House Bill 0645

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    Florida House of Representatives - 2000                 HB 645

        By Representatives C. Green, Jones, Peaden, Fasano and
    Maygarden





  1                      A bill to be entitled

  2         An act relating to health care; creating the

  3         Florida Health Endowment Association; providing

  4         for appointment of a board of directors;

  5         providing a limitation on the liability of

  6         members, employees of the association, and

  7         representatives of the Department of Health

  8         when performing responsibilities of the

  9         association; providing for open meetings;

10         prescribing duties of the board; authorizing

11         the board to administer the Florida Health

12         Endowment Trust Fund; providing for the

13         adoption of a comprehensive health insurance

14         plan for state residents; providing for the

15         establishment of a plan of operation by the

16         board that includes the assumption of all

17         assets and liabilities of the Florida

18         Comprehensive Health Association and for the

19         transfer of its remaining policyholders into

20         the plan; providing rulemaking authority;

21         specifying mandatory and discretionary powers

22         of the board; requiring an audit and report;

23         providing definitions; providing eligibility

24         requirements for persons who seek to join the

25         new comprehensive health insurance plan;

26         specifying coverages and limitations on

27         coverages as a condition of a person's

28         eligibility; providing for the selection of,

29         term of service of, and duties of the

30         administrator of the plan; providing coverages,

31         benefits, expenses, premiums, and deductibles

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  1         under the plan; requiring coverage provided by

  2         the plan to be directly insured by the Florida

  3         Health Endowment Association and requiring

  4         policies to be issued by the administrator;

  5         authorizing the association to contract with

  6         insurers to provide disease-management

  7         services; providing a tax credit for certain

  8         insurers that make a contribution to the

  9         association; providing conditions; repealing s.

10         627.648, F.S., which provides for the Florida

11         Comprehensive Health Association Act; repealing

12         s. 627.6482, F.S., relating to definitions;

13         repealing s. 627.6484, F.S., relating to

14         termination of enrollment; repealing s.

15         627.6486, F.S., relating to eligibility;

16         repealing s. 627.6487, F.S., relating to

17         availability of individual health insurance

18         coverage; repealing s. 627.64871, F.S.,

19         relating to certification of coverage;

20         repealing s. 627.6488, F.S., relating to the

21         creation of the Florida Comprehensive Health

22         Association; repealing s. 627.6489, F.S.,

23         relating to the disease-management program;

24         repealing s. 627.649, F.S., relating to the

25         administrator of the program; repealing s.

26         627.6496, F.S., relating to issuance of

27         policies; repealing s. 627.6498, F.S., relating

28         to minimum benefits; repealing s. 627.6492,

29         F.S., relating to participation of insurers;

30         repealing s. 627.6494, F.S., relating to

31         assessments; providing that individuals having

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  1         coverage issued by the Florida Comprehensive

  2         Health Association will be issued coverage

  3         under the plan of the Florida Health Endowment

  4         Association on the effective date of the plan;

  5         requiring the Florida Health Endowment

  6         Association to assume the assets and

  7         liabilities of the Florida Comprehensive Health

  8         Association; providing an appropriation to the

  9         Florida Health Endowment Trust Fund; providing

10         a contingent effective date.

11

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

13

14         Section 1.  Florida Health Endowment Association.--

15         (1)  There is created a nonprofit legal entity to be

16  known as the "Florida Health Endowment Association."

17         (2)(a)  The association shall operate subject to the

18  supervision and approval of a five-member board of directors.

19  The board of directors shall consist of:

20         1.  The Secretary of Health, or his or her designee

21  from the Department of Health, who shall serve as chairperson

22  of the board.

23         2.  The Insurance Commissioner, or his or her designee

24  from the Department of Insurance.

25         3.  Three members appointed by the Governor as follows:

26         a.  One representative of policyholders who is not

27  associated with the medical profession or a hospital.

28         b.  One representative of the health insurance

29  industry.

30         c.  One member of the public.

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  1         (b)  The administrator of the plan, or his or her

  2  affiliate, may not be a member of the board. Any appointed

  3  board member may be removed and replaced by his or her

  4  appointor at any time without cause.

  5         (c)  All appointed board members, including the

  6  chairperson, shall be appointed to staggered 3-year terms

  7  beginning on a date established in the plan of operation.

  8         (d)  The board of directors may employ persons to

  9  perform the administrative and financial transactions and

10  responsibilities of the association and to perform other

11  necessary functions not prohibited by law.

