Senate Bill sb1208

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    Florida Senate - 2001                                  SB 1208

    By Senator Latvala





    19-790B-01

  1                      A bill to be entitled

  2         An act relating to health insurance; amending

  3         s. 627.6482, F.S.; amending definitions used in

  4         the Florida Comprehensive Health Association

  5         Act; amending s. 627.6486, F.S.; revising the

  6         criteria for eligibility for coverage from the

  7         association; providing for cessation of

  8         coverage; requiring all eligible persons to

  9         agree to be placed in a case-management system;

10         amending s. 627.6487, F.S.; redefining the term

11         "eligible individual" for purposes of

12         guaranteed availability of individual health

13         insurance coverage; providing that a person is

14         not eligible if the person is eligible for

15         coverage under the Florida Comprehensive Health

16         Association; amending s. 627.6488, F.S.;

17         revising the membership of the board of

18         directors of the association; revising the

19         reimbursement of board members; requiring that

20         the plan of the association be submitted to the

21         department for approval on an annual basis;

22         revising the duties of the association related

23         to administrative and accounting procedures;

24         requiring an annual audit; specifying grievance

25         procedures; deleting requirements for

26         categorizing insureds as low-risk, medium-risk,

27         and high-risk; authorizing the association to

28         place an individual with a case manager who

29         determines the health care system or provider;

30         requiring an annual review of the actuarial

31         soundness of the association and the

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  1         feasibility of enrolling new members; requiring

  2         a separate account for policyholders insured

  3         prior to a specified date; requiring

  4         appointment of an executive director with

  5         specified duties; authorizing the board to

  6         restrict the number of participants based on

  7         inadequate funding; specifying other powers of

  8         the board; amending s. 627.649, F.S.; revising

  9         the requirements for the association to use in

10         selecting an administrator; amending s.

11         627.6492, F.S.; requiring insurers to be

12         members of the association and to be subject to

13         assessments for operating expenses; limiting

14         assessments to specified maximum amounts;

15         specifying when assessments are calculated and

16         paid; allowing certain assessments to be

17         charged by the health insurer directly to each

18         insured, member, or subscriber and to not be

19         subject to department review or approval;

20         amending s. 627.6498, F.S.; revising the

21         coverage, benefits, covered expenses, premiums,

22         and deductibles of the association; requiring

23         preexisting condition limitations; providing

24         that the act does not provide an entitlement to

25         health care services or health insurance and

26         does not create a cause of action; repealing s.

27         627.6484, F.S., relating to a prohibition on

28         the Florida Comprehensive Health Association

29         from accepting applications for coverage after

30         a certain date; providing effective dates.

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

  2

  3         Section 1.  Subsection (12) of section 627.6482,

  4  Florida Statutes, is amended to read:

  5         627.6482  Definitions.--As used in ss.

  6  627.648-627.6498, the term:

  7         (12)  "Premium" means the entire cost of an insurance

  8  plan, including the administrative fee, the risk assumption

  9  charge, and, in the instance of a minimum premium plan or

10  stop-loss coverage, the incurred claims whether or not such

11  claims are paid directly by the insurer.  "Premium" shall not

12  include a health maintenance organization's annual earned

13  premium revenue for Medicare and Medicaid contracts for any

14  assessment due for calendar years 1990 and 1991.  For

15  assessments due for calendar year 1992 and subsequent years, A

16  health maintenance organization's annual earned premium

17  revenue for Medicare and Medicaid contracts is subject to

18  assessments unless the department determines that the health

19  maintenance organization has made a reasonable effort to amend

20  its Medicare or Medicaid government contract for 1992 and

21  subsequent years to provide reimbursement for any assessment

22  on Medicare or Medicaid premiums paid by the health

23  maintenance organization and the contract does not provide for

24  such reimbursement.

25         Section 2.  Section 627.6486, Florida Statutes, is

26  amended to read:

27         627.6486  Eligibility.--

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

29  who is a resident of this state and has been a resident of

30  this state for the previous 12 months is shall be eligible for

31  coverage under the plan, including:

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  1         (a)  The insured's spouse.

  2         (b)  Any dependent unmarried child of the insured, from

  3  the moment of birth.  Subject to the provisions of ss. s.

  4  627.6041 and 627.6562, such coverage shall terminate at the

  5  end of the premium period in which the child marries, ceases

  6  to be a dependent of the insured, or attains the age of 19,

  7  whichever occurs first. However, if the child is a full-time

  8  student at an accredited institution of higher learning, the

  9  coverage may continue while the child remains unmarried and a

10  full-time student, but not beyond the premium period in which

11  the child reaches age 23.

12         (c)  The former spouse of the insured whose coverage

13  would otherwise terminate because of annulment or dissolution

14  of marriage, if the former spouse is dependent upon the

15  insured for financial support. The former spouse shall have

16  continued coverage and shall not be subject to waiting periods

17  because of the change in policyholder status.

