Senate Bill sb1210e1
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1 A bill to be entitled
2 An act relating to health insurance; amending
3 s. 627.410, F.S.; requiring certain group
4 certificates for health insurance coverage to
5 be subject to the requirements for individual
6 health insurance policies; revising
7 requirements for filing and approval of
8 individual health insurance rates; exempting
9 group health insurance policies insuring groups
10 of a certain size from rate filing
11 requirements; providing alternative rate filing
12 requirements for insurers with less than a
13 specified number of nationwide policyholders or
14 members; amending s. 627.411, F.S.; revising
15 the grounds for the disapproval of insurance
16 policy forms; providing that a health insurance
17 policy form may be disapproved if it results in
18 certain rate increases; specifying allowable
19 new business rates and renewal rates if rate
20 increases exceed certain levels; authorizing
21 the Department of Insurance to determine
22 medical trend for purposes of approving rate
23 filings; amending s. 627.6487, F.S.; revising
24 the types of policies that individual health
25 insurers must offer to persons eligible for
26 guaranteed individual health insurance
27 coverage; prohibiting individual health
28 insurers from applying discriminatory
29 underwriting or rating practices to eligible
30 individuals; amending s. 627.6515, F.S.;
31 requiring that coverage issued to a state
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1 resident under certain group health insurance
2 policies issued outside the state be subject to
3 the requirements for individual health
4 insurance policies; amending s. 627.6699, F.S.;
5 revising definitions used in the Employee
6 Health Care Access Act; allowing carriers to
7 separate the experience of small employer
8 groups with fewer than two employees; revising
9 the rating factors that may be used by small
10 employer carriers; amending s. 627.9408, F.S.;
11 authorizing the department to adopt by rule
12 certain provisions of the Long-Term Care
13 Insurance Model Regulation, as adopted by the
14 National Association of Insurance
15 Commissioners; amending s. 641.31, F.S.;
16 exempting contracts of group health maintenance
17 organizations covering a specified number of
18 persons from the requirements of filing with
19 the department; specifying the standards for
20 department approval and disapproval of a change
21 in rates by a health maintenance organization;
22 providing alternative rate filing requirements
23 for organizations with less than a specified
24 number of subscribers; amending s. 627.6482,
25 F.S.; amending definitions used in the Florida
26 Comprehensive Health Association Act; amending
27 s. 627.6486, F.S.; revising the criteria for
28 eligibility for coverage from the association;
29 providing for cessation of coverage; requiring
30 all eligible persons to agree to be placed in a
31 case-management system; amending s. 627.6487,
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1 F.S.; redefining the term "eligible individual"
2 for purposes of guaranteed availability of
3 individual health insurance coverage; providing
4 that a person is not eligible if the person is
5 eligible for coverage under the Florida
6 Comprehensive Health Association; amending s.
7 627.6488, F.S.; revising the membership of the
8 board of directors of the association; revising
9 the reimbursement of board members and
10 employees; requiring that the plan of the
11 association be submitted to the department for
12 approval on an annual basis; revising the
13 duties of the association related to
14 administrative and accounting procedures;
15 requiring an annual financial audit; specifying
16 grievance procedures; establishing a premium
17 schedule based upon an individual's family
18 income; deleting requirements for categorizing
19 insureds as low-risk, medium-risk, and
20 high-risk; authorizing the association to place
21 an individual with a case manager who
22 determines the health care system or provider;
23 requiring an annual review of the actuarial
24 soundness of the association and the
25 feasibility of enrolling new members; requiring
26 a separate account for policyholders insured
27 prior to a specified date; requiring
28 appointment of an executive director with
29 specified duties; authorizing the board to
30 restrict the number of participants based on
31 inadequate funding; limiting enrollment;
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1 specifying other powers of the board; amending
2 s. 627.649, F.S.; revising the requirements for
3 the association to use in selecting an
4 administrator; amending s. 627.6492, F.S.;
5 requiring insurers to be members of the
6 association and to be subject to assessments
7 for operating expenses; limiting assessments to
8 specified maximum amounts; specifying when
9 assessments are calculated and paid; allowing
10 certain assessments to be charged by the health
11 insurer directly to each insured, member, or
12 subscriber and to not be subject to department
13 review or approval; amending s. 627.6498, F.S.;
14 revising the coverage, benefits, covered
15 expenses, premiums, and deductibles of the
16 association; requiring preexisting condition
17 limitations; providing that the act does not
18 provide an entitlement to health care services
19 or health insurance and does not create a cause
20 of action; limiting enrollment in the
21 association; repealing s. 627.6484, F.S.,
22 relating to a prohibition on the Florida
23 Comprehensive Health Association from accepting
24 applications for coverage after a certain date;
25 making a legislative finding that the
26 provisions of this act fulfill an important
27 state interest; providing that the amendments
28 to s. 627.6487(3), F.S., do not take effect
29 unless approved by the U.S. Health Care
30 Financing Administration; providing effective
31 dates.
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1 Be It Enacted by the Legislature of the State of Florida:
2
3 Section 1. Subsection (1) and paragraph (a) of
4 subsection (6) of section 627.410, Florida Statutes, are
5 amended, and paragraphs (f) and (g) are added to subsection
6 (6) of that section, to read:
7 627.410 Filing, approval of forms.--
8 (1) No basic insurance policy or annuity contract
9 form, or application form where written application is
10 required and is to be made a part of the policy or contract,
11 or group certificates issued under a master contract delivered
12 in this state, or printed rider or endorsement form or form of
13 renewal certificate, shall be delivered or issued for delivery
14 in this state, unless the form has been filed with the
15 department at its offices in Tallahassee by or in behalf of
16 the insurer which proposes to use such form and has been
17 approved by the department. This provision does not apply to
18 surety bonds or to policies, riders, endorsements, or forms of
19 unique character which are designed for and used with relation
20 to insurance upon a particular subject (other than as to
21 health insurance), or which relate to the manner of
22 distribution of benefits or to the reservation of rights and
23 benefits under life or health insurance policies and are used
24 at the request of the individual policyholder, contract
25 holder, or certificateholder. As to group insurance policies
26 effectuated and delivered outside this state but covering
27 persons resident in this state, the group certificates to be
28 delivered or issued for delivery in this state shall be filed
29 with the department for information purposes only, except that
30 group certificates for health insurance coverage, as described
31 in s. 627.6561(5)(a)2., which require individual underwriting
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1 to determine coverage eligibility for an individual or premium
2 rates to be charged to an individual, shall be considered
3 policies issued on an individual basis and are subject to and
4 must comply with the Florida Insurance Code in the same manner
5 as individual health insurance policies issued in this state.
6 (6)(a) An insurer shall not deliver or issue for
7 delivery or renew in this state any health insurance policy
8 form until it has filed with the department a copy of every
9 applicable rating manual, rating schedule, change in rating
10 manual, and change in rating schedule; if rating manuals and
11 rating schedules are not applicable, the insurer must file
12 with the department applicable premium rates and any change in
13 applicable premium rates. Changes in rates, rating manuals,
14 and rating schedules for individual health insurance policies
15 shall be filed for approval pursuant to this paragraph. Prior
16 approval shall not be required for an individual health
17 insurance policy rate filing which complies with the
18 requirements of paragraph (6)(f). Nothing in this paragraph
19 shall be construed to interfere with the department's
20 authority to investigate suspected violations of this section
21 or to take necessary corrective action where a violation can
22 be demonstrated. Nothing in this paragraph shall prevent an
23 insurer from filing rates or rate changes for approval or from
24 deeming rate changes approved pursuant to an approved loss
25 ratio guarantee pursuant to subsection (8). This paragraph
26 does not apply to group health insurance policies, effectuated
27 and delivered in this state, insuring groups of 51 or more
28 persons, except for Medicare supplement insurance, long-term
29 care insurance, and any coverage under which the increase in
30 claim costs over the lifetime of the contract due to advancing
31 age or duration is prefunded in the premium.