12         (e)  Board members may be reimbursed from moneys of the

13  association for actual and necessary expenses incurred by them

14  as members, but may not otherwise be compensated for their

15  services.

16         (f)  There is no liability on the part of, and no cause

17  of action of any nature shall arise against, any employee of

18  the association, member of the board of directors of the

19  association, or representative of the Department of Health for

20  any act or omission taken by them in the performance of their

21  powers and duties under this act, unless that act or omission

22  is in intentional disregard of the rights of the claimant.

23         (g)  Meetings of the board are subject to section

24  286.011, Florida Statutes.

25         (3)  The board of directors of the association shall

26  adopt a plan pursuant to this act and submit its articles,

27  bylaws, and operating rules to the Department of Health for

28  approval. If the board of directors fails to adopt such plan

29  and suitable articles, bylaws, and operating rules within 180

30  days after the appointment of the board, the department shall

31  adopt rules to implement this act, and such rules shall remain

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  1  in effect until superseded by a plan and articles, bylaws, and

  2  operating rules submitted by the board of directors and

  3  approved by the department.

  4         (4)  The board of directors shall:

  5         (a)  Establish administrative and accounting procedures

  6  for the operation of the association.

  7         (b)  Contract with an actuary to evaluate the pool of

  8  insureds in the plan and monitor the financial status of the

  9  Florida Health Endowment Trust Fund. The actuary shall

10  recommend to the board the opening and closing of the plan,

11  which must be based on an analysis of the trust fund; the

12  income of the trust fund; and any premiums, deductibles, and

13  coinsurance paid to the association.

14         (c)  Establish eligibility requirements for individuals

15  participating in the plan to ensure the viability of the

16  association.

17         (d)  Establish procedures under which applicants in the

18  plan may have grievances reviewed by an impartial body and

19  reported to the board.

20         (e)  Select an administrator under section 4.

21         (f)  Require that all policy forms issued by the

22  association conform to standard forms developed by the

23  association. The forms must be approved by the Department of

24  Insurance.

25         (g)  Develop and implement a program to publicize the

26  existence of the plan, the eligibility requirements for the

27  plan, and the procedures for enrollment in the plan, and

28  maintain public awareness of the plan.

29         (h)  Design and employ cost-containment measures and

30  requirements that shall include preadmission certification,

31  any out-of-state health care, home health care, hospice care,

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  1  negotiated purchase of medical and pharmaceutical supplies,

  2  and individual case management.

  3         (i)  Contract with preferred provider organizations and

  4  health maintenance organizations giving due consideration to

  5  the preferred provider organizations. If cost-effective and

  6  available in the county where the policyholder resides, the

  7  board, upon application or renewal of a policy, shall place an

  8  individual, as established under section 5, with the plan case

  9  manager who shall determine the most cost-effective quality

10  care system or health care provider and shall place the

11  individual in such system or with such health care provider.

12  Prior to and during the implementation of case management, the

13  plan case manager shall obtain input from the policyholder,

14  parent, guardian, and health care providers.

15         (j)  Use a case manager or managers to supervise and

16  manage the medical care or coordinate the supervision and

17  management of the medical care of specified individuals. The

18  case manager, with the approval of the board, has final

19  approval over the case management for any specific individual.

20         (k)  Appoint an executive director to serve as the

21  chief administrative and operational officer of the board and

22  to perform other duties assigned to him or her by the board.

23         (l)  Administer the Florida Health Endowment Trust Fund

24  in a manner that is sufficiently actuarially sound to defray

25  the obligations of the program. The board shall annually

26  evaluate or cause to be evaluated the actuarial soundness of

27  the fund. If the board perceives a need for additional assets

28  to preserve actuarial soundness, the board may adjust the

29  benefits or restrict enrollment of the plan to ensure such

30  soundness.

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  1         (m)  Establish a comprehensive investment plan with the

  2  approval of the State Board of Administration. The

  3  comprehensive investment plan must specify the investment

  4  policies to be used by the board in administering the fund.

  5  The board may place assets of the fund in savings accounts or

  6  use the fund to purchase fixed or variable life insurance or

  7  annuity contracts, securities, evidence of indebtedness, or

  8  other investment products pursuant to the comprehensive

  9  investment plan and in such proportions as are designated or

10  approved under the investment plan. Such insurance, annuity,

11  savings, or investment products must be underwritten and

12  offered in compliance with the applicable federal and state

13  laws and rules by persons who are authorized by applicable

14  federal and state authorities. Within the comprehensive

15  investment plan, the board may authorize investment vehicles,

16  or products incident thereto, that are available or offered by

17  qualified companies or persons.