18         (2)(a)  The board or administrator shall require

19  verification of residency for the preceding 12 months and

20  shall require any additional information or documentation, or

21  statements under oath, when necessary to determine residency

22  upon initial application and for the entire term of the

23  policy. A person may demonstrate his or her residency by

24  maintaining his or her residence in this state for the

25  preceding 12 months, purchasing a home that has been occupied

26  by him or her as his or her primary residence for the previous

27  12 months, or having established a domicile in this state

28  pursuant to s. 222.17 for the preceding 12 months.

29         (b)  No person who is currently eligible for health

30  care benefits under Florida's Medicaid program is eligible for

31  coverage under the plan unless:

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  1         1.  He or she has an illness or disease which requires

  2  supplies or medication which are covered by the association

  3  but are not included in the benefits provided under Florida's

  4  Medicaid program in any form or manner; and

  5         2.  He or she is not receiving health care benefits or

  6  coverage under Florida's Medicaid program.

  7         (c)  No person who is covered under the plan and

  8  terminates the coverage is again eligible for coverage.

  9         (d)  No person on whose behalf the plan has paid out

10  the lifetime maximum benefit currently being offered by the

11  association $500,000 in covered benefits is eligible for

12  coverage under the plan.

13         (e)  The coverage of any person who ceases to meet the

14  eligibility requirements of this section may be terminated

15  immediately.  If such person again becomes eligible for

16  subsequent coverage under the plan, any previous claims

17  payments shall be applied towards the $500,000 lifetime

18  maximum benefit and any limitation relating to preexisting

19  conditions in effect at the time such person again becomes

20  eligible shall apply to such person. However, no such person

21  may again become eligible for coverage after June 30, 1991.

22         (f)  No person is eligible for coverage under the plan

23  unless such person has been rejected by two insurers for

24  coverage substantially similar to the plan coverage and no

25  insurer has been found through the market assistance plan

26  pursuant to s. 627.6484 that is willing to accept the

27  application.  As used in this paragraph, "rejection" includes

28  an offer of coverage with a material underwriting restriction

29  or an offer of coverage at a rate greater than the association

30  plan rate.

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  1         (g)  No person is eligible for coverage under the plan

  2  if such person has, or is eligible for, on the date of issue

  3  of coverage under the plan, substantially similar coverage

  4  under another contract or policy, unless such coverage is

  5  provided pursuant to the Consolidated Omnibus Budget

  6  Reconciliation Act of 1985, Pub. L. No. 99-272, 100 Stat. 82

  7  (1986) (COBRA), as amended, or such coverage is provided

  8  pursuant to s. 627.6692 and such coverage is scheduled to end

  9  at a time certain and the person meets all other requirements

10  of eligibility. Coverage provided by the association shall be

11  secondary to any coverage provided by an insurer pursuant to

12  COBRA or pursuant to s. 627.6692.

13         (h)  A person is ineligible for coverage under the plan

14  if such person is currently eligible for health care benefits

15  under the Medicare programs, except for a person who is

16  insured by the Florida Comprehensive Health Association and

17  enrolled under Medicare on July 1, 2001. All eligible persons

18  who are classified as high-risk individuals pursuant to s.

19  627.6498(4)(a)4. shall, upon application or renewal, agree to

20  be placed in a case management system when it is determined by

21  the board and the plan case manager that such system will be

22  cost-effective and provide quality care to the individual.

23         (i)  A person is ineligible for coverage under the plan

24  if such person's premiums are paid for or reimbursed under any

25  government-sponsored program or by any government agency or

26  health care provider.

27         (j)  An eligible individual, as defined in s. 627.6487,

28  and his or her dependents, as described in subsection (1), are

29  automatically eligible for coverage in the association unless

30  the association has ceased accepting new enrollees under s.

31  627.6488. If the association has ceased accepting new

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  1  enrollees, the eligible individual is subject to the coverage

  2  rights set forth in s. 627.6487.

  3         (3)  A person's coverage ceases:

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

  5  this state;

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

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

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

  9  policy; or

10         (e)  Sixty days after the person receives notice from

11  the association making any inquiry concerning the person's

12  eligibility or place or residence to which the person does not

13  reply.

14         (4)  All eligible persons must, upon application or

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

16  the association and case manager find that such system will be

17  cost-effective and provide quality care to the individual.

18         (5)  Except for persons who are insured by the

19  association on December 31, 2001, and who renew such coverage,

20  persons may apply for coverage beginning January 1, 2002, and

21  coverage for such persons shall begin on or after April 1,

22  2002, as determined by the board pursuant to s.

23  627.6488(5)(e).

