HOUSE AMENDMENT Bill No. HB 723 CS
1	CHAMBER ACTION
2	Senate House
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12	Representative Negron offered the following:
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14	Amendment (with title amendment)
15	Remove everything after the enacting clause, and insert:
16	Section 1. Section 627.411, Florida Statutes, is amended
17	to read:
18	627.411 Grounds for disapproval.--
19	(1) The department shall disapprove any form filed under
20	s. 627.410, or withdraw any previous approval thereof, only if
21	the form:
22	(a) Is in any respect in violation of, or does not comply
23	with, this code.
24	(b) Contains or incorporates by reference, where such
25	incorporation is otherwise permissible, any inconsistent,
26	ambiguous, or misleading clauses, or exceptions and conditions
27	which deceptively affect the risk purported to be assumed in the
28	general coverage of the contract.
29	(c) Has any title, heading, or other indication of its
30	provisions which is misleading.
31	(d) Is printed or otherwise reproduced in such manner as
32	to render any material provision of the form substantially
33	illegible.
34	(e) Is for health insurance, and:
35	1. Provides benefits thatwhichare unreasonable in
36	relation to the premium charged;,
37	2. Contains provisions thatwhichare unfair or
38	inequitable or contrary to the public policy of this state or
39	thatwhich encourage misrepresentation;, or
40	3. Contains provisions thatwhich apply rating practices
41	thatwhich result in premium escalations that are not viable for
42	the policyholder market or result in unfair discrimination
43	pursuant to s. 626.9541(1)(g)2.; or
44	4. Results in actuarially justified rate increases on an
45	annual basis:
46	a. Attributed to the insurer reducing the portion of the
47	premium used to pay claims from the loss ratio standard
48	certified in the last actuarial certification filed by the
49	insurer, in excess of the greater of 50 percent of annual
50	medical trend or 5 percent. At its option, the insurer may file
51	for approval of an actuarially justified new business rate
52	schedule for new insureds and a rate increase for existing
53	insureds that is equal to the greater of 150 percent of annual
54	medical trend or 10 percent. Future annual rate increases for
55	existing insureds shall be limited to the greater of 150 percent
56	of the rate increase approved for new insureds or 10 percent
57	until the two rate schedules converge;
58	b. In excess of the greater of 150 percent of annual
59	medical trend or 10 percent and the company did not comply with
60	the annual filing requirements of s. 627.410(7) or commission
61	rule for health maintenance organizations pursuant to s. 641.31.
62	At its option, the insurer may file for approval of an
63	actuarially justified new business rate schedule for new
64	insureds and a rate increase for existing insureds that is equal
65	to the rate increase allowed by the preceding sentence. Future
66	annual rate increases for existing insureds shall be limited to
67	the greater of 150 percent of the rate increase approved for new
68	insureds or 10 percent until the two rate schedules converge; or
69	c. In excess of the greater of 150 percent of annual
70	medical trend or 10 percent on a form or block of pooled forms
71	in which no form is currently available for sale. This sub-
72	subparagraph does not apply to pre-standardized Medicare
73	supplement formsin sales practices.
74	(f) Excludes coverage for human immunodeficiency virus
75	infection or acquired immune deficiency syndrome or contains
76	limitations in the benefits payable, or in the terms or
77	conditions of such contract, for human immunodeficiency virus
78	infection or acquired immune deficiency syndrome which are
79	different than those which apply to any other sickness or
80	medical condition.
81	(2) In determining whether the benefits are reasonable in
82	relation to the premium charged, the department, in accordance
83	with reasonable actuarial techniques, shall consider:
84	(a) Past loss experience and prospective loss experience
85	within and without this state.
86	(b) Allocation of expenses.
87	(c) Risk and contingency margins, along with justification
88	of such margins.
89	(d) Acquisition costs.
90	(3)(a) For health insurance coverage as described in s.
91	627.6561(5)(a)2., the minimum loss ratio standard of incurred
92	claims to earned premium for the form shall be 65 percent.
93	(b) Incurred claims are claims occurring within a fixed
94	period, whether or not paid during the same period, under the
95	terms of the policy period.
96	1. Claims include scheduled benefit payments, or services
97	provided by a provider or through a provider network for dental,
98	vision, disability, and similar health benefits.
99	2. Claims do not include state assessments, taxes, company
100	expenses, or any expense incurred by the company for the cost of
101	adjusting and settling a claim, including the review,
102	qualification, oversight, management, or monitoring of a claim
103	or incentives or compensation to providers for other than the
104	provisions of health care services.
105	3. A company may, at its discretion, include costs that
106	are demonstrated to reduce claims, such as fraud intervention
107	programs or case management costs, which are identified in each
108	filing, are demonstrated to reduce claims costs, and do not
109	result in increasing the experience period loss ratio by more
110	than 5 percent.
111	4. For scheduled claim payments, such as disability income
112	or long-term care, the incurred claims shall be the present
113	value of the benefit payments discounted for continuance and
114	interest.
