Senate Bill sb1286c2
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Florida Senate - 2002 CS for CS for SB's 1286, 1134 & 1008
By the Committees on Health, Aging and Long-Term Care; Banking
and Insurance; and Senators King, Peaden and Campbell
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1 A bill to be entitled
2 An act relating to health insurance; providing
3 legislative findings and legislative intent;
4 defining terms; providing for a pilot program
5 for health flex plans for certain uninsured
6 persons; providing criteria; authorizing the
7 Agency for Health Care Administration and the
8 Department of Insurance to adopt rules;
9 exempting approved health flex plans from
10 certain licensing requirements; providing
11 criteria for eligibility to enroll in a health
12 flex plan; requiring health flex plan providers
13 to maintain certain records; providing
14 requirements for denial, nonrenewal, or
15 cancellation of coverage; specifying that
16 coverage under an approved health flex plan is
17 not an entitlement; providing for civil actions
18 against health plan entities by the Agency for
19 Health Care Administration under certain
20 circumstances; amending s. 627.410, F.S.;
21 requiring that certain group certificates for
22 health insurance coverage be subject to the
23 requirements for individual health insurance
24 policies; exempting group health insurance
25 policies insuring groups of a certain size from
26 rate-filing requirements; providing alternative
27 rate-filing requirements for insurers having
28 fewer than a specified number of nationwide
29 policyholders or members; amending s. 627.411,
30 F.S.; revising the grounds for the disapproval
31 of insurance policy forms; providing that a
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1 health insurance policy form may be disapproved
2 if it results in certain rate increases;
3 specifying allowable new business rates and
4 renewal rates if rate increases exceed certain
5 levels; authorizing the Department of Insurance
6 to determine medical trend for purposes of
7 approving rate filings; amending s. 627.6475,
8 F.S.; revising criteria for reinsuring
9 individuals under an individual health
10 reinsurance program; amending s. 627.6515,
11 F.S.; requiring that coverage issued to a state
12 resident under certain group health insurance
13 policies issued outside the state be subject to
14 the requirements for individual health
15 insurance policies; amending s. 627.667, F.S.;
16 deleting an exception to an
17 extension-of-benefits application provision for
18 out-of-state group policies; amending s.
19 627.6692, F.S.; extending a time period for
20 premium payment for continuation of coverage;
21 amending s. 627.6699, F.S.; redefining terms;
22 allowing carriers to separate the experience of
23 small-employer groups having fewer than two
24 employees; authorizing certain small employers
25 to enroll with alternate carriers under certain
26 circumstances; revising certain criteria of the
27 small-employer health reinsurance program;
28 requiring the Insurance Commissioner to appoint
29 a health benefit plan committee to modify the
30 standard, basic, and flexible health benefit
31 plans; revising the disclosure that a carrier
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1 must make to a small employer upon offering
2 certain policies; prohibiting small-employer
3 carriers from using certain policies,
4 contracts, forms, or rates unless filed with
5 and approved by the Department of Insurance
6 pursuant to certain provisions; restricting
7 application of certain laws to flexible benefit
8 policies under certain circumstances; amending
9 s. 627.6425, F.S.; revising provisions
10 permitting an insurer to nonrenew or
11 discontinue coverage; authorizing offering or
12 delivering flexible benefit policies or
13 contracts to certain employers; providing
14 requirements for benefits in flexible benefit
15 policies or contracts for small employers;
16 amending s. 627.911, F.S.; including health
17 maintenance organizations under certain
18 information-reporting requirements; amending s.
19 627.9175, F.S.; revising health insurance
20 reporting requirements for insurers; amending
21 s. 627.9403, F.S.; clarifying application of
22 exceptions to certain long-term-care insurance
23 policy requirements for certain limited-benefit
24 policies; amending s. 627.9408, F.S.;
25 authorizing the department to adopt by rule
26 certain provisions of the Long-Term Care
27 Insurance Model Regulation, as adopted by the
28 National Association of Insurance
29 Commissioners; amending s. 641.31, F.S.;
30 exempting contracts of group health maintenance
31 organizations covering a specified number of
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1 persons from the requirements of filing with
2 the department; specifying the standards for
3 department approval and disapproval of a change
4 in rates by a health maintenance organization;
5 providing alternative rate-filing requirements
6 for organizations having fewer than a specified
7 number of subscribers; amending s. 641.3111,
8 F.S.; revising extension-of-benefits
9 requirements for group health maintenance
10 contracts; providing an effective date.
11
12 Be It Enacted by the Legislature of the State of Florida:
13
14 Section 1. Health flex plans.--
15 (1) INTENT.--The Legislature finds that a significant
16 proportion of the residents of this state are unable to obtain
17 affordable health insurance coverage. Therefore, it is the
18 intent of the Legislature to expand the availability of health
19 care options for low-income uninsured state residents by
20 encouraging health insurers, health maintenance organizations,
21 health-care-provider-sponsored organizations, local
22 governments, health care districts, or other public or private
23 community-based organizations to develop alternative
24 approaches to traditional health insurance which emphasize
25 coverage for basic and preventive health care services. To the
26 maximum extent possible, these options should be coordinated
27 with existing governmental or community-based health services
28 programs in a manner that is consistent with the objectives
29 and requirements of such programs.
30 (2) DEFINITIONS.--As used in this section, the term:
31
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1 (a) "Agency" means the Agency for Health Care
2 Administration.
3 (b) "Department" means the Department of Insurance.
4 (c) "Enrollee" means an individual who has been
5 determined to be eligible for and is receiving health care
6 coverage under a health flex plan approved under this section.
7 (d) "Health care coverage" or "health flex plan
8 coverage" means health care services that are covered as
9 benefits under an approved health flex plan or that are
10 otherwise provided, either directly or through arrangements
11 with other persons, via a health flex plan on a prepaid
12 per-capita basis or on a prepaid aggregate fixed-sum basis.
13 (e) "Health flex plan" means a health plan approved
14 under subsection (3) which guarantees payment for specified
15 health care coverage provided to the enrollee.
16 (f) "Health flex plan entity" means a health insurer,
17 health maintenance organization, health care
18 provider-sponsored organization, local government, health care
19 district, or other public or private community-based
20 organization that develops and implements an approved health
21 flex plan and is responsible for administering the health flex
22 plan and paying all claims for health flex plan coverage by
23 enrollees of the health flex plan.
24 (3) PILOT PROGRAM.--The agency and the department
25 shall each approve or disapprove health flex plans that
26 provide health care coverage for eligible participants who
27 reside in the three areas of the state that have the highest
28 number of uninsured persons, as identified in the Florida
29 Health Insurance Study conducted by the agency and in Indian
30 River County. A health flex plan may limit or exclude benefits
31 otherwise required by law for insurers offering coverage in
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1 this state, may cap the total amount of claims paid per year
2 per enrollee, may limit the number of enrollees, or may take
3 any combination of those actions.
4 (a) The agency shall develop guidelines for the review
5 of applications for health flex plans and shall disapprove or
6 withdraw approval of plans that do not meet or no longer meet
7 minimum standards for quality of care and access to care.
8 (b) The department shall develop guidelines for the
9 review of health flex plan applications and shall disapprove
10 or shall withdraw approval of plans that:
11 1. Contain any ambiguous, inconsistent, or misleading
12 provisions or any exceptions or conditions that deceptively
13 affect or limit the benefits purported to be assumed in the
14 general coverage provided by the health flex plan;
15 2. Provide benefits that are unreasonable in relation
16 to the premium charged or contain provisions that are unfair
17 or inequitable or contrary to the public policy of this state,
18 that encourage misrepresentation, or that result in unfair
19 discrimination in sales practices; or
20 3. Cannot demonstrate that the health flex plan is
21 financially sound and that the applicant is able to underwrite
22 or finance the health care coverage provided.
23 (c) The agency and the department may adopt rules as
24 needed to administer this section.
25 (4) LICENSE NOT REQUIRED.--Neither the licensing
26 requirements of the Florida Insurance Code nor chapter 641,
27 Florida Statutes, relating to health maintenance
28 organizations, is applicable to a health flex plan approved
29 under this section, unless expressly made applicable. However,
30 for the purpose of prohibiting unfair trade practices, health
31 flex plans are considered to be insurance subject to the
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1 applicable provisions of part IX of chapter 626, Florida
2 Statutes, except as otherwise provided in this section.
3 (5) ELIGIBILITY.--Eligibility to enroll in an approved
4 health flex plan is limited to residents of this state who:
5 (a) Are 64 years of age or younger;
6 (b) Have a family income equal to or less than 200
7 percent of the federal poverty level;
8 (c) Are not covered by a private insurance policy and
9 are not eligible for coverage through a public health
10 insurance program, such as Medicare or Medicaid, or another
11 public health care program, such as KidCare, and have not been
12 covered at any time during the past 6 months; and
13 (d) Have applied for health care coverage through an
14 approved health flex plan and have agreed to make any payments
15 required for participation, including periodic payments or
16 payments due at the time health care services are provided.
