HB 0723 2003
1	A bill to be entitled
2	An act relating to health insurance; amending ss.
3	626.9541, 641.3903, and 641.441, F.S.; specifying
4	mandatory arbitration as an unfair method of competition
5	and unfair or deceptive act or practice for certain
6	insurers, managed care providers, prepaid limited health
7	service organizations, or prepaid health clinics; amending
8	s. 627.4091, F.S.; including certain additional contracts
9	and plans under a requirement to provide specific reasons
10	for denial of an application for insurance; creating s.
11	627.4303, F.S.; requiring policies, contracts, and plans
12	providing benefits for prescription drug coverage to cover
13	all federally approved drugs without a waiting period;
14	requiring prescription drug formularies to be limited to
15	three tiers of coverage; creating s. 627.6042, F.S.;
16	requiring policies of insurers offering coverage of
17	dependent children to maintain such coverage until the
18	child reaches age 25, under certain circumstances;
19	providing application; amending s. 627.6415, F.S.;
20	deleting an 18th birthday age limitation on application of
21	certain dependent coverage requirements; amending s.
22	627.6475, F.S.; revising risk-assuming carrier election
23	requirements and procedures; revising certain criteria and
24	limitations under the individual health reinsurance
25	program; amending s. 627.6617, F.S.; increasing a minimum
26	reimbursement limitation amount for home health care
27	services; amending s. 627.662, F.S.; revising a list of
28	provisions applicable to group, blanket, or franchise
29	health insurance to include use of specific methodology
30	for payment of claims provisions; amending s. 627.667,
31	F.S.; deleting a limitation on application of certain
32	extension of benefits provisions; amending s. 627.6692,
33	F.S.; increasing a time period for payment of premium to
34	continue coverage under a group health plan; amending s.
35	627.6699, F.S.; revising certain definitions; revising
36	certain coverage enrollment eligibility criteria for small
37	employers; deleting a premium rate restriction on charging
38	for certain rate adjustments; revising small employer
39	carrier election requirements and procedures; revising
40	certain criteria and limitations under the small employer
41	health reinsurance program; amending ss. 627.911 and
42	627.9175, F.S.; applying certain information reporting
43	requirements to health maintenance organizations; revising
44	health insurance information requirements and criteria;
45	deleting an annual report requirement; amending s.
46	627.9403, F.S.; deleting an exemption for limited benefit
47	policies from a long-term care insurance restriction
48	relating to nursing home care; amending ss. 636.016 and
49	641.31, F.S.; requiring prepaid limited health service
50	organizations and health maintenance organizations
51	offering coverage of dependent children to maintain such
52	coverage until the child reaches age 25, under certain
53	circumstances; providing application; providing
54	requirements for contract termination and denial of a
55	claim related to limiting age attainment; amending s.
56	641.3101, F.S.; providing a compliance requirement for
57	health maintenance contracts using a specific payment of
58	claims methodology; creating s. 641.31075, F.S.; imposing
59	compliance requirements upon health maintenance
60	organization replacements of other group or individual
61	health coverage with organization coverage; amending s.
62	641.3111, F.S.; deleting a limitation on certain extension
63	of benefits provisions upon group health maintenance
64	contract termination; imposing additional extension of
65	benefits requirements upon such termination; amending ss.
66	627.651, 641.2018, 641.3107, and 641.513, F.S.; correcting
67	cross references; providing an effective date.
68
69	Be It Enacted by the Legislature of the State of Florida:
70
71	Section 1. Paragraph (bb) is added to subsection (1) of
72	section 626.9541, Florida Statutes, to read:
73	626.9541 Unfair methods of competition and unfair or
74	deceptive acts or practices defined.--
75	(1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
76	ACTS.--The following are defined as unfair methods of
77	competition and unfair or deceptive acts or practices:
78	(bb) Mandatory arbitration.--For a life insurer, health
79	insurer, or disability insurer, issuing a policy which requires
80	the submission of disputes between the parties to the policy or
81	contract to arbitration.