18         (n)  Solicit proposals and contract under section

19  287.057, Florida Statutes, for a trustee services firm to

20  select and supervise investment programs on behalf of the

21  board. The goal of the board in selecting a trustee services

22  firm is to obtain the highest standards of professional

23  trustee services, to allow all qualified firms interested in

24  providing such services equal consideration, and to provide

25  such services to the state at no cost and to the purchasers at

26  the lowest cost possible. The trustee services firm must agree

27  to meet the obligations of the board to qualified

28  beneficiaries if moneys in the fund fail to offset the

29  obligations of the board as a result of imprudent selection or

30  supervision of investment programs by such firm. Evaluations

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  1  of proposals submitted under this paragraph must include the

  2  following criteria:

  3         1.  Adequacy of trustee services for supervising and

  4  managing the program, including current operations and staff

  5  organization and commitment of management to the proposal.

  6         2.  Capability to execute plan responsibilities within

  7  time and regulatory constraints.

  8         3.  Past experience in trustee services and current

  9  ability to maintain regular and continuous interactions with

10  the board, records administrator, and product provider.

11         4.  The minimum purchaser participation assumed within

12  the proposal and any additional requirements of purchases.

13         5.  Adequacy of technical assistance and services

14  proposed for the staff.

15         6.  Adequacy of a management system for evaluating and

16  improving overall trustee services to the plan.

17         7.  Adequacy of facilities, equipment, and electronic

18  data processing services.

19         8.  Detailed projections of administrative costs of

20  trustee services, including the amount and type of insurance

21  coverage, and detailed projections of total costs.

22         (o)  Make a report to the Governor, the President of

23  the Senate, the Speaker of the House of Representatives, and

24  the Minority Leaders of the Senate and the House of

25  Representatives not later than October 1 of each year. The

26  report must summarize the activities of the plan for the

27  12-month period ending December 31 of the previous year,

28  including then-current data and estimates as to net written

29  and earned premiums, the expense of administration, the paid

30  and incurred losses for the year, the financial status of the

31  Florida Health Endowment Trust Fund, and any recommendations

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  1  by the actuary and actions by the board for the opening or

  2  closing of the plan. The report shall also include analysis

  3  and recommendations for legislative changes regarding

  4  utilization review, quality assurance, an evaluation of the

  5  administrator of the plan, access to cost-effective health

  6  care, and the cost-containment and case-management policy and

  7  recommendations concerning the opening of enrollment.

  8         (p)  Establish a plan of operation which includes the

  9  assumption of all assets and liabilities of the Florida

10  Comprehensive Health Association and the transition of its

11  remaining policyholders into the plan.

12         1.  The plan must include directives for calculating,

13  issuing, and collecting the final assessment for operating

14  losses of the Florida Comprehensive Health Association as

15  defined in section 627.6488(4)(d), Florida Statutes.

16         2.  The plan must ensure that remaining Florida

17  Comprehensive Health Association policyholders, including

18  those currently enrolled in Medicare, will not be subjected to

19  a new pre-existing condition waiting period. In addition,

20  those individuals will retain the remaining lifetime benefits

21  available under their prior Florida Comprehensive Health

22  Association policy, subject to the viability of the plan.

23         (5)  The board may:

24         (a)  Adopt articles and rules.

25         (b)  Exercise powers granted to insurers under the laws

26  of this state.

27         (c)  Sue or be sued.

28         (d)  Make and execute contracts and other necessary

29  instruments.

30         (e)  Prepare or contract for a performance audit of the

31  administrator of the association.

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  1         (f)  Invest funds not required for immediate

  2  disbursement.

  3         (g)  Appear in its own behalf before boards,

  4  commissions, or other governmental agencies.

  5         (h)  Hold, buy, and sell any instruments, obligations,

  6  securities, and property determined appropriate by the board.

  7         (i)  Restrict the number of participants in the plan

  8  based on actuarial estimates. However, any person denied

  9  participation solely on the basis of such restriction must be

10  granted priority on a first-come, first-served basis for

11  participation in the succeeding years in which the plan is

12  reopened for participants.

13         (j)  Contract for necessary goods and services; employ

14  necessary personnel; and engage the services of private

15  consultants, actuaries, managers, legal counsel, and auditors

16  for administrative or technical assistance.

17         (k)  Solicit and accept gifts, grants, loans, and other

18  aids from any source or participate in any other way in any

19  government program to carry out the purposes of this act.