17 (6) RECORDS.--Each health flex plan shall maintain
18 enrollment data and reasonable records of its losses,
19 expenses, and claims experience and shall make those records
20 reasonably available to enable the department to monitor and
21 determine the financial viability of the health flex plan, as
22 necessary. Provider networks and total enrollment by area
23 shall be reported to the agency biannually to enable the
24 agency to monitor access to care.
25 (7) NOTICE.--The denial of coverage by a health flex
26 plan, or the nonrenewal or cancellation of coverage, must be
27 accompanied by the specific reasons for denial, nonrenewal, or
28 cancellation. Notice of nonrenewal or cancellation must be
29 provided at least 45 days in advance of the nonrenewal or
30 cancellation, except that 10 days' written notice must be
31 given for cancellation due to nonpayment of premiums. If the
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1 health flex plan fails to give the required notice, the health
2 flex plan coverage must remain in effect until notice is
3 appropriately given.
4 (8) NONENTITLEMENT.--Coverage under an approved health
5 flex plan is not an entitlement, and a cause of action does
6 not arise against the state, a local government entity, or any
7 other political subdivision of this state, or against the
8 agency, for failure to make coverage available to eligible
9 persons under this section.
10 (9) PROGRAM EVALUATION.--The agency and the department
11 shall evaluate the pilot program and its effect on the
12 entities that seek approval as health flex plans, on the
13 number of enrollees, and on the scope of the health care
14 coverage offered under a health flex plan; shall provide an
15 assessment of the health flex plans and their potential
16 applicability in other settings; and shall, by January 1,
17 2004, jointly submit a report to the Governor, the President
18 of the Senate, and the Speaker of the House of
19 Representatives.
20 (10) EXPIRATION.--This section expires July 1, 2004.
21 Section 2. Subsection (1) and paragraph (a) of
22 subsection (6) of section 627.410, Florida Statutes, are
23 amended, paragraphs (f) and (g) are added to subsection (6) of
24 that section, and paragraph (f) is added to subsection (7) of
25 that section, to read:
26 627.410 Filing, approval of forms.--
27 (1) No basic insurance policy or annuity contract
28 form, or application form where written application is
29 required and is to be made a part of the policy or contract,
30 or group certificates issued under a master contract delivered
31 in this state, or printed rider or endorsement form or form of
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1 renewal certificate, shall be delivered or issued for delivery
2 in this state, unless the form has been filed with the
3 department at its offices in Tallahassee by or in behalf of
4 the insurer which proposes to use such form and has been
5 approved by the department. This provision does not apply to
6 surety bonds or to policies, riders, endorsements, or forms of
7 unique character which are designed for and used with relation
8 to insurance upon a particular subject (other than as to
9 health insurance), or which relate to the manner of
10 distribution of benefits or to the reservation of rights and
11 benefits under life or health insurance policies and are used
12 at the request of the individual policyholder, contract
13 holder, or certificateholder. As to group insurance policies
14 effectuated and delivered outside this state but covering
15 persons resident in this state, the group certificates to be
16 delivered or issued for delivery in this state shall be filed
17 with the department for information purposes only, except that
18 group certificates for health insurance coverage, as described
19 in s. 627.6561(5)(a)2., which require individual underwriting
20 to determine coverage eligibility for an individual or premium
21 rates to be charged to an individual, shall be considered
22 policies issued on an individual basis and are subject to and
23 must comply with the Florida Insurance Code in the same manner
24 as individual health insurance policies issued in this state.
25 (6)(a) An insurer shall not deliver or issue for
26 delivery or renew in this state any health insurance policy
27 form until it has filed with the department a copy of every
28 applicable rating manual, rating schedule, change in rating
29 manual, and change in rating schedule; if rating manuals and
30 rating schedules are not applicable, the insurer must file
31 with the department applicable premium rates and any change in
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1 applicable premium rates. This paragraph does not apply to
2 group health insurance policies, effectuated and delivered in
3 this state, insuring groups of 51 or more persons, except for
4 Medicare supplement insurance, long-term care insurance, and
5 any coverage under which the increase in claim costs over the
6 lifetime of the contract due to advancing age or duration is
7 prefunded in the premium.
8 (f) Notwithstanding the requirements of subsection
9 (2), an insurer that files changes in rates, rating manuals,
10 or rating schedules with the department for individual health
11 policies as described in s. 627.6561(5)(a)2., but excluding
12 Medicare supplement policies, according to this paragraph may
13 begin providing required notice to policyholders and charging
14 corresponding adjusted rates in accordance with s. 627.6043,
15 upon filing, if the insurer certifies that it has met the
16 criteria of subparagraphs 1., 2., and 3. Filings submitted
17 under this paragraph must contain the same information and
18 demonstrations and must meet the same requirements as rate
19 filings submitted for approval under this section, including
20 the requirements of s. 627.411, except as indicated in this
21 paragraph.
22 1. The insurer must have complied with annual
23 rate-filing requirements then in effect pursuant to subsection
24 (7) since October 1, 2002, or for the previous 2 years,
25 whichever is less, and must have filed and implemented
26 actuarially justifiable rate adjustments at least annually
27 during this period. This subparagraph does not prevent an
28 insurer from filing rate adjustments more often than annually.
29 2. The insurer must have pooled experience for
30 applicable individual health policy forms in accordance with
31 the requirements of subparagraph (6)(e)3. Rate changes used on
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1 a form must not vary by the experience of that form or the
2 health status of covered individuals on that form but must be
3 based on the experience of all forms, including rating
4 characteristics as defined in this paragraph.
5 3. Rates for the policy form are anticipated to meet a
6 minimum loss ratio of 65 percent over the expected life of the
7 form.
8
9 Rates for all individual health policy forms issued on or
10 after October 1, 2002, must be based upon the same factors for
11 each rating characteristic. As used in this paragraph, the
12 term "rating characteristics" means demographic
13 characteristics of individuals, including, but not limited to,
14 geographic area factors, benefit design, smoking status, and
15 health status at issue.
16 (g) After filing a change of rates for an individual
17 health policy under paragraph (f), an insurer may be required
18 to furnish additional information to demonstrate compliance
19 with this section and s. 627.411. If the department finds that
20 the adjusted rates are not reasonable in relation to premiums
21 charged under the standards of this section and s. 627.411,
22 the department may order appropriate corrective action.
23 (7)
24 (f) Insurers with fewer than 1,000 nationwide
25 policyholders or insured group members or subscribers covered
26 under any form or pooled group of forms with health insurance
27 coverage, as described in s. 627.6561(5)(a)2., excluding
28 Medicare supplement insurance coverage under part VIII, at the
29 time of a rate filing made under subparagraph (b)1., may file
30 for an annual rate increase limited to medical trend as
31 adopted by the department under s. 627.411(4). The filing is
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1 in lieu of the actuarial memorandum required for a rate filing
2 prescribed by paragraph (b). The filing must include forms
3 adopted by the department and a certification by an officer of
4 the company that the filing includes all similar forms.
5 Section 3. Paragraph (e) of subsection (1) of section
6 627.411, Florida Statutes, is amended, and subsections (3),
7 (4), and (5) are added to that section, to read:
8 627.411 Grounds for disapproval.--
9 (1) The department shall disapprove any form filed
10 under s. 627.410, or withdraw any previous approval thereof,
11 only if the form:
12 (e) Is for health insurance, and:
13 1. Provides benefits that which are unreasonable in
14 relation to the premium charged based on the original filed
15 and approved loss ratio for the form and rules adopted by the
16 department under s. 627.410(6)(b);,
17 2. Contains provisions that which are unfair or
18 inequitable or contrary to the public policy of this state or
19 that which encourage misrepresentation;, or
20 3. Contains provisions that which apply rating
21 practices that which result in premium escalations that are
22 not viable for the policyholder market or result in unfair
23 discrimination under s. 626.9541(1)(g)2.; or in sales
24 practices.