82	Section 2. Subsection (1) of section 627.4091, Florida
83	Statutes, is amended to read:
84	627.4091 Specific reasons for denial, cancellation, or
85	nonrenewal.--
86	(1) The denial of an application for an insurance policy,
87	health maintenance organization contract, or prepaid limited
88	health service organization planmust be accompanied by the
89	specific reasons for denial, including the specific underwriting
90	reasons, if applicable.
91	Section 3. Section 627.4303, Florida Statutes, is created
92	to read:
93	627.4303 Prescription drug formularies.--Notwithstanding
94	any other provision of law, any individual, blanket, or group
95	health insurance policy, health maintenance organization
96	contract, or prepaid limited health organization plan, or any
97	health insurance policy or certificate delivered or issued for
98	delivery to any person in this state, including out-of-state
99	group plans pursuant to s. 627.6515 covering residents of this
100	state, that provides benefits for prescription drug coverage
101	shall cover all prescription drugs approved by the United States
102	Food and Drug Administration without any waiting period.
103	Prescription drug formularies shall be limited to no more than
104	three tiers of coverage, including generic and nongeneric
105	prescription drugs.
106	Section 4. Section 627.6042, Florida Statutes, is created
107	to read:
108	627.6042 Dependent coverage.--
109	(1) If an insurer offers coverage that insures dependent
110	children of the policyholder or certificateholder, the policy
111	must insure a dependent child of the policyholder or
112	certificateholder at least until the end of the calendar year in
113	which the child reaches the age of 25, if:
114	(a) The child is dependent upon the policyholder or
115	certificateholder for support.
116	(b) The child is living in the household of the
117	policyholder or certificateholder or the child is a full-time or
118	part-time student.
119	(2) Nothing in this section affects or preempts an
120	insurer's right to medically underwrite or charge the
121	appropriate premium.
122	Section 5. Subsections (1) and (4) of section 627.6415,
123	Florida Statutes, are amended to read:
124	627.6415 Coverage for natural-born, adopted, and foster
125	children; children in insured's custodial care.--
126	(1) A health insurance policy that provides coverage for a
127	member of the family of the insured shall, as to the family
128	member's coverage, provide that the health insurance benefits
129	applicable to children of the insured also apply to an adopted
130	child or a foster child of the insured placed in compliance with
131	chapter 63, prior to the child's 18th birthday,from the moment
132	of placement in the residence of the insured. Except in the case
133	of a foster child, the policy may not exclude coverage for any
134	preexisting condition of the child. In the case of a newborn
135	child, coverage begins at the moment of birth if a written
136	agreement to adopt the child has been entered into by the
137	insured prior to the birth of the child, whether or not the
138	agreement is enforceable. This section does not require coverage
139	for an adopted child who is not ultimately placed in the
140	residence of the insured in compliance with chapter 63.
141	(4) In order to increase access to postnatal, infant, and
142	pediatric health care for all children placed in court-ordered
143	custody, including foster children, all health insurance
144	policies that provide coverage for a member of the family of the
145	insured shall, as to such family member's coverage, also provide
146	that the health insurance benefits applicable for children shall
147	be payable with respect to a foster child or other child in
148	court-ordered temporary or other custody of the insured, prior
149	to the child's 18th birthday.
150	Section 6. Paragraph (a) of subsection (5), paragraph (c)
151	of subsection (6), and paragraphs (b), (c), and (e) of
152	subsection (7) of section 627.6475, Florida Statutes, are
153	amended to read:
154	627.6475 Individual reinsurance pool.--
155	(5) ISSUER'S ELECTION TO BECOME A RISK-ASSUMING CARRIER.--
156	(a) Each health insurance issuer that offers individual
157	health insurance must elect to become a risk-assuming carrier or
158	a reinsuring carrier for purposes of this section. Each such
159	issuer must make an initial election, binding through December
160	31, 1999. The issuer's initial election must be made no later
161	than October 31, 1997. By October 31, 1997, all issuers must
162	file a final election, which is binding for 2 years, from
163	January 1, 1998, through December 31, 1999, after whichan
164	election which shall be binding indefinitely or until modified
165	or withdrawnfor a period of 5 years. The department may permit
166	an issuer to modify its election at any time for good cause
167	shown, after a hearing.