20         (l)  Require and collect administrative fees and

21  charges in connection with any transaction and impose

22  reasonable penalties, including default, for delinquent

23  payments or for entering into the plan on a fraudulent basis.

24         (m)  Procure insurance against any loss in connection

25  with the property, assets, and activities of the fund or the

26  board.

27         (n)  Establish other policies, procedures, and criteria

28  to implement and administer this section.

29         (o)  Adopt procedures to govern contract dispute

30  proceedings between the board and its vendors.

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  1         (6)  The Auditor General shall conduct a performance

  2  audit, including a review of the annual financial audit and

  3  the annual report prepared by the board. The report shall

  4  critique the affairs of the association and shall be submitted

  5  to the President of the Senate and the Speaker of the House of

  6  Representatives prior to the legislative session. The Auditor

  7  General may require and receive from the association, its

  8  administrator, and its independent auditor any detail or

  9  supplemental data relative to the operation of the

10  association.

11         Section 2.  Definitions.--As used in sections 1-8 of

12  this act, the term:

13         (1)  "Association" means the Florida Health Endowment

14  Association.

15         (2)  "Board" means the board of directors of the

16  association.

17         (3)  "Case management" means the specific supervision

18  and management of the medical care provided or prescribed for

19  a specific individual or a specific episode of care, which may

20  include the use of health care providers designated by the

21  plan case manager.

22         (4)  "Department" means the Department of Health.

23         (5)  "Federal poverty level" means the level

24  established by the Economic Service Department of Children and

25  Families and in effect on the date of the policy and its

26  annual renewal.

27         (6)  "Household" means a person or group of persons

28  living together in a room or group of rooms as a housing unit,

29  but the term does not include persons boarding in or renting a

30  portion of the dwelling.

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  1         (7)  "Household or family income" means the adjusted

  2  gross income, as defined in s. 62 of the United States

  3  Internal Revenue Code, of all members of a household.

  4         (8)  "Medicaid" means the medical assistance program

  5  authorized by Title XIX of the Social Security Act, 42 U.S.C.

  6  s. 1396 et seq., and regulations thereunder, as administered

  7  in this state by the agency.

  8         (9)  "Medicare" means coverage under both parts A and B

  9  of Title XVII of the Social Security Act, 42 U.S.C. s. 1395 et

10  seq., as amended.

11         (10)  "Plan case manager" means the person or persons

12  used by the association to supervise and manage or coordinate

13  with the administrator the supervision and management of the

14  medical care provided or prescribed for a specific individual.

15         (11)  "Plan of operation" means the articles, bylaws,

16  and operating rules and procedures adopted by the board under

17  section 1.

18         (12)  "Plan" means the comprehensive health insurance

19  plan adopted by the association.

20         (13)  "Resident" means a person who is legally

21  domiciled in this state.

22         (14)  "Transferee" means any person who:

23         (a)  Through the voluntary sale, assignment, or other

24  transfer of the business or control of the business of the

25  insurance company, including the sale or other transfer of

26  stock or assets by merger, consolidation, or dissolution,

27  succeeds to all or substantially all of the business and

28  property of an insurance company;

29         (b)  Becomes by operation of law or otherwise the

30  parent company or a wholly owned subsidiary of an insurance

31  company; or

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  1         (c)  Directly or indirectly owns, whether through

  2  rights, options, convertible interests, or otherwise,

  3  controls, or holds power to vote 10 percent or more of the

  4  outstanding voting securities or other ownership interests of

  5  an insurance company.

  6         Section 3.  Eligibility.--

  7         (1)  Except as provided in subsection (2), any person

  8  who has been for the previous year and continues to be a

  9  resident of the state is eligible for plan coverage if such

10  person provides evidence of:

11         (a)  A notice of rejection or refusal to issue

12  substantially similar insurance for health reasons by an

13  insurer licensed to do business in this state; or

14         (b)  A refusal by an insurer to issue insurance except

15  at a rate exceeding the plan rate.

16

17  A rejection or refusal by an insurer offering only stop-loss,

18  excess-of-loss, or reinsurance coverage with respect to the

19  applicant is sufficient evidence under this subsection.

20         (2)  The board or administrator shall require

21  verification of residency and shall require any additional

22  information or documentation or statements under oath when

23  necessary to determine residency upon initial application and

24  for the entire term of the policy.

25         (3)  The board shall adopt a list of medical or health

26  conditions for which a person is eligible for plan coverage

27  without applying for health insurance under subsection (1).