25 4. Results in actuarially justified annual rate
26 increases:
27 a. Which includes a reduction by the insurer of its
28 loss ratio that affects the rate by more than the greater of
29 50 percent of trend or 5 percent. At its option, the insurer
30 may file for approval of the actuarially justified rate
31 schedule for new insureds and a rate increase for existing
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1 insureds where the increase due to the loss ratio reduction is
2 limited to the greater of 50 percent of medical trend or 5
3 percent. Future annual rate increases for existing insureds
4 must be limited to the greater of 150 percent of the rate
5 increase approved for new insureds or 10 percent until the two
6 rate schedules converge;
7 b. In excess of the greater of 150 percent of annual
8 medical trend or 10 percent and the company did not comply
9 with the annual filing requirements of s. 627.410(7) or
10 department rule for health maintenance organizations pursuant
11 to s. 641.31. At its option, the insurer may file for approval
12 of an actuarially justified new business rate schedule for new
13 insureds and a rate increase for existing insureds which is
14 equal to the rate increase otherwise allowed by this
15 sub-subparagraph. Future annual rate increases for existing
16 insureds are limited to the greater of 150 percent of the rate
17 increase approved for new insureds or 10 percent until the two
18 rate schedules converge; or
19 c. In excess of the greater of 150 percent of annual
20 medical trend or 10 percent on a form or block of pooled forms
21 in which no form is currently available for sale. This
22 sub-subparagraph does not apply to prestandardized Medicare
23 supplement forms.
24 (3) If a health insurance rate filing changes the
25 established rate relationships between insureds, the aggregate
26 effect of such a change must be revenue-neutral. The change to
27 the new relationship must be phased-in over a period approved
28 by the department. The department may not require the phase-in
29 period to exceed 3 years in duration. The rate filing may also
30 include increases based on overall experience or annual
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1 medical trend, or both, which portions are not to be phased-in
2 pursuant to this subsection.
3 (4) Individual health insurance policies that are
4 subject to renewability requirements of s. 627.6425 are
5 guaranteed renewable for purposes of establishing loss ratio
6 standards and must comply with the same loss ratio standards
7 as other guaranteed renewable forms.
8 (5) In determining medical trend for application of
9 subparagraph (1)(e)4., the department shall semiannually
10 determine medical trend for each health care market, using
11 reasonable actuarial techniques and standards. The trend must
12 be adopted by the department by rule and determined as
13 follows:
14 (a) Trend must be determined separately for medical
15 expense, preferred provider organization, Medicare supplement,
16 health maintenance organization, and other coverage for
17 individual, small group, and large group, where applicable.
18 (b) The department shall survey insurers and health
19 maintenance organizations currently issuing products and
20 representing at least an 80-percent market share based on
21 premiums earned in the state for the most recent calendar year
22 for each of the categories specified in paragraph (a).
23 (c) Trend must be computed as the average annual
24 medical trend approved for the carriers surveyed, giving
25 appropriate weight to each carrier's statewide market share of
26 earned premiums.
27 (d) The annual trend is the annual change in claims
28 cost per unit of exposure. Trend includes the combined effect
29 of medical provider price changes, changes in utilization, new
30 medical procedures, and technology and cost shifting.
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1 Section 4. Paragraphs (b), (c), and (e) of subsection
2 (7) of section 627.6475, Florida Statutes, are amended to
3 read:
4 627.6475 Individual reinsurance pool.--
5 (7) INDIVIDUAL HEALTH REINSURANCE PROGRAM.--
6 (b) A reinsuring carrier may reinsure with the program
7 coverage of an eligible individual, subject to each of the
8 following provisions:
9 1. A reinsuring carrier may reinsure an eligible
10 individual within 90 60 days after commencement of the
11 coverage of the eligible individual.
12 2. The program may not reimburse a participating
13 carrier with respect to the claims of a reinsured eligible
14 individual until the carrier has paid incurred claims of an
15 amount equal to the participating carrier's selected
16 deductible level, as established by the board, at least $5,000
17 in a calendar year for benefits covered by the program. In
18 addition, the reinsuring carrier is responsible for 10 percent
19 of the next $50,000 and 5 percent of the next $100,000 of
20 incurred claims during a calendar year, and the program shall
21 reinsure the remainder.
22 3. The board shall annually adjust the initial level
23 of claims and the maximum limit to be retained by the carrier
24 to reflect increases in costs and utilization within the
25 standard market for health benefit plans within the state. The
26 adjustment may not be less than the annual change in the
27 medical component of the "Commerce Price Index for All Urban
28 Consumers" of the Bureau of Labor Statistics of the United
29 States Department of Labor, unless the board proposes and the
30 department approves a lower adjustment factor.
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1 4. A reinsuring carrier may terminate reinsurance for
2 all reinsured eligible individuals on any plan anniversary.
3 5. The premium rate charged for reinsurance by the
4 program to a health maintenance organization that is approved
5 by the Secretary of Health and Human Services as a federally
6 qualified health maintenance organization pursuant to 42
7 U.S.C. s. 300e(c)(2)(A) and that, as such, is subject to
8 requirements that limit the amount of risk that may be ceded
9 to the program, which requirements are more restrictive than
10 subparagraph 2., shall be reduced by an amount equal to that
11 portion of the risk, if any, which exceeds the amount set
12 forth in subparagraph 2., which may not be ceded to the
13 program.
14 6. The board may consider adjustments to the premium
15 rates charged for reinsurance by the program or carriers that
16 use effective cost-containment measures, including high-cost
17 case management, as defined by the board.
18 7. A reinsuring carrier shall apply its
19 case-management and claims-handling techniques, including, but
20 not limited to, utilization review, individual case
21 management, preferred provider provisions, other managed-care
22 provisions, or methods of operation consistently with both
23 reinsured business and nonreinsured business.
24 (c)1. The board, as part of the plan of operation,
25 shall establish a methodology for determining premium rates to
26 be charged by the program for reinsuring eligible individuals
27 pursuant to this section. The methodology must include a
28 system for classifying individuals which reflects the types of
29 case characteristics commonly used by carriers in this state.
30 The methodology must provide for the development of basic
31 reinsurance premium rates, which shall be multiplied by the
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1 factors set for them in this paragraph to determine the
2 premium rates for the program. The basic reinsurance premium
3 rates shall be established by the board, subject to the
4 approval of the department, and shall be set at levels that
5 reasonably approximate gross premiums charged to eligible
6 individuals for individual health insurance by health
7 insurance issuers. The premium rates set by the board may vary
8 by geographical area, as determined under this section, to
9 reflect differences in cost. An eligible individual may be
10 reinsured for a rate that is five times the rate established
11 by the board.
12 2. The board shall periodically review the methodology
13 established, including the system of classification and any
14 rating factors, to ensure that it reasonably reflects the
15 claims experience of the program. The board may propose
16 changes to the rates that are subject to the approval of the
17 department.
18 (e)1. Before September March 1 of each calendar year,
19 the board shall determine and report to the department the
20 program net loss in the individual account for the previous
21 year, including administrative expenses for that year and the
22 incurred losses for that year, taking into account investment
23 income and other appropriate gains and losses.
24 2. Any net loss in the individual account for the year
25 shall be recouped by assessing the carriers as follows:
26 a. The operating losses of the program shall be
27 assessed in the following order subject to the specified
28 limitations. The first tier of assessments shall be made
29 against reinsuring carriers in an amount that may not exceed 5
30 percent of each reinsuring carrier's premiums for individual
31 health insurance. If such assessments have been collected and
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1 additional moneys are needed, the board shall make a second
2 tier of assessments in an amount that may not exceed 0.5
3 percent of each carrier's health benefit plan premiums.
4 b. Except as provided in paragraph (f), risk-assuming
5 carriers are exempt from all assessments authorized pursuant
6 to this section. The amount paid by a reinsuring carrier for
7 the first tier of assessments shall be credited against any
8 additional assessments made.
9 c. The board shall equitably assess reinsuring
10 carriers for operating losses of the individual account based
11 on market share. The board shall annually assess each carrier
12 a portion of the operating losses of the individual account.