24         Section 3.  Subsection (3) of section 627.6487, Florida

25  Statutes, is amended to read:

26         627.6487  Guaranteed availability of individual health

27  insurance coverage to eligible individuals.--

28         (3)  For the purposes of this section, the term

29  "eligible individual" means an individual:

30         (a)1.  For whom, as of the date on which the individual

31  seeks coverage under this section, the aggregate of the

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  1  periods of creditable coverage, as defined in s. 627.6561(5)

  2  and (6), is 18 or more months; and

  3         2.a.  Whose most recent prior creditable coverage was

  4  under a group health plan, governmental plan, or church plan,

  5  or health insurance coverage offered in connection with any

  6  such plan; or

  7         b.  Whose most recent prior creditable coverage was

  8  under an individual plan issued in this state by a health

  9  insurer or health maintenance organization, which coverage is

10  terminated due to the insurer or health maintenance

11  organization becoming insolvent or discontinuing the offering

12  of all individual coverage in the State of Florida, or due to

13  the insured no longer living in the service area in the State

14  of Florida of the insurer or health maintenance organization

15  that provides coverage through a network plan in the State of

16  Florida;

17         (b)  Who is not eligible for coverage under:

18         1.  A group health plan, as defined in s. 2791 of the

19  Public Health Service Act;

20         2.  A conversion policy or contract issued by an

21  authorized insurer or health maintenance organization under s.

22  627.6675 or s. 641.3921, respectively, offered to an

23  individual who is no longer eligible for coverage under either

24  an insured or self-insured employer plan;

25         3.  Part A or part B of Title XVIII of the Social

26  Security Act; or

27         4.  A state plan under Title XIX of such act, or any

28  successor program, and does not have other health insurance

29  coverage; or

30

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  1         5.  The Florida Comprehensive Health Association, if

  2  the association is accepting and issuing coverage to new

  3  enrollees;

  4         (c)  With respect to whom the most recent coverage

  5  within the coverage period described in paragraph (a) was not

  6  terminated based on a factor described in s. 627.6571(2)(a) or

  7  (b), relating to nonpayment of premiums or fraud, unless such

  8  nonpayment of premiums or fraud was due to acts of an employer

  9  or person other than the individual;

10         (d)  Who, having been offered the option of

11  continuation coverage under a COBRA continuation provision or

12  under s. 627.6692, elected such coverage; and

13         (e)  Who, if the individual elected such continuation

14  provision, has exhausted such continuation coverage under such

15  provision or program.

16         Section 4.  Section 627.6488, Florida Statutes, is

17  amended to read:

18         627.6488  Florida Comprehensive Health Association.--

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

20  known as the "Florida Comprehensive Health Association."  All

21  insurers, as a condition of doing business, shall be members

22  of the association.

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

24  supervision and approval of a five-member three-member board

25  of directors consisting of the Insurance Commissioner, or his

26  or her designee, who shall serve as chairperson of the board,

27  and four additional members who must be state residents. At

28  least one member must be a representative of an authorized

29  health insurer or health maintenance organization authorized

30  to transact business in this state. The board of directors

31  shall be appointed by the Insurance Commissioner as follows:

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  1         1.  The chair of the board shall be the Insurance

  2  Commissioner or his or her designee.

  3         2.  One representative of policyholders who is not

  4  associated with the medical profession, a hospital, or an

  5  insurer.

  6         3.  One representative of insurers.

  7

  8  The administrator or his or her affiliate shall not be a

  9  member of the board. Any board member appointed by the

10  commissioner may be removed and replaced by him or her at any

11  time without cause.

12         (b)  All board members, including the chair, shall be

13  appointed to serve for staggered 3-year terms beginning on a

14  date as established in the plan of operation.

15         (c)  The board of directors may shall have the power to

16  employ or retain such persons as are necessary to perform the

17  administrative and financial transactions and responsibilities

18  of the association and to perform other necessary and proper

19  functions not prohibited by law.

20         (d)  Board members may be reimbursed from moneys of the

21  association for actual and necessary expenses incurred by them

22  as members in carrying out their responsibilities under the

23  Florida Comprehensive Health Association Act, as provided in

24  s. 112.061, but may not otherwise be compensated for their

25  services.

26         (e)  There shall be no liability on the part of, and no

27  cause of action of any nature shall arise against, any member

28  insurer, or its agents or employees, agents or employees of

29  the association, members of the board of directors of the

30  association, or the departmental representatives for any act

31  or omission taken by them in the performance of their powers

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  1  and duties under this act, unless such act or omission by such

  2  person is in intentional disregard of the rights of the

  3  claimant.

  4         (f)  Meetings of the board are subject to s. 286.011.

  5         (3)  The association shall adopt a plan pursuant to

  6  this act and submit its articles, bylaws, and operating rules

  7  to the department for approval.  If the association fails to

  8  adopt such plan and suitable articles, bylaws, and operating

  9  rules within 180 days after the appointment of the board, the

10  department shall adopt rules to effectuate the provisions of

11  this act; and such rules shall remain in effect until

12  superseded by a plan and articles, bylaws, and operating rules

13  submitted by the association and approved by the department.