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1 (f) An insurer that files changes in rates, rating
2 manuals or rating schedules, with the department, for
3 individual health policies as described in s.
4 627.6561(5)(a)2., but excluding Medicare supplement policies,
5 according to this paragraph may begin providing required
6 notice to policyholders upon filing provided the insurer
7 certifies that it has met the requirements of subparagraphs 1.
8 through 3. of this paragraph. Filings submitted pursuant to
9 this paragraph shall contain the same information and
10 demonstrations and shall meet the same requirements as rate
11 filings submitted for approval under this section, including
12 the requirements of s. 627.411, except as indicated in this
13 paragraph.
14 1. The insurer has complied with annual rate filing
15 requirements then in effect pursuant to subsection (7) since
16 the effective date of this paragraph or for the previous 2
17 years, whichever is less and has filed and implemented
18 actuarially justifiable rate adjustments at least annually
19 during this period. Nothing in this section shall be construed
20 to prevent an insurer from filing rate adjustments more often
21 than annually.
22 2. The insurer has pooled experience for applicable
23 individual health policy forms in accordance with the
24 requirements of subparagraph (6)(e)3.
25 3. Rates for the policy form are anticipated to meet a
26 minimum loss ratio of 65 percent over the expected life of the
27 form.
28
29 As used in this paragraph, the term "rating characteristics"
30 means demographic characteristics of individuals, including,
31 but not limited to, age, gender, occupation, geographic area
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1 factors, benefit design, smoking status, and health status at
2 issue.
3 (g) Subsequent to filing a change of rates for an
4 individual health policy pursuant to paragraph (f), an insurer
5 may be required to furnish additional information to
6 demonstrate compliance with this section. If the department
7 finds that the adjusted rates are not reasonable in relation
8 to premiums charged pursuant to the standards of this section,
9 the department may order appropriate corrective action.
10 Section 2. Section 627.411, Florida Statutes, is
11 amended to read:
12 627.411 Grounds for disapproval.--
13 (1) The department shall disapprove any form filed
14 under s. 627.410, or withdraw any previous approval thereof,
15 only if the form:
16 (a) Is in any respect in violation of, or does not
17 comply with, this code.
18 (b) Contains or incorporates by reference, where such
19 incorporation is otherwise permissible, any inconsistent,
20 ambiguous, or misleading clauses, or exceptions and conditions
21 which deceptively affect the risk purported to be assumed in
22 the general coverage of the contract.
23 (c) Has any title, heading, or other indication of its
24 provisions which is misleading.
25 (d) Is printed or otherwise reproduced in such manner
26 as to render any material provision of the form substantially
27 illegible.
28 (e) Is for health insurance, and:
29 1. Provides benefits that which are unreasonable in
30 relation to the premium charged;,
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1 2. Contains provisions that which are unfair or
2 inequitable or contrary to the public policy of this state or
3 that which encourage misrepresentation;, or
4 3. Contains provisions that which apply rating
5 practices that which result in premium escalations that are
6 not viable for the policyholder market or result in unfair
7 discrimination pursuant to s. 626.9541(1)(g)2.; in sales
8 practices.
9 4. Results in actuarially justified rate increases on
10 an annual basis:
11 a. Attributed to the insurer reducing the portion of
12 the premium used to pay claims from the loss ratio standard
13 certified in the last actuarial certification filed by the
14 insurer, in excess of the greater of 50 percent of annual
15 medical trend or 5 percent. At its option, the insurer may
16 file for approval of an actuarially justified new business
17 rate schedule for new insureds and a rate increase for
18 existing insureds that is equal to the greater of 150 percent
19 of annual medical trend or 10 percent. Future annual rate
20 increases for existing insureds shall be limited to the
21 greater of 150 percent of the rate increase approved for new
22 insureds or 10 percent until the two rate schedules converge;
23 b. In excess of the greater of 150 percent of annual
24 medical trend or 10 percent and the company did not comply
25 with the annual filing requirements of s. 627.410(7) or
26 department rule for health maintenance organizations pursuant
27 to s. 641.31. At its option the insurer may file for approval
28 of an actuarially justified new business rate schedule for new
29 insureds and a rate increase for existing insureds that is
30 equal to the rate increase allowed by the preceding sentence.
31 Future annual rate increases for existing insureds shall be
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1 limited to the greater of 150 percent of the rate increase
2 approved for new insureds or 10 percent until the two rate
3 schedules converge; or
4 c. In excess of the greater of 150 percent of annual
5 medical trend or 10 percent on a form or block of pooled forms
6 in which no form is currently available for sale. This
7 provision does not apply to pre-standardized Medicare
8 supplement forms.
9 (f) Excludes coverage for human immunodeficiency virus
10 infection or acquired immune deficiency syndrome or contains
11 limitations in the benefits payable, or in the terms or
12 conditions of such contract, for human immunodeficiency virus
13 infection or acquired immune deficiency syndrome which are
14 different than those which apply to any other sickness or
15 medical condition.
16 (2) In determining whether the benefits are reasonable
17 in relation to the premium charged, the department, in
18 accordance with reasonable actuarial techniques, shall
19 consider:
20 (a) Past loss experience and prospective loss
21 experience within and without this state.
22 (b) Allocation of expenses.
23 (c) Risk and contingency margins, along with
24 justification of such margins.
25 (d) Acquisition costs.
26 (3) If a health insurance rate filing changes the
27 established rate relationships between insureds, the aggregate
28 effect of such change shall be revenue-neutral. The change to
29 the new relationship shall be phased-in over a period not to
30 exceed 3 years as approved by the department. The rate filing
31 may also include increases based on overall experience or
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1 annual medical trend, or both, which portions shall not be
2 phased-in pursuant to this paragraph.
3 (4) Individual health insurance policies which are
4 subject to renewability requirements of s. 627.6425 shall be
5 deemed guaranteed renewable for purposes of establishing loss
6 ratio standards and shall comply with the same loss ratio
7 standards as other guaranteed renewable forms.
8 (5) In determining medical trend for application of
9 subparagraph (1)(e)4., the department shall semiannually
10 determine medical trend for each health care market, using
11 reasonable actuarial techniques and standards. The trend must
12 be adopted by the department by rule and determined as
13 follows:
14 (a) Trend must be determined separately for medical
15 expense; preferred provider organization; Medicare supplement;
16 health maintenance organization; and other coverage for
17 individual, small group, and large group, where applicable.
18 (b) The department shall survey insurers and health
19 maintenance organizations currently issuing products and
20 representing at least an 80-percent market share based on
21 premiums earned in the state for the most recent calendar year
22 for each of the categories specified in paragraph (a).
23 (c) Trend must be computed as the average annual
24 medical trend approved for the carriers surveyed, giving
25 appropriate weight to each carrier's statewide market share of
26 earned premiums.
27 (d) The annual trend is the annual change in claims
28 cost per unit of exposure. Trend includes the combined effect
29 of medical provider price changes, changes in utilization, new
30 medical procedures, and technology and cost shifting.
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1 Section 3. Subsections (4) and (8) of section
2 627.6487, Florida Statutes, are amended to read:
3 627.6487 Guaranteed availability of individual health
4 insurance coverage to eligible individuals.--
5 (4)(a) The health insurance issuer may elect to limit
6 the coverage offered under subsection (1) if the issuer offers
7 at least two different policy forms of health insurance
8 coverage, both of which:
9 1. Are designed for, made generally available to,
10 actively marketed to, and enroll both eligible and other
11 individuals by the issuer; and
12 2. Meet the requirement of paragraph (b).
13
14 For purposes of this subsection, policy forms that have
15 different cost-sharing arrangements or different riders are
16 considered to be different policy forms.
17 (b) The requirement of this subsection is met for
18 health insurance coverage policy forms offered by an issuer in
19 the individual market if the issuer offers the basic and
20 standard health benefit plans as established pursuant to s.
