Senate Bill sb1960c2
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Florida Senate - 2001 CS for CS for SB's 1960 & 1760
By the Committees on Health, Aging and Long-Term Care; Banking
and Insurance; and Senators Latvala and King
317-1931-01
1 A bill to be entitled
2 An act relating to health care; making
3 legislative findings and providing legislative
4 intent; providing definitions; providing for a
5 pilot program for health flex plans for certain
6 uninsured persons; providing criteria;
7 exempting approved health flex plans from
8 certain licensing requirements; providing
9 criteria for eligibility to enroll in a health
10 flex plan; requiring health flex plan providers
11 to maintain certain records; providing
12 requirements for denial, nonrenewal, or
13 cancellation of coverage; specifying that
14 coverage under an approved health flex plan is
15 not an entitlement; providing for civil actions
16 against health plan entities by the Agency for
17 Health Care Administration under certain
18 circumstances; amending s. 627.410, F.S.;
19 requiring certain group certificates for health
20 insurance coverage to be subject to the
21 requirements for individual health insurance
22 policies; exempting group health insurance
23 policies insuring groups of a certain size from
24 rate filing requirements; providing alternative
25 rate filing requirements for insurers with less
26 than a specified number of nationwide
27 policyholders or members; amending s. 627.411,
28 F.S.; revising the grounds for the disapproval
29 of insurance policy forms; providing that a
30 health insurance policy form may be disapproved
31 if it results in certain rate increases;
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1 specifying allowable new business rates and
2 renewal rates if rate increases exceed certain
3 levels; authorizing the Department of Insurance
4 to determine medical trend for purposes of
5 approving rate filings; amending s. 627.6487,
6 F.S.; revising the types of policies that
7 individual health insurers must offer to
8 persons eligible for guaranteed individual
9 health insurance coverage; prohibiting
10 individual health insurers from applying
11 discriminatory underwriting or rating practices
12 to eligible individuals; amending s. 627.6482,
13 F.S.; amending definitions used in the Florida
14 Comprehensive Health Association Act; amending
15 s. 627.6486, F.S.; revising the criteria for
16 eligibility for coverage from the association;
17 providing for cessation of coverage; requiring
18 all eligible persons to agree to be placed in a
19 case-management system; amending s. 627.6487,
20 F.S.; redefining the term "eligible individual"
21 for purposes of guaranteed availability of
22 individual health insurance coverage; providing
23 that a person is not eligible if the person is
24 eligible for coverage under the Florida
25 Comprehensive Health Association; amending s.
26 627.6488, F.S.; revising the membership of the
27 board of directors of the association; revising
28 the reimbursement of board members and
29 employees; requiring that the plan of the
30 association be submitted to the department for
31 approval on an annual basis; revising the
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1 duties of the association related to
2 administrative and accounting procedures;
3 requiring an annual financial audit; specifying
4 grievance procedures; establishing a premium
5 schedule based upon an individual's family
6 income; deleting requirements for categorizing
7 insureds as low-risk, medium-risk, and
8 high-risk; authorizing the association to place
9 an individual with a case manager who
10 determines the health care system or provider;
11 requiring an annual review of the actuarial
12 soundness of the association and the
13 feasibility of enrolling new members; requiring
14 a separate account for policyholders insured
15 prior to a specified date; requiring
16 appointment of an executive director with
17 specified duties; authorizing the board to
18 restrict the number of participants based on
19 inadequate funding; limiting enrollment;
20 specifying other powers of the board; amending
21 s. 627.649, F.S.; revising the requirements for
22 the association to use in selecting an
23 administrator; amending s. 627.6492, F.S.;
24 requiring insurers to be members of the
25 association and to be subject to assessments
26 for operating expenses; limiting assessments to
27 specified maximum amounts; specifying when
28 assessments are calculated and paid; allowing
29 certain assessments to be charged by the health
30 insurer directly to each insured, member, or
31 subscriber and to not be subject to department
3
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1 review or approval; amending s. 627.6498, F.S.;
2 revising the coverage, benefits, covered
3 expenses, premiums, and deductibles of the
4 association; requiring preexisting condition
5 limitations; providing that the act does not
6 provide an entitlement to health care services
7 or health insurance and does not create a cause
8 of action; limiting enrollment in the
9 association; repealing s. 627.6484, F.S.,
10 relating to a prohibition on the Florida
11 Comprehensive Health Association from accepting
12 applications for coverage after a certain date;
13 making a legislative finding that the
14 provisions of this act fulfill an important
15 state interest; providing that the amendments
16 to s. 627.6487(3), F.S., do not take effect
17 unless approved by the U.S. Health Care
18 Financing Administration; amending s. 627.6515,
19 F.S.; requiring that coverage issued to a state
20 resident under certain group health insurance
21 policies issued outside the state be subject to
22 the requirements for individual health
23 insurance policies; amending s. 627.6699, F.S.;
24 revising definitions used in the Employee
25 Health Care Access Act; allowing carriers to
26 separate the experience of small employer
27 groups with fewer than two employees; revising
28 the rating factors that may be used by small
29 employer carriers; requiring the Insurance
30 Commissioner to appoint a health benefit plan
31 committee to modify the standard, basic, and
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1 limited health benefit plans; revising the
2 disclosure that a carrier must make to a small
3 employer upon offering certain policies;
4 prohibiting small employer carriers from using
5 certain policies, contracts, forms, or rates
6 unless filed with and approved by the
7 Department of Insurance pursuant to certain
8 provisions; restricting application of certain
9 laws to limited benefit policies under certain
10 circumstances; authorizing offering or
11 delivering limited benefit policies or
12 contracts to certain employers; providing
13 requirements for benefits in limited benefit
14 policies or contracts for small employers;
15 amending s. 627.9408, F.S.; authorizing the
16 department to adopt by rule certain provisions
17 of the Long-Term Care Insurance Model
18 Regulation, as adopted by the National
19 Association of Insurance Commissioners;
20 amending s. 641.31, F.S.; exempting contracts
21 of group health maintenance organizations
22 covering a specified number of persons from the
23 requirements of filing with the department;
24 specifying the standards for department
25 approval and disapproval of a change in rates
26 by a health maintenance organization; providing
27 alternative rate filing requirements for
28 organizations with less than a specified number
29 of subscribers; providing an effective date.
30
31
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1 WHEREAS, the Legislature recognizes that the increasing
2 number of uninsured Floridians is due in part to small
3 employers' and their employees' inability to afford
4 comprehensive health insurance coverage, and
5 WHEREAS, the Legislature recognizes the need for small
6 employers and their employees to have the opportunity to
7 choose more affordable and flexible health insurance plans,
8 and
9 WHEREAS, it is the intent of the Legislature that
10 insurers and health maintenance organizations have maximum
11 flexibility in health plan design or in developing a health
12 plan design to complement a medical savings account program
13 established by a small employer for the benefit of its
14 employees, NOW, THEREFORE,
15
16 Be It Enacted by the Legislature of the State of Florida:
17
18 Section 1. Health flex plans.--
19 (1) INTENT.--The Legislature finds that a significant
20 portion of state residents are not able to obtain affordable
21 health insurance coverage. Therefore, it is the intent of the
22 Legislature to expand the availability of health care options
23 for lower-income uninsured state residents by encouraging
24 health insurers, health maintenance organizations, health care
25 provider-sponsored organizations, local governments, health
26 care districts, and other public or private community-based
27 organizations to develop alternative approaches to traditional
28 health insurance which emphasize coverage for basic and
29 preventive health care services. To the maximum extent
30 possible, these options should be coordinated with existing
31 governmental or community-based health services programs in a
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1 manner that is consistent with the objectives and requirements
2 of such programs.
3 (2) DEFINITIONS.--As used in this section, the term:
4 (a) "Agency" means the Agency for Health Care
5 Administration.
6 (b) "Approved plan" means a health flex plan approved
7 under subsection (3) which guarantees payment by the health
8 plan entity for specified health care services provided to the
9 enrollee.
10 (c) "Enrollee" means an individual who has been
11 determined eligible for and is receiving health benefits under
12 a health flex plan approved under this section.
13 (d) "Health care coverage" means payment for health
14 care services covered as benefits under an approved plan or
15 which otherwise provides, either directly or through
16 arrangements with other persons, covered health care services
17 on a prepaid per capita basis or on a prepaid aggregate
18 fixed-sum basis.
19 (e) "Health plan entity" means a health insurer,
20 health maintenance organization, health care
21 provider-sponsored organization, local government, health care
22 district, or other public or private community-based
23 organization that develops and implements an approved plan and
24 is responsible for financing and paying all claims by
25 enrollees of the plan.
26 (3) PILOT PROGRAM.--The agency and the Department of
27 Insurance shall jointly approve or disapprove health flex
28 plans that provide health care coverage for eligible
29 participants residing in the three areas of the state having
30 the highest number of uninsured residents as determined by the
31 agency. A plan may limit or exclude benefits otherwise
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1 required by law for insurers offering coverage in this state,
2 cap the total amount of claims paid in 1 year per enrollee, or
3 limit the number of enrollees covered. The agency and the
4 Department of Insurance shall not approve, or shall withdraw
5 approval of, plans that:
6 (a) Contain any ambiguous, inconsistent, or misleading
7 provisions or any exceptions or conditions that deceptively
8 affect or limit the benefits purported to be assumed in the
9 general coverage provided by the plan;
10 (b) Provide benefits that are unreasonable in relation
11 to the premium charged, contain provisions that are unfair or
12 inequitable or contrary to the public policy of this state,
13 that encourage misrepresentation, or that result in unfair
14 discrimination in sales practices; or
15 (c) Cannot demonstrate that the plan is financially
16 sound and that the applicant has the ability to underwrite or
17 finance the benefits provided.