28  Persons who demonstrate the existence or history of any

29  medical or health conditions on the list adopted by the board

30  are not required to provide the evidence specified in

31

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  1  subsection (1). The list is effective on the first day of the

  2  operation of the plan and may be amended as appropriate.

  3         (4)  Any resident dependent unmarried child of the

  4  insured is eligible from the moment of birth, provided that no

  5  other coverage is available. Subject to the provisions of

  6  section 627.6041, Florida Statutes, such coverage will

  7  terminate at the end of the premium period in which the child

  8  marries, ceases to be a dependent of the insured, or attains

  9  the age of 19, whichever occurs first. However, if the child

10  is a full-time student at an accredited institution of higher

11  learning, the coverage may continue while the child remains

12  unmarried and a full-time student, but not beyond the premium

13  period in which the child reaches age 23.

14         (5)  A person is ineligible for coverage under the plan

15  if:

16         (a)  The person has or obtains health insurance

17  coverage substantially similar to or more comprehensive than a

18  plan policy, or would be eligible to have coverage if the

19  person elected to obtain it.

20         (b)  The person is an inmate or resident of a public

21  institution or correction facility.

22         (c)  The person's premiums are paid for or reimbursed

23  under any government-sponsored program or by any government

24  agency or health care provider, except as an agency or health

25  care provider.

26         (d)  The person has received $500,000 in covered

27  benefits that have been paid out pursuant to the plan.

28         (e)  The person is eligible, on the date of issue of

29  coverage under the plan, for substantially similar coverage

30  under another contract or policy, unless such coverage is

31  provided pursuant to the Consolidated Omnibus Budget

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  1  Reconciliation Act of 1985, Pub. L. No. 99-272, 100 Stat.

  2  82(1986)(COBRA), as amended, and scheduled to end at a time

  3  certain and the person meets all other requirements of

  4  eligibility. Coverage provided by the association shall be

  5  secondary to any coverage provided by an insurer pursuant to

  6  COBRA.

  7         (f)  The person is currently enrolled for health care

  8  benefits under the Medicare programs.

  9         (6)  Coverage ceases:

10         (a)  On the date a person is no longer a resident of

11  this state;

12         (b)  On the date a person requests coverage to end;

13         (c)  Upon the date of death of the covered person;

14         (d)  On the date state law requires cancellation of the

15  policy; or

16         (e)  At the option of the plan, 30 days after the plan

17  makes any inquiry concerning the person's eligibility or place

18  of residence to which the person does not reply.

19         (7)  All eligible persons must, upon application or

20  renewal, agree to be placed in a case-management system when

21  it is determined by the board and the plan case manager that

22  such system will be cost-effective and provide quality care to

23  the individual.

24         (8)  The coverage of any person who ceases to meet the

25  eligibility requirements may be terminated immediately. If

26  such person again becomes eligible for subsequent coverage

27  under the plan, any previous claims payments must be applied

28  towards the $500,000 lifetime maximum benefit, and any

29  limitation relating to preexisting conditions in effect at the

30  time such person again becomes eligible applies to such

31  person.

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  1         Section 4.  Administrator.--

  2         (1)  The board shall select an administrator, through a

  3  competitive bidding process, to administer the plan. The board

  4  shall evaluate bids based on criteria established by the

  5  board, which must include:

  6         (a)  The administrator's proven ability to handle

  7  individual accident and health insurance.

  8         (b)  The extent to which the administrator has

  9  developed a network of health care providers for providing

10  managed health care on a statewide basis.

11         (c)  The efficiency of the administrator's

12  claims-paying procedures.

13         (d)  An estimate of total charges for administering the

14  plan.

15         (2)  The administrator serves for a period of 3 years

16  unless otherwise determined by the board. At least 1 year

17  prior to the expiration of each 3-year period of service by an

18  administrator, the board shall invite all insurers, including

19  the current administering insurer, to submit bids to serve as

20  the administrator for the succeeding 3-year period. The

21  selection of the administrator for the succeeding period must

22  be made at least 6 months prior to the end of the current

23  3-year period.

24         (3)  The administrator may:

25         (a)  Perform all eligibility and administrative

26  claims-payment functions relating to the plan, as prescribed

27  by the board.

28         (b)  Pay an agent's referral fee as established by the

29  board to each insurance agent who refers an applicant to the

30  plan, if the applicant's application is accepted. The selling

31  or marketing of plans is not limited to the administrator or

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  1  its agents. However, any agent must be selected by the board

  2  and licensed by the Department of Insurance to sell health

  3  insurance in this state. The referral fees must be paid by the

  4  administrator from moneys received as premiums for the plan.