21 627.6699(12) or policy forms for individual health insurance
22 coverage with the largest, and next to largest, premium volume
23 of all such policy forms offered by the issuer in this state
24 or applicable marketing or service area, as prescribed in
25 rules adopted by the department, in the individual market in
26 the period involved. To the greatest extent possible, such
27 rules must be consistent with regulations adopted by the
28 United States Department of Health and Human Services.
29 (8) This section does not:
30 (a) Restrict the issuer from applying the same
31 nondiscriminatory underwriting and rating practices that are
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1 applied by the issuer to other individuals applying for
2 coverage amount of the premium rates that an issuer may charge
3 an individual for individual health insurance coverage; or
4 (b) Prevent a health insurance issuer that offers
5 individual health insurance coverage from establishing premium
6 discounts or rebates or modifying otherwise applicable
7 copayments or deductibles in return for adherence to programs
8 of health promotion and disease prevention.
9 Section 4. Subsection (9) is added to section
10 627.6515, Florida Statutes, to read:
11 627.6515 Out-of-state groups.--
12 (9) Notwithstanding any other provision of this
13 section, any group health insurance policy or group
14 certificate for health insurance, as described in s.
15 627.6561(5)(a)2., which is issued to a resident of this state
16 and requires individual underwriting to determine coverage
17 eligibility for an individual or premium rates to be charged
18 to an individual shall be considered a policy issued on an
19 individual basis and is subject to and must comply with the
20 Florida Insurance Code in the same manner as individual
21 insurance policies issued in this state.
22 Section 5. Paragraphs (i) and (n) of subsection (3)
23 and paragraph (b) of subsection (6) of section 627.6699,
24 Florida Statutes, are amended to read:
25 627.6699 Employee Health Care Access Act.--
26 (3) DEFINITIONS.--As used in this section, the term:
27 (i) "Established geographic area" means the county or
28 counties, or any portion of a county or counties, within which
29 the carrier provides or arranges for health care services to
30 be available to its insureds, members, or subscribers.
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1 (n) "Modified community rating" means a method used to
2 develop carrier premiums which spreads financial risk across a
3 large population; allows the use of separate rating factors
4 for age, gender, family composition, tobacco usage, and
5 geographic area as determined under paragraph (5)(j); and
6 allows adjustments for: claims experience, health status, or
7 credits based on the duration that the of coverage has been in
8 force as permitted under subparagraph (6)(b)6. subparagraph
9 (6)(b)5.; and administrative and acquisition expenses as
10 permitted under subparagraph (6)(b)5. A carrier may separate
11 the experience of small employer groups with less than two
12 eligible employees from the experience of small employer
13 groups with two through 50 eligible employees.
14 (6) RESTRICTIONS RELATING TO PREMIUM RATES.--
15 (b) For all small employer health benefit plans that
16 are subject to this section and are issued by small employer
17 carriers on or after January 1, 1994, premium rates for health
18 benefit plans subject to this section are subject to the
19 following:
20 1. Small employer carriers must use a modified
21 community rating methodology in which the premium for each
22 small employer must be determined solely on the basis of the
23 eligible employee's and eligible dependent's gender, age,
24 family composition, tobacco use, or geographic area as
25 determined under paragraph (5)(j) and in which the premium may
26 be adjusted as permitted by subparagraphs 5., and 6., and 7.
27 2. Rating factors related to age, gender, family
28 composition, tobacco use, or geographic location may be
29 developed by each carrier to reflect the carrier's experience.
30 The factors used by carriers are subject to department review
31 and approval.
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1 3. If the modified community rate is determined from
2 two experience pools as authorized by paragraph (5)(n), the
3 rate to be charged to small employer groups of less than two
4 eligible employees may not exceed 150 percent of the rate
5 determined for groups of two through 50 eligible employees;
6 however, the carrier may charge excess losses of the
7 less-than-two-eligible-employee experience pool to the
8 experience pool of the two through 50 eligible employees so
9 that all losses are allocated and the 150-percent rate limit
10 on the less-than-two-eligible-employee experience pool is
11 maintained. Notwithstanding the provisions of s.
12 627.411(1)(e)4. and (3), the rate to be charged to a small
13 employer group of fewer than 2 eligible employees insured as
14 of July 1, 2001, may be up to 125 percent of the rate
15 determined for groups of 2 through 50 eligible employees for
16 the first annual renewal and 150 percent for subsequent annual
17 renewals.
18 4.3. Small employer carriers may not modify the rate
19 for a small employer for 12 months from the initial issue date
20 or renewal date, unless the composition of the group changes
21 or benefits are changed. However, a small employer carrier may
22 modify the rate one time prior to 12 months after the initial
23 issue date for a small employer who enrolls under a previously
24 issued group policy that has a common anniversary date for all
25 employers covered under the policy if:
26 a. The carrier discloses to the employer in a clear
27 and conspicuous manner the date of the first renewal and the
28 fact that the premium may increase on or after that date.
29 b. The insurer demonstrates to the department that
30 efficiencies in administration are achieved and reflected in
31 the rates charged to small employers covered under the policy.
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1 5.4. A carrier may issue a group health insurance
2 policy to a small employer health alliance or other group
3 association with rates that reflect a premium credit for
4 expense savings attributable to administrative activities
5 being performed by the alliance or group association if such
6 expense savings are specifically documented in the insurer's
7 rate filing and are approved by the department. Any such
8 credit may not be based on different morbidity assumptions or
9 on any other factor related to the health status or claims
10 experience of any person covered under the policy. Nothing in
11 this subparagraph exempts an alliance or group association
12 from licensure for any activities that require licensure under
13 the insurance code. A carrier issuing a group health insurance
14 policy to a small employer health alliance or other group
15 association shall allow any properly licensed and appointed
16 agent of that carrier to market and sell the small employer
17 health alliance or other group association policy. Such agent
18 shall be paid the usual and customary commission paid to any
19 agent selling the policy.
20 6.5. Any adjustments in rates for claims experience,
21 health status, or credits based on the duration of coverage
22 may not be charged to individual employees or dependents. For
23 a small employer's policy, such adjustments may not result in
24 a rate for the small employer which deviates more than 15
25 percent from the carrier's approved rate. Any such adjustment
26 must be applied uniformly to the rates charged for all
27 employees and dependents of the small employer. A small
28 employer carrier may make an adjustment to a small employer's
29 renewal premium, not to exceed 10 percent annually, due to the
30 claims experience, health status, or credits based on the
31 duration of coverage of the employees or dependents of the
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1 small employer. Semiannually, small group carriers shall
2 report information on forms adopted by rule by the department,
3 to enable the department to monitor the relationship of
4 aggregate adjusted premiums actually charged policyholders by
5 each carrier to the premiums that would have been charged by
6 application of the carrier's approved modified community
7 rates. If the aggregate resulting from the application of such
8 adjustment exceeds the premium that would have been charged by
9 application of the approved modified community rate by 5
10 percent for the current reporting period, the carrier shall
11 limit the application of such adjustments only to minus
12 adjustments beginning not more than 60 days after the report
13 is sent to the department. For any subsequent reporting
14 period, if the total aggregate adjusted premium actually
15 charged does not exceed the premium that would have been
16 charged by application of the approved modified community rate
17 by 5 percent, the carrier may apply both plus and minus
18 adjustments. A small employer carrier may provide a credit to
19 a small employer's premium based on administrative and
20 acquisition expense differences resulting from the size of the
21 group. Group size administrative and acquisition expense
22 factors may be developed by each carrier to reflect the
23 carrier's experience and are subject to department review and
24 approval.
25 7.6. A small employer carrier rating methodology may
26 include separate rating categories for one dependent child,
27 for two dependent children, and for three or more dependent
28 children for family coverage of employees having a spouse and
29 dependent children or employees having dependent children
30 only. A small employer carrier may have fewer, but not
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1 greater, numbers of categories for dependent children than
2 those specified in this subparagraph.
3 8.7. Small employer carriers may not use a composite
4 rating methodology to rate a small employer with fewer than 10
5 employees. For the purposes of this subparagraph, a "composite
6 rating methodology" means a rating methodology that averages
7 the impact of the rating factors for age and gender in the
8 premiums charged to all of the employees of a small employer.