13 The first tier of assessments shall be determined by
14 multiplying the operating losses by a fraction, the numerator
15 of which equals the reinsuring carrier's earned premium
16 pertaining to direct writings of individual health insurance
17 in the state during the calendar year for which the assessment
18 is levied, and the denominator of which equals the total of
19 all such premiums earned by reinsuring carriers in the state
20 during that calendar year. The second tier of assessments
21 shall be based on the premiums that all carriers, except
22 risk-assuming carriers, earned on all health benefit plans
23 written in this state. The board may levy interim assessments
24 against reinsuring carriers to ensure the financial ability of
25 the plan to cover claims expenses and administrative expenses
26 paid or estimated to be paid in the operation of the plan for
27 the calendar year prior to the association's anticipated
28 receipt of annual assessments for that calendar year. Any
29 interim assessment is due and payable within 30 days after
30 receipt by a carrier of the interim assessment notice. Interim
31 assessment payments shall be credited against the carrier's
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1 annual assessment. Health benefit plan premiums and benefits
2 paid by a carrier that are less than an amount determined by
3 the board to justify the cost of collection may not be
4 considered for purposes of determining assessments.
5 d. Subject to the approval of the department, the
6 board shall adjust the assessment formula for reinsuring
7 carriers that are approved as federally qualified health
8 maintenance organizations by the Secretary of Health and Human
9 Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,
10 if any, that restrictions are placed on them which are not
11 imposed on other carriers.
12 3. Before September March 1 of each year, the board
13 shall determine and file with the department an estimate of
14 the assessments needed to fund the losses incurred by the
15 program in the individual account for the previous calendar
16 year.
17 4. If the board determines that the assessments needed
18 to fund the losses incurred by the program in the individual
19 account for the previous calendar year will exceed the amount
20 specified in subparagraph 2., the board shall evaluate the
21 operation of the program and report its findings and
22 recommendations to the department in the format established in
23 s. 627.6699(11) for the comparable report for the small
24 employer reinsurance program.
25 Section 5. 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 is 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 6. Subsection (6) of section 627.667, Florida
8 Statutes, is amended to read:
9 627.667 Extension of benefits.--
10 (6) This section also applies to holders of group
11 certificates which are renewed, delivered, or issued for
12 delivery to residents of this state under group policies
13 effectuated or delivered outside this state, unless a
14 succeeding carrier under a group policy has agreed to assume
15 liability for the benefits.
16 Section 7. Paragraph (e) of subsection (5) of section
17 627.6692, Florida Statutes, as amended by section 1 of chapter
18 2001-353, Laws of Florida, is amended to read:
19 627.6692 Florida Health Insurance Coverage
20 Continuation Act.--
21 (5) CONTINUATION OF COVERAGE UNDER GROUP HEALTH
22 PLANS.--
23 (e)1. A covered employee or other qualified
24 beneficiary who wishes continuation of coverage must pay the
25 initial premium and elect such continuation in writing to the
26 insurance carrier issuing the employer's group health plan
27 within 63 30 days after receiving notice from the insurance
28 carrier under paragraph (d). Subsequent premiums are due by
29 the grace period expiration date. The insurance carrier or
30 the insurance carrier's designee shall process all elections
31 promptly and provide coverage retroactively to the date
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1 coverage would otherwise have terminated. The premium due
2 shall be for the period beginning on the date coverage would
3 have otherwise terminated due to the qualifying event. The
4 first premium payment must include the coverage paid to the
5 end of the month in which the first payment is made. After
6 the election, the insurance carrier must bill the qualified
7 beneficiary for premiums once each month, with a due date on
8 the first of the month of coverage and allowing a 30-day grace
9 period for payment.
10 2. Except as otherwise specified in an election, any
11 election by a qualified beneficiary shall be deemed to include
12 an election of continuation of coverage on behalf of any other
13 qualified beneficiary residing in the same household who would
14 lose coverage under the group health plan by reason of a
15 qualifying event. This subparagraph does not preclude a
16 qualified beneficiary from electing continuation of coverage
17 on behalf of any other qualified beneficiary.
18 Section 8. Paragraphs (i), (m), and (n) of subsection
19 (3), paragraph (c) of subsection (5), paragraph (b) of
20 subsection (6), paragraphs (f), (g), (h), and (j) of
21 subsection (11), paragraphs (a), (c), (d), and (e) of
22 subsection (12), and subsection (15) of section 627.6699,
23 Florida Statutes, are amended to read:
24 627.6699 Employee Health Care Access Act.--
25 (3) DEFINITIONS.--As used in this section, the term:
26 (i) "Established geographic area" means the county or
27 counties, or any portion of a county or counties, within which
28 the carrier provides or arranges for health care services to
29 be available to its insureds, members, or subscribers.
30 (m) "Flexible Limited benefit policy or contract"
31 means a policy or contract that provides coverage for each
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1 person insured under the policy and for a specifically named
2 disease or diseases, a specifically named accident, or a
3 specifically named limited market that fulfills a an
4 experimental or reasonable need by providing more affordable
5 health insurance to a small employer or a small employer
6 health alliance under s. 627.654, such as the small group
7 market.
8 (n) "Modified community rating" means a method used to
9 develop carrier premiums which spreads financial risk across a
10 large population; allows the use of separate rating factors
11 for age, gender, family composition, tobacco usage, and
12 geographic area as determined under paragraph (5)(j); and
13 allows adjustments for: claims experience, health status, or
14 duration of coverage as permitted under subparagraph (6)(b)5.;
15 and administrative and acquisition expenses as permitted under
16 subparagraph (6)(b)5.
17 (5) AVAILABILITY OF COVERAGE.--
18 (c) Every small employer carrier must, as a condition
19 of transacting business in this state:
20 1. Beginning July 1, 2000, offer and issue all small
21 employer health benefit plans on a guaranteed-issue basis to
22 every eligible small employer, with 2 to 50 eligible
23 employees, that elects to be covered under such plan, agrees
24 to make the required premium payments, and satisfies the other
25 provisions of the plan. A rider for additional or increased
26 benefits may be medically underwritten and may only be added
27 to the standard health benefit plan. The increased rate
28 charged for the additional or increased benefit must be rated
29 in accordance with this section.
30 2. Beginning July 1, 2000, and until July 31, 2001,
31 offer and issue basic and standard small employer health
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1 benefit plans on a guaranteed-issue basis to every eligible
2 small employer which is eligible for guaranteed renewal, has
3 less than two eligible employees, is not formed primarily for
4 the purpose of buying health insurance, elects to be covered
5 under such plan, agrees to make the required premium payments,
6 and satisfies the other provisions of the plan. A rider for
7 additional or increased benefits may be medically underwritten
8 and may be added only to the standard benefit plan. The
9 increased rate charged for the additional or increased benefit
10 must be rated in accordance with this section. For purposes of
11 this subparagraph, a person, his or her spouse, and his or her
12 dependent children shall constitute a single eligible employee
13 if that person and spouse are employed by the same small
14 employer and either one has a normal work week of less than 25
15 hours.
16 3.a. Beginning August 1, 2001, offer and issue basic
17 and standard small employer health benefit plans on a
18 guaranteed-issue basis, during a 31-day open enrollment period
19 of August 1 through August 31 of each year, to every eligible
20 small employer, with fewer than two eligible employees, which
21 small employer is not formed primarily for the purpose of
22 buying health insurance and which elects to be covered under
23 such plan, agrees to make the required premium payments, and
24 satisfies the other provisions of the plan. Coverage provided
25 under this subparagraph shall begin on October 1 of the same
26 year as the date of enrollment, unless the small employer
27 carrier and the small employer agree to a different date. A
28 rider for additional or increased benefits may be medically
29 underwritten and may only be added to the standard health
30 benefit plan. The increased rate charged for the additional
31 or increased benefit must be rated in accordance with this
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1 section. For purposes of this subparagraph, a person, his or
2 her spouse, and his or her dependent children constitute a
3 single eligible employee if that person and spouse are
4 employed by the same small employer and either that person or
5 his or her spouse has a normal work week of less than 25
6 hours.
7 b. Notwithstanding the restrictions set forth in
8 sub-subparagraph a., when a small employer group is losing
9 coverage because a carrier is exercising the provisions of s.
10 627.6571(3)(b) or s. 641.31074(3)(b), the eligible small
11 employer, as defined in sub-subparagraph a., is entitled to
12 enroll with another carrier offering small employer coverage
13 within 63 days after the notice of termination or the
14 termination date of the prior coverage, whichever is later.
15 Coverage provided under this sub-subparagraph begins
16 immediately upon enrollment, unless the small employer carrier
17 and the small employer agree to a different date.
18 4. This paragraph does not limit a carrier's ability
19 to offer other health benefit plans to small employers if the
20 standard and basic health benefit plans are offered and
21 rejected.