18 (4) LICENSE NOT REQUIRED.--A health flex plan approved
19 under this section is not subject to the licensing
20 requirements of the Florida Insurance Code or chapter 641,
21 Florida Statutes, relating to health maintenance
22 organizations, unless expressly made applicable. However, for
23 the purposes of prohibiting unfair trade practices, health
24 flex plans shall be considered insurance subject to the
25 applicable provisions of part IX of chapter 626, Florida
26 Statutes, except as otherwise provided in this section.
27 (5) ELIGIBILITY.--Eligibility to enroll in an approved
28 health flex plan is limited to Florida residents who:
29 (a) Are 64 years of age or younger;
30 (b) Have a family income equal to or less than 200
31 percent of the federal poverty level;
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1 (c) Are not covered by a private insurance policy and
2 are not eligible for coverage through a public health
3 insurance program such as Medicare or Medicaid or another
4 public health care program, including, but not limited to,
5 KidCare; and have not been covered at any time during the
6 preceding 6 months; and
7 (d) Have applied for health care benefits through an
8 approved health flex plan and agree to make any payments
9 required for participation, including, but not limited to,
10 periodic payments or payments due at the time health care
11 services are provided.
12 (6) RECORDS.--Every health plan entity shall maintain
13 reasonable records of its loss, expense, and claims experience
14 and shall make such records reasonably available to enable the
15 agency and the Department of Insurance to monitor and
16 determine the financial viability of the plan, as necessary.
17 (7) NOTICE.--The denial of coverage by the health plan
18 entity, or nonrenewal or cancellation of coverage, must be
19 accompanied by the specific reasons for denial, nonrenewal, or
20 cancellation. Notice of nonrenewal or cancellation shall be
21 provided at least 45 days in advance of such nonrenewal or
22 cancellation, except that 10 days' written notice shall be
23 given for cancellation due to nonpayment of premiums. If the
24 health plan entity fails to give the required notice, the plan
25 shall remain in effect until notice is appropriately given.
26 (8) NONENTITLEMENT.--Coverage under an approved health
27 flex plan is not an entitlement, and no cause of action shall
28 arise against the state, a local government entity or other
29 political subdivision of this state, or the agency for failure
30 to make coverage available to eligible persons under this
31 section.
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1 (9) CIVIL ACTIONS.--In addition to an administrative
2 action initiated under subsection (4), the agency may seek any
3 remedy provided by law, including, but not limited to, the
4 remedies provided in section 812.035, Florida Statutes, if the
5 agency finds that a health plan entity has engaged in any act
6 resulting in injury to an enrollee covered by a plan approved
7 under this section.
8 Section 2. Subsection (1) and paragraph (a) of
9 subsection (6) of section 627.410, Florida Statutes, are
10 amended, and paragraph (f) is added to subsection (7) of that
11 section, to read:
12 627.410 Filing, approval of forms.--
13 (1) No basic insurance policy or annuity contract
14 form, or application form where written application is
15 required and is to be made a part of the policy or contract,
16 or group certificates issued under a master contract delivered
17 in this state, or printed rider or endorsement form or form of
18 renewal certificate, shall be delivered or issued for delivery
19 in this state, unless the form has been filed with the
20 department at its offices in Tallahassee by or in behalf of
21 the insurer which proposes to use such form and has been
22 approved by the department. This provision does not apply to
23 surety bonds or to policies, riders, endorsements, or forms of
24 unique character which are designed for and used with relation
25 to insurance upon a particular subject (other than as to
26 health insurance), or which relate to the manner of
27 distribution of benefits or to the reservation of rights and
28 benefits under life or health insurance policies and are used
29 at the request of the individual policyholder, contract
30 holder, or certificateholder. As to group insurance policies
31 effectuated and delivered outside this state but covering
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1 persons resident in this state, the group certificates to be
2 delivered or issued for delivery in this state shall be filed
3 with the department for information purposes only, except that
4 group certificates for health insurance coverage, as described
5 in s. 627.6561(5)(a)2., which require individual underwriting
6 to determine coverage eligibility for an individual or premium
7 rates to be charged to an individual, shall be considered
8 policies issued on an individual basis and are subject to and
9 must comply with the Florida Insurance Code in the same manner
10 as individual health insurance policies issued in this state.
11 (6)(a) An insurer shall not deliver or issue for
12 delivery or renew in this state any health insurance policy
13 form until it has filed with the department a copy of every
14 applicable rating manual, rating schedule, change in rating
15 manual, and change in rating schedule; if rating manuals and
16 rating schedules are not applicable, the insurer must file
17 with the department applicable premium rates and any change in
18 applicable premium rates. This paragraph does not apply to
19 group health insurance policies insuring groups of 51 or more
20 persons, effectuated and delivered in this state, except for
21 Medicare supplement insurance, long-term care insurance, and
22 any coverage under which the increase in claim costs over the
23 lifetime of the contract due to advancing age or duration is
24 prefunded in the premium.
25 (7)
26 (f) Insurers with fewer than 1,000 nationwide
27 policyholders or insured group members or subscribers covered
28 under any form or pooled group of forms with health insurance
29 coverage, as described in s. 627.6561(5)(a)2., excluding
30 Medicare supplement insurance coverage under part VIII, at the
31 time of a rate filing made pursuant to subparagraph (b)1., may
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1 file for an annual rate increase limited to medical trend as
2 adopted by the department pursuant to s. 627.411(4). The
3 filing is in lieu of the actuarial memorandum required for a
4 rate filing prescribed by paragraph (6)(b). The filing must
5 include forms adopted by the department and a certification by
6 an officer of the company that the filing includes all similar
7 forms.
8 Section 3. Section 627.411, Florida Statutes, is
9 amended to read:
10 627.411 Grounds for disapproval.--
11 (1) The department shall disapprove any form filed
12 under s. 627.410, or withdraw any previous approval thereof,
13 only if the form:
14 (a) Is in any respect in violation of, or does not
15 comply with, this code.
16 (b) Contains or incorporates by reference, where such
17 incorporation is otherwise permissible, any inconsistent,
18 ambiguous, or misleading clauses, or exceptions and conditions
19 which deceptively affect the risk purported to be assumed in
20 the general coverage of the contract.
21 (c) Has any title, heading, or other indication of its
22 provisions which is misleading.
23 (d) Is printed or otherwise reproduced in such manner
24 as to render any material provision of the form substantially
25 illegible.
26 (e) Is for health insurance, and:
27 1. Provides benefits that which are unreasonable in
28 relation to the premium charged;,
29 2. Contains provisions that which are unfair or
30 inequitable or contrary to the public policy of this state or
31 that which encourage misrepresentation;, or
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1 3. Contains provisions that which apply rating
2 practices that which result in premium escalations that are
3 not viable for the policyholder market or result in unfair
4 discrimination pursuant to s. 626.9541(1)(g)2.; in sales
5 practices.
6 4. Results in actuarially justified rate increases on
7 an annual basis:
8 a. Attributed to the insurer reducing the portion of
9 the premium used to pay claims from the loss ratio standard
10 certified in the last actuarial certification filed by the
11 insurer, in excess of the greater of 50 percent of annual
12 medical trend or 5 percent. At its option, the insurer may
13 file for approval of an actuarially justified new business
14 rate schedule for new insureds and a rate increase for
15 existing insureds that is equal to the greater of 150 percent
16 of annual medical trend or 10 percent. Future annual rate
17 increases for existing insureds shall be limited to the
18 greater of 150 percent of the rate increase approved for new
19 insureds or 10 percent until the two rate schedules converge;
20 b. In excess of the greater of 150 percent of annual
21 medical trend or 10 percent and the company did not comply
22 with the annual filing requirements of s. 627.410(7) or
23 department rule for health maintenance organizations pursuant
24 to s. 641.31. At its option the insurer may file for approval
25 of an actuarially justified new business rate schedule for new
26 insureds and a rate increase for existing insureds that is
27 equal to the rate increase allowed by the preceding sentence.
28 Future annual rate increases for existing insureds shall be
29 limited to the greater of 150 percent of the rate increase
30 approved for new insureds or 10 percent until the two rate
31 schedules converge; or
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1 c. In excess of the greater of 150 percent of annual
2 medical trend or 10 percent on a form or block of pooled forms
3 in which no form is currently available for sale. This
4 sub-subparagraph does not apply to pre-standardized Medicare
5 supplement forms.
6 (f) Excludes coverage for human immunodeficiency virus
7 infection or acquired immune deficiency syndrome or contains
8 limitations in the benefits payable, or in the terms or
9 conditions of such contract, for human immunodeficiency virus
10 infection or acquired immune deficiency syndrome which are
11 different than those which apply to any other sickness or
12 medical condition.
13 (2) In determining whether the benefits are reasonable
14 in relation to the premium charged, the department, in
15 accordance with reasonable actuarial techniques, shall
16 consider:
17 (a) Past loss experience and prospective loss
18 experience within and without this state.
19 (b) Allocation of expenses.
20 (c) Risk and contingency margins, along with
21 justification of such margins.
22 (d) Acquisition costs.