9 Section 6. Section 627.9408, Florida Statutes, is
10 amended to read:
11 627.9408 Rules.--
12 (1) The department may has authority to adopt rules
13 pursuant to ss. 120.536(1) and 120.54 to administer implement
14 the provisions of this part.
15 (2) The department may adopt by rule the provisions of
16 the Long-Term Care Insurance Model Regulation adopted by the
17 National Association of Insurance Commissioners in the second
18 quarter of the year 2000 which are not in conflict with the
19 Florida Insurance Code.
20 Section 7. Paragraphs (b) and (d) of subsection (3) of
21 section 641.31, Florida Statutes, are amended, and paragraph
22 (f) is added to that subsection, to read:
23 641.31 Health maintenance contracts.--
24 (3)
25 (b) Any change in the rate is subject to paragraph (d)
26 and requires at least 30 days' advance written notice to the
27 subscriber. In the case of a group member, there may be a
28 contractual agreement with the health maintenance organization
29 to have the employer provide the required notice to the
30 individual members of the group. This paragraph does not apply
31 to a group contract covering 51 or more persons unless the
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1 rate is for any coverage under which the increase in claim
2 costs over the lifetime of the contract due to advancing age
3 or duration is prefunded in the premium.
4 (d) Any change in rates charged for the contract must
5 be filed with the department not less than 30 days in advance
6 of the effective date. At the expiration of such 30 days, the
7 rate filing shall be deemed approved unless prior to such time
8 the filing has been affirmatively approved or disapproved by
9 order of the department pursuant to s. 627.411. The approval
10 of the filing by the department constitutes a waiver of any
11 unexpired portion of such waiting period. The department may
12 extend by not more than an additional 15 days the period
13 within which it may so affirmatively approve or disapprove any
14 such filing, by giving notice of such extension before
15 expiration of the initial 30-day period. At the expiration of
16 any such period as so extended, and in the absence of such
17 prior affirmative approval or disapproval, any such filing
18 shall be deemed approved.
19 (f) A health maintenance organization with fewer than
20 1,000 covered subscribers under all individual or group
21 contracts, at the time of a rate filing, may file for an
22 annual rate increase limited to annual medical trend, as
23 adopted by the department. The filing is in lieu of the
24 actuarial memorandum otherwise required for the rate filing.
25 The filing must include forms adopted by the department and a
26 certification by an officer of the company that the filing
27 includes all similar forms.
28 Section 8. Subsection (12) of section 627.6482,
29 Florida Statutes, is amended, and subsections (15) and (16)
30 are added to that section, to read:
31
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1 627.6482 Definitions.--As used in ss.
2 627.648-627.6498, the term:
3 (12) "Premium" means the entire cost of an insurance
4 plan, including the administrative fee, the risk assumption
5 charge, and, in the instance of a minimum premium plan or
6 stop-loss coverage, the incurred claims whether or not such
7 claims are paid directly by the insurer. "Premium" shall not
8 include a health maintenance organization's annual earned
9 premium revenue for Medicare and Medicaid contracts for any
10 assessment due for calendar years 1990 and 1991. For
11 assessments due for calendar year 1992 and subsequent years, A
12 health maintenance organization's annual earned premium
13 revenue for Medicare and Medicaid contracts is subject to
14 assessments unless the department determines that the health
15 maintenance organization has made a reasonable effort to amend
16 its Medicare or Medicaid government contract for 1992 and
17 subsequent years to provide reimbursement for any assessment
18 on Medicare or Medicaid premiums paid by the health
19 maintenance organization and the contract does not provide for
20 such reimbursement.
21 (15) "Federal poverty level" means the most current
22 federal poverty guidelines, as established by the federal
23 Department of Health and Human Services and published in the
24 Federal Register, and in effect on the date of the policy and
25 its annual renewal.
26 (16) "Family income" means the adjusted gross income,
27 as defined in s. 62 of the United States Internal Revenue
28 Code, of all members of a household.
29 Section 9. Section 627.6486, Florida Statutes, is
30 amended to read:
31 627.6486 Eligibility.--
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1 (1) Except as provided in subsection (2), any person
2 who is a resident of this state and has been a resident of
3 this state for the previous 6 months is shall be eligible for
4 coverage under the plan, including:
5 (a) The insured's spouse.
6 (b) Any dependent unmarried child of the insured, from
7 the moment of birth. Subject to the provisions of ss. s.
8 627.6041 and 627.6562, such coverage shall terminate at the
9 end of the premium period in which the child marries, ceases
10 to be a dependent of the insured, or attains the age of 19,
11 whichever occurs first. However, if the child is a full-time
12 student at an accredited institution of higher learning, the
13 coverage may continue while the child remains unmarried and a
14 full-time student, but not beyond the premium period in which
15 the child reaches age 23.
16 (c) The former spouse of the insured whose coverage
17 would otherwise terminate because of annulment or dissolution
18 of marriage, if the former spouse is dependent upon the
19 insured for financial support. The former spouse shall have
20 continued coverage and shall not be subject to waiting periods
21 because of the change in policyholder status.
22 (2)(a) The board or administrator shall require
23 verification of residency for the preceding 6 months and shall
24 require any additional information or documentation, or
25 statements under oath, when necessary to determine residency
26 upon initial application and for the entire term of the
27 policy. A person may demonstrate his or her residency by
28 maintaining his or her residence in this state for the
29 preceding 6 months, purchasing a home that has been occupied
30 by him or her as his or her primary residence for the previous
31
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1 6 months, or having established a domicile in this state
2 pursuant to s. 222.17 for the preceding 6 months.
3 (b) No person who is currently eligible for health
4 care benefits under Florida's Medicaid program is eligible for
5 coverage under the plan unless:
6 1. He or she has an illness or disease which requires
7 supplies or medication which are covered by the association
8 but are not included in the benefits provided under Florida's
9 Medicaid program in any form or manner; and
10 2. He or she is not receiving health care benefits or
11 coverage under Florida's Medicaid program.
12 (c) No person who is covered under the plan and
13 terminates the coverage is again eligible for coverage.
14 (d) No person on whose behalf the plan has paid out
15 the lifetime maximum benefit currently being offered by the
16 association of $500,000 in covered benefits is eligible for
17 coverage under the plan.
18 (e) The coverage of any person who ceases to meet the
19 eligibility requirements of this section may be terminated
20 immediately. If such person again becomes eligible for
21 subsequent coverage under the plan, any previous claims
22 payments shall be applied towards the $500,000 lifetime
23 maximum benefit and any limitation relating to preexisting
24 conditions in effect at the time such person again becomes
25 eligible shall apply to such person. However, no such person
26 may again become eligible for coverage after June 30, 1991.
27 (f) No person is eligible for coverage under the plan
28 unless such person has been rejected by two insurers for
29 coverage substantially similar to the plan coverage and no
30 insurer has been found through the market assistance plan
31 pursuant to s. 627.6484 that is willing to accept the
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1 application. As used in this paragraph, "rejection" includes
2 an offer of coverage with a material underwriting restriction
3 or an offer of coverage at a rate greater than the association
4 plan rate.
5 (g) No person is eligible for coverage under the plan
6 if such person has, or is eligible for, on the date of issue
7 of coverage under the plan, substantially similar coverage
8 under another contract or policy, unless such coverage is
9 provided pursuant to the Consolidated Omnibus Budget
10 Reconciliation Act of 1985, Pub. L. No. 99-272, 100 Stat. 82
11 (1986) (COBRA), as amended, or such coverage is provided
12 pursuant to s. 627.6692 and such coverage is scheduled to end
13 at a time certain and the person meets all other requirements
14 of eligibility. Coverage provided by the association shall be
15 secondary to any coverage provided by an insurer pursuant to
16 COBRA or pursuant to s. 627.6692.
17 (h) A person is ineligible for coverage under the plan
18 if such person is currently eligible for health care benefits
19 under the Medicare program, except for a person who is insured
20 by the Florida Comprehensive Health Association and enrolled
21 under Medicare on July 1, 2001. All eligible persons who are
22 classified as high-risk individuals pursuant to s.