  5         (c)  Establish a premium-billing procedure for

  6  collecting premiums from insured persons. Billings must be

  7  made periodically as determined by the board.

  8         (d)  Perform all necessary functions to assure timely

  9  payment of benefits under the plan, including:

10         1.  Making available information relating to the proper

11  manner of submitting a claim for benefits under the plan and

12  distributing forms upon which submissions are made.

13         2.  Evaluating the eligibility of each claim for

14  payment under the plan.

15         3.  Notifying each claimant, within the time limits

16  prescribed by law, as to insurers after receiving a properly

17  completed and executed proof of loss whether the claim is

18  accepted, rejected, or compromised.

19         (e)  Submit regular reports to the board regarding the

20  operation of the plan. The frequency, content, and form of the

21  reports must be determined by the board.

22         (f)  Following the close of each calendar year,

23  determine net premiums, reinsurance premiums less

24  administrative expense allowance, and the expense of

25  administration pertaining to the reinsurance operations of the

26  association.

27         (g)  Pay claims expenses from the premium payments

28  received from or on behalf of covered persons under the plan.

29  If the payments by the administrator for claims expenses

30  exceed the portion of premiums allocated by the board for

31  payment of claims expenses, the board must provide the

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  1  administrator with additional funds for payment of claims

  2  expenses to the extent that such funds are available.

  3         (4)(a)  The administrator must be paid, as provided in

  4  the contract of the association, for its direct and indirect

  5  expenses incurred in the performance of its services.

  6         (b)  As used in this subsection, the term "direct and

  7  indirect expenses" includes that portion of the audited

  8  administrative costs, printing expenses, claims administration

  9  expenses, management expenses, building overhead expenses, and

10  other actual operating and administrative expenses of the

11  administering insurer which is approved by the board as

12  allocable to the administration of the plan and included in

13  the bid specifications.

14         Section 5.  Minimum benefits coverage; exclusions;

15  premiums; deductibles.--

16         (1)  COVERAGE OFFERED.--

17         (a)  The plan must offer in an annually renewable

18  policy the coverage specified in this section for each

19  eligible individual.

20         (b)  Any person whose health insurance coverage is

21  involuntarily terminated for any reason other than nonpayment

22  of premium may apply for coverage under the plan. If such

23  coverage is applied for within 60 days after the involuntary

24  termination and if premiums are paid for the entire period of

25  coverage, the effective date of the coverage is the date of

26  termination of the previous coverage.

27         (c)  Coverage provided to a person who is eligible for

28  Medicare benefits may not be issued as a Medicare supplement

29  policy as defined in section 627.672, Florida Statutes.

30         (2)  BENEFITS.--The plan must offer major medical

31  expense coverage to every eligible person, subject to

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  1  limitations set by the board. Major medical expense coverage

  2  offered under the plan must pay an eligible person's covered

  3  expenses, subject to limits on the deductible and coinsurance

  4  payments authorized under subsection (4), up to a lifetime

  5  limit of $500,000 per covered individual. The maximum limit

  6  under this subsection may not be altered by the board, and no

  7  actuarially equivalent benefit may be substituted by the

  8  board.

  9         (3)  COVERED EXPENSES.--The coverage to be issued by

10  the association must, at a minimum, be patterned after the

11  standard individual health insurance plan approved by the

12  Department of Insurance.

13         (4)  PREMIUMS, DEDUCTIBLES, AND COINSURANCE.--

14         (a)  The plan may provide for annual deductibles for

15  major medical expense coverage in the amount of $1,000 or any

16  higher amounts proposed by the board and approved by the

17  Department of Insurance, plus the benefits payable under any

18  other type of insurance coverage or workers' compensation. The

19  schedules of premiums and deductibles must be established by

20  the association.

21         1.  Separate schedules of premium rates based on age,

22  gender, and geography may apply for individual risk.

23         2.  Rates are subject to approval by the Department of

24  Insurance.

25         3.  Standard risk rates for coverage issued by the

26  association must be established under section 627.6675(3),

27  Florida Statutes. Rates established by the board may not

28  exceed 200 percent of the standard risk rate.

29         4.  The board shall establish three separate premium

30  schedules:

31

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  1         a.  Schedule A is applicable to an individual whose

  2  family income exceeds the allowable amount for determining

  3  eligibility under the Florida Medicaid program, up to and

  4  including 200 percent of the Federal Poverty level. Premiums

  5  for a person under this schedule may not exceed 5 percent of

  6  the family income of an eligible person.