23 (3) If a health insurance rate filing changes the
24 established rate relationships between insureds, the aggregate
25 effect of such change shall be revenue-neutral. The change to
26 the new relationship shall be phased-in over a period not to
27 exceed 3 years as approved by the department. The rate filing
28 may also include increases based on overall experience or
29 annual medical trend, or both, which portions shall not be
30 phased-in pursuant to this paragraph.
31
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1 (4) In determining medical trend for application of
2 subparagraph (1)(e)4., the department shall semiannually
3 determine medical trend for each health care market, using
4 reasonable actuarial techniques and standards. The trend must
5 be adopted by the department by rule and determined as
6 follows:
7 (a) Trend must be determined separately for medical
8 expense; preferred provider organization; Medicare supplement;
9 health maintenance organization; and other coverage for
10 individual, small group, and large group, where applicable.
11 (b) The department shall survey insurers and health
12 maintenance organizations currently issuing products and
13 representing at least an 80-percent market share based on
14 premiums earned in the state for the most recent calendar year
15 for each of the categories specified in paragraph (a).
16 (c) Trend must be computed as the average annual
17 medical trend approved for the carriers surveyed, giving
18 appropriate weight to each carrier's statewide market share of
19 earned premiums.
20 (d) The annual trend is the annual change in claims
21 cost per unit of exposure. Trend includes the combined effect
22 of medical provider price changes, changes in utilization, new
23 medical procedures, and technology and cost shifting.
24 Section 4. Subsections (4) and (8) of section
25 627.6487, Florida Statutes, are amended to read:
26 627.6487 Guaranteed availability of individual health
27 insurance coverage to eligible individuals.--
28 (4)(a) The health insurance issuer may elect to limit
29 the coverage offered under subsection (1) if the issuer offers
30 at least two different policy forms of health insurance
31 coverage, both of which:
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1 1. Are designed for, made generally available to,
2 actively marketed to, and enroll both eligible and other
3 individuals by the issuer; and
4 2. Meet the requirement of paragraph (b).
5
6 For purposes of this subsection, policy forms that have
7 different cost-sharing arrangements or different riders are
8 considered to be different policy forms.
9 (b) The requirement of this subsection is met for
10 health insurance coverage policy forms offered by an issuer in
11 the individual market if the issuer offers the basic and
12 standard health benefit plans as established pursuant to s.
13 627.6699(12) or policy forms for individual health insurance
14 coverage with the largest, and next to largest, premium volume
15 of all such policy forms offered by the issuer in this state
16 or applicable marketing or service area, as prescribed in
17 rules adopted by the department, in the individual market in
18 the period involved. To the greatest extent possible, such
19 rules must be consistent with regulations adopted by the
20 United States Department of Health and Human Services.
21 (8) This section does not:
22 (a) Restrict the issuer from applying the same
23 nondiscriminatory underwriting and rating practices that are
24 applied by the issuer to other individuals applying for
25 coverage amount of the premium rates that an issuer may charge
26 an individual for individual health insurance coverage; or
27 (b) Prevent a health insurance issuer that offers
28 individual health insurance coverage from establishing premium
29 discounts or rebates or modifying otherwise applicable
30 copayments or deductibles in return for adherence to programs
31 of health promotion and disease prevention.
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1 Section 5. Subsection (12) of section 627.6482,
2 Florida Statutes, is amended, and subsections (15) and (16)
3 are added to that section, to read:
4 627.6482 Definitions.--As used in ss.
5 627.648-627.6498, the term:
6 (12) "Premium" means the entire cost of an insurance
7 plan, including the administrative fee, the risk assumption
8 charge, and, in the instance of a minimum premium plan or
9 stop-loss coverage, the incurred claims whether or not such
10 claims are paid directly by the insurer. "Premium" shall not
11 include a health maintenance organization's annual earned
12 premium revenue for Medicare and Medicaid contracts for any
13 assessment due for calendar years 1990 and 1991. For
14 assessments due for calendar year 1992 and subsequent years, A
15 health maintenance organization's annual earned premium
16 revenue for Medicare and Medicaid contracts is subject to
17 assessments unless the department determines that the health
18 maintenance organization has made a reasonable effort to amend
19 its Medicare or Medicaid government contract for 1992 and
20 subsequent years to provide reimbursement for any assessment
21 on Medicare or Medicaid premiums paid by the health
22 maintenance organization and the contract does not provide for
23 such reimbursement.
24 (15) "Federal poverty level" means the most current
25 federal poverty guidelines, as established by the federal
26 Department of Health and Human Services and published in the
27 Federal Register, and in effect on the date of the policy and
28 its annual renewal.
29 (16) "Family income" means the adjusted gross income,
30 as defined in s. 62 of the United States Internal Revenue
31 Code, of all members of a household.
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1 Section 6. Section 627.6486, Florida Statutes, is
2 amended to read:
3 627.6486 Eligibility.--
4 (1) Except as provided in subsection (2), any person
5 who is a resident of this state and has been a resident of
6 this state for the previous 6 months is shall be eligible for
7 coverage under the plan, including:
8 (a) The insured's spouse.
9 (b) Any dependent unmarried child of the insured, from
10 the moment of birth. Subject to the provisions of ss. s.
11 627.6041 and 627.6562, such coverage shall terminate at the
12 end of the premium period in which the child marries, ceases
13 to be a dependent of the insured, or attains the age of 19,
14 whichever occurs first. However, if the child is a full-time
15 student at an accredited institution of higher learning, the
16 coverage may continue while the child remains unmarried and a
17 full-time student, but not beyond the premium period in which
18 the child reaches age 23.
19 (c) The former spouse of the insured whose coverage
20 would otherwise terminate because of annulment or dissolution
21 of marriage, if the former spouse is dependent upon the
22 insured for financial support. The former spouse shall have
23 continued coverage and shall not be subject to waiting periods
24 because of the change in policyholder status.
25 (2)(a) The board or administrator shall require
26 verification of residency for the preceding 6 months and shall
27 require any additional information or documentation, or
28 statements under oath, when necessary to determine residency
29 upon initial application and for the entire term of the
30 policy. A person may demonstrate his or her residency by
31 maintaining his or her residence in this state for the
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1 preceding 6 months, purchasing a home that has been occupied
2 by him or her as his or her primary residence for the previous
3 6 months, or having established a domicile in this state
4 pursuant to s. 222.17 for the preceding 6 months.
5 (b) No person who is currently eligible for health
6 care benefits under Florida's Medicaid program is eligible for
7 coverage under the plan unless:
8 1. He or she has an illness or disease which requires
9 supplies or medication which are covered by the association
10 but are not included in the benefits provided under Florida's
11 Medicaid program in any form or manner; and
12 2. He or she is not receiving health care benefits or
13 coverage under Florida's Medicaid program.
14 (c) No person who is covered under the plan and
15 terminates the coverage is again eligible for coverage.
16 (d) No person on whose behalf the plan has paid out
17 the lifetime maximum benefit currently being offered by the
18 association of $500,000 in covered benefits is eligible for
19 coverage under the plan.
20 (e) The coverage of any person who ceases to meet the
21 eligibility requirements of this section may be terminated
22 immediately. If such person again becomes eligible for
23 subsequent coverage under the plan, any previous claims
24 payments shall be applied towards the $500,000 lifetime
25 maximum benefit and any limitation relating to preexisting
26 conditions in effect at the time such person again becomes
27 eligible shall apply to such person. However, no such person
28 may again become eligible for coverage after June 30, 1991.
29 (f) No person is eligible for coverage under the plan
30 unless such person has been rejected by two insurers for
31 coverage substantially similar to the plan coverage and no
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1 insurer has been found through the market assistance plan
2 pursuant to s. 627.6484 that is willing to accept the
3 application. As used in this paragraph, "rejection" includes
4 an offer of coverage with a material underwriting restriction
5 or an offer of coverage at a rate greater than the association
6 plan rate.
7 (g) No person is eligible for coverage under the plan
8 if such person has, or is eligible for, on the date of issue
9 of coverage under the plan, substantially similar coverage
10 under another contract or policy, unless such coverage is
11 provided pursuant to the Consolidated Omnibus Budget
12 Reconciliation Act of 1985, Pub. L. No. 99-272, 100 Stat. 82
13 (1986) (COBRA), as amended, or such coverage is provided
14 pursuant to s. 627.6692 and such coverage is scheduled to end
15 at a time certain and the person meets all other requirements
16 of eligibility. Coverage provided by the association shall be
17 secondary to any coverage provided by an insurer pursuant to
18 COBRA or pursuant to s. 627.6692.
19 (h) A person is ineligible for coverage under the plan
20 if such person is currently eligible for health care benefits
21 under the Medicare program, except for a person who is insured
22 by the Florida Comprehensive Health Association and enrolled
23 under Medicare on July 1, 2001. All eligible persons who are
24 classified as high-risk individuals pursuant to s.
25 627.6498(4)(a)4. shall, upon application or renewal, agree to
26 be placed in a case management system when it is determined by
27 the board and the plan case manager that such system will be
28 cost-effective and provide quality care to the individual.
29 (i) A person is ineligible for coverage under the plan
30 if such person's premiums are paid for or reimbursed under any
31
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1 government-sponsored program or by any government agency or
2 health care provider.
3 (j) An eligible individual, as defined in s. 627.6487,
4 and his or her dependents, as described in subsection (1), are
5 automatically eligible for coverage in the association unless
6 the association has ceased accepting new enrollees under s.
