under subparagraph (6)(b)6.

  3         (5)  AVAILABILITY OF COVERAGE.--

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

  5  of transacting business in this state:

  6         1.  Beginning July 1, 2000, January 1, 1994, offer and

  7  issue all small employer health benefit plans on a

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

  9  2 3 to 50 eligible employees, that elects to be covered under

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

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

12  additional or increased benefits may be medically underwritten

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

14  The increased rate charged for the additional or increased

15  benefit must be rated in accordance with this section.

16         2.  Beginning August 1, 2000 April 15, 1994, offer and

17  issue basic and standard small employer health benefit plans

18  on a guaranteed-issue basis, during a 31-day open enrollment

19  period of August 1 through August 31 of each year, to every

20  eligible small employer, with less than one or two eligible

21  employees, which small employer is not formed primarily for

22  the purpose of buying health insurance and which elects to be

23  covered under such plan, agrees to make the required premium

24  payments, and satisfies the other provisions of the plan.

25  Coverage provided under this subparagraph shall begin on

26  October 1 of the same year as the date of enrollment, unless

27  the small employer carrier and the small employer agree to a

28  different date. A rider for additional or increased benefits

29  may be medically underwritten and may only be added to the

30  standard health benefit plan.  The increased rate charged for

31  the additional or increased benefit must be rated in

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    Florida Senate - 2000                                  SB 1300
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  1  accordance with this section. For purposes of this

  2  subparagraph, a person, his or her spouse, and his or her

  3  dependent children constitute a single eligible employee if

  4  that person and spouse are employed by the same small

  5  employer.

  6         3.  Offer to eligible small employers the standard and

  7  basic health benefit plans.  This paragraph subparagraph does

  8  not limit a carrier's ability to offer other health benefit

  9  plans to small employers if the standard and basic health

10  benefit plans are offered and rejected.

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

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

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

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

15  benefit plans subject to this section are subject to the

16  following:

17         1.  Small employer carriers must use a modified

18  community rating methodology in which the premium for each

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

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

21  family composition, tobacco use, or geographic area as

22  determined under paragraph (5)(j) and in which the premium may

23  be adjusted as permitted by subparagraphs 6. and 7.

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

25  composition, tobacco use, or geographic location may be

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

27  The factors used by carriers are subject to department review

28  and approval.

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

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

31

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    Florida Senate - 2000                                  SB 1300
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  1  renewal date, unless the composition of the group changes or

  2  benefits are changed.

  3         4.  Carriers participating in the alliance program, in

  4  accordance with ss. 408.70-408.706, may apply a different

  5  community rate to business written in that program.

  6         5.  Any adjustments in rates for claims experience,

  7  health status, or duration of coverage may not be charged to

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

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

10  small employer which deviates more than 15 percent from the

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

12  uniformly to the rates charged for all employees and

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

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

15  to exceed 10 percent annually, due to the claims experience,

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

17  dependents of the small employer. Semiannually small group

18  carriers shall report information on forms adopted by rule by

19  the department to enable the department to monitor the

20  relationship of aggregate adjusted premiums actually charged

21  policyholders by each carrier to the premiums that would have

22  been charged by application of the carrier's approved modified

23  community rates. If the aggregate resulting from the

24  application of such adjustment exceeds the premium that would

25  have been charged by application of the approved modified

26  community rate by 5 percent for the current reporting period,

27  the carrier shall limit the application of such adjustments

28  only to minus adjustments beginning not more than 60 days

29  after the report is sent to the department. For any subsequent

30  reporting period, if the total aggregate adjusted premium

31  actually charged does not exceed the premium that would have

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    Florida Senate - 2000                                  SB 1300
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  1  been charged by application of the approved modified community

  2  rate by 5 percent, the carrier may apply both plus and minus

  3  adjustments. A small employer carrier may provide a credit to

  4  a small employer's premium based on administrative and

  5  acquisition expense differences resulting from the size of the

  6  group. Group size administrative and acquisition expense

  7  factors may be developed by each carrier to reflect the

  8  carrier's experience and are subject to department review and

  9  approval.

10         6.  A small employer carrier rating methodology may

11  include separate rating categories for one dependent child,

12  for two dependent children, and for three or more dependent

13  children for family coverage of employees having a spouse and

14  dependent children or employees having dependent children

15  only. A small employer carrier may have fewer, but not

16  greater, numbers of categories for dependent children than

17  those specified in this subparagraph.

18         7.  Small employer carriers may not use a composite

19  rating methodology to rate a small employer with fewer than 10

20  employees. For the purposes of this subparagraph, a "composite

21  rating methodology" means a rating methodology that averages

22  the impact of the rating factors for age and gender in the

23  premiums charged to all of the employees of a small employer.

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

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

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

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

28  provided by a small employer carrier that is a health

29  maintenance organization that provides coverage to one or more

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

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

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    Florida Senate - 2000                                  SB 1300
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  1  benefit plan covers employees or their covered dependents who

  2  are residents of this state.

  3         Section 2.  This act shall take effect July 1, 2000.

  4

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  6                          SENATE SUMMARY

  7    Modifies definitions applicable to the Employee Health
      Care Access Act. Requires small employer carriers to
  8    begin to offer and issue all small employer benefit plans
      on a specified date. Deletes the requirement that basic
  9    and standard small employer health benefit plans be
      issued. Provides additional requirements for determining
10    premium rates for benefit plans. Provides that the act
      applies to plans provided by small employer carriers that
11    are insurers or health maintenance organizations
      regardless of other statutory provisions.
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