  7         b.  Schedule B will be applicable to a person whose

  8  family income exceeds 200 percent of the Federal Poverty level

  9  and whose combined premiums and deductible exceed 7.5 percent

10  of the family income of the person.

11         c.  Schedule C will be applicable to a person whose

12  family income exceeds 200 percent of the Federal Poverty level

13  and whose combined premiums and deductible do not exceed 7.5

14  percent of the family income of the person.

15         (b)  For persons eligible under Schedule A that use the

16  preferred provider network, the plan shall pay 100 percent of

17  the covered cost incurred by the person during the policy

18  term. No cost will be covered for services provided by

19  non-network providers.

20         (c)  For persons eligible under Schedule B, if covered

21  costs incurred by the eligible person exceed the deductible

22  for major medical expense coverage selected by the person in a

23  policy year, the plan must pay in the following manner:

24         1.  For persons placed under case management, after

25  satisfaction of the deductible, the plan must pay 90 percent

26  of the additional covered cost incurred by the person during

27  the policy year for the first $10,000, after which the plan

28  must pay 100 percent of the covered costs incurred by the

29  person during the policy year.

30         2.  For persons using the preferred provider network,

31  after satisfaction of the deductible, the plan must pay 80

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  1  percent of the additional covered cost incurred by the person

  2  during the policy year for the first $10,000, after which the

  3  plan must pay 90 percent of covered costs incurred by the

  4  person during the policy year.

  5         3.  If the person does not use the case management

  6  system or the preferred provider network, after satisfaction

  7  of the deductible, the plan must pay 60 percent of the

  8  additional covered costs incurred by the person for the first

  9  $10,000, after which the plan must pay 70 percent of the

10  additional cost incurred by the person during the policy year.

11         (d)  For persons eligible under Schedule C, if covered

12  costs incurred by the eligible person exceed the deductible

13  for major medical expense coverage selected by the person in a

14  policy year, the plan must pay in the following manner:

15         1.  For persons placed under case management, after

16  satisfaction of the deductible, the plan must pay 90 percent

17  of the additional covered cost incurred by the person during

18  the policy year.

19         2.  For persons using the preferred provider network,

20  after satisfaction of the deductible, the plan must pay 80

21  percent of the additional covered cost incurred by the person

22  during the policy year.

23         3.  If the person does not use the case management

24  system or the preferred provider network, after satisfaction

25  of the deductible, the plan must pay 60 percent of the

26  additional covered cost incurred by the person during the

27  policy year.

28         (e)  All premiums paid to the association must be

29  deposited with the Florida Health Endowment Association.

30         (f)  Notwithstanding the provisions of section 624.509,

31  Florida Statutes, premiums for coverage are, as to the

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  1  association and participating insurers, exempt from premium

  2  taxation.

  3         (5)  PREEXISTING CONDITIONS.--An association policy may

  4  contain provisions under which coverage is excluded during a

  5  period of 12 months following the effective date of coverage

  6  with respect to a given covered individual for any preexisting

  7  condition, if:

  8         (a)  The condition manifested itself with 6 months

  9  before the effective date of coverage; or

10         (b)  Medical advice or treatment was recommended or

11  received within 6 months before the effective date of

12  coverage.

13         (6)  OTHER SOURCES PRIMARY.--

14         (a)  Any amounts paid or payable by Medicare or any

15  other governmental program or any other insurance, or

16  self-insurance maintained in lieu of otherwise statutorily

17  required insurance, may not be made or recognized as claims

18  under such policy or be recognized as or towards satisfaction

19  of applicable deductibles or out-of-pocket maximums or to

20  reduce the limits of benefits available.

21         (b)  The association has a cause of action against a

22  participant for any benefits paid to the participant which

23  should not have been claimed or recognized as claims because

24  of the provisions of this subsection or because the condition

25  is not covered.

26         (7)  NONENTITLEMENT.--This section does not provide an

27  individual with an entitlement to health care services or

28  health insurance. A cause of action does not arise against the

29  state, the board, or a unit of local government for failure to

30  make health services for health insurance available under this

31  section.

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  1         (8)  ISSUING OF POLICIES.--The coverage provided by

  2  this plan must be directly insured by the Florida Health

  3  Endowment Association, and the policies must be issued through

  4  the administrator.

  5         Section 6.  Disease management services.--

  6         (1)  The association may contract with insurers to

  7  provide disease management services for insurers that elect to

  8  participate in the association's disease management program.

  9         (2)  An insurer that elects to contract for such

10  services must provide the association with all medical records

11  and claims information necessary for the association to

12  effectively manage the services.