7 627.6488. If the association has ceased accepting new
8 enrollees, the eligible individual is subject to the coverage
9 rights set forth in s. 627.6487.
10 (3) A person's coverage ceases:
11 (a) On the date a person is no longer a resident of
12 this state;
13 (b) On the date a person requests coverage to end;
14 (c) Upon the date of death of the covered person;
15 (d) On the date state law requires cancellation of the
16 policy; or
17 (e) Sixty days after the person receives notice from
18 the association making any inquiry concerning the person's
19 eligibility or place or residence to which the person does not
20 reply.
21 (4) All eligible persons must, upon application or
22 renewal, agree to be placed in a case-management system when
23 the association and case manager find that such system will be
24 cost-effective and provide quality care to the individual.
25 (5) Except for persons who are insured by the
26 association on December 31, 2001, and who renew such coverage,
27 persons may apply for coverage beginning January 1, 2002, and
28 coverage for such persons shall begin on or after April 1,
29 2002, as determined by the board pursuant to s.
30 627.6488(4)(n).
31
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1 Section 7. Subsection (3) of section 627.6487, Florida
2 Statutes, is amended to read:
3 627.6487 Guaranteed availability of individual health
4 insurance coverage to eligible individuals.--
5 (3) For the purposes of this section, the term
6 "eligible individual" means an individual:
7 (a)1. For whom, as of the date on which the individual
8 seeks coverage under this section, the aggregate of the
9 periods of creditable coverage, as defined in s. 627.6561(5)
10 and (6), is 18 or more months; and
11 2.a. Whose most recent prior creditable coverage was
12 under a group health plan, governmental plan, or church plan,
13 or health insurance coverage offered in connection with any
14 such plan; or
15 b. Whose most recent prior creditable coverage was
16 under an individual plan issued in this state by a health
17 insurer or health maintenance organization, which coverage is
18 terminated due to the insurer or health maintenance
19 organization becoming insolvent or discontinuing the offering
20 of all individual coverage in the State of Florida, or due to
21 the insured no longer living in the service area in the State
22 of Florida of the insurer or health maintenance organization
23 that provides coverage through a network plan in the State of
24 Florida;
25 (b) Who is not eligible for coverage under:
26 1. A group health plan, as defined in s. 2791 of the
27 Public Health Service Act;
28 2. A conversion policy or contract issued by an
29 authorized insurer or health maintenance organization under s.
30 627.6675 or s. 641.3921, respectively, offered to an
31
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1 individual who is no longer eligible for coverage under either
2 an insured or self-insured employer plan;
3 3. Part A or part B of Title XVIII of the Social
4 Security Act; or
5 4. A state plan under Title XIX of such act, or any
6 successor program, and does not have other health insurance
7 coverage; or
8 5. The Florida Comprehensive Health Association, if
9 the association is accepting and issuing coverage to new
10 enrollees, provided that the 63-day period specified in s.
11 627.6561(6) shall be tolled from the time the association
12 receives an application from an individual until the
13 association notifies the individual that it is not accepting
14 and issuing coverage to that individual;
15 (c) With respect to whom the most recent coverage
16 within the coverage period described in paragraph (a) was not
17 terminated based on a factor described in s. 627.6571(2)(a) or
18 (b), relating to nonpayment of premiums or fraud, unless such
19 nonpayment of premiums or fraud was due to acts of an employer
20 or person other than the individual;
21 (d) Who, having been offered the option of
22 continuation coverage under a COBRA continuation provision or
23 under s. 627.6692, elected such coverage; and
24 (e) Who, if the individual elected such continuation
25 provision, has exhausted such continuation coverage under such
26 provision or program.
27 Section 8. Section 627.6488, Florida Statutes, is
28 amended to read:
29 627.6488 Florida Comprehensive Health Association.--
30 (1) There is created a nonprofit legal entity to be
31 known as the "Florida Comprehensive Health Association." All
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1 insurers, as a condition of doing business, shall be members
2 of the association.
3 (2)(a) The association shall operate subject to the
4 supervision and approval of a five-member three-member board
5 of directors consisting of the Insurance Commissioner, or his
6 or her designee, who shall serve as chairperson of the board,
7 and four additional members who must be state residents. At
8 least one member must be a representative of an authorized
9 health insurer or health maintenance organization authorized
10 to transact business in this state. The board of directors
11 shall be appointed by the Insurance Commissioner as follows:
12 1. The chair of the board shall be the Insurance
13 Commissioner or his or her designee.
14 2. One representative of policyholders who is not
15 associated with the medical profession, a hospital, or an
16 insurer.
17 3. One representative of insurers.
18
19 The administrator or his or her affiliate shall not be a
20 member of the board. Any board member appointed by the
21 commissioner may be removed and replaced by him or her at any
22 time without cause.
23 (b) All board members, including the chair, shall be
24 appointed to serve for staggered 3-year terms beginning on a
25 date as established in the plan of operation.
26 (c) The board of directors may shall have the power to
27 employ or retain such persons as are necessary to perform the
28 administrative and financial transactions and responsibilities
29 of the association and to perform other necessary and proper
30 functions not prohibited by law. Employees of the association
31 shall be reimbursed as provided in s. 112.061 from moneys of
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1 the association for expenses incurred in carrying out their
2 responsibilities under this act.
3 (d) Board members may be reimbursed as provided in s.
4 112.061 from moneys of the association for actual and
5 necessary expenses incurred by them as members in carrying out
6 their responsibilities under the Florida Comprehensive Health
7 Association Act, but may not otherwise be compensated for
8 their services.
9 (e) There shall be no liability on the part of, and no
10 cause of action of any nature shall arise against, any member
11 insurer, or its agents or employees, agents or employees of
12 the association, members of the board of directors of the
13 association, or the departmental representatives for any act
14 or omission taken by them in the performance of their powers
15 and duties under this act, unless such act or omission by such
16 person is in intentional disregard of the rights of the
17 claimant.
18 (f) Meetings of the board are subject to s. 286.011.
19 (3) The association shall adopt a plan pursuant to
20 this act and submit its articles, bylaws, and operating rules
21 to the department for approval. If the association fails to
22 adopt such plan and suitable articles, bylaws, and operating
23 rules within 180 days after the appointment of the board, the
24 department shall adopt rules to effectuate the provisions of
25 this act; and such rules shall remain in effect until
26 superseded by a plan and articles, bylaws, and operating rules
27 submitted by the association and approved by the department.
28 Such plan shall be reviewed, revised as necessary, and
29 annually submitted to the department for approval.
30 (4) The association shall:
31
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1 (a) Establish administrative and accounting procedures
2 and internal controls for the operation of the association and
3 provide for an annual financial audit of the association by an
4 independent certified public accountant licensed pursuant to
5 chapter 473.
6 (b) Establish procedures under which applicants and
7 participants in the plan may have grievances reviewed by an
8 impartial body and reported to the board. Individuals
9 receiving care through the association under contract from a
10 health maintenance organization must follow the grievance
11 procedures established in ss. 408.7056 and 641.31(5).
12 (c) Select an administrator in accordance with s.
13 627.649.
14 (d) Collect assessments from all insurers to provide
15 for operating losses incurred or estimated to be incurred
16 during the period for which the assessment is made. The level
17 of payments shall be established by the board, as formulated
18 in s. 627.6492(1). Annual assessment of the insurers for each
19 calendar year shall occur as soon thereafter as the operating
20 results of the plan for the calendar year and the earned
21 premiums of insurers being assessed for that year are known.
22 Annual assessments are due and payable within 30 days of
23 receipt of the assessment notice by the insurer.
24 (e) Require that all policy forms issued by the
25 association conform to standard forms developed by the
26 association. The forms shall be approved by the department.
27 (f) Develop and implement a program to publicize the
28 existence of the plan, the eligibility requirements for the
29 plan, and the procedures for enrollment in the plan and to
30 maintain public awareness of the plan.
31
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1 (g) Design and employ cost containment measures and
2 requirements which may include preadmission certification,
3 home health care, hospice care, negotiated purchase of medical
4 and pharmaceutical supplies, and individual case management.
5 (h) Contract with preferred provider organizations and
6 health maintenance organizations giving due consideration to
7 the preferred provider organizations and health maintenance
8 organizations which have contracted with the state group
9 health insurance program pursuant to s. 110.123. If
10 cost-effective and available in the county where the
11 policyholder resides, the board, upon application or renewal
12 of a policy, shall place a high-risk individual, as
13 established under s. 627.6498(4)(a)4., with the plan case
14 manager who shall determine the most cost-effective quality
15 care system or health care provider and shall place the
16 individual in such system or with such health care provider.
17 If cost-effective and available in the county where the
18 policyholder resides, the board, with the consent of the
19 policyholder, may place a low-risk or medium-risk individual,
20 as established under s. 627.6498(4)(a)4., with the plan case
21 manager who may determine the most cost-effective quality care
22 system or health care provider and shall place the individual
23 in such system or with such health care provider. Prior to and
24 during the implementation of case management, the plan case
25 manager shall obtain input from the policyholder, parent, or
26 guardian.
27 (h)(i) Make a report to the Governor, the President of
28 the Senate, the Speaker of the House of Representatives, and
29 the Minority Leaders of the Senate and the House of
30 Representatives not later than March 1 October 1 of each year.
31 The report shall summarize the activities of the plan for the
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1 prior fiscal 12-month period ending July 1 of that year,
2 including then-current data and estimates as to net written
3 and earned premiums, the expense of administration, and the
4 paid and incurred losses for the year. The report shall also
5 include analysis and recommendations for legislative changes
6 regarding utilization review, quality assurance, an evaluation
7 of the administrator of the plan, access to cost-effective
8 health care, and cost containment/case management policy and
9 recommendations concerning the opening of enrollment to new
10 entrants as of July 1, 1992.