168	(6) ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER.--
169	(c) The department shall provide public notice of an
170	issuer's filing adesignation of election under this subsection
171	to become a risk-assuming carrier and shall provide at least a
172	21-day period for public comment upon receipt of such filing
173	prior to making a decision on the election. The department shall
174	hold a hearing on the election at the request of the issuer.
175	(7) INDIVIDUAL HEALTH REINSURANCE PROGRAM.--
176	(b) A reinsuring carrier may reinsure with the program
177	coverage of an eligible individual, subject to each of the
178	following provisions:
179	1. A reinsuring carrier may reinsure an eligible
180	individual within 9060days after commencement of the coverage
181	of the eligible individual.
182	2. The program may not reimburse a participating carrier
183	with respect to the claims of a reinsured eligible individual
184	until the carrier has paid incurred claims of an amount equal to
185	the participating carrier’s selected deductible levelat least
186	$5,000 in a calendar year for benefits covered by the program.
187	In addition, the reinsuring carrier is responsible for 10
188	percent of the next $50,000 and 5 percent of the next $100,000
189	of incurred claims during a calendar year, and the program shall
190	reinsure the remainder.
191	3. The board shall annually adjust the initial level of
192	claims and the maximum limit to be retained by the carrier to
193	reflect increases in costs and utilization within the standard
194	market for health benefit plans within the state. The adjustment
195	may not be less than the annual change in the medical component
196	of the "Commerce Price Index for All Urban Consumers" of the
197	Bureau of Labor Statistics of the United States Department of
198	Labor, unless the board proposes and the department approves a
199	lower adjustment factor.
200	4. A reinsuring carrier may terminate reinsurance for all
201	reinsured eligible individuals on any plan anniversary.
202	5. The premium rate charged for reinsurance by the program
203	to a health maintenance organization that is approved by the
204	Secretary of Health and Human Services as a federally qualified
205	health maintenance organization pursuant to 42 U.S.C. s.
206	300e(c)(2)(A) and that, as such, is subject to requirements that
207	limit the amount of risk that may be ceded to the program, which
208	requirements are more restrictive than subparagraph 2., shall be
209	reduced by an amount equal to that portion of the risk, if any,
210	which exceeds the amount set forth in subparagraph 2., which may
211	not be ceded to the program.
212	6. The board may consider adjustments to the premium rates
213	charged for reinsurance by the program or carriers that use
214	effective cost-containment measures, including high-cost case
215	management, as defined by the board.
216	7. A reinsuring carrier shall apply its case-management
217	and claims-handling techniques, including, but not limited to,
218	utilization review, individual case management, preferred
219	provider provisions, other managed-care provisions, or methods
220	of operation consistently with both reinsured business and
221	nonreinsured business.
222	(c)1. The board, as part of the plan of operation, shall
223	establish a methodology for determining premium rates to be
224	charged by the program for reinsuring eligible individuals
225	pursuant to this section. The methodology must include a system
226	for classifying individuals which reflects the types of case
227	characteristics commonly used by carriers in this state. The
228	methodology must provide for the development of basic
229	reinsurance premium rates, which shall be multiplied by the
230	factors set for them in this paragraph to determine the premium
231	rates for the program. The basic reinsurance premium rates shall
232	be established by the board, subject to the approval of the
233	department, and shall be set at levels that reasonably
234	approximate gross premiums charged to eligible individuals for
235	individual health insurance by health insurance issuers. The
236	premium rates set by the board may vary by geographical area, as
237	determined under this section, to reflect differences in cost.
238	An eligible individual may be reinsured for a rate that is five
239	times the rate established by the board.
240	2. The board shall periodically review the methodology
241	established, including the system of classification and any
242	rating factors, to ensure that it reasonably reflects the claims
243	experience of the program. The board may propose changes to the
244	rates that are subject to the approval of the department.
245	(e)1. Before SeptemberMarch1 of each calendar year, the
246	board shall determine and report to the department the program
247	net loss in the individual account for the previous year,
248	including administrative expenses for that year and the incurred
249	losses for that year, taking into account investment income and
250	other appropriate gains and losses.
251	2. Any net loss in the individual account for the year
252	shall be recouped by assessing the carriers as follows:
253	a. The operating losses of the program shall be assessed
254	in the following order subject to the specified limitations. The
255	first tier of assessments shall be made against reinsuring
256	carriers in an amount that may not exceed 5 percent of each
257	reinsuring carrier's premiums for individual health insurance.