23 627.6498(4)(a)4. shall, upon application or renewal, agree to
24 be placed in a case management system when it is determined by
25 the board and the plan case manager that such system will be
26 cost-effective and provide quality care to the individual.
27 (i) A person is ineligible for coverage under the plan
28 if such person's premiums are paid for or reimbursed under any
29 government-sponsored program or by any government agency or
30 health care provider.
31
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1 (j) An eligible individual, as defined in s. 627.6487,
2 and his or her dependents, as described in subsection (1), are
3 automatically eligible for coverage in the association unless
4 the association has ceased accepting new enrollees under s.
5 627.6488. If the association has ceased accepting new
6 enrollees, the eligible individual is subject to the coverage
7 rights set forth in s. 627.6487.
8 (3) A person's coverage ceases:
9 (a) On the date a person is no longer a resident of
10 this state;
11 (b) On the date a person requests coverage to end;
12 (c) Upon the date of death of the covered person;
13 (d) On the date state law requires cancellation of the
14 policy; or
15 (e) Sixty days after the person receives notice from
16 the association making any inquiry concerning the person's
17 eligibility or place or residence to which the person does not
18 reply.
19 (4) All eligible persons must, upon application or
20 renewal, agree to be placed in a case-management system when
21 the association and case manager find that such system will be
22 cost-effective and provide quality care to the individual.
23 (5) Except for persons who are insured by the
24 association on December 31, 2001, and who renew such coverage,
25 persons may apply for coverage beginning January 1, 2002, and
26 coverage for such persons shall begin on or after April 1,
27 2002, as determined by the board pursuant to s.
28 627.6488(4)(n).
29 Section 10. Subsection (3) of section 627.6487,
30 Florida Statutes, is amended to read:
31
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1 627.6487 Guaranteed availability of individual health
2 insurance coverage to eligible individuals.--
3 (3) For the purposes of this section, the term
4 "eligible individual" means an individual:
5 (a)1. For whom, as of the date on which the individual
6 seeks coverage under this section, the aggregate of the
7 periods of creditable coverage, as defined in s. 627.6561(5)
8 and (6), is 18 or more months; and
9 2.a. Whose most recent prior creditable coverage was
10 under a group health plan, governmental plan, or church plan,
11 or health insurance coverage offered in connection with any
12 such plan; or
13 b. Whose most recent prior creditable coverage was
14 under an individual plan issued in this state by a health
15 insurer or health maintenance organization, which coverage is
16 terminated due to the insurer or health maintenance
17 organization becoming insolvent or discontinuing the offering
18 of all individual coverage in the State of Florida, or due to
19 the insured no longer living in the service area in the State
20 of Florida of the insurer or health maintenance organization
21 that provides coverage through a network plan in the State of
22 Florida;
23 (b) Who is not eligible for coverage under:
24 1. A group health plan, as defined in s. 2791 of the
25 Public Health Service Act;
26 2. A conversion policy or contract issued by an
27 authorized insurer or health maintenance organization under s.
28 627.6675 or s. 641.3921, respectively, offered to an
29 individual who is no longer eligible for coverage under either
30 an insured or self-insured employer plan;
31
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1 3. Part A or part B of Title XVIII of the Social
2 Security Act; or
3 4. A state plan under Title XIX of such act, or any
4 successor program, and does not have other health insurance
5 coverage; or
6 5. The Florida Comprehensive Health Association, if
7 the association is accepting and issuing coverage to new
8 enrollees, provided that the 63-day period specified in s.
9 627.6561(6) shall be tolled from the time the association
10 receives an application from an individual until the
11 association notifies the individual that it is not accepting
12 and issuing coverage to that individual;
13 (c) With respect to whom the most recent coverage
14 within the coverage period described in paragraph (a) was not
15 terminated based on a factor described in s. 627.6571(2)(a) or
16 (b), relating to nonpayment of premiums or fraud, unless such
17 nonpayment of premiums or fraud was due to acts of an employer
18 or person other than the individual;
19 (d) Who, having been offered the option of
20 continuation coverage under a COBRA continuation provision or
21 under s. 627.6692, elected such coverage; and
22 (e) Who, if the individual elected such continuation
23 provision, has exhausted such continuation coverage under such
24 provision or program.
25 Section 11. Section 627.6488, Florida Statutes, is
26 amended to read:
27 627.6488 Florida Comprehensive Health Association.--
28 (1) There is created a nonprofit legal entity to be
29 known as the "Florida Comprehensive Health Association." All
30 insurers, as a condition of doing business, shall be members
31 of the association.
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1 (2)(a) The association shall operate subject to the
2 supervision and approval of a five-member three-member board
3 of directors consisting of the Insurance Commissioner, or his
4 or her designee, who shall serve as chairperson of the board,
5 and four additional members who must be state residents. At
6 least one member must be a representative of an authorized
7 health insurer or health maintenance organization authorized
8 to transact business in this state. The board of directors
9 shall be appointed by the Insurance Commissioner as follows:
10 1. The chair of the board shall be the Insurance
11 Commissioner or his or her designee.
12 2. One representative of policyholders who is not
13 associated with the medical profession, a hospital, or an
14 insurer.
15 3. One representative of insurers.
16
17 The administrator or his or her affiliate shall not be a
18 member of the board. Any board member appointed by the
19 commissioner may be removed and replaced by him or her at any
20 time without cause.
21 (b) All board members, including the chair, shall be
22 appointed to serve for staggered 3-year terms beginning on a
23 date as established in the plan of operation.
24 (c) The board of directors may shall have the power to
25 employ or retain such persons as are necessary to perform the
26 administrative and financial transactions and responsibilities
27 of the association and to perform other necessary and proper
28 functions not prohibited by law. Employees of the association
29 shall be reimbursed as provided in s. 112.061 from moneys of
30 the association for expenses incurred in carrying out their
31 responsibilities under this act.
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1 (d) Board members may be reimbursed as provided in s.
2 112.061 from moneys of the association for actual and
3 necessary expenses incurred by them as members in carrying out
4 their responsibilities under the Florida Comprehensive Health
5 Association Act, but may not otherwise be compensated for
6 their services.
7 (e) There shall be no liability on the part of, and no
8 cause of action of any nature shall arise against, any member
9 insurer, or its agents or employees, agents or employees of
10 the association, members of the board of directors of the
11 association, or the departmental representatives for any act
12 or omission taken by them in the performance of their powers
13 and duties under this act, unless such act or omission by such
14 person is in intentional disregard of the rights of the
15 claimant.
16 (f) Meetings of the board are subject to s. 286.011.
17 (3) The association shall adopt a plan pursuant to
18 this act and submit its articles, bylaws, and operating rules
19 to the department for approval. If the association fails to
20 adopt such plan and suitable articles, bylaws, and operating
21 rules within 180 days after the appointment of the board, the
22 department shall adopt rules to effectuate the provisions of
23 this act; and such rules shall remain in effect until
24 superseded by a plan and articles, bylaws, and operating rules
25 submitted by the association and approved by the department.
26 Such plan shall be reviewed, revised as necessary, and
27 annually submitted to the department for approval.
28 (4) The association shall:
29 (a) Establish administrative and accounting procedures
30 and internal controls for the operation of the association and
31 provide for an annual financial audit of the association by an
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1 independent certified public accountant licensed pursuant to
2 chapter 473.
3 (b) Establish procedures under which applicants and
4 participants in the plan may have grievances reviewed by an
5 impartial body and reported to the board. Individuals
6 receiving care through the association under contract from a
7 health maintenance organization must follow the grievance
8 procedures established in ss. 408.7056 and 641.31(5).
9 (c) Select an administrator in accordance with s.
10 627.649.