22 (6) RESTRICTIONS RELATING TO PREMIUM RATES.--
23 (b) For all small employer health benefit plans that
24 are subject to this section and are issued by small employer
25 carriers on or after January 1, 1994, premium rates for health
26 benefit plans subject to this section are subject to the
27 following:
28 1. Small employer carriers must use a modified
29 community rating methodology in which the premium for each
30 small employer must be determined solely on the basis of the
31 eligible employee's and eligible dependent's gender, age,
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1 family composition, tobacco use, or geographic area as
2 determined under paragraph (5)(j) and in which the premium may
3 be adjusted as permitted by subparagraphs 5., and 6., and 7.
4 2. Rating factors related to age, gender, family
5 composition, tobacco use, or geographic location may be
6 developed by each carrier to reflect the carrier's experience.
7 The factors used by carriers are subject to department review
8 and approval.
9 3. Small employer carriers may not modify the rate for
10 a small employer for 12 months from the initial issue date or
11 renewal date, unless the composition of the group changes or
12 benefits are changed. However, a small employer carrier may
13 modify the rate one time prior to 12 months after the initial
14 issue date for a small employer who enrolls under a previously
15 issued group policy that has a common anniversary date for all
16 employers covered under the policy if:
17 a. The carrier discloses to the employer in a clear
18 and conspicuous manner the date of the first renewal and the
19 fact that the premium may increase on or after that date.
20 b. The insurer demonstrates to the department that
21 efficiencies in administration are achieved and reflected in
22 the rates charged to small employers covered under the policy.
23 4. A carrier may issue a group health insurance policy
24 to a small employer health alliance or other group association
25 with rates that reflect a premium credit for expense savings
26 attributable to administrative activities being performed by
27 the alliance or group association if such expense savings are
28 specifically documented in the insurer's rate filing and are
29 approved by the department. Any such credit may not be based
30 on different morbidity assumptions or on any other factor
31 related to the health status or claims experience of any
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1 person covered under the policy. Nothing in this subparagraph
2 exempts an alliance or group association from licensure for
3 any activities that require licensure under the insurance
4 code. A carrier issuing a group health insurance policy to a
5 small employer health alliance or other group association
6 shall allow any properly licensed and appointed agent of that
7 carrier to market and sell the small employer health alliance
8 or other group association policy. Such agent shall be paid
9 the usual and customary commission paid to any agent selling
10 the policy.
11 5. Any adjustments in rates for claims experience,
12 health status, or duration of coverage may not be charged to
13 individual employees or dependents. For a small employer's
14 policy, such adjustments may not result in a rate for the
15 small employer which deviates more than 15 percent from the
16 carrier's approved rate. Any such adjustment must be applied
17 uniformly to the rates charged for all employees and
18 dependents of the small employer. A small employer carrier may
19 make an adjustment to a small employer's renewal premium, not
20 to exceed 10 percent annually, due to the claims experience,
21 health status, or duration of coverage of the employees or
22 dependents of the small employer. Semiannually, small group
23 carriers shall report information on forms adopted by rule by
24 the department, to enable the department to monitor the
25 relationship of aggregate adjusted premiums actually charged
26 policyholders by each carrier to the premiums that would have
27 been charged by application of the carrier's approved modified
28 community rates. If the aggregate resulting from the
29 application of such adjustment exceeds the premium that would
30 have been charged by application of the approved modified
31 community rate by 5 percent for the current reporting period,
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1 the carrier shall limit the application of such adjustments
2 only to minus adjustments beginning not more than 60 days
3 after the report is sent to the department. For any subsequent
4 reporting period, if the total aggregate adjusted premium
5 actually charged does not exceed the premium that would have
6 been charged by application of the approved modified community
7 rate by 5 percent, the carrier may apply both plus and minus
8 adjustments. A small employer carrier may provide a credit to
9 a small employer's premium based on administrative and
10 acquisition expense differences resulting from the size of the
11 group. Group size administrative and acquisition expense
12 factors may be developed by each carrier to reflect the
13 carrier's experience and are subject to department review and
14 approval.
15 6. A small employer carrier rating methodology may
16 include separate rating categories for one dependent child,
17 for two dependent children, and for three or more dependent
18 children for family coverage of employees having a spouse and
19 dependent children or employees having dependent children
20 only. A small employer carrier may have fewer, but not
21 greater, numbers of categories for dependent children than
22 those specified in this subparagraph.
23 7. Small employer carriers may not use a composite
24 rating methodology to rate a small employer with fewer than 10
25 employees. For the purposes of this subparagraph, a "composite
26 rating methodology" means a rating methodology that averages
27 the impact of the rating factors for age and gender in the
28 premiums charged to all of the employees of a small employer.
29 8.a. A carrier may separate the experience of small
30 employer groups with less than 2 eligible employees from the
31 experience of small employer groups with 2-50 eligible
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1 employees for purposes of determining an alternative modified
2 community rating.
3 b. If a carrier separates the experience of small
4 employer groups as provided in sub-subparagraph a., the rate
5 to be charged to small employer groups of less than 2 eligible
6 employees may not exceed 150 percent of the rate determined
7 for small employer groups of 2-50 eligible employees. However,
8 the carrier may charge excess losses of the experience pool
9 consisting of small employer groups with less than 2 eligible
10 employees to the experience pool consisting of small employer
11 groups with 2-50 eligible employees so that all losses are
12 allocated and the 150-percent rate limit on the experience
13 pool consisting of small employer groups with less than 2
14 eligible employees is maintained. Notwithstanding s.
15 627.411(1), the rate to be charged to a small employer group
16 of fewer than 2 eligible employees, insured as of July 1,
17 2002, may be up to 125 percent of the rate determined for
18 small employer groups of 2-50 eligible employees for the first
19 annual renewal and 150 percent for subsequent annual renewals.
20 (11) SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
21 (f) The program has the general powers and authority
22 granted under the laws of this state to insurance companies
23 and health maintenance organizations licensed to transact
24 business, except the power to issue health benefit plans
25 directly to groups or individuals. In addition thereto, the
26 program has specific authority to:
27 1. Enter into contracts as necessary or proper to
28 carry out the provisions and purposes of this act, including
29 the authority to enter into contracts with similar programs of
30 other states for the joint performance of common functions or
31
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1 with persons or other organizations for the performance of
2 administrative functions.
3 2. Sue or be sued, including taking any legal action
4 necessary or proper for recovering any assessments and
5 penalties for, on behalf of, or against the program or any
6 carrier.
7 3. Take any legal action necessary to avoid the
8 payment of improper claims against the program.
9 4. Issue reinsurance policies, in accordance with the
10 requirements of this act.
11 5. Establish rules, conditions, and procedures for
12 reinsurance risks under the program participation.
13 6. Establish actuarial functions as appropriate for
14 the operation of the program.
15 7. Assess participating carriers in accordance with
16 paragraph (j), and make advance interim assessments as may be
17 reasonable and necessary for organizational and interim
18 operating expenses. Interim assessments shall be credited as
19 offsets against any regular assessments due following the
20 close of the calendar year.
21 8. Appoint appropriate legal, actuarial, and other
22 committees as necessary to provide technical assistance in the
23 operation of the program, and in any other function within the
24 authority of the program.
25 9. Borrow money to effect the purposes of the program.
26 Any notes or other evidences of indebtedness of the program
27 which are not in default constitute legal investments for
28 carriers and may be carried as admitted assets.
29 10. To the extent necessary, increase the $5,000
30 deductible reinsurance requirement to adjust for the effects
31 of inflation. The program may evaluate the desirability of
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1 establishing differing levels of deductibles. If differing
2 levels of deductibles are established, such levels and the
3 resulting premiums must be approved by the department.
4 (g) A reinsuring carrier may reinsure with the program
5 coverage of an eligible employee of a small employer, or any
6 dependent of such an employee, subject to each of the
7 following provisions:
8 1. With respect to a standard and basic health care
9 plan, the program may must reinsure the level of coverage
10 provided; and, with respect to any other plan, the program may
11 must reinsure the coverage up to, but not exceeding, the level
12 of coverage provided under the standard and basic health care
13 plan. As an alternative to reinsuring the entire level of
14 coverage provided, the program may develop corridors of
15 reinsurance designed to coordinate with a reinsuring carrier's
16 existing reinsurance. The corridors of reinsurance and
17 resulting premiums must be approved by the department.