11 (i)(j) Make a report to the Governor, the Insurance
12 Commissioner, the President of the Senate, the Speaker of the
13 House of Representatives, and the Minority Leaders of the
14 Senate and House of Representatives, not later than 45 days
15 after the close of each calendar quarter, which includes, for
16 the prior quarter, current data and estimates of net written
17 and earned premiums, the expenses of administration, and the
18 paid and incurred losses. The report shall identify any
19 statutorily mandated program that has not been fully
20 implemented by the board.
21 (j)(k) To facilitate preparation of assessments and
22 for other purposes, the board shall engage an independent
23 certified public account licensed pursuant to chapter 473 to
24 conduct an annual financial audit of the association direct
25 preparation of annual audited financial statements for each
26 calendar year as soon as feasible following the conclusion of
27 that calendar year, and shall, within 30 days after the
28 issuance rendition of such statements, file with the
29 department the annual report containing such information as
30 required by the department to be filed on March 1 of each
31 year.
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1 (k)(l) Employ a plan case manager or managers to
2 supervise and manage the medical care or coordinate the
3 supervision and management of the medical care, with the
4 administrator, of specified individuals. The plan case
5 manager, with the approval of the board, shall have final
6 approval over the case management for any specific individual.
7 If cost-effective and available in the county where the
8 policyholder resides, the association, upon application or
9 renewal of a policy, may place an individual with the plan
10 case manager, who shall determine the most cost-effective
11 quality care system or health care provider and shall place
12 the individual in such system or with such health care
13 provider. Prior to and during the implementation of case
14 management, the plan case manager shall obtain input from the
15 policyholder, parent or guardian, and the health care
16 providers.
17 (l) Administer the association in a fiscally
18 responsible manner that ensures that its expenditures are
19 reasonable in relation to the services provided and that the
20 financial resources of the association are adequate to meet
21 its obligations.
22 (m) At least annually, but no more than quarterly,
23 evaluate or cause to be evaluated the actuarial soundness of
24 the association. The association shall contract with an
25 actuary to evaluate the pool of insureds in the association
26 and monitor the financial condition of the association. The
27 actuary shall determine the feasibility of enrolling new
28 members in the association, which must be based on the
29 projected revenues and expenses of the association.
30 (n) Restrict at any time the number of participants in
31 the association based on a determination by the board that the
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1 revenues will be inadequate to fund new participants. However,
2 any person denied participation solely on the basis of such
3 restriction must be granted priority for participation in the
4 succeeding period in which the association is reopened for
5 participants. Effective April 1, 2002, the association may
6 provide coverage for up to 500 persons for the period ending
7 December 31, 2002. On or after January 1, 2003, the
8 association may enroll an additional 1,500 persons. At no time
9 may the association provide coverage for more than 2,000
10 persons. Except as provided in s. 627.6486(2)(j), applications
11 for enrollment must be processed on a first-in, first-out
12 basis.
13 (o) Establish procedures to maintain separate accounts
14 and recordkeeping for policyholders prior to January 1, 2002,
15 and policyholders issued coverage on and after January 1,
16 2002.
17 (p) Appoint an executive director to serve as the
18 chief administrative and operational officer of the
19 association and operate within the specifications of the plan
20 of operation and perform other duties assigned to him or her
21 by the board.
22 (5) The association may:
23 (a) Exercise powers granted to insurers under the laws
24 of this state.
25 (b) Sue or be sued.
26 (c) In addition to imposing annual assessments under
27 paragraph (4)(d), levy interim assessments against insurers to
28 ensure the financial ability of the plan to cover claims
29 expenses and administrative expenses paid or estimated to be
30 paid in the operation of the plan for a calendar year prior to
31 the association's anticipated receipt of annual assessments
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1 for that calendar year. Any interim assessment shall be due
2 and payable within 30 days after of receipt by an insurer of
3 an interim assessment notice. Interim assessment payments
4 shall be credited against the insurer's annual assessment.
5 Such assessments may be levied only for costs and expenses
6 associated with policyholders insured with the association
7 prior to January 1, 2002.
8 (d) Prepare or contract for a performance audit of the
9 administrator of the association.
10 (e) Appear in its own behalf before boards,
11 commissions, or other governmental agencies.
12 (f) Solicit and accept gifts, grants, loans, and other
13 aid from any source or participate in any way in any
14 government program to carry out the purposes of the Florida
15 Comprehensive Health Association Act.
16 (g) Require and collect administrative fees and
17 charges in connection with any transaction and impose
18 reasonable penalties, including default, for delinquent
19 payments or for entering into the association on a fraudulent
20 basis.
21 (h) Procure insurance against any loss in connection
22 with the property, assets, and activities of the association
23 or the board.
24 (i) Contract for necessary goods and services; employ
25 necessary personnel; and engage the services of private
26 consultants, actuaries, managers, legal counsel, and
27 independent certified public accountants for administrative or
28 technical assistance.
29 (6) The department shall examine and investigate the
30 association in the manner provided in part II of chapter 624.
31
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1 Section 9. Paragraph (b) of subsection (3) of section
2 627.649, Florida Statutes, is amended to read:
3 627.649 Administrator.--
4 (3) The administrator shall:
5 (b) Pay an agent's referral fee as established by the
6 board to each insurance agent who refers an applicant to the
7 plan, if the applicant's application is accepted. The selling
8 or marketing of plans shall not be limited to the
9 administrator or its agents. Any agent must be licensed by the
10 department to sell health insurance in this state. The
11 referral fees shall be paid by the administrator from moneys
12 received as premiums for the plan.
13 Section 10. Section 627.6492, Florida Statutes, is
14 amended to read:
15 627.6492 Participation of insurers.--
16 (1)(a) As a condition of doing business in this state
17 an insurer shall pay an assessment to the board, in the amount
18 prescribed by this section. Subsections (1), (2), and (3)
19 apply only to the costs and expenses associated with
20 policyholders insured with the association prior to January 1,
21 2002, including renewal of coverage for such policyholders
22 after that date. For operating losses incurred in any
23 calendar year on July 1, 1991, and thereafter, each insurer
24 shall annually be assessed by the board in the following
25 calendar year a portion of such incurred operating losses of
26 the plan; such portion shall be determined by multiplying such
27 operating losses by a fraction, the numerator of which equals
28 the insurer's earned premium pertaining to direct writings of
29 health insurance in the state during the calendar year
30 preceding that for which the assessment is levied, and the
31 denominator of which equals the total of all such premiums
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1 earned by participating insurers in the state during such
2 calendar year.
3 (b) For operating losses incurred from July 1, 1991,
4 through December 31, 1991, the total of all assessments upon a
5 participating insurer shall not exceed .375 percent of such
6 insurer's health insurance premiums earned in this state
7 during 1990. For operating losses incurred in 1992 and
8 thereafter, The total of all assessments upon a participating
9 insurer shall not exceed 1 percent of such insurer's health
10 insurance premium earned in this state during the calendar
11 year preceding the year for which the assessments were levied.
12 (c) For operating losses incurred from October 1,
13 1990, through June 30, 1991, the board shall assess each
14 insurer in the amount and manner prescribed by chapter 90-334,
15 Laws of Florida. The maximum assessment against an insurer, as
16 provided in such act, shall apply separately to the claims
17 incurred in 1990 (October 1 through December 31) and the
18 claims incurred in 1991 (January 1 through June 30). For
19 operating losses incurred on January 1, 1991, through June 30,
20 1991, the maximum assessment against an insurer shall be
21 one-half of the amount of the maximum assessment specified for
22 such insurer in former s. 627.6492(1)(b), 1990 Supplement, as
23 amended by chapter 90-334, Laws of Florida.
24 (c)(d) All rights, title, and interest in the
25 assessment funds collected shall vest in this state. However,
26 all of such funds and interest earned shall be used by the
27 association to pay claims and administrative expenses.
28 (2) If assessments and other receipts by the
29 association, board, or administrator exceed the actual losses
30 and administrative expenses of the plan, the excess shall be
31 held at interest and used by the board to offset future
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1 losses. As used in this subsection, the term "future losses"
2 includes reserves for claims incurred but not reported.
3 (3) Each insurer's assessment shall be determined
4 annually by the association based on annual statements and
5 other reports deemed necessary by the association and filed
6 with it by the insurer. Any deficit incurred under the plan
7 shall be recouped by assessments against participating
8 insurers by the board in the manner provided in subsection
9 (1); and the insurers may recover the assessment in the normal
10 course of their respective businesses without time limitation.
11 (4)(a) This subsection applies only to those costs and
12 expenses of the association related to persons whose coverage
13 begins after January 1, 2002. As a condition of doing business
14 in this state, every insurer shall pay an amount determined by
15 the board of up to 25 cents per month for each individual
16 policy or covered group subscriber insured in this state, not
17 including covered dependents, under a health insurance policy,
18 certificate, or other evidence of coverage that is issued for
19 a resident of this state and shall file the information with
20 the association as required pursuant to paragraph (d). Any
21 insurer who neglects, fails, or refuses to collect the fee
22 shall be liable for and pay the fee. The fee shall not be
23 subject to the provisions of s. 624.509.