258	If such assessments have been collected and additional moneys
259	are needed, the board shall make a second tier of assessments in
260	an amount that may not exceed 0.5 percent of each carrier's
261	health benefit plan premiums.
262	b. Except as provided in paragraph (f), risk-assuming
263	carriers are exempt from all assessments authorized pursuant to
264	this section. The amount paid by a reinsuring carrier for the
265	first tier of assessments shall be credited against any
266	additional assessments made.
267	c. The board shall equitably assess reinsuring carriers
268	for operating losses of the individual account based on market
269	share. The board shall annually assess each carrier a portion of
270	the operating losses of the individual account. The first tier
271	of assessments shall be determined by multiplying the operating
272	losses by a fraction, the numerator of which equals the
273	reinsuring carrier's earned premium pertaining to direct
274	writings of individual health insurance in the state during the
275	calendar year for which the assessment is levied, and the
276	denominator of which equals the total of all such premiums
277	earned by reinsuring carriers in the state during that calendar
278	year. The second tier of assessments shall be based on the
279	premiums that all carriers, except risk-assuming carriers,
280	earned on all health benefit plans written in this state. The
281	board may levy interim assessments against reinsuring carriers
282	to ensure the financial ability of the plan to cover claims
283	expenses and administrative expenses paid or estimated to be
284	paid in the operation of the plan for the calendar year prior to
285	the association's anticipated receipt of annual assessments for
286	that calendar year. Any interim assessment is due and payable
287	within 30 days after receipt by a carrier of the interim
288	assessment notice. Interim assessment payments shall be credited
289	against the carrier's annual assessment. Health benefit plan
290	premiums and benefits paid by a carrier that are less than an
291	amount determined by the board to justify the cost of collection
292	may not be considered for purposes of determining assessments.
293	d. Subject to the approval of the department, the board
294	shall adjust the assessment formula for reinsuring carriers that
295	are approved as federally qualified health maintenance
296	organizations by the Secretary of Health and Human Services
297	pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent, if any,
298	that restrictions are placed on them which are not imposed on
299	other carriers.
300	3. Before SeptemberMarch1 of each year, the board shall
301	determine and file with the department an estimate of the
302	assessments needed to fund the losses incurred by the program in
303	the individual account for the previous calendar year.
304	4. If the board determines that the assessments needed to
305	fund the losses incurred by the program in the individual
306	account for the previous calendar year will exceed the amount
307	specified in subparagraph 2., the board shall evaluate the
308	operation of the program and report its findings and
309	recommendations to the department in the format established in
310	s. 627.6699(11) for the comparable report for the small employer
311	reinsurance program.
312	Section 7. Subsection (2) of section 627.6617, Florida
313	Statutes, is amended to read:
314	627.6617 Coverage for home health care services.--
315	(2) Carriers providing coverage pursuant to this section
316	may establish a maximum length of care for any policy year, but
317	in no event shall reimbursement be limited to an amount less
318	than $15,000$1,000per year.
319	Section 8. Section 627.662, Florida Statutes, is amended
320	to read:
321	627.662 Other provisions applicable.--The following
322	provisions apply to group health insurance, blanket health
323	insurance, and franchise health insurance:
324	(1) Section 627.569, relating to use of dividends,
325	refunds, rate reductions, commissions, and service fees.
326	(2) Section 627.602(1)(f) and (2), relating to
327	identification numbers and statement of deductible provisions.
328	(3) Section 627.6044, relating to the use of specific
329	methodology for payment of claims.
330	(4)(3)Section 627.635, relating to excess insurance.
331	(5)(4)Section 627.638, relating to direct payment for
332	hospital or medical services.
333	(6)(5)Section 627.640, relating to filing and
334	classification of rates.
335	(7)(6)Section 627.613, relating to timely payment of
336	claims, or s. 627.6131, relating to payment of claims, whichever
337	is applicable.
338	(8)(7)Section 627.645(1), relating to denial of claims.
339	(9)(8)Section 627.6471, relating to preferred provider
340	organizations.