115	Section 2. Subsection (2) of section 627.6515, Florida
116	Statutes, is amended, and subsections (9) and (10) are added to
117	said section, to read:
118	627.6515 Out-of-state groups.--
119	(2) Except as provided in this part,this part does not
120	apply to a group health insurance policy issued or delivered
121	outside this state under which a resident of this state is
122	provided coverage if:
123	(a) The policy is issued to an employee group the
124	composition of which is substantially as described in s.
125	627.653; a labor union group or association group the
126	composition of which is substantially as described in s.
127	627.654; an additional group the composition of which is
128	substantially as described in s. 627.656; a group insured under
129	a blanket health policy when the composition of the group is
130	substantially in compliance with s. 627.659; a group insured
131	under a franchise health policy when the composition of the
132	group is substantially in compliance with s. 627.663 and the
133	policy was issued prior to January 1, 2003; an association group
134	to cover persons associated in any other common group, which
135	common group is formed primarily for purposes other than
136	providing insurance; a group that is established primarily for
137	the purpose of providing group insurance, provided the benefits
138	are reasonable in relation to the premiums charged thereunder
139	and the issuance of the group policy has resulted, or will
140	result, in economies of administration; or a group of insurance
141	agents of an insurer, which insurer is the policyholder;
142	(b) Certificates evidencing coverage under the policy are
143	issued to residents of this state and contain in contrasting
144	color and not less than 10-point type the following statement:
145	"The benefits of the policy providing your coverage are governed
146	primarily by the law of a state other than Florida"; and
147	(c) The policy provides the benefits specified in ss.
148	627.419, 627.6574, 627.6575, 627.6579, 627.6612, 627.66121,
149	627.66122, 627.6613, 627.667, 627.6675, 627.6691, and
150	627.66911;.
151	(d) For the policies or contracts issued on or after
152	October 1, 2003, regardless of the type of group described in
153	this subsection to which the policy is issued, except for
154	policies issued to provide coverage to groups of persons all of
155	whom are in the same or functionally related licensed
156	professions, and providing coverage only to such licensed
157	professionals, their employees or their dependents, or to a bona
158	fide association as defined in s. 627.6571(5), the policy
159	complies with the antidiscrimination provisions set forth in s.
160	627.65625, regarding rating and eligibility for enrollment and
161	for any benefit under the policy, and with s. 627.6571;
162	(e) For the policies or contracts issued on or after
163	October 1, 2003, the policy is not issued to a group, other than
164	an employer group for the benefit of its employees, that
165	directly or indirectly uses any health-status-related factor, as
166	described in s. 627.65625, in determining eligibility for
167	initial or continued membership in the group or initial or
168	continued eligibility of any group member to participate in any
169	aspect of the group insurance program; and
170	(f) For the purposes of paragraphs (d) and (e), "group
171	health insurance policy" means any hospital or medical policy,
172	hospital or medical service plan contract, or health maintenance
173	organization subscriber contract. The term does not include
174	accidental death, accidental death and dismemberment, accident-
175	only, vision-only, dental-only, hospital indemnity, hospital
176	accident, cancer, specified disease, Medicare supplement,
177	products that supplement Medicare, long-term care, or disability
178	income insurance, similar supplemental plans provided under a
179	separate policy, certificate, or contract of insurance, which
180	cannot duplicate coverage under an underlying health plan and
181	are specifically designed to fill gaps in the underlying health
182	plan, coinsurance, or deductibles; coverage issued as a
183	supplement to liability insurance; workers' compensation or
184	similar insurance; or automobile medical payment insurance.
185	(9) The Financial Services Commission shall adopt rules
186	necessary to administer this section.
187	(10) The Financial Services Commission may adopt rules to
188	establish standards for exempting certain groups from the
189	provisions of paragraphs (2)(d) and (e). Such rules shall
190	establish standards for determining that the members of the
191	group policy are provided protection from rate escalations from
192	the segregation of risks and that members are provided
193	protection by an individual or board that is not owned or
194	controlled by the carrier or affiliate of the carrier and acts
195	in a fiduciary capacity for the protection of its members. The
196	office must provide, upon request of an insurer, a 90-day
197	exemption from the October 1, 2003, effect date of paragraphs
198	(2)(d) and (e) to any insurer:
199	(a) Having an approved filing for individual business by
200	October 1, 2003; and
201	(b) Certifying that each individual issued a policy or
202	certificate after October 1, 2003, will be offered the
203	opportunity to switch his or her policy to the new form at the
204	end of the exemption period.
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206	The provisions of paragraphs (2)(d) and (e) do not apply to
207	policies or certificates issued prior to October 1, 2003.
208	Section 3. This act shall take effect July 1, 2003.
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210	================= T I T L E A M E N D M E N T =================
211	Remove the entire title, and insert:
212	A bill to be entitled
213	An act relating to health insurance; amending s. 627.411,
214	F.S.; revising grounds for disapproval of health insurance
215	policy forms that apply certain rating practices or that
216	result in actuarially justified rate increases under
217	certain circumstances; requiring health insurance policies
218	to meet a minimum loss ratio of a specified amount;
219	amending s. 627.6515, F.S.; amending conditions that must
220	be met to exempt from part VII of ch. 627, F.S., a group
221	health insurance policy issued or delivered outside this
222	state under which a resident of this state is provided
223	coverage; providing rulemaking authority; providing an
224	effective date.