24 (b) For purposes of this subsection, health insurance
25 does not include accident only, specified disease, individual
26 hospital indemnity, credit, dental-only, vision-only, Medicare
27 supplement, long-term care, nursing home care, home health
28 care, community-based care, or disability income insurance;
29 similar supplemental plans provided under a separate policy,
30 certificate, or contract of insurance, which cannot duplicate
31 coverage under an underlying health plan and are specifically
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1 designed to fill gaps in the underlying health plan,
2 coinsurance, or deductibles; any policy covering
3 medical-payment coverage or personal injury protection
4 coverage in a motor vehicle policy; coverage issued as a
5 supplement to liability insurance; or workers' compensation
6 insurance. For the purposes of this subsection, the term
7 "insurer" as defined in s. 627.6482(7) also includes
8 administrators licensed pursuant to s. 626.8805, and any
9 insurer defined in s. 627.6482(7) from whom any person
10 providing health insurance to Florida residents procures
11 insurance for itself in the insurer, with respect to all or
12 part of the health insurance risk of the person, or provides
13 administrative services only. This definition of insurer
14 excludes self-insured, employee welfare benefit plans that are
15 not regulated by the Florida Insurance Code pursuant to the
16 Employee Retirement Income Security Act of 1974, Pub. L. No.
17 93-406, as amended. However, this definition of insurer
18 includes multiple employer welfare arrangements as provided
19 for in the Employee Retirement Income Security Act of 1974,
20 Pub. L. No. 93-406, as amended. Each covered group subscriber,
21 without regard to covered dependents of the subscriber, shall
22 be counted only once with respect to any assessment. For that
23 purpose, the board shall allow an insurer as defined by this
24 subsection to exclude from its number of covered group
25 subscribers those who have been counted by any primary insurer
26 providing health insurance coverage pursuant to s. 624.603.
27 (c) The calculation shall be determined as of December
28 31 of each year and shall include all policies and covered
29 subscribers, not including covered dependents of the
30 subscribers, insured at any time during the year, calculated
31 for each month of coverage. The payment is payable to the
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1 association no later than April 1 of the subsequent year. The
2 first payment shall be forwarded to the association no later
3 than April 1, 2002, covering the period of October 1, 2001,
4 through December 31, 2001.
5 (d) The payment of such funds shall be submitted to
6 the association accompanied by a form prescribed by the
7 association and adopted in the plan of operation. The form
8 shall identify the number of covered lives for different types
9 of health insurance products and the number of months of
10 coverage.
11 (e) Beginning October 1, 2001, the fee paid to the
12 association may be charged by the health insurer directly to
13 each policyholder, insured member, or subscriber and is not
14 part of the premium subject to the department's review and
15 approval. Nonpayment of the fee shall be considered nonpayment
16 of premium for purposes of s. 627.6043.
17 Section 11. Section 627.6498, Florida Statutes, is
18 amended to read:
19 627.6498 Minimum benefits coverage; exclusions;
20 premiums; deductibles.--
21 (1) COVERAGE OFFERED.--
22 (a) The plan shall offer in an annually a semiannually
23 renewable policy the coverage specified in this section for
24 each eligible person. For applications accepted on or after
25 June 7, 1991, but before July 1, 1991, coverage shall be
26 effective on July 1, 1991, and shall be renewable on January
27 1, 1992, and every 6 months thereafter. Policies in existence
28 on June 7, 1991, shall, upon renewal, be for a term of less
29 than 6 months that terminates and becomes subject to
30 subsequent renewal on the next succeeding January 1 or July 1,
31 whichever is sooner.
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1 (b) If an eligible person is also eligible for
2 Medicare coverage, the plan shall not pay or reimburse any
3 person for expenses paid by Medicare.
4 (c) Any person whose health insurance coverage is
5 involuntarily terminated for any reason other than nonpayment
6 of premium may apply for coverage under the plan. If such
7 coverage is applied for within 60 days after the involuntary
8 termination and if premiums are paid for the entire period of
9 coverage, the effective date of the coverage shall be the date
10 of termination of the previous coverage.
11 (b)(d) The plan shall provide that, upon the death or
12 divorce of the individual in whose name the contract was
13 issued, every other person then covered in the contract may
14 elect within 60 days to continue under the same or a different
15 contract.
16 (c)(e) No coverage provided to a person who is
17 eligible for Medicare benefits shall be issued as a Medicare
18 supplement policy as defined in s. 627.672.
19 (2) BENEFITS.--
20 (a) The plan must offer coverage to every eligible
21 person subject to limitations set by the association. The
22 coverage offered must pay an eligible person's covered
23 expenses, subject to limits on the deductible and coinsurance
24 payments authorized under subsection (4). The lifetime
25 benefits limit for such coverage shall be $500,000. However,
26 policyholders of association policies issued prior to 1992 are
27 entitled to continued coverage at the benefit level
28 established prior to January 1, 2002. Only the premium,
29 deductible, and coinsurance amounts may be modified as
30 determined necessary by the board. The plan shall offer major
31 medical expense coverage similar to that provided by the state
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1 group health insurance program as defined in s. 110.123 except
2 as specified in subsection (3) to every eligible person who is
3 not eligible for Medicare. Major medical expense coverage
4 offered under the plan shall pay an eligible person's covered
5 expenses, subject to limits on the deductible and coinsurance
6 payments authorized under subsection (4), up to a lifetime
7 limit of $500,000 per covered individual. The maximum limit
8 under this paragraph shall not be altered by the board, and no
9 actuarially equivalent benefit may be substituted by the
10 board.
11 (b) The plan shall provide that any policy issued to a
12 person eligible for Medicare shall be separately rated to
13 reflect differences in experience reasonably expected to occur
14 as a result of Medicare payments.
15 (3) COVERED EXPENSES.--
16 (a) The board shall establish the coverage to be
17 issued by the association.
18 (b) If the coverage is being issued to an eligible
19 individual as defined in s. 627.6487, the individual shall be
20 offered, at the option of the individual, the basic and the
21 standard health benefit plan as established in s. 627.6699.
22 The coverage to be issued by the association shall be
23 patterned after the state group health insurance program as
24 defined in s. 110.123, including its benefits, exclusions, and
25 other limitations, except as otherwise provided in this act.
26 The plan may cover the cost of experimental drugs which have
27 been approved for use by the Food and Drug Administration on
28 an experimental basis if the cost is less than the usual and
29 customary treatment. Such coverage shall only apply to those
30 insureds who are in the case management system upon the
31 approval of the insured, the case manager, and the board.
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1 (4) PREMIUMS AND, DEDUCTIBLES, AND COINSURANCE.--
2 (a) The plan shall provide for annual deductibles for
3 major medical expense coverage in the amount of $1,000 or any
4 higher amounts proposed by the board and approved by the
5 department, plus the benefits payable under any other type of
6 insurance coverage or workers' compensation. The schedule of
7 premiums and deductibles shall be established by the board
8 association. With regard to any preferred provider arrangement
9 utilized by the association, the deductibles provided in this
10 paragraph shall be the minimum deductibles applicable to the
11 preferred providers and higher deductibles, as approved by the
12 department, may be applied to providers who are not preferred
13 providers.
14 1. Separate schedules of premium rates based on age
15 may apply for individual risks.
16 2. Rates are subject to approval by the department
17 pursuant to ss. 627.410 and 627.411, except as provided by
18 this section. The board shall revise premium schedules
19 annually, beginning January 2002.
20 3. Standard risk rates for coverages issued by the
21 association shall be established by the department, pursuant
22 to s. 627.6675(3).
23 3.4. The board shall establish three premium schedules
24 based upon an individual's family income:
25 a. Schedule A is applicable to an individual whose
26 family income exceeds the allowable amount for determining
27 eligibility under the Medicaid program, up to and including
28 200 percent of the Federal Poverty Level. Premiums for a
29 person under this schedule may not exceed 150 percent of the
30 standard risk rate.
31
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1 b. Schedule B is applicable to an individual whose
2 family income exceeds 200 percent but is less than 300 percent
3 of the Federal Poverty Level. Premiums for a person under this
4 schedule may not exceed 250 percent of the standard risk rate.
5 c. Schedule C is applicable to an individual whose
6 family income is equal to or greater than 300 percent of the
7 Federal Poverty Level. Premiums for a person under this
8 schedule may not exceed 300 percent of the standard risk rate.
9 establish separate premium schedules for low-risk individuals,
10 medium-risk individuals, and high-risk individuals and shall
11 revise premium schedules annually beginning January 1999.
12 4. The standard risk rate shall be determined by the
13 department pursuant to s. 627.6675(3). The rate shall be
14 adjusted for benefit differences. No rate shall exceed 200
15 percent of the standard risk rate for low-risk individuals,
16 225 percent of the standard risk rate for medium-risk
17 individuals, or 250 percent of the standard risk rate for
18 high-risk individuals. For the purpose of determining what
19 constitutes a low-risk individual, medium-risk individual, or
20 high-risk individual, the board shall consider the anticipated
21 claims payment for individuals based upon an individual's
22 health condition.
23 (b) If the covered costs incurred by the eligible
24 person exceed the deductible for major medical expense
25 coverage selected by the person in a policy year, the plan
26 shall pay in the following manner:
27 1. For individuals placed under case management, the
28 plan shall pay 90 percent of the additional covered costs
29 incurred by the person during the policy year for the first
30 $10,000, after which the plan shall pay 100 percent of the
31 covered costs incurred by the person during the policy year.