11 (d) Collect assessments from all insurers to provide
12 for operating losses incurred or estimated to be incurred
13 during the period for which the assessment is made. The level
14 of payments shall be established by the board, as formulated
15 in s. 627.6492(1). Annual assessment of the insurers for each
16 calendar year shall occur as soon thereafter as the operating
17 results of the plan for the calendar year and the earned
18 premiums of insurers being assessed for that year are known.
19 Annual assessments are due and payable within 30 days of
20 receipt of the assessment notice by the insurer.
21 (e) Require that all policy forms issued by the
22 association conform to standard forms developed by the
23 association. The forms shall be approved by the department.
24 (f) Develop and implement a program to publicize the
25 existence of the plan, the eligibility requirements for the
26 plan, and the procedures for enrollment in the plan and to
27 maintain public awareness of the plan.
28 (g) Design and employ cost containment measures and
29 requirements which may include preadmission certification,
30 home health care, hospice care, negotiated purchase of medical
31 and pharmaceutical supplies, and individual case management.
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1 (h) Contract with preferred provider organizations and
2 health maintenance organizations giving due consideration to
3 the preferred provider organizations and health maintenance
4 organizations which have contracted with the state group
5 health insurance program pursuant to s. 110.123. If
6 cost-effective and available in the county where the
7 policyholder resides, the board, upon application or renewal
8 of a policy, shall place a high-risk individual, as
9 established under s. 627.6498(4)(a)4., with the plan case
10 manager who shall determine the most cost-effective quality
11 care system or health care provider and shall place the
12 individual in such system or with such health care provider.
13 If cost-effective and available in the county where the
14 policyholder resides, the board, with the consent of the
15 policyholder, may place a low-risk or medium-risk individual,
16 as established under s. 627.6498(4)(a)4., with the plan case
17 manager who may determine the most cost-effective quality care
18 system or health care provider and shall place the individual
19 in such system or with such health care provider. Prior to and
20 during the implementation of case management, the plan case
21 manager shall obtain input from the policyholder, parent, or
22 guardian.
23 (h)(i) Make a report to the Governor, the President of
24 the Senate, the Speaker of the House of Representatives, and
25 the Minority Leaders of the Senate and the House of
26 Representatives not later than March 1 October 1 of each year.
27 The report shall summarize the activities of the plan for the
28 prior fiscal 12-month period ending July 1 of that year,
29 including then-current data and estimates as to net written
30 and earned premiums, the expense of administration, and the
31 paid and incurred losses for the year. The report shall also
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1 include analysis and recommendations for legislative changes
2 regarding utilization review, quality assurance, an evaluation
3 of the administrator of the plan, access to cost-effective
4 health care, and cost containment/case management policy and
5 recommendations concerning the opening of enrollment to new
6 entrants as of July 1, 1992.
7 (i)(j) Make a report to the Governor, the Insurance
8 Commissioner, the President of the Senate, the Speaker of the
9 House of Representatives, and the Minority Leaders of the
10 Senate and House of Representatives, not later than 45 days
11 after the close of each calendar quarter, which includes, for
12 the prior quarter, current data and estimates of net written
13 and earned premiums, the expenses of administration, and the
14 paid and incurred losses. The report shall identify any
15 statutorily mandated program that has not been fully
16 implemented by the board.
17 (j)(k) To facilitate preparation of assessments and
18 for other purposes, the board shall engage an independent
19 certified public accountant licensed pursuant to chapter 473
20 to conduct an annual financial audit of the association direct
21 preparation of annual audited financial statements for each
22 calendar year as soon as feasible following the conclusion of
23 that calendar year, and shall, within 30 days after the
24 issuance rendition of such statements, file with the
25 department the annual report containing such information as
26 required by the department to be filed on March 1 of each
27 year.
28 (k)(l) Employ a plan case manager or managers to
29 supervise and manage the medical care or coordinate the
30 supervision and management of the medical care, with the
31 administrator, of specified individuals. The plan case
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1 manager, with the approval of the board, shall have final
2 approval over the case management for any specific individual.
3 If cost-effective and available in the county where the
4 policyholder resides, the association, upon application or
5 renewal of a policy, may place an individual with the plan
6 case manager, who shall determine the most cost-effective
7 quality care system or health care provider and shall place
8 the individual in such system or with such health care
9 provider. Prior to and during the implementation of case
10 management, the plan case manager shall obtain input from the
11 policyholder, parent or guardian, and the health care
12 providers.
13 (l) Administer the association in a fiscally
14 responsible manner that ensures that its expenditures are
15 reasonable in relation to the services provided and that the
16 financial resources of the association are adequate to meet
17 its obligations.
18 (m) At least annually, but no more than quarterly,
19 evaluate or cause to be evaluated the actuarial soundness of
20 the association. The association shall contract with an
21 actuary to evaluate the pool of insureds in the association
22 and monitor the financial condition of the association. The
23 actuary shall determine the feasibility of enrolling new
24 members in the association, which must be based on the
25 projected revenues and expenses of the association.
26 (n) Restrict at any time the number of participants in
27 the association based on a determination by the board that the
28 revenues will be inadequate to fund new participants. However,
29 any person denied participation solely on the basis of such
30 restriction must be granted priority for participation in the
31 succeeding period in which the association is reopened for
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1 participants. Effective April 1, 2002, the association may
2 provide coverage for up to 500 persons for the period ending
3 December 31, 2002. On or after January 1, 2003, the
4 association may enroll an additional 1,500 persons. At no time
5 may the association provide coverage for more than 2,000
6 persons. Except as provided in s. 627.6486(2)(j), applications
7 for enrollment must be processed on a first-in, first-out
8 basis.
9 (o) Establish procedures to maintain separate accounts
10 and recordkeeping for policyholders prior to January 1, 2002,
11 and policyholders issued coverage on and after January 1,
12 2002.
13 (p) Appoint an executive director to serve as the
14 chief administrative and operational officer of the
15 association and operate within the specifications of the plan
16 of operation and perform other duties assigned to him or her
17 by the board.
18 (5) The association may:
19 (a) Exercise powers granted to insurers under the laws
20 of this state.
21 (b) Sue or be sued.
22 (c) In addition to imposing annual assessments under
23 paragraph (4)(d), levy interim assessments against insurers to
24 ensure the financial ability of the plan to cover claims
25 expenses and administrative expenses paid or estimated to be
26 paid in the operation of the plan for a calendar year prior to
27 the association's anticipated receipt of annual assessments
28 for that calendar year. Any interim assessment shall be due
29 and payable within 30 days after of receipt by an insurer of
30 an interim assessment notice. Interim assessment payments
31 shall be credited against the insurer's annual assessment.
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1 Such assessments may be levied only for costs and expenses
2 associated with policyholders insured with the association
3 prior to January 1, 2002.
4 (d) Prepare or contract for a performance audit of the
5 administrator of the association.
6 (e) Appear in its own behalf before boards,
7 commissions, or other governmental agencies.
8 (f) Solicit and accept gifts, grants, loans, and other
9 aid from any source or participate in any way in any
10 government program to carry out the purposes of the Florida
11 Comprehensive Health Association Act.
12 (g) Require and collect administrative fees and
13 charges in connection with any transaction and impose
14 reasonable penalties, including default, for delinquent
15 payments or for entering into the association on a fraudulent
16 basis.
17 (h) Procure insurance against any loss in connection
18 with the property, assets, and activities of the association
19 or the board.
20 (i) Contract for necessary goods and services; employ
21 necessary personnel; and engage the services of private
22 consultants, actuaries, managers, legal counsel, and
23 independent certified public accountants for administrative or
24 technical assistance.
25 (6) The department shall examine and investigate the
26 association in the manner provided in part II of chapter 624.
27 Section 12. Paragraph (b) of subsection (3) of section
28 627.649, Florida Statutes, is amended to read:
29 627.649 Administrator.--
30 (3) The administrator shall:
31
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1 (b) Pay an agent's referral fee as established by the
2 board to each insurance agent who refers an applicant to the
3 plan, if the applicant's application is accepted. The selling
4 or marketing of plans shall not be limited to the
5 administrator or its agents. Any agent must be licensed by the
6 department to sell health insurance in this state. The
7 referral fees shall be paid by the administrator from moneys
8 received as premiums for the plan.