14  Such plan shall be reviewed, revised as necessary, and

15  annually submitted to the department for approval.

16         (4)  The association shall:

17         (a)  Establish competitive administrative and

18  accounting procedures and internal controls for the operation

19  of the association and provide for an annual audit of the

20  financial statements by an independent certified public

21  accountant.

22         (b)  Establish procedures under which applicants and

23  participants in the plan may have grievances reviewed by an

24  impartial body and reported to the board. Individuals

25  receiving care through the association under contract from a

26  health maintenance organization must follow the grievance

27  procedures established in ss. 408.7056 and 641.31(5).

28         (c)  Select an administrator in accordance with s.

29  627.649.

30         (d)  Collect assessments from all insurers to provide

31  for operating losses incurred or estimated to be incurred

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  1  during the period for which the assessment is made.  The level

  2  of payments shall be established by the board, as formulated

  3  in s. 627.6492(1). Annual assessment of the insurers for each

  4  calendar year shall occur as soon thereafter as the operating

  5  results of the plan for the calendar year and the earned

  6  premiums of insurers being assessed for that year are known.

  7  Annual assessments are due and payable within 30 days of

  8  receipt of the assessment notice by the insurer.

  9         (e)  Require that all policy forms issued by the

10  association conform to standard forms developed by the

11  association. The forms shall be approved by the department.

12         (f)  Develop and implement a program to publicize the

13  existence of the plan, the eligibility requirements for the

14  plan, and the procedures for enrollment in the plan and to

15  maintain public awareness of the plan.

16         (g)  Design and employ cost containment measures and

17  requirements which may include preadmission certification,

18  home health care, hospice care, negotiated purchase of medical

19  and pharmaceutical supplies, and individual case management.

20         (h)  Contract with preferred provider organizations and

21  health maintenance organizations giving due consideration to

22  the preferred provider organizations and health maintenance

23  organizations which have contracted with the state group

24  health insurance program pursuant to s. 110.123.  If

25  cost-effective and available in the county where the

26  policyholder resides, the board, upon application or renewal

27  of a policy, shall place a high-risk individual, as

28  established under s. 627.6498(4)(a)4., with the plan case

29  manager who shall determine the most cost-effective quality

30  care system or health care provider and shall place the

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

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  1  If cost-effective and available in the county where the

  2  policyholder resides, the board, with the consent of the

  3  policyholder, may place a low-risk or medium-risk individual,

  4  as established under s. 627.6498(4)(a)4., with the plan case

  5  manager who may determine the most cost-effective quality care

  6  system or health care provider and shall place the individual

  7  in such system or with such health care provider. Prior to and

  8  during the implementation of case management, the plan case

  9  manager shall obtain input from the policyholder, parent, or

10  guardian.

11         (h)(i)  Make a report to the Governor, the President of

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

13  the Minority Leaders of the Senate and the House of

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

15  report shall summarize the activities of the plan for the

16  12-month period ending July 1 of that year, including

17  then-current data and estimates as to net written and earned

18  premiums, the expense of administration, and the paid and

19  incurred losses for the year.  The report shall also include

20  analysis and recommendations for legislative changes regarding

21  utilization review, quality assurance, an evaluation of the

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

23  care, and cost containment/case management policy and

24  recommendations concerning the opening of enrollment to new

25  entrants as of July 1, 1992.

26         (i)(j)  Make a report to the Governor, the Insurance

27  Commissioner, the President of the Senate, the Speaker of the

28  House of Representatives, and the Minority Leaders of the

29  Senate and House of Representatives, not later than 45 days

30  after the close of each calendar quarter, which includes, for

31  the prior quarter, current data and estimates of net written

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  1  and earned premiums, the expenses of administration, and the

  2  paid and incurred losses.  The report shall identify any

  3  statutorily mandated program that has not been fully

  4  implemented by the board.

  5         (j)(k)  To facilitate preparation of assessments and

  6  for other purposes, the board shall direct preparation of

  7  annual audited financial statements for each calendar year as

  8  soon as feasible following the conclusion of that calendar

  9  year, and shall, within 30 days after rendition of such

10  statements, file with the department the annual report

11  containing such information as required by the department to

12  be filed on March 1 of each year.

13         (k)(l)  Employ a plan case manager or managers to

14  supervise and manage the medical care or coordinate the

15  supervision and management of the medical care, with the

16  administrator, of specified individuals.  The plan case

17  manager, with the approval of the board, shall have final

18  approval over the case management for any specific individual.