341	(10)(9)Section 627.6472, relating to exclusive provider
342	organizations.
343	(11)(10)Section 627.6473, relating to combined preferred
344	provider and exclusive provider policies.
345	(12)(11)Section 627.6474, relating to provider contracts.
346	Section 9. Subsection (6) of section 627.667, Florida
347	Statutes, is amended to read:
348	627.667 Extension of benefits.--
349	(6) This section also applies to holders of group
350	certificates which are renewed, delivered, or issued for
351	delivery to residents of this state under group policies
352	effectuated or delivered outside this state, unless a succeeding
353	carrier under a group policy has agreed to assume liability for
354	the benefits.
355	Section 10. Paragraph (e) of subsection (5) of section
356	627.6692, Florida Statutes, is amended to read:
357	627.6692 Florida Health Insurance Coverage Continuation
358	Act.--
359	(5) CONTINUATION OF COVERAGE UNDER GROUP HEALTH PLANS.--
360	(e)1. A covered employee or other qualified beneficiary
361	who wishes continuation of coverage must pay the initial premium
362	and elect such continuation in writing to the insurance carrier
363	issuing the employer's group health plan within 6330days after
364	receiving notice from the insurance carrier under paragraph (d).
365	Subsequent premiums are due by the grace period expiration date.
366	The insurance carrier or the insurance carrier's designee shall
367	process all elections promptly and provide coverage
368	retroactively to the date coverage would otherwise have
369	terminated. The premium due shall be for the period beginning on
370	the date coverage would have otherwise terminated due to the
371	qualifying event. The first premium payment must include the
372	coverage paid to the end of the month in which the first payment
373	is made. After the election, the insurance carrier must bill the
374	qualified beneficiary for premiums once each month, with a due
375	date on the first of the month of coverage and allowing a 30-day
376	grace period for payment.
377	2. Except as otherwise specified in an election, any
378	election by a qualified beneficiary shall be deemed to include
379	an election of continuation of coverage on behalf of any other
380	qualified beneficiary residing in the same household who would
381	lose coverage under the group health plan by reason of a
382	qualifying event. This subparagraph does not preclude a
383	qualified beneficiary from electing continuation of coverage on
384	behalf of any other qualified beneficiary.
385	Section 11. Paragraphs (h), (i), (n), and (u) of
386	subsection (3), paragraph (c) of subsection (5), paragraph (b)
387	of subsection (6), paragraph (a) of subsection (9), paragraph
388	(d) of subsection (10), and paragraphs (f), (g), (h), and (j) of
389	subsection (11) of section 627.6699, Florida Statutes, are
390	amended to read:
391	627.6699 Employee Health Care Access Act.--
392	(3) DEFINITIONS.--As used in this section, the term:
393	(h) "Eligible employee" means an employee who works full
394	time, having a normal workweek of 25 or more hours, who is paid
395	wages or a salary at least equal to the federal minimum hourly
396	wage applicable to such employee,and who has met any applicable
397	waiting-period requirements or other requirements of this act.
398	The term includes a self-employed individual, a sole proprietor,
399	a partner of a partnership, or an independent contractor, if the
400	sole proprietor, partner, or independent contractor is included
401	as an employee under a health benefit plan of a small employer,
402	but does not include a part-time, temporary, or substitute
403	employee.
404	(i) "Established geographic area" means the county or
405	counties, or any portion of a county or counties,within which
406	the carrier provides or arranges for health care services to be
407	available to its insureds, members, or subscribers.
408	(n) "Modified community rating" means a method used to
409	develop carrier premiums which spreads financial risk across a
410	large population; allows the use of separate rating factors for
411	age, gender, family composition, tobacco usage, and geographic
412	area as determined under paragraph (5)(j); and allows
413	adjustments for: claims experience, health status, or duration
414	of coverage as permitted under subparagraph (6)(b)5.; and
415	administrative and acquisition expenses as permitted under
416	subparagraph (6)(b)5.
417	(u) "Self-employed individual" means an individual or sole
418	proprietor who derives his or her income from a trade or
419	business carried on by the individual or sole proprietor which
420	necessitates that the individual file with the Internal Revenue
421	Service for the most recent tax year federal income tax forms
422	with supporting schedules and accompanying income reporting
423	forms or federal income tax extensions of time to file forms
424	results in taxable income as indicated on IRS Form 1040,
425	schedule C or F, and which generated taxable income in one of
426	the 2 previous years.