9 Section 13. Section 627.6492, Florida Statutes, is
10 amended to read:
11 627.6492 Participation of insurers.--
12 (1)(a) As a condition of doing business in this state
13 an insurer shall pay an assessment to the board, in the amount
14 prescribed by this section. Subsections (1), (2), and (3)
15 apply only to the costs and expenses associated with
16 policyholders insured with the association prior to January 1,
17 2002, including renewal of coverage for such policyholders
18 after that date. For operating losses incurred in any
19 calendar year on July 1, 1991, and thereafter, each insurer
20 shall annually be assessed by the board in the following
21 calendar year a portion of such incurred operating losses of
22 the plan; such portion shall be determined by multiplying such
23 operating losses by a fraction, the numerator of which equals
24 the insurer's earned premium pertaining to direct writings of
25 health insurance in the state during the calendar year
26 preceding that for which the assessment is levied, and the
27 denominator of which equals the total of all such premiums
28 earned by participating insurers in the state during such
29 calendar year.
30 (b) For operating losses incurred from July 1, 1991,
31 through December 31, 1991, the total of all assessments upon a
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1 participating insurer shall not exceed .375 percent of such
2 insurer's health insurance premiums earned in this state
3 during 1990. For operating losses incurred in 1992 and
4 thereafter, The total of all assessments upon a participating
5 insurer shall not exceed 1 percent of such insurer's health
6 insurance premium earned in this state during the calendar
7 year preceding the year for which the assessments were levied.
8 (c) For operating losses incurred from October 1,
9 1990, through June 30, 1991, the board shall assess each
10 insurer in the amount and manner prescribed by chapter 90-334,
11 Laws of Florida. The maximum assessment against an insurer, as
12 provided in such act, shall apply separately to the claims
13 incurred in 1990 (October 1 through December 31) and the
14 claims incurred in 1991 (January 1 through June 30). For
15 operating losses incurred on January 1, 1991, through June 30,
16 1991, the maximum assessment against an insurer shall be
17 one-half of the amount of the maximum assessment specified for
18 such insurer in former s. 627.6492(1)(b), 1990 Supplement, as
19 amended by chapter 90-334, Laws of Florida.
20 (c)(d) All rights, title, and interest in the
21 assessment funds collected shall vest in this state. However,
22 all of such funds and interest earned shall be used by the
23 association to pay claims and administrative expenses.
24 (2) If assessments and other receipts by the
25 association, board, or administrator exceed the actual losses
26 and administrative expenses of the plan, the excess shall be
27 held at interest and used by the board to offset future
28 losses. As used in this subsection, the term "future losses"
29 includes reserves for claims incurred but not reported.
30 (3) Each insurer's assessment shall be determined
31 annually by the association based on annual statements and
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1 other reports deemed necessary by the association and filed
2 with it by the insurer. Any deficit incurred under the plan
3 shall be recouped by assessments against participating
4 insurers by the board in the manner provided in subsection
5 (1); and the insurers may recover the assessment in the normal
6 course of their respective businesses without time limitation.
7 (4)(a) This subsection applies only to those costs and
8 expenses of the association related to persons whose coverage
9 begins after January 1, 2002. As a condition of doing business
10 in this state, every insurer shall pay an amount determined by
11 the board of up to 25 cents per month for each individual
12 policy or covered group subscriber insured in this state, not
13 including covered dependents, under a health insurance policy,
14 certificate, or other evidence of coverage that is issued for
15 a resident of this state and shall file the information with
16 the association as required pursuant to paragraph (d). Any
17 insurer who neglects, fails, or refuses to collect the fee
18 shall be liable for and pay the fee. The fee shall not be
19 subject to the provisions of s. 624.509.
20 (b) For purposes of this subsection, health insurance
21 does not include accident only, specified disease, individual
22 hospital indemnity, credit, dental-only, vision-only, Medicare
23 supplement, long-term care, nursing home care, home health
24 care, community-based care, or disability income insurance;
25 similar supplemental plans provided under a separate policy,
26 certificate, or contract of insurance, which cannot duplicate
27 coverage under an underlying health plan and are specifically
28 designed to fill gaps in the underlying health plan,
29 coinsurance, or deductibles; any policy covering
30 medical-payment coverage or personal injury protection
31 coverage in a motor vehicle policy; coverage issued as a
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1 supplement to liability insurance; or workers' compensation
2 insurance. For the purposes of this subsection, the term
3 "insurer" as defined in s. 627.6482(7) also includes
4 administrators licensed pursuant to s. 626.8805, and any
5 insurer defined in s. 627.6482(7) from whom any person
6 providing health insurance to Florida residents procures
7 insurance for itself in the insurer, with respect to all or
8 part of the health insurance risk of the person, or provides
9 administrative services only. This definition of insurer
10 excludes self-insured, employee welfare benefit plans that are
11 not regulated by the Florida Insurance Code pursuant to the
12 Employee Retirement Income Security Act of 1974, Pub. L. No.
13 93-406, as amended. However, this definition of insurer
14 includes multiple employer welfare arrangements as provided
15 for in the Employee Retirement Income Security Act of 1974,
16 Pub. L. No. 93-406, as amended. Each covered group subscriber,
17 without regard to covered dependents of the subscriber, shall
18 be counted only once with respect to any assessment. For that
19 purpose, the board shall allow an insurer as defined by this
20 subsection to exclude from its number of covered group
21 subscribers those who have been counted by any primary insurer
22 providing health insurance coverage pursuant to s. 624.603.
23 (c) The calculation shall be determined as of December
24 31 of each year and shall include all policies and covered
25 subscribers, not including covered dependents of the
26 subscribers, insured at any time during the year, calculated
27 for each month of coverage. The payment is payable to the
28 association no later than April 1 of the subsequent year. The
29 first payment shall be forwarded to the association no later
30 than April 1, 2002, covering the period of October 1, 2001,
31 through December 31, 2001.
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1 (d) The payment of such funds shall be submitted to
2 the association accompanied by a form prescribed by the
3 association and adopted in the plan of operation. The form
4 shall identify the number of covered lives for different types
5 of health insurance products and the number of months of
6 coverage.
7 (e) Beginning October 1, 2001, the fee paid to the
8 association may be charged by the health insurer directly to
9 each policyholder, insured member, or subscriber and is not
10 part of the premium subject to the department's review and
11 approval. Nonpayment of the fee shall be considered nonpayment
12 of premium for purposes of s. 627.6043.
13 Section 14. Section 627.6498, Florida Statutes, is
14 amended to read:
15 627.6498 Minimum benefits coverage; exclusions;
16 premiums; deductibles.--
17 (1) COVERAGE OFFERED.--
18 (a) The plan shall offer in an annually a semiannually
19 renewable policy the coverage specified in this section for
20 each eligible person. For applications accepted on or after
21 June 7, 1991, but before July 1, 1991, coverage shall be
22 effective on July 1, 1991, and shall be renewable on January
23 1, 1992, and every 6 months thereafter. Policies in existence
24 on June 7, 1991, shall, upon renewal, be for a term of less
25 than 6 months that terminates and becomes subject to
26 subsequent renewal on the next succeeding January 1 or July 1,
27 whichever is sooner.
28 (b) If an eligible person is also eligible for
29 Medicare coverage, the plan shall not pay or reimburse any
30 person for expenses paid by Medicare.
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1 (c) Any person whose health insurance coverage is
2 involuntarily terminated for any reason other than nonpayment
3 of premium may apply for coverage under the plan. If such
4 coverage is applied for within 60 days after the involuntary
5 termination and if premiums are paid for the entire period of
6 coverage, the effective date of the coverage shall be the date
7 of termination of the previous coverage.