18 2. Except in the case of a late enrollee, a reinsuring
19 carrier may reinsure an eligible employee or dependent within
20 90 60 days after the commencement of the coverage of the small
21 employer. A newly employed eligible employee or dependent of a
22 small employer may be reinsured within 90 60 days after the
23 commencement of his or her coverage.
24 3. A small employer carrier may reinsure an entire
25 employer group within 90 60 days after the commencement of the
26 group's coverage under the plan. The carrier may choose to
27 reinsure newly eligible employees and dependents of the
28 reinsured group pursuant to subparagraph 1.
29 4. The program may evaluate the option of allowing a
30 small employer carrier to reinsure an entire employer group or
31 an eligible employee at the first or subsequent renewal date.
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1 Any such option and the resulting premium must be approved by
2 the department.
3 5.4. The program may not reimburse a participating
4 carrier with respect to the claims of a reinsured employee or
5 dependent until the carrier has paid incurred claims of an
6 amount equal to the participating carrier's selected
7 deductible level at least $5,000 in a calendar year for
8 benefits covered by the program. In addition, the reinsuring
9 carrier shall be responsible for 10 percent of the next
10 $50,000 and 5 percent of the next $100,000 of incurred claims
11 during a calendar year and the program shall reinsure the
12 remainder.
13 6.5. The board annually may shall adjust the initial
14 level of claims and the maximum limit to be retained by the
15 carrier to reflect increases in costs and utilization within
16 the standard market for health benefit plans within the state.
17 The adjustment shall not be less than the annual change in the
18 medical component of the "Consumer Price Index for All Urban
19 Consumers" of the Bureau of Labor Statistics of the Department
20 of Labor, unless the board proposes and the department
21 approves a lower adjustment factor.
22 7.6. A small employer carrier may terminate
23 reinsurance for all reinsured employees or dependents on any
24 plan anniversary.
25 8.7. The premium rate charged for reinsurance by the
26 program to a health maintenance organization that is approved
27 by the Secretary of Health and Human Services as a federally
28 qualified health maintenance organization pursuant to 42
29 U.S.C. s. 300e(c)(2)(A) and that, as such, is subject to
30 requirements that limit the amount of risk that may be ceded
31 to the program, which requirements are more restrictive than
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1 subparagraph 4., shall be reduced by an amount equal to that
2 portion of the risk, if any, which exceeds the amount set
3 forth in subparagraph 4. which may not be ceded to the
4 program.
5 9.8. The board may consider adjustments to the premium
6 rates charged for reinsurance by the program for carriers that
7 use effective cost containment measures, including high-cost
8 case management, as defined by the board.
9 10.9. A reinsuring carrier shall apply its
10 case-management and claims-handling techniques, including, but
11 not limited to, utilization review, individual case
12 management, preferred provider provisions, other managed care
13 provisions or methods of operation, consistently with both
14 reinsured business and nonreinsured business.
15 (h)1. The board, as part of the plan of operation,
16 shall establish a methodology for determining premium rates to
17 be charged by the program for reinsuring small employers and
18 individuals pursuant to this section. The methodology shall
19 include a system for classification of small employers that
20 reflects the types of case characteristics commonly used by
21 small employer carriers in the state. The methodology shall
22 provide for the development of basic reinsurance premium
23 rates, which shall be multiplied by the factors set for them
24 in this paragraph to determine the premium rates for the
25 program. The basic reinsurance premium rates shall be
26 established by the board, subject to the approval of the
27 department, and shall be set at levels which reasonably
28 approximate gross premiums charged to small employers by small
29 employer carriers for health benefit plans with benefits
30 similar to the standard and basic health benefit plan. The
31 premium rates set by the board may vary by geographical area,
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1 as determined under this section, to reflect differences in
2 cost. The multiplying factors must be established as follows:
3 a. The entire group may be reinsured for a rate that
4 is 1.5 times the rate established by the board.
5 b. An eligible employee or dependent may be reinsured
6 for a rate that is 5 times the rate established by the board.
7 2. The board periodically shall review the methodology
8 established, including the system of classification and any
9 rating factors, to assure that it reasonably reflects the
10 claims experience of the program. The board may propose
11 changes to the rates which shall be subject to the approval of
12 the department.
13 (j)1. Before September March 1 of each calendar year,
14 the board shall determine and report to the department the
15 program net loss for the previous year, including
16 administrative expenses for that year, and the incurred losses
17 for the year, taking into account investment income and other
18 appropriate gains and losses.
19 2. Any net loss for the year shall be recouped by
20 assessment of the carriers, as follows:
21 a. The operating losses of the program shall be
22 assessed in the following order subject to the specified
23 limitations. The first tier of assessments shall be made
24 against reinsuring carriers in an amount which shall not
25 exceed 5 percent of each reinsuring carrier's premiums from
26 health benefit plans covering small employers. If such
27 assessments have been collected and additional moneys are
28 needed, the board shall make a second tier of assessments in
29 an amount which shall not exceed 0.5 percent of each carrier's
30 health benefit plan premiums. Except as provided in paragraph
31 (n), risk-assuming carriers are exempt from all assessments
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1 authorized pursuant to this section. The amount paid by a
2 reinsuring carrier for the first tier of assessments shall be
3 credited against any additional assessments made.
4 b. The board shall equitably assess carriers for
5 operating losses of the plan based on market share. The board
6 shall annually assess each carrier a portion of the operating
7 losses of the plan. The first tier of assessments shall be
8 determined by multiplying the operating losses by a fraction,
9 the numerator of which equals the reinsuring carrier's earned
10 premium pertaining to direct writings of small employer health
11 benefit plans in the state during the calendar year for which
12 the assessment is levied, and the denominator of which equals
13 the total of all such premiums earned by reinsuring carriers
14 in the state during that calendar year. The second tier of
15 assessments shall be based on the premiums that all carriers,
16 except risk-assuming carriers, earned on all health benefit
17 plans written in this state. The board may levy interim
18 assessments against carriers to ensure the financial ability
19 of the plan to cover claims expenses and administrative
20 expenses paid or estimated to be paid in the operation of the
21 plan for the calendar year prior to the association's
22 anticipated receipt of annual assessments for that calendar
23 year. Any interim assessment is due and payable within 30
24 days after receipt by a carrier of the interim assessment
25 notice. Interim assessment payments shall be credited against
26 the carrier's annual assessment. Health benefit plan premiums
27 and benefits paid by a carrier that are less than an amount
28 determined by the board to justify the cost of collection may
29 not be considered for purposes of determining assessments.
30 c. Subject to the approval of the department, the
31 board shall make an adjustment to the assessment formula for
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1 reinsuring carriers that are approved as federally qualified
2 health maintenance organizations by the Secretary of Health
3 and Human Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to
4 the extent, if any, that restrictions are placed on them that
5 are not imposed on other small employer carriers.
6 3. Before September March 1 of each year, the board
7 shall determine and file with the department an estimate of
8 the assessments needed to fund the losses incurred by the
9 program in the previous calendar year.
10 4. If the board determines that the assessments needed
11 to fund the losses incurred by the program in the previous
12 calendar year will exceed the amount specified in subparagraph
13 2., the board shall evaluate the operation of the program and
14 report its findings, including any recommendations for changes
15 to the plan of operation, to the department within 240 90 days
16 following the end of the calendar year in which the losses
17 were incurred. The evaluation shall include an estimate of
18 future assessments, the administrative costs of the program,
19 the appropriateness of the premiums charged and the level of
20 carrier retention under the program, and the costs of coverage
21 for small employers. If the board fails to file a report with
22 the department within 240 90 days following the end of the
23 applicable calendar year, the department may evaluate the
24 operations of the program and implement such amendments to the
25 plan of operation the department deems necessary to reduce
26 future losses and assessments.
27 5. If assessments exceed the amount of the actual
28 losses and administrative expenses of the program, the excess
29 shall be held as interest and used by the board to offset
30 future losses or to reduce program premiums. As used in this
31
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1 paragraph, the term "future losses" includes reserves for
2 incurred but not reported claims.
3 6. Each carrier's proportion of the assessment shall
4 be determined annually by the board, based on annual
5 statements and other reports considered necessary by the board
6 and filed by the carriers with the board.
7 7. Provision shall be made in the plan of operation
8 for the imposition of an interest penalty for late payment of
9 an assessment.