19  If cost-effective and available in the county where the

20  policyholder resides, the association, upon application or

21  renewal of a policy, may place an individual with the plan

22  case manager, who shall determine the most cost-effective

23  quality care system or health care provider and shall place

24  the individual in such system or with such health care

25  provider. Prior to and during the implementation of case

26  management, the plan case manager shall obtain input from the

27  policyholder, parent, or guardian and the health care

28  providers and shall:

29         (l)  Administer the association in a fiscally

30  responsible manner that ensures that its expenditures are

31  reasonable in relation to the services provided and that the

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  1  financial resources of the association are adequate to meet

  2  its obligations.

  3         (m)  At least annually, but no more than quarterly,

  4  evaluate or cause to be evaluated the actuarial soundness of

  5  the association. The association shall contract with an

  6  actuary to evaluate the pool of insureds in the association

  7  and monitor the financial condition of the association. The

  8  actuary shall determine the feasibility of enrolling new

  9  members in the association, which must be based on the

10  projected revenues and expenses of the association.

11         (n)  Restrict at any time the number of participants in

12  the association based on a determination by the board that the

13  revenues will be inadequate to fund new participants. However,

14  any person denied participation solely on the basis of such

15  restriction must be granted priority for participation in the

16  succeeding period in which the association is reopened for

17  participants.

18         (o)  Establish procedures to maintain separate accounts

19  and recordkeeping for policyholders prior to January 1, 2002,

20  and policyholders issued coverage on and after January 1,

21  2002.

22         (p)  Appoint an executive director to serve as the

23  chief administrative and operational officer of the

24  association and operate within the specifications of the plan

25  of operation and perform other duties assigned to him or her

26  by the board.

27         (q)  Develop and promote one or more pilot programs to

28  expand health-care options for lower-income, uninsured state

29  residents. In administering the pilot program, the

30  association:

31         1.  Shall limit eligibility to state residents who:

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  1         a.  Are 64 years of age or younger;

  2         b.  Have a family income of less than 200 percent of

  3  the federal poverty level;

  4         c.  Are not covered by any other private coverage or

  5  public health care program and have not been covered at any

  6  time during the previous 6 months;

  7         d.  Request to obtain the affordable health-care

  8  option; and

  9         e.  Agree to make payments required for participation,

10  including periodic payments or payments due at the time the

11  health care services are provided.

12         2.  Shall emphasize basic and preventive health care

13  services and shall consider cost-containment measures and

14  coverages to make the program affordable by eligible state

15  residents.

16         3.  May integrate the pilot program with other

17  governmental or community-based programs in a manner that is

18  consistent with the objectives and requirements of the pilot

19  program.

20         4.  May limit or exclude benefits otherwise required by

21  law for insurers offering coverage in this state.

22         5.  May contract with community-based programs,

23  provider-sponsored organizations, health insurers, or health

24  maintenance organizations to provide or administer all or a

25  portion of a pilot program.

26         6.  Shall include the pilot program in the

27  association's operating plan by 2003.

28         7.  Shall submit the forms and rates and program

29  structure of the pilot program for approval by the department.

30         8.  Shall design the pilot program to be financially

31  self-sufficient.

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  1         (5)  The association may:

  2         (a)  Exercise powers granted to insurers under the laws

  3  of this state.

  4         (b)  Sue or be sued.

  5         (c)  In addition to imposing annual assessments under

  6  paragraph (4)(d), levy interim assessments against insurers to

  7  ensure the financial ability of the plan to cover claims

  8  expenses and administrative expenses paid or estimated to be

  9  paid in the operation of the plan for a calendar year prior to

10  the association's anticipated receipt of annual assessments

11  for that calendar year.  Any interim assessment shall be due

12  and payable within 30 days after of receipt by an insurer of

13  an interim assessment notice.  Interim assessment payments

14  shall be credited against the insurer's annual assessment.

15  Such assessments may be levied only for costs and expenses

16  associated with policyholders insured with the association

17  prior to January 1, 2002.

18         (d)  Prepare or contract for a performance audit of the

19  administrator of the association.

20         (e)  Appear in its own behalf before boards,

21  commissions, or other governmental agencies.

22         (f)  Solicit and accept gifts, grants, loans, and other

23  aid from any source or participate in any way in any

24  government program to carry out the purposes of the Florida

25  Comprehensive Health Association Act.

26         (g)  Require and collect administrative fees and

27  charges in connection with any transaction and impose

28  reasonable penalties, including default, for delinquent

29  payments or for entering into the association on a fraudulent

30  basis.

31

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  1         (h)  Procure insurance against any loss in connection

  2  with the property, assets, and activities of the association

  3  or the board.

  4         (i)  Contract for necessary goods and services; employ

  5  necessary personnel; and engage the services of private

  6  consultants, actuaries, managers, legal counsel, and

  7  independent certified public accountants for administrative or

  8  technical assistance.

  9         (6)  The department shall examine and investigate the

10  association in the manner provided in part II of chapter 624.