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1 2. For individuals utilizing the preferred provider
2 network, the plan shall pay 80 percent of the additional
3 covered costs incurred by the person during the policy year
4 for the first $10,000, after which the plan shall pay 90
5 percent of covered costs incurred by the person during the
6 policy year.
7 3. If the person does not utilize either the case
8 management system or the preferred provider network, the plan
9 shall pay 60 percent of the additional covered costs incurred
10 by the person for the first $10,000, after which the plan
11 shall pay 70 percent of the additional covered costs incurred
12 by the person during the policy year.
13 (5) PREEXISTING CONDITIONS.--An association policy
14 shall may contain provisions under which coverage is excluded
15 during a period of 12 months following the effective date of
16 coverage with respect to a given covered individual for any
17 preexisting condition, as long as:
18 (a) The condition manifested itself within a period of
19 6 months before the effective date of coverage; or
20 (b) Medical advice or treatment was recommended or
21 received within a period of 6 months before the effective date
22 of coverage.
23
24 This subsection does not apply to an eligible individual as
25 defined in s. 627.6487.
26 (6) OTHER SOURCES PRIMARY.--
27 (a) No amounts paid or payable by Medicare or any
28 other governmental program or any other insurance, or
29 self-insurance maintained in lieu of otherwise statutorily
30 required insurance, may be made or recognized as claims under
31 such policy or be recognized as or towards satisfaction of
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1 applicable deductibles or out-of-pocket maximums or to reduce
2 the limits of benefits available.
3 (b) The association has a cause of action against a
4 participant for any benefits paid to the participant which
5 should not have been claimed or recognized as claims because
6 of the provisions of this subsection or because otherwise not
7 covered.
8 (7) NONENTITLEMENT.--The Florida Comprehensive Health
9 Association Act does not provide an individual with an
10 entitlement to health care services or health insurance. A
11 cause of action does not arise against the state, the board,
12 or the association for failure to make health services or
13 health insurance available under the Florida Comprehensive
14 Health Association Act.
15 Section 12. The Legislature finds that the provisions
16 of this act fulfill an important state interest.
17 Section 13. The amendments in this act to section
18 627.6487(3), Florida Statutes, shall not take effect unless
19 the Health Care Financing Administration of the U.S.
20 Department of Health and Human Services approves this act as
21 providing an acceptable alternative mechanism, as provided in
22 the Public Health Service Act.
23 Section 14. Effective January 1, 2002, section
24 627.6484, Florida Statutes, is repealed.
25 Section 15. Subsection (9) is added to section
26 627.6515, Florida Statutes, to read:
27 627.6515 Out-of-state groups.--
28 (9) Notwithstanding any other provision of this
29 section, any group health insurance policy or group
30 certificate for health insurance, as described in s.
31 627.6561(5)(a)2., which is issued to a resident of this state
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1 and requires individual underwriting to determine coverage
2 eligibility for an individual or premium rates to be charged
3 to an individual shall be considered a policy issued on an
4 individual basis and is subject to and must comply with the
5 Florida Insurance Code in the same manner as individual
6 insurance policies issued in this state.
7 Section 16. Paragraphs (i), (m), and (n) of subsection
8 (3), paragraph (b) of subsection (6), paragraphs (a), (d), and
9 (e) of subsection (12), and paragraph (a) of subsection (15)
10 of section 627.6699, Florida Statutes, are amended to read:
11 627.6699 Employee Health Care Access Act.--
12 (3) DEFINITIONS.--As used in this section, the term:
13 (i) "Established geographic area" means the county or
14 counties, or any portion of a county or counties, within which
15 the carrier provides or arranges for health care services to
16 be available to its insureds, members, or subscribers.
17 (m) "Limited benefit policy or contract" means a
18 policy or contract that provides coverage for each person
19 insured under the policy for a specifically named disease or
20 diseases or, a specifically named accident, or a specifically
21 named limited market that fulfills a an experimental or
22 reasonable need by providing more affordable health insurance,
23 such as the small group market.
24 (n) "Modified community rating" means a method used to
25 develop carrier premiums which spreads financial risk across a
26 large population; allows the use of separate rating factors
27 for age, gender, family composition, tobacco usage, and
28 geographic area as determined under paragraph (5)(j); and
29 allows adjustments for: claims experience, health status, or
30 credits based on the duration that the of coverage has been in
31 force as permitted under subparagraph (6)(b)6. subparagraph
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1 (6)(b)5.; and administrative and acquisition expenses as
2 permitted under subparagraph (6)(b)5. A carrier may separate
3 the experience of small employer groups with less than two
4 eligible employees from the experience of small employer
5 groups with two through 50 eligible employees.
6 (6) RESTRICTIONS RELATING TO PREMIUM RATES.--
7 (b) For all small employer health benefit plans that
8 are subject to this section and are issued by small employer
9 carriers on or after January 1, 1994, premium rates for health
10 benefit plans subject to this section are subject to the
11 following:
12 1. Small employer carriers must use a modified
13 community rating methodology in which the premium for each
14 small employer must be determined solely on the basis of the
15 eligible employee's and eligible dependent's gender, age,
16 family composition, tobacco use, or geographic area as
17 determined under paragraph (5)(j) and in which the premium may
18 be adjusted as permitted by subparagraphs 5., and 6., and 7.
19 2. Rating factors related to age, gender, family
20 composition, tobacco use, or geographic location may be
21 developed by each carrier to reflect the carrier's experience.
22 The factors used by carriers are subject to department review
23 and approval.
24 3. If the modified community rate is determined from
25 two experience pools as authorized by paragraph (5)(n), the
26 rate to be charged to small employer groups of less than two
27 eligible employees may not exceed 150 percent of the rate
28 determined for groups of two through 50 eligible employees;
29 however, the carrier may charge excess losses of the
30 less-than-two-eligible-employee experience pool to the
31 experience pool of the two through 50 eligible employees so
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1 that all losses are allocated and the 150-percent rate limit
2 on the less-than-two-eligible-employee experience pool is
3 maintained. Notwithstanding the provisions of s.
4 627.411(1)(e)4. and (3), the rate to be charged to a small
5 employer group of fewer than 2 eligible employees insured as
6 of July 1, 2001, may be up to 125 percent of the rate
7 determined for groups of 2 through 50 eligible employees for
8 the first annual renewal and 150 percent for subsequent annual
9 renewals.
10 4.3. Small employer carriers may not modify the rate
11 for a small employer for 12 months from the initial issue date
12 or renewal date, unless the composition of the group changes
13 or benefits are changed. However, a small employer carrier may
14 modify the rate one time prior to 12 months after the initial
15 issue date for a small employer who enrolls under a previously
16 issued group policy that has a common anniversary date for all
17 employers covered under the policy if:
18 a. The carrier discloses to the employer in a clear
19 and conspicuous manner the date of the first renewal and the
20 fact that the premium may increase on or after that date.
21 b. The insurer demonstrates to the department that
22 efficiencies in administration are achieved and reflected in
23 the rates charged to small employers covered under the policy.
24 5.4. A carrier may issue a group health insurance
25 policy to a small employer health alliance or other group
26 association with rates that reflect a premium credit for
27 expense savings attributable to administrative activities
28 being performed by the alliance or group association if such
29 expense savings are specifically documented in the insurer's
30 rate filing and are approved by the department. Any such
31 credit may not be based on different morbidity assumptions or
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1 on any other factor related to the health status or claims
2 experience of any person covered under the policy. Nothing in
3 this subparagraph exempts an alliance or group association
4 from licensure for any activities that require licensure under
5 the insurance code. A carrier issuing a group health insurance
6 policy to a small employer health alliance or other group
7 association shall allow any properly licensed and appointed
8 agent of that carrier to market and sell the small employer
9 health alliance or other group association policy. Such agent
10 shall be paid the usual and customary commission paid to any
11 agent selling the policy.
12 6.5. Any adjustments in rates for claims experience,
13 health status, or credits based on the duration of coverage
14 may not be charged to individual employees or dependents. For
15 a small employer's policy, such adjustments may not result in
16 a rate for the small employer which deviates more than 15
17 percent from the carrier's approved rate. Any such adjustment
18 must be applied uniformly to the rates charged for all
19 employees and dependents of the small employer. A small
20 employer carrier may make an adjustment to a small employer's
21 renewal premium, not to exceed 10 percent annually, due to the
22 claims experience, health status, or credits based on the
23 duration of coverage of the employees or dependents of the
24 small employer. Semiannually, small group carriers shall
25 report information on forms adopted by rule by the department,
26 to enable the department to monitor the relationship of
27 aggregate adjusted premiums actually charged policyholders by
28 each carrier to the premiums that would have been charged by
29 application of the carrier's approved modified community
30 rates. If the aggregate resulting from the application of such
31 adjustment exceeds the premium that would have been charged by
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1 application of the approved modified community rate by 5
2 percent for the current reporting period, the carrier shall
3 limit the application of such adjustments only to minus
4 adjustments beginning not more than 60 days after the report
5 is sent to the department. For any subsequent reporting
6 period, if the total aggregate adjusted premium actually
7 charged does not exceed the premium that would have been
8 charged by application of the approved modified community rate
9 by 5 percent, the carrier may apply both plus and minus
10 adjustments. A small employer carrier may provide a credit to
11 a small employer's premium based on administrative and
12 acquisition expense differences resulting from the size of the
13 group. Group size administrative and acquisition expense
14 factors may be developed by each carrier to reflect the
15 carrier's experience and are subject to department review and
16 approval.