10 8. A carrier may seek, from the commissioner, a
11 deferment, in whole or in part, from any assessment made by
12 the board. The department may defer, in whole or in part, the
13 assessment of a carrier if, in the opinion of the department,
14 the payment of the assessment would place the carrier in a
15 financially impaired condition. If an assessment against a
16 carrier is deferred, in whole or in part, the amount by which
17 the assessment is deferred may be assessed against the other
18 carriers in a manner consistent with the basis for assessment
19 set forth in this section. The carrier receiving such
20 deferment remains liable to the program for the amount
21 deferred and is prohibited from reinsuring any individuals or
22 groups in the program if it fails to pay assessments.
23 (12) STANDARD, BASIC, AND FLEXIBLE LIMITED HEALTH
24 BENEFIT PLANS.--
25 (a)1. By May 15, 1993, the commissioner shall appoint
26 a health benefit plan committee composed of four
27 representatives of carriers which shall include at least two
28 representatives of HMOs, at least one of which is a staff
29 model HMO, two representatives of agents, four representatives
30 of small employers, and one employee of a small employer. The
31 carrier members shall be selected from a list of individuals
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1 recommended by the board. The commissioner may require the
2 board to submit additional recommendations of individuals for
3 appointment.
4 2. The plans shall comply with all of the requirements
5 of this subsection.
6 3. The plans must be filed with and approved by the
7 department prior to issuance or delivery by any small employer
8 carrier.
9 4. Before October 1, 2003, and in every 4th year
10 thereafter, the commissioner shall appoint a new health
11 benefit plan committee in the manner provided in subparagraph
12 1. to determine whether modifications to a plan might be
13 appropriate and to submit recommended modifications to the
14 department for approval. Such a determination must be based
15 upon prevailing industry standards regarding managed care and
16 cost-containment provisions and is to serve the purpose of
17 ensuring that the benefit plans offered to small employers on
18 a guaranteed-issue basis are consistent with the low-priced to
19 mid-priced benefit plans offered in the large-group market.
20 Each new health benefit plan committee shall evaluate the
21 implementation of this act and its impact on the entities that
22 provide the plans, the number of enrollees, the participants
23 covered by the plans and their access to care, the scope of
24 health care coverage offered under the plans, the difference
25 in premiums between these plans and standard or basic plans,
26 and an assessment of the plans. This determination shall be
27 included in a report submitted to the President of the Senate
28 and the Speaker of the House of Representatives annually by
29 October 1. After approval of the revised health benefit plans,
30 if the department determines that modifications to a plan
31 might be appropriate, the commissioner shall appoint a new
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1 health benefit plan committee in the manner provided in
2 subparagraph 1. to submit recommended modifications to the
3 department for approval.
4 (c) If a small employer rejects, in writing, the
5 standard health benefit plan and the basic health benefit
6 plan, the small employer carrier may offer the small employer
7 a flexible limited benefit policy or contract.
8 (d)1. Upon offering coverage under a standard health
9 benefit plan, a basic health benefit plan, or a flexible
10 limited benefit policy or contract for any small employer, the
11 small employer carrier shall provide such employer group with
12 a written statement that contains, at a minimum:
13 a. An explanation of those mandated benefits and
14 providers that are not covered by the policy or contract;
15 b. An explanation of the managed care and cost control
16 features of the policy or contract, along with all appropriate
17 mailing addresses and telephone numbers to be used by insureds
18 in seeking information or authorization; and
19 c. An explanation of the primary and preventive care
20 features of the policy or contract.
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 b. Acknowledges the limited nature of the coverage and
5 an understanding of the managed care and cost control features
6 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 flexible
10 limited benefit policy or contract, the person making such
11 misrepresentations forfeits coverage provided by the policy or
12 contract; and
13 d. If a flexible benefit policy or contract limited
14 plan is requested, acknowledges that he or she was the
15 prospective policyholder had been offered, at the time of
16 application for the insurance policy or contract, the
17 opportunity to purchase any health benefit plan offered by the
18 carrier and that he or she the prospective policyholder had
19 rejected 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 4. Each marketing communication that is intended to be
2 used in the marketing of a health benefit plan in this state
3 must be submitted for review by the department prior to use
4 and must contain the disclosures stated in this subsection.
5 5. The contract, policy, and certificates evidencing
6 coverage under a flexible benefit policy or contract and the
7 application for coverage under such plans must state in not
8 less than 10-point type on the first page in contrasting color
9 the following: "The benefits provided by this health plan are
10 limited and may not cover all of your medical needs. You
11 should carefully review the benefits offered under this health
12 plan."
13 (e) A small employer carrier may not use any policy,
14 contract, form, or rate under this section, including
15 applications, enrollment forms, policies, contracts,
16 certificates, evidences of coverage, riders, amendments,
17 endorsements, and disclosure forms, until the carrier insurer
18 has filed it with the department and the department has
19 approved it under ss. 627.410, and 627.411, and 641.31 and
20 this section.
21 (f) A small employer carrier may offer a flexible
22 benefit policy or contract only to a small employer that is
23 not covered by any health insurance or health care plan and
24 has not been covered at any time during the past 6 months.
25 (15) APPLICABILITY OF OTHER STATE LAWS.--
26 (a) Except as expressly provided in this section, a
27 law requiring coverage for a specific health care service or
28 benefit, or a law requiring reimbursement, utilization, or
29 consideration of a specific category of licensed health care
30 practitioner, does not apply to a standard or basic health
31 benefit plan policy or contract or a flexible limited benefit
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1 policy or contract offered or delivered to a small employer
2 unless that law is made expressly applicable to such policies
3 or contracts. A law restricting or limiting deductibles,
4 copayments, or annual or lifetime maximum payments does not
5 apply to any health plan policy or contract, including a
6 standard or basic health benefit plan policy or contract or a
7 flexible benefit policy or contract offered or delivered to a
8 small employer unless the law is made expressly applicable to
9 such a policy or contract. Any covered disease or condition
10 may be treated by any physician or dentist, without
11 discrimination, who is licensed or certified to treat the
12 disease or condition.
13 (b) Except as provided in this section, a standard or
14 basic health benefit plan policy or contract or flexible
15 limited benefit policy or contract offered to a small employer
16 is not subject to any provision of this code which:
17 1. Inhibits a small employer carrier from contracting
18 with providers or groups of providers with respect to health
19 care services or benefits;
20 2. Imposes any restriction on a small employer
21 carrier's ability to negotiate with providers regarding the
22 level or method of reimbursing care or services provided under
23 a health benefit plan; or
24 3. Requires a small employer carrier to either include
25 a specific provider or class of providers when contracting for
26 health care services or benefits or to exclude any class of
27 providers that is generally authorized by statute to provide
28 such care.
29 (c) Any second tier assessment paid by a carrier
30 pursuant to paragraph (11)(j) may be credited against
31
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1 assessments levied against the carrier pursuant to s.
2 627.6494.
3 (d) Notwithstanding chapter 641, a health maintenance
4 organization is authorized to issue contracts providing
5 benefits equal to the standard health benefit plan, the basic
6 health benefit plan, and the flexible limited benefit policy
7 authorized by this section.
8 Section 9. Section 627.911, Florida Statutes, is
9 amended to read:
10 627.911 Scope of this part.--Any insurer or health
11 maintenance organization transacting insurance in this state
12 shall report information as required by this part.
13 Section 10. Section 627.9175, Florida Statutes, is
14 amended to read:
15 627.9175 Reports of information on health insurance.--
16 (1) Each authorized health insurer shall submit
17 annually to the department information concerning health
18 insurance coverage being issued or currently in force in this
19 state. The information must include information related to
20 premium, number of policies, and covered lives for such
21 policies and other information necessary for analyzing trends
22 in enrollment, premiums, and claim costs. as to policies of
23 individual health insurance:
24 (a) The required information must be broken down by
25 market segment, to include:
26 1. Health insurance issuer company contact
27 information.
28 2. Information on all health insurance products issued
29 or in force. Such information must include:
30 a. Direct premiums earned.
31 b. Direct losses incurred.
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1 c. Direct premiums earned for new business issued
2 during the year.
3 d. Number of policies.
4 e. Number of certificates.
5 f. Number of total covered lives.
6 A summary of typical benefits, exclusions, and
7 limitations for each type of individual policy form currently
8 being issued in the state. The summary shall include, as
9 appropriate:
10 1. The deductible amount;
11 2. The coinsurance percentage;
12 3. The out-of-pocket maximum;
13 4. Outpatient benefits;
14 5. Inpatient benefits; and
15 6. Any exclusions for preexisting conditions.
16
17 The department shall determine other appropriate benefits,
18 exclusions, and limitations to be reported for inclusion in
19 the consumer's guide published pursuant to this section.