11         Section 5.  Paragraph (b) of subsection (3) of section

12  627.649, Florida Statutes, is amended to read:

13         627.649  Administrator.--

14         (3)  The administrator shall:

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

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

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

18  or marketing of plans shall not be limited to the

19  administrator or its agents. Any agent must be licensed by the

20  department to sell health insurance in this state. The

21  referral fees shall be paid by the administrator from moneys

22  received as premiums for the plan.

23         Section 6.  Section 627.6492, Florida Statutes, is

24  amended to read:

25         627.6492  Participation of insurers.--

26         (1)(a)  As a condition of doing business in this state

27  an insurer shall pay an assessment to the board, in the amount

28  prescribed by this section. Subsections (1), (2), and (3)

29  apply only to the costs and expenses associated with

30  policyholders insured with the association prior to January 1,

31  2002, including renewal of coverage for such policyholders

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  1  after that date.  For operating losses incurred in any

  2  calendar year on July 1, 1991, and thereafter, each insurer

  3  shall annually be assessed by the board in the following

  4  calendar year a portion of such incurred operating losses of

  5  the plan; such portion shall be determined by multiplying such

  6  operating losses by a fraction, the numerator of which equals

  7  the insurer's earned premium pertaining to direct writings of

  8  health insurance in the state during the calendar year

  9  preceding that for which the assessment is levied, and the

10  denominator of which equals the total of all such premiums

11  earned by participating insurers in the state during such

12  calendar year.

13         (b)  For operating losses incurred from July 1, 1991,

14  through December 31, 1991, the total of all assessments upon a

15  participating insurer shall not exceed .375 percent of such

16  insurer's health insurance premiums earned in this state

17  during 1990. For operating losses incurred in 1992 and

18  thereafter, The total of all assessments upon a participating

19  insurer shall not exceed 1 percent of such insurer's health

20  insurance premium earned in this state during the calendar

21  year preceding the year for which the assessments were levied.

22         (c)  For operating losses incurred from October 1,

23  1990, through June 30, 1991, the board shall assess each

24  insurer in the amount and manner prescribed by chapter 90-334,

25  Laws of Florida. The maximum assessment against an insurer, as

26  provided in such act, shall apply separately to the claims

27  incurred in 1990 (October 1 through December 31) and the

28  claims incurred in 1991 (January 1 through June 30).  For

29  operating losses incurred on January 1, 1991, through June 30,

30  1991, the maximum assessment against an insurer shall be

31  one-half of the amount of the maximum assessment specified for

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  1  such insurer in former s. 627.6492(1)(b), 1990 Supplement, as

  2  amended by chapter 90-334, Laws of Florida.

  3         (c)(d)  All rights, title, and interest in the

  4  assessment funds collected shall vest in this state.  However,

  5  all of such funds and interest earned shall be used by the

  6  association to pay claims and administrative expenses.

  7         (2)  If assessments and other receipts by the

  8  association, board, or administrator exceed the actual losses

  9  and administrative expenses of the plan, the excess shall be

10  held at interest and used by the board to offset future

11  losses.  As used in this subsection, the term "future losses"

12  includes reserves for claims incurred but not reported.

13         (3)  Each insurer's assessment shall be determined

14  annually by the association based on annual statements and

15  other reports deemed necessary by the association and filed

16  with it by the insurer.  Any deficit incurred under the plan

17  shall be recouped by assessments against participating

18  insurers by the board in the manner provided in subsection

19  (1); and the insurers may recover the assessment in the normal

20  course of their respective businesses without time limitation.

21         (4)(a)  This subsection applies only to those costs and

22  expenses of the association related to persons whose coverage

23  begins after January 1, 2002. As a condition of doing business

24  in this state, every insurer shall pay an amount determined by

25  the board of up to $1 per month for each individual policy or

26  insured group member or subscriber insured in this state under

27  a health insurance policy or certificate that is issued for a

28  resident of this state.

29         (b)  For purposes of this subsection, health insurance

30  does not include accident only, specified disease, individual

31  hospital indemnity, credit, dental-only, vision-only, Medicare

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  1  supplement, long-term care, nursing home care, home health

  2  care, community-based care, or disability income insurance;

  3  similar supplemental plans provided under a separate policy,

  4  certificate, or contract of insurance, which cannot duplicate

  5  coverage under an underlying health plan and are specifically

  6  designed to fill gaps in the underlying health plan,

  7  coinsurance, or deductibles; any policy covering

  8  medical-payment coverage or personal injury protection

  9  coverage in a motor vehicle policy; coverage issued as a

10  supplement to liability insurance; or workers' compensation

11  insurance. For the purposes of this subsection, the term

12  "insurer" also includes third-party administrators

13  administering self-insured health benefit plans in this state

14  where such plans provide benefits consistent with the

15  definition of health insurance. Each covered group member or

16  subscriber shall be counted only once with respect to any

17  assessment. For that purpose, the board shall allow an excess

18  or stop-loss insurer to exclude from its number of covered

19  group members or subscribers those who have been counted by

20  the primary insurer or third-party administrator for the

21  purpose of determining its assessment under this subsection.