8 (b)(d) The plan shall provide that, upon the death or
9 divorce of the individual in whose name the contract was
10 issued, every other person then covered in the contract may
11 elect within 60 days to continue under the same or a different
12 contract.
13 (c)(e) No coverage provided to a person who is
14 eligible for Medicare benefits shall be issued as a Medicare
15 supplement policy as defined in s. 627.672.
16 (2) BENEFITS.--
17 (a) The plan must offer coverage to every eligible
18 person subject to limitations set by the association. The
19 coverage offered must pay an eligible person's covered
20 expenses, subject to limits on the deductible and coinsurance
21 payments authorized under subsection (4). The lifetime
22 benefits limit for such coverage shall be $500,000. However,
23 policyholders of association policies issued prior to 1992 are
24 entitled to continued coverage at the benefit level
25 established prior to January 1, 2002. Only the premium,
26 deductible, and coinsurance amounts may be modified as
27 determined necessary by the board. The plan shall offer major
28 medical expense coverage similar to that provided by the state
29 group health insurance program as defined in s. 110.123 except
30 as specified in subsection (3) to every eligible person who is
31 not eligible for Medicare. Major medical expense coverage
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1 offered under the plan shall pay an eligible person's covered
2 expenses, subject to limits on the deductible and coinsurance
3 payments authorized under subsection (4), up to a lifetime
4 limit of $500,000 per covered individual. The maximum limit
5 under this paragraph shall not be altered by the board, and no
6 actuarially equivalent benefit may be substituted by the
7 board.
8 (b) The plan shall provide that any policy issued to a
9 person eligible for Medicare shall be separately rated to
10 reflect differences in experience reasonably expected to occur
11 as a result of Medicare payments.
12 (3) COVERED EXPENSES.--
13 (a) The board shall establish the coverage to be
14 issued by the association.
15 (b) If the coverage is being issued to an eligible
16 individual as defined in s. 627.6487, the individual shall be
17 offered, at the option of the individual, the basic and the
18 standard health benefit plan as established in s. 627.6699.
19 The coverage to be issued by the association shall be
20 patterned after the state group health insurance program as
21 defined in s. 110.123, including its benefits, exclusions, and
22 other limitations, except as otherwise provided in this act.
23 The plan may cover the cost of experimental drugs which have
24 been approved for use by the Food and Drug Administration on
25 an experimental basis if the cost is less than the usual and
26 customary treatment. Such coverage shall only apply to those
27 insureds who are in the case management system upon the
28 approval of the insured, the case manager, and the board.
29 (4) PREMIUMS AND, DEDUCTIBLES, AND COINSURANCE.--
30 (a) The plan shall provide for annual deductibles for
31 major medical expense coverage in the amount of $1,000 or any
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1 higher amounts proposed by the board and approved by the
2 department, plus the benefits payable under any other type of
3 insurance coverage or workers' compensation. The schedule of
4 premiums and deductibles shall be established by the board
5 association. With regard to any preferred provider arrangement
6 utilized by the association, the deductibles provided in this
7 paragraph shall be the minimum deductibles applicable to the
8 preferred providers and higher deductibles, as approved by the
9 department, may be applied to providers who are not preferred
10 providers.
11 1. Separate schedules of premium rates based on age
12 may apply for individual risks.
13 2. Rates are subject to approval by the department
14 pursuant to ss. 627.410 and 627.411, except as provided by
15 this section. The board shall revise premium schedules
16 annually, beginning January 2002.
17 3. Standard risk rates for coverages issued by the
18 association shall be established by the department, pursuant
19 to s. 627.6675(3).
20 3.4. The board shall establish three premium schedules
21 based upon an individual's family income:
22 a. Schedule A is applicable to an individual whose
23 family income exceeds the allowable amount for determining
24 eligibility under the Medicaid program, up to and including
25 200 percent of the Federal Poverty Level. Premiums for a
26 person under this schedule may not exceed 150 percent of the
27 standard risk rate.
28 b. Schedule B is applicable to an individual whose
29 family income exceeds 200 percent but is less than 300 percent
30 of the Federal Poverty Level. Premiums for a person under this
31 schedule may not exceed 250 percent of the standard risk rate.
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1 c. Schedule C is applicable to an individual whose
2 family income is equal to or greater than 300 percent of the
3 Federal Poverty Level. Premiums for a person under this
4 schedule may not exceed 300 percent of the standard risk rate.
5 establish separate premium schedules for low-risk individuals,
6 medium-risk individuals, and high-risk individuals and shall
7 revise premium schedules annually beginning January 1999.
8 4. The standard risk rate shall be determined by the
9 department pursuant to s. 627.6675(3). The rate shall be
10 adjusted for benefit differences. No rate shall exceed 200
11 percent of the standard risk rate for low-risk individuals,
12 225 percent of the standard risk rate for medium-risk
13 individuals, or 250 percent of the standard risk rate for
14 high-risk individuals. For the purpose of determining what
15 constitutes a low-risk individual, medium-risk individual, or
16 high-risk individual, the board shall consider the anticipated
17 claims payment for individuals based upon an individual's
18 health condition.
19 (b) If the covered costs incurred by the eligible
20 person exceed the deductible for major medical expense
21 coverage selected by the person in a policy year, the plan
22 shall pay in the following manner:
23 1. For individuals placed under case management, the
24 plan shall pay 90 percent of the additional covered costs
25 incurred by the person during the policy year for the first
26 $10,000, after which the plan shall pay 100 percent of the
27 covered costs incurred by the person during the policy year.
28 2. For individuals utilizing the preferred provider
29 network, the plan shall pay 80 percent of the additional
30 covered costs incurred by the person during the policy year
31 for the first $10,000, after which the plan shall pay 90
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1 percent of covered costs incurred by the person during the
2 policy year.
3 3. If the person does not utilize either the case
4 management system or the preferred provider network, the plan
5 shall pay 60 percent of the additional covered costs incurred
6 by the person for the first $10,000, after which the plan
7 shall pay 70 percent of the additional covered costs incurred
8 by the person during the policy year.
9 (5) PREEXISTING CONDITIONS.--An association policy
10 shall may contain provisions under which coverage is excluded
11 during a period of 12 months following the effective date of
12 coverage with respect to a given covered individual for any
13 preexisting condition, as long as:
14 (a) The condition manifested itself within a period of
15 6 months before the effective date of coverage; or
16 (b) Medical advice or treatment was recommended or
17 received within a period of 6 months before the effective date
18 of coverage.
19
20 This subsection does not apply to an eligible individual as
21 defined in s. 627.6487.
22 (6) OTHER SOURCES PRIMARY.--
23 (a) No amounts paid or payable by Medicare or any
24 other governmental program or any other insurance, or
25 self-insurance maintained in lieu of otherwise statutorily
26 required insurance, may be made or recognized as claims under
27 such policy or be recognized as or towards satisfaction of
28 applicable deductibles or out-of-pocket maximums or to reduce
29 the limits of benefits available.
30 (b) The association has a cause of action against a
31 participant for any benefits paid to the participant which
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1 should not have been claimed or recognized as claims because
2 of the provisions of this subsection or because otherwise not
3 covered.
4 (7) NONENTITLEMENT.--The Florida Comprehensive Health
5 Association Act does not provide an individual with an
6 entitlement to health care services or health insurance. A
7 cause of action does not arise against the state, the board,
8 or the association for failure to make health services or
9 health insurance available under the Florida Comprehensive
10 Health Association Act.
11 Section 15. The Legislature finds that the provisions
12 of this act fulfill an important state interest.
13 Section 16. The amendments in this act to section
14 627.6487(3), Florida Statutes, shall not take effect unless
15 the Health Care Financing Administration of the U.S.
16 Department of Health and Human Services approves this act as
17 providing an acceptable alternative mechanism, as provided in
18 the Public Health Service Act.
19 Section 17. Effective January 1, 2002, section
20 627.6484, Florida Statutes, is repealed.
21 Section 18. Except as otherwise expressly provided in
22 this act, this act shall take effect July 1, 2001.
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