427	(5) AVAILABILITY OF COVERAGE.--
428	(c) Every small employer carrier must, as a condition of
429	transacting business in this state:
430	1. Beginning July 1, 2000, offer and issue all small
431	employer health benefit plans on a guaranteed-issue basis to
432	every eligible small employer, with 2 to 50 eligible employees,
433	that elects to be covered under such plan, agrees to make the
434	required premium payments, and satisfies the other provisions of
435	the plan. A rider for additional or increased benefits may be
436	medically underwritten and may only be added to the standard
437	health benefit plan. The increased rate charged for the
438	additional or increased benefit must be rated in accordance with
439	this section.
440	2. Beginning July 1, 2000, and until July 31, 2001, offer
441	and issue basic and standard small employer health benefit plans
442	on a guaranteed-issue basis to every eligible small employer
443	which is eligible for guaranteed renewal, has less than two
444	eligible employees, is not formed primarily for the purpose of
445	buying health insurance, elects to be covered under such plan,
446	agrees to make the required premium payments, and satisfies the
447	other provisions of the plan. A rider for additional or
448	increased benefits may be medically underwritten and may be
449	added only to the standard benefit plan. The increased rate
450	charged for the additional or increased benefit must be rated in
451	accordance with this section. For purposes of this subparagraph,
452	a person, his or her spouse, and his or her dependent children
453	shall constitute a single eligible employee if that person and
454	spouse are employed by the same small employer and either one
455	has a normal work week of less than 25 hours.
456	3.a.Beginning August 1, 2001, offer and issue basic and
457	standard small employer health benefit plans on a guaranteed-
458	issue basis, during a 31-day open enrollment period of August 1
459	through August 31 of each year, to every eligible small
460	employer, with fewer than two eligible employees, which small
461	employer is not formed primarily for the purpose of buying
462	health insurance and which elects to be covered under such plan,
463	agrees to make the required premium payments, and satisfies the
464	other provisions of the plan. Coverage provided under this sub-
465	subparagraph subparagraphshall begin on October 1 of the same
466	year as the date of enrollment, unless the small employer
467	carrier and the small employer agree to a different date. A
468	rider for additional or increased benefits may be medically
469	underwritten and may only be added to the standard health
470	benefit plan. The increased rate charged for the additional or
471	increased benefit must be rated in accordance with this section.
472	For purposes of this sub-subparagraphsubparagraph, a person,
473	his or her spouse, and his or her dependent children constitute
474	a single eligible employee if that person and spouse are
475	employed by the same small employer and either that person or
476	his or her spouse has a normal work week of less than 25 hours.
477	b. Notwithstanding the restrictions set forth in sub-
478	subparagraph a., when a small employer group is losing coverage
479	because a carrier is exercising the provisions of s.
480	627.6571(3)(b) or s. 641.31074(3)(b), the eligible small
481	employer, as defined in sub-subparagraph a., shall be entitled
482	to enroll with another carrier offering small employer coverage
483	within 63 days after the notice of termination or the
484	termination date of the prior coverage, whichever is later.
485	Coverage provided under this sub-subparagraph shall begin
486	immediately upon enrollment unless the small employer carrier
487	and the small employer agree to a different date.
488	4. This paragraph does not limit a carrier's ability to
489	offer other health benefit plans to small employers if the
490	standard and basic health benefit plans are offered and
491	rejected.
492	(6) RESTRICTIONS RELATING TO PREMIUM RATES.--
493	(b) For all small employer health benefit plans that are
494	subject to this section and are issued by small employer
495	carriers on or after January 1, 1994, premium rates for health
496	benefit plans subject to this section are subject to the
497	following:
498	1. Small employer carriers must use a modified community
499	rating methodology in which the premium for each small employer
500	must be determined solely on the basis of the eligible
501	employee's and eligible dependent's gender, age, family
502	composition, tobacco use, or geographic area as determined under
503	paragraph (5)(j) and in which the premium may be adjusted as
504	permitted by this paragraph.