22         (c)  The calculation shall be determined as of December

23  31 of each year and shall include all policies and group

24  members or subscribers insured at any time during the year,

25  calculated for each month of coverage. The payment is payable

26  to the association no later than April 1 of the subsequent

27  year. The first payment shall be forwarded to the association

28  no later than April 1, 2002, covering the period of October 1,

29  2001, through December 31, 2001.

30         (d)  The payment of such funds shall be submitted to

31  the association accompanied by a form prescribed by the

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  1  association and adopted in the plan of operation. The form

  2  shall identify the number of covered lives for different types

  3  of health insurance products and the number of months of

  4  coverage.

  5         (e)  Beginning October 1, 2001, the fee paid to the

  6  association may be charged by the health insurer directly to

  7  each policyholder, insured member, or subscriber and is not

  8  part of the premium subject to the department's review and

  9  approval.

10         Section 7.  Section 627.6498, Florida Statutes, is

11  amended to read:

12         627.6498  Minimum benefits coverage; exclusions;

13  premiums; deductibles.--

14         (1)  COVERAGE OFFERED.--

15         (a)  The plan shall offer in an annually a semiannually

16  renewable policy the coverage specified in this section for

17  each eligible person. For applications accepted on or after

18  June 7, 1991, but before July 1, 1991, coverage shall be

19  effective on July 1, 1991, and shall be renewable on January

20  1, 1992, and every 6 months thereafter.  Policies in existence

21  on June 7, 1991, shall, upon renewal, be for a term of less

22  than 6 months that terminates and becomes subject to

23  subsequent renewal on the next succeeding January 1 or July 1,

24  whichever is sooner.

25         (b)  If an eligible person is also eligible for

26  Medicare coverage, the plan shall not pay or reimburse any

27  person for expenses paid by Medicare.

28         (c)  Any person whose health insurance coverage is

29  involuntarily terminated for any reason other than nonpayment

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

31  coverage is applied for within 60 days after the involuntary

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

  2  coverage, the effective date of the coverage shall be the date

  3  of termination of the previous coverage.

  4         (b)(d)  The plan shall provide that, upon the death or

  5  divorce of the individual in whose name the contract was

  6  issued, every other person then covered in the contract may

  7  elect within 60 days to continue under the same or a different

  8  contract.

  9         (c)(e)  No coverage provided to a person who is

10  eligible for Medicare benefits shall be issued as a Medicare

11  supplement policy as defined in s. 627.672.

12         (2)  BENEFITS.--

13         (a)  The plan must offer coverage to every eligible

14  person subject to limitations set by the association. The

15  coverage offered must pay an eligible person's covered

16  expenses, subject to limits on the deductible and coinsurance

17  payments authorized under subsection (4). However,

18  policyholders of association policies issued prior to 1992 are

19  entitled to continued coverage at the benefit level

20  established prior to January 1, 2002. Only the premium,

21  deductible, and coinsurance amounts may be modified as

22  determined necessary by the board. The plan shall offer major

23  medical expense coverage similar to that provided by the state

24  group health insurance program as defined in s. 110.123 except

25  as specified in subsection (3) to every eligible person who is

26  not eligible for Medicare. Major medical expense coverage

27  offered under the plan shall pay an eligible person's covered

28  expenses, subject to limits on the deductible and coinsurance

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

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

31  under this paragraph shall not be altered by the board, and no

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  1  actuarially equivalent benefit may be substituted by the

  2  board.

  3         (b)  The plan shall provide that any policy issued to a

  4  person eligible for Medicare shall be separately rated to

  5  reflect differences in experience reasonably expected to occur

  6  as a result of Medicare payments.

  7         (3)  COVERED EXPENSES.--

  8         (a)  The board shall establish the coverage to be

  9  issued by the association.

10         (b)  If the coverage is being issued to an eligible

11  individual as defined in s. 627.6487, the individual shall be

12  offered, at the option of the individual, the basic and the

13  standard health benefit plan as established in s. 627.6699.

14  The coverage to be issued by the association shall be

15  patterned after the state group health insurance program as

16  defined in s. 110.123, including its benefits, exclusions, and

17  other limitations, except as otherwise provided in this act.

18  The plan may cover the cost of experimental drugs which have

19  been approved for use by the Food and Drug Administration on

20  an experimental basis if the cost is less than the usual and

21  customary treatment.  Such coverage shall only apply to those

22  insureds who are in the case management system upon the

23  approval of the insured, the case manager, and the board.