20 (b) The department may adopt rules to administer this
21 section, including, but not limited to, rules governing
22 compliance and provisions implementing electronic
23 methodologies for use in furnishing such records or documents.
24 A schedule of rates for each type of individual policy form
25 reflecting typical variations by age, sex, region of the
26 state, or any other applicable factor which is in use and is
27 determined to be appropriate for inclusion by the department.
28
29 The department may shall provide by rule a uniform format for
30 the submission of this information in order to allow for
31 meaningful comparisons of premiums charged for comparable
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1 benefits. The department shall publish annually a consumer's
2 guide which summarizes and compares the information required
3 to be reported under this subsection.
4 (2)(a) The department shall publish annually a
5 consumer's guide Every insurer transacting health insurance in
6 this state shall report annually to the department, not later
7 than April 1, information relating to any measure the insurer
8 has implemented or proposes to implement during the next
9 calendar year for the purpose of containing health insurance
10 costs or cost increases. The reports shall identify each
11 measure and the forms to which the measure is applied, shall
12 provide an explanation as to how the measure is used, and
13 shall provide an estimate of the cost effect of the measure.
14 (b) The department shall promulgate forms to be used
15 by insurers in reporting information pursuant to this
16 subsection and shall utilize such forms to analyze the effects
17 of health care cost containment programs used by health
18 insurers in this state.
19 (c) The department shall analyze the data reported
20 under this subsection and shall annually make available to the
21 public a summary of its findings as to the types of cost
22 containment measures reported and the estimated effect of
23 these measures.
24 Section 11. Section 627.9403, Florida Statutes, is
25 amended to read:
26 627.9403 Scope.--The provisions of this part shall
27 apply to long-term care insurance policies delivered or issued
28 for delivery in this state, and to policies delivered or
29 issued for delivery outside this state to the extent provided
30 in s. 627.9406, by an insurer, a fraternal benefit society as
31 defined in s. 632.601, a health maintenance organization as
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1 defined in s. 641.19, a prepaid health clinic as defined in s.
2 641.402, or a multiple-employer welfare arrangement as defined
3 in s. 624.437. A policy which is advertised, marketed, or
4 offered as a long-term care policy and as a Medicare
5 supplement policy shall meet the requirements of this part and
6 the requirements of ss. 627.671-627.675 and, to the extent of
7 a conflict, be subject to the requirement that is more
8 favorable to the policyholder or certificateholder. The
9 provisions of this part shall not apply to a continuing care
10 contract issued pursuant to chapter 651 and shall not apply to
11 guaranteed renewable policies issued prior to October 1, 1988.
12 Any limited benefit policy that limits coverage to care in a
13 nursing home or to one or more lower levels of care required
14 or authorized to be provided by this part or by department
15 rule must meet all requirements of this part that apply to
16 long-term care insurance policies, except ss. 627.9407(3)(c)
17 and (d), (9), (10)(f), and (12) and 627.94073(2). If the
18 limited benefit policy does not provide coverage for care in a
19 nursing home, but does provide coverage for one or more lower
20 levels of care, the policy shall also be exempt from the
21 requirements of s. 627.9407(3)(d).
22 Section 12. Section 627.9408, Florida Statutes, is
23 amended to read:
24 627.9408 Rules.--
25 (1) The department may has authority to adopt rules
26 pursuant to ss. 120.536(1) and 120.54 to administer implement
27 the provisions of this part.
28 (2) The department may adopt by rule the provisions of
29 the Long-Term Care Insurance Model Regulation adopted by the
30 National Association of Insurance Commissioners in the second
31
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1 quarter of the year 2000 which are not in conflict with the
2 Florida Insurance Code.
3 Section 13. Paragraphs (b) and (d) of subsection (3)
4 of section 641.31, Florida Statutes, are amended, and
5 paragraph (f) is added to that subsection, to read:
6 641.31 Health maintenance contracts.--
7 (3)
8 (b) Any change in the rate is subject to paragraph (d)
9 and requires at least 30 days' advance written notice to the
10 subscriber. In the case of a group member, there may be a
11 contractual agreement with the health maintenance organization
12 to have the employer provide the required notice to the
13 individual members of the group. This paragraph does not apply
14 to a group contract covering 51 or more persons unless the
15 rate is for any coverage under which the increase in claim
16 costs over the lifetime of the contract due to advancing age
17 or duration is prefunded in the premium.
18 (d) Any change in rates charged for the contract must
19 be filed with the department not less than 30 days in advance
20 of the effective date. At the expiration of such 30 days, the
21 rate filing shall be deemed approved unless prior to such time
22 the filing has been affirmatively approved or disapproved by
23 order of the department pursuant to s. 627.411. The approval
24 of the filing by the department constitutes a waiver of any
25 unexpired portion of such waiting period. The department may
26 extend by not more than an additional 15 days the period
27 within which it may so affirmatively approve or disapprove any
28 such filing, by giving notice of such extension before
29 expiration of the initial 30-day period. At the expiration of
30 any such period as so extended, and in the absence of such
31
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1 prior affirmative approval or disapproval, any such filing
2 shall be deemed approved.
3 (f) A health maintenance organization that has fewer
4 than 1,000 covered subscribers under all individual or group
5 contracts at the time of a rate filing may file for an annual
6 rate increase limited to annual medical trend, as adopted by
7 the department. The filing is in lieu of the actuarial
8 memorandum otherwise required for the rate filing. The filing
9 must include forms adopted by the department and a
10 certification by an officer of the company that the filing
11 includes all similar forms.
12 Section 14. Subsections (1) and (3) of section
13 641.3111, Florida Statutes, are amended to read:
14 641.3111 Extension of benefits.--
15 (1) Every group health maintenance contract shall
16 provide that termination of the contract shall be without
17 prejudice to any continuous loss which commenced while the
18 contract was in force, but any extension of benefits beyond
19 the period the contract was in force may be predicated upon
20 the continuous total disability of the subscriber and may be
21 limited to payment for the treatment of a specific accident or
22 illness incurred while the subscriber was a member. The
23 extension is required regardless of whether the group contract
24 holder or other entity secures replacement coverage from a new
25 insurer or health maintenance organization or foregoes the
26 provision of coverage. The required provision must provide for
27 continuation of contract benefits in connection with the
28 treatment of a specific accident or illness incurred while the
29 contract was in effect. Such extension of benefits may be
30 limited to the occurrence of the earliest of the following
31 events:
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1 (a) The expiration of 12 months.
2 (b) Such time as the member is no longer totally
3 disabled.
4 (c) A succeeding carrier elects to provide replacement
5 coverage without limitation as to the disability condition.
6 (d) The maximum benefits payable under the contract
7 have been paid.
8 (3) In the case of maternity coverage, when not
9 covered by the succeeding carrier, a reasonable extension of
10 benefits or accrued liability provision is required, which
11 provision provides for continuation of the contract benefits
12 in connection with maternity expenses for a pregnancy that
13 commenced while the policy was in effect. The extension shall
14 be for the period of that pregnancy and shall not be based
15 upon total disability.
16 Section 15. Paragraph (a) of subsection (2) of section
17 627.6425, Florida Statutes, is amended to read:
18 627.6425 Renewability of individual coverage.--
19 (2) An insurer may nonrenew or discontinue health
20 insurance coverage of an individual in the individual market
21 based only on one or more of the following:
22 (a) The individual has failed to pay premiums or
23 contributions, or a required copayment payable to the insurer,
24 in accordance with the terms of the health insurance coverage
25 or the insurer has not received timely premium payments. When
26 the copayment is payable to the insurer and exceeds $300, the
27 insurer shall allow the insured up to 90 days after the date
28 of the procedure to pay the required copayment. The insurer
29 shall print in 10-point type, on the declaration-of-benefits
30 page, notification that the insured could be terminated for
31 failure to make any required copayment to the insurer.
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1 Section 16. This act shall take effect October 1,
2 2002.
3
4 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
5 CS for Senate Bill's 1286, 1134 & 1008
6
7 The Committee Substitute differs from CS/SB's 1286, 1134, &
1008 in two ways:
8
Under the Employee Health Care Access Act, any licensed or
9 certified dentist, as well as any physician, may treat any
covered disease or condition, provided he or she is licensed
10 or certified to treat the condition.
11 An insurer may nonrenew or discontinue health insurance
coverage of an individual, in the individual market, if the
12 person fails to make required copayments to the insurer.
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