17 7.6. A small employer carrier rating methodology may
18 include separate rating categories for one dependent child,
19 for two dependent children, and for three or more dependent
20 children for family coverage of employees having a spouse and
21 dependent children or employees having dependent children
22 only. A small employer carrier may have fewer, but not
23 greater, numbers of categories for dependent children than
24 those specified in this subparagraph.
25 8.7. Small employer carriers may not use a composite
26 rating methodology to rate a small employer with fewer than 10
27 employees. For the purposes of this subparagraph, a "composite
28 rating methodology" means a rating methodology that averages
29 the impact of the rating factors for age and gender in the
30 premiums charged to all of the employees of a small employer.
31
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1 (12) STANDARD, BASIC, AND LIMITED HEALTH BENEFIT
2 PLANS.--
3 (a)1. By May 15, 1993, the commissioner shall appoint
4 a health benefit plan committee composed of four
5 representatives of carriers which shall include at least two
6 representatives of HMOs, at least one of which is a staff
7 model HMO, two representatives of agents, four representatives
8 of small employers, and one employee of a small employer. The
9 carrier members shall be selected from a list of individuals
10 recommended by the board. The commissioner may require the
11 board to submit additional recommendations of individuals for
12 appointment.
13 2. The plans shall comply with all of the requirements
14 of this subsection.
15 3. The plans must be filed with and approved by the
16 department prior to issuance or delivery by any small employer
17 carrier.
18 4. Before October 1, 2001, and in every 4th year
19 thereafter, the commissioner shall appoint a new health
20 benefit plan committee in the manner provided in subparagraph
21 1. to determine whether modifications to a plan might be
22 appropriate and to submit recommended modifications to the
23 department for approval. Such determination shall be based
24 upon prevailing industry standards regarding managed care and
25 cost-containment provisions and shall be for the purpose of
26 ensuring that the benefit plans offered to small employers on
27 a guaranteed-issue basis are consistent with the low to
28 mid-priced benefit plans offered in the large-group market.
29 This determination shall be included in a report submitted to
30 the President of the Senate and the Speaker of the House of
31 Representatives annually by October 1. After approval of the
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1 revised health benefit plans, if the department determines
2 that modifications to a plan might be appropriate, the
3 commissioner shall appoint a new health benefit plan committee
4 in the manner provided in subparagraph 1. to submit
5 recommended modifications to the department for approval.
6 (d)1. Upon offering coverage under a standard health
7 benefit plan, a basic health benefit plan, or a limited
8 benefit policy or contract for any small employer, the small
9 employer carrier shall disclose in writing to the employer
10 provide such employer group with a written statement that
11 contains, at a minimum:
12 a. An explanation of those mandated benefits and
13 providers that are not covered by the policy or contract;
14 a.b. An outline of coverage explanation of the managed
15 care and cost control features of the policy or contract,
16 along with all appropriate mailing addresses and telephone
17 numbers to be used by insureds in seeking information or
18 authorization; and
19 b.c. An explanation of The primary and preventive care
20 features of the policy or contract; and.
21
22 Such disclosure statement must be presented in a clear and
23 understandable form and format and must be separate from the
24 policy or certificate or evidence of coverage provided to the
25 employer group.
26 2. Before a small employer carrier issues a standard
27 health benefit plan, a basic health benefit plan, or a limited
28 benefit policy or contract, it must obtain from the
29 prospective policyholder a signed written statement in which
30 the prospective policyholder:
31
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1 a. Certifies as to eligibility for coverage under the
2 standard health benefit plan, basic health benefit plan, or
3 limited benefit policy or contract;
4 c.b. Acknowledges The limited nature of the coverage
5 and the an understanding of the managed care and cost control
6 features of the policy or contract.;
7 c. Acknowledges that if misrepresentations are made
8 regarding eligibility for coverage under a standard health
9 benefit plan, a basic health benefit plan, or a limited
10 benefit policy or contract, the person making such
11 misrepresentations forfeits coverage provided by the policy or
12 contract; and
13 2.d. If a limited plan is requested, the prospective
14 policyholder must acknowledge in writing acknowledges that he
15 or she the prospective policyholder had been offered, at the
16 time of application for the insurance policy or contract, the
17 opportunity to purchase any health benefit plan offered by the
18 carrier and that the prospective policyholder had rejected
19 that coverage.
20
21 A copy of such written statement shall be provided to the
22 prospective policyholder no later than at the time of delivery
23 of the policy or contract, and the original of such written
24 statement shall be retained in the files of the small employer
25 carrier for the period of time that the policy or contract
26 remains in effect or for 5 years, whichever period is longer.
27 3. Any material statement made by an applicant for
28 coverage under a health benefit plan which falsely certifies
29 as to the applicant's eligibility for coverage serves as the
30 basis for terminating coverage under the policy or contract.
31
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1 3.4. Each marketing communication that is intended to
2 be used in the marketing of a health benefit plan in this
3 state must be submitted for review by the department prior to
4 use and must contain the disclosures stated in this
5 subsection.
6 4. The contract, policy, and certificates evidencing
7 coverage under a limited benefit policy or contract and the
8 application for coverage under such plans must state in not
9 less than 10-point type on the first page in contrasting color
10 the following: "The benefits provided by this health plan are
11 limited and may not cover all of your medical needs. You
12 should carefully review the benefits offered under this health
13 plan."
14 (d)(e) A small employer carrier may not use any
15 policy, contract, form, or rate under this section, including
16 applications, enrollment forms, policies, contracts,
17 certificates, evidences of coverage, riders, amendments,
18 endorsements, and disclosure forms, until the insurer has
19 filed it with the department and the department has approved
20 it under ss. 627.31, 627.410, 627.4106, and 627.411.
21 (15) APPLICABILITY OF OTHER STATE LAWS.--
22 (a) Except as expressly provided in this section, a
23 law requiring coverage for a specific health care service or
24 benefit, or a law requiring reimbursement, utilization, or
25 consideration of a specific category of licensed health care
26 practitioner, does not apply to a standard or basic health
27 benefit plan policy or contract or a limited benefit policy or
28 contract offered or delivered to a small employer unless that
29 law is made expressly applicable to such policies or
30 contracts. A law restricting or limiting deductibles,
31 copayments, or annual or lifetime maximum payments does not
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1 apply to a limited benefit policy or contract offered or
2 delivered to a small employer unless such law is made
3 expressly applicable to such policy or contract. A limited
4 benefit policy or contract that is offered or delivered to a
5 small employer may also be offered or delivered to an employer
6 having 51 or more eligible employees.
7 Section 17. Section 627.9408, Florida Statutes, is
8 amended to read:
9 627.9408 Rules.--
10 (1) The department may has authority to adopt rules
11 pursuant to ss. 120.536(1) and 120.54 to administer implement
12 the provisions of this part.
13 (2) The department may adopt by rule the provisions of
14 the Long-Term Care Insurance Model Regulation adopted by the
15 National Association of Insurance Commissioners in the second
16 quarter of the year 2000 which are not in conflict with the
17 Florida Insurance Code.
18 Section 18. Paragraphs (b) and (d) of subsection (3)
19 of section 641.31, Florida Statutes, are amended, and
20 paragraph (f) is added to that subsection, to read:
21 641.31 Health maintenance contracts.--
22 (3)
23 (b) Any change in the rate is subject to paragraph (d)
24 and requires at least 30 days' advance written notice to the
25 subscriber. In the case of a group member, there may be a
26 contractual agreement with the health maintenance organization
27 to have the employer provide the required notice to the
28 individual members of the group. This paragraph does not apply
29 to a group contract covering 51 or more persons unless the
30 rate is for any coverage under which the increase in claim
31
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1 costs over the lifetime of the contract due to advancing age
2 or duration is prefunded in the premium.
3 (d) Any change in rates charged for the contract must
4 be filed with the department not less than 30 days in advance
5 of the effective date. At the expiration of such 30 days, the
6 rate filing shall be deemed approved unless prior to such time
7 the filing has been affirmatively approved or disapproved by
8 order of the department pursuant to s. 627.411. The approval
9 of the filing by the department constitutes a waiver of any
10 unexpired portion of such waiting period. The department may
11 extend by not more than an additional 15 days the period
12 within which it may so affirmatively approve or disapprove any
13 such filing, by giving notice of such extension before
14 expiration of the initial 30-day period. At the expiration of
15 any such period as so extended, and in the absence of such
16 prior affirmative approval or disapproval, any such filing
17 shall be deemed approved.
18 (f) A health maintenance organization with fewer than
19 1,000 covered subscribers under all individual or group
20 contracts, at the time of a rate filing, may file for an
21 annual rate increase limited to annual medical trend, as
22 adopted by the department. The filing is in lieu of the
23 actuarial memorandum otherwise required for the rate filing.
24 The filing must include forms adopted by the department and a
25 certification by an officer of the company that the filing
26 includes all similar forms.
27 Section 19. This act shall take effect October 1,
28 2001.
29
30
31
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1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 CS for SB 1960 & 1760
3
4 The Committee Substitute for the Committee Substitute for
Senate Bills 1960 and 1760 reopens the Florida Comprehensive
5 Health Association for enrollment on January 1, 2002, caps new
enrollment in the association at 500 for calendar year 2002
6 and allows an additional 1,500 members, effective January 1,
2003, and makes changes to procedures, structure and
7 eligibility for the program.
8
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17
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