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

25         (a)  The plan shall provide for annual deductibles for

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

27  higher amounts proposed by the board and approved by the

28  department, plus the benefits payable under any other type of

29  insurance coverage or workers' compensation.  The schedule of

30  premiums and deductibles shall be established by the board

31  association. With regard to any preferred provider arrangement

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  1  utilized by the association, the deductibles provided in this

  2  paragraph shall be the minimum deductibles applicable to the

  3  preferred providers and higher deductibles, as approved by the

  4  department, may be applied to providers who are not preferred

  5  providers.

  6         1.  Separate schedules of premium rates based on age

  7  may apply for individual risks.

  8         2.  Rates are subject to approval by the department

  9  pursuant to ss. 627.410 and 627.411, except as provided by

10  this section.

11         3.  Standard risk rates for coverages issued by the

12  association shall be established by the department, pursuant

13  to s. 627.6675(3).

14         3.4.  The board shall establish separate premium

15  schedules for low-risk individuals, medium-risk individuals,

16  and high-risk individuals and shall revise premium schedules

17  annually beginning January 2002 1999.

18         4.  No rate shall exceed 200 percent of the standard

19  risk rate, as determined pursuant to s. 627.6675(3). The rate

20  shall be adjusted for benefit differences. for low-risk

21  individuals, 225 percent of the standard risk rate for

22  medium-risk individuals, or 250 percent of the standard risk

23  rate for high-risk individuals. For the purpose of determining

24  what constitutes a low-risk individual, medium-risk

25  individual, or high-risk individual, the board shall consider

26  the anticipated claims payment for individuals based upon an

27  individual's health condition.

28         (b)  If the covered costs incurred by the eligible

29  person exceed the deductible for major medical expense

30  coverage selected by the person in a policy year, the plan

31  shall pay in the following manner:

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  1         1.  For individuals placed under case management, the

  2  plan shall pay 90 percent of the additional covered costs

  3  incurred by the person during the policy year for the first

  4  $10,000, after which the plan shall pay 100 percent of the

  5  covered costs incurred by the person during the policy year.

  6         2.  For individuals utilizing the preferred provider

  7  network, the plan shall pay 80 percent of the additional

  8  covered costs incurred by the person during the policy year

  9  for the first $10,000, after which the plan shall pay 90

10  percent of covered costs incurred by the person during the

11  policy year.

12         3.  If the person does not utilize either the case

13  management system or the preferred provider network, the plan

14  shall pay 60 percent of the additional covered costs incurred

15  by the person for the first $10,000, after which the plan

16  shall pay 70 percent of the additional covered costs incurred

17  by the person during the policy year.

18         (5)  PREEXISTING CONDITIONS.--An association policy

19  shall may contain provisions under which coverage is excluded

20  during a period of 12 months following the effective date of

21  coverage with respect to a given covered individual for any

22  preexisting condition, as long as:

23         (a)  The condition manifested itself within a period of

24  6 months before the effective date of coverage; or

25         (b)  Medical advice or treatment was recommended or

26  received within a period of 6 months before the effective date

27  of coverage.

28

29  This subsection does not apply to an eligible individual as

30  defined in s. 627.6487.

31         (6)  OTHER SOURCES PRIMARY.--

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  1         (a)  No amounts paid or payable by Medicare or any

  2  other governmental program or any other insurance, or

  3  self-insurance maintained in lieu of otherwise statutorily

  4  required insurance, may be made or recognized as claims under

  5  such policy or be recognized as or towards satisfaction of

  6  applicable deductibles or out-of-pocket maximums or to reduce

  7  the limits of benefits available.

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

  9  participant for any benefits paid to the participant which

10  should not have been claimed or recognized as claims because

11  of the provisions of this subsection or because otherwise not

12  covered.

13         (7)  NONENTITLEMENT.--The Florida Comprehensive Health

14  Association Act does not provide an individual with an

15  entitlement to health care services or health insurance. A

16  cause of action does not arise against the state, the board,

17  or the association for failure to make health services or

18  health insurance available under the Florida Comprehensive

19  Health Association Act.

20         Section 8.  Effective January 1, 2002, section

21  627.6484, Florida Statutes, is repealed.

22         Section 9.  Except as otherwise expressly provided in

23  this act, this act shall take effect July 1, 2001.

24

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  1            *****************************************

  2                          SENATE SUMMARY

  3    Revises various provisions of the Florida Insurance Code
      relating to health insurance. Revises criteria for
  4    eligibility for coverage under the Florida Comprehensive
      Health Association Act. Provides for persons eligible for
  5    coverage to be placed in a case-management system if it
      is cost-effective. Revises the membership of the board of
  6    directors of the Florida Comprehensive Health
      Association. Authorizes the board to restrict the number
  7    of participants in the association. Provides for insurers
      to pay assessments to cover costs and expenses of the
  8    association. (See bill for details.)

  9

10

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12

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16

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18

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