13         (3)  Moneys collected by the association for providing

14  disease management services must be used by the association to

15  pay administrative expenses associated with the disease

16  management program and any remaining moneys must be deposited

17  in the Florida Health Endowment Trust Fund.

18         Section 7.  Tax credits.--

19         (1)(a)  Any insurance company subject to premium tax

20  liability under section 624.509, Florida Statutes, which makes

21  a contribution to the Florida Health Endowment Association

22  earns a vested credit against premium tax liability equal to

23  100 percent of the contribution. Insurance companies may use

24  not more than 25 percentage points of the vested premium tax

25  credit, including any carryforward credits under this act, per

26  year beginning with premium tax filings for calendar year

27  2002. Any premium tax credits not used in any single year may

28  be carried forward and applied against the premium tax

29  liabilities for subsequent calendar years.

30

31

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  1         (b)  The credit to be applied against premium tax

  2  liability in any single year may not exceed the premium tax

  3  liability of the insurance company for that taxable year.

  4         (c)  An insurance company claiming a credit against

  5  premium tax liability earned through an investment in the

  6  Florida Health Endowment Association is not required to pay

  7  any additional retaliatory tax levied under section 624.5091,

  8  Florida Statutes, as a result of claiming such credit. Because

  9  credits under this section are available to an insurance

10  company, section 624.5091, Florida Statutes, does not limit

11  such credit in any manner.

12         (2)  The claim of a transferee of an insurance

13  company's unused premium tax credit must be permitted in the

14  same manner and subject to the same provisions and limitations

15  of this act as is the original insurance company.

16         Section 8.  Plan termination.--If the state determines

17  the plan to be financially infeasible, the state may

18  discontinue the plan. Any participant is entitled to exercise

19  the complete benefits for which he or she has contracted.

20  However, additional participants may not be permitted to enter

21  the plan.

22         Section 9.  Section 627.648, Florida Statutes, section

23  627.6482, Florida Statutes, sections 627.6484 and 627.6486,

24  Florida Statutes, section 627.6487, Florida Statutes, sections

25  627.64871, 627.6488, 627.6489, 627.649, and 627.6496, Florida

26  Statutes, and section 627.6498, Florida Statutes, are repealed

27  effective upon the opening of the plan by the board. Sections

28  627.6492 and 627.6494, Florida Statutes, are repealed January

29  1, 2001. Effective upon the date of the opening of the plan,

30  all individuals who have insurance coverage issued by the

31  Florida Comprehensive Health Association on that date must be

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  1  issued insurance coverage under the plan. The Florida Health

  2  Endowment Association shall assume all assets and liabilities

  3  of the Florida Comprehensive Health Association.

  4         Section 10.  The sum of $50 million is appropriated

  5  from the General Revenue Fund to the Florida Health Endowment

  6  Trust Fund to carry out the provisions of this act during the

  7  2000-2001 fiscal year.

  8         Section 11.  The act shall take effect July 1, 2000,

  9  contingent upon the sum of $50 million being appropriated to

10  the Florida Health Endowment Trust Fund.

11

12            *****************************************

13                          SENATE SUMMARY

14    Repeals the Florida Comprehensive Health Association Act.
      Creates the Florida Health Endowment Association to adopt
15    a comprehensive health insurance plan for state
      residents. Provides for appointment of a board of
16    directors of the association. Prescribes duties of the
      board and limits members' liability for actions
17    undertaken while performing responsibilities of the
      association under certain circumstances. Provides for
18    open board meetings. Authorizes the board to administer
      the Florida Health Endowment Trust Fund. Provides for a
19    plan of operation by the board that includes the
      assumption of assets and liabilities of the Florida
20    Comprehensive Health Association, and provides for the
      transfer of its members into the new comprehensive plan.
21    Provides rulemaking authority and specifies mandatory and
      discretionary powers of the board. Provides eligibility
22    requirements for persons who want to join the new plan.
      Specifies amounts of coverages and limitations on
23    coverages as a condition of eligibility. Provides for
      selection and duties of the plan's administrator.
24    Provides coverages, benefits, expenses, premiums, and
      deductibles under the plan. Requires coverage under the
25    plan to be insured by the association and to be issued by
      the administrator. Authorizes the association to contract
26    with insurers to provide disease management services.
      Provides a tax credit for certain insurers that
27    contribute to the association. Provides a $50 million
      appropriation to the Florida Health Endowment Trust Fund.
28    Provides a contingent effective date.

29

30

31

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