505	2. Rating factors related to age, gender, family
506	composition, tobacco use, or geographic location may be
507	developed by each carrier to reflect the carrier's experience.
508	The factors used by carriers are subject to department review
509	and approval.
510	3. Small employer carriers may not modify the rate for a
511	small employer for 12 months from the initial issue date or
512	renewal date, unless the composition of the group changes or
513	benefits are changed. However, a small employer carrier may
514	modify the rate one time prior to 12 months after the initial
515	issue date for a small employer who enrolls under a previously
516	issued group policy that has a common anniversary date for all
517	employers covered under the policy if:
518	a. The carrier discloses to the employer in a clear and
519	conspicuous manner the date of the first renewal and the fact
520	that the premium may increase on or after that date.
521	b. The insurer demonstrates to the department that
522	efficiencies in administration are achieved and reflected in the
523	rates charged to small employers covered under the policy.
524	4. A carrier may issue a group health insurance policy to
525	a small employer health alliance or other group association with
526	rates that reflect a premium credit for expense savings
527	attributable to administrative activities being performed by the
528	alliance or group association if such expense savings are
529	specifically documented in the insurer's rate filing and are
530	approved by the department. Any such credit may not be based on
531	different morbidity assumptions or on any other factor related
532	to the health status or claims experience of any person covered
533	under the policy. Nothing in this subparagraph exempts an
534	alliance or group association from licensure for any activities
535	that require licensure under the insurance code. A carrier
536	issuing a group health insurance policy to a small employer
537	health alliance or other group association shall allow any
538	properly licensed and appointed agent of that carrier to market
539	and sell the small employer health alliance or other group
540	association policy. Such agent shall be paid the usual and
541	customary commission paid to any agent selling the policy.
542	5. Any adjustments in rates for claims experience, health
543	status, or duration of coverage may not be charged to individual
544	employees or dependents. For a small employer's policy, such
545	adjustments may not result in a rate for the small employer
546	which deviates more than 15 percent from the carrier's approved
547	rate. Any such adjustment must be applied uniformly to the rates
548	charged for all employees and dependents of the small employer.
549	A small employer carrier may make an adjustment to a small
550	employer's renewal premium, not to exceed 10 percent annually,
551	due to the claims experience, health status, or duration of
552	coverage of the employees or dependents of the small employer.
553	Semiannually, small group carriers shall report information on
554	forms adopted by rule by the department, to enable the
555	department to monitor the relationship of aggregate adjusted
556	premiums actually charged policyholders by each carrier to the
557	premiums that would have been charged by application of the
558	carrier's approved modified community rates. If the aggregate
559	resulting from the application of such adjustment exceeds the
560	premium that would have been charged by application of the
561	approved modified community rate by 5 percent for the current
562	reporting period, the carrier shall limit the application of
563	such adjustments only to minus adjustments beginning not more
564	than 60 days after the report is sent to the department. For any
565	subsequent reporting period, if the total aggregate adjusted
566	premium actually charged does not exceed the premium that would
567	have been charged by application of the approved modified
568	community rate by 5 percent, the carrier may apply both plus and
569	minus adjustments.A small employer carrier may provide a credit
570	to a small employer's premium based on administrative and
571	acquisition expense differences resulting from the size of the
572	group. Group size administrative and acquisition expense factors
573	may be developed by each carrier to reflect the carrier's
574	experience and are subject to department review and approval.
575	6. A small employer carrier rating methodology may include
576	separate rating categories for one dependent child, for two
577	dependent children, and for three or more dependent children for
578	family coverage of employees having a spouse and dependent
579	children or employees having dependent children only. A small
580	employer carrier may have fewer, but not greater, numbers of
581	categories for dependent children than those specified in this
582	subparagraph.
583	7. Small employer carriers may not use a composite rating
584	methodology to rate a small employer with fewer than 10
585	employees. For the purposes of this subparagraph, a "composite
586	rating methodology" means a rating methodology that averages the
587	impact of the rating factors for age and gender in the premiums
588	charged to all of the employees of a small employer.
589	8.a. A carrier may separate the experience of small
590	employer groups with less than 2 eligible employees from the
591	experience of small employer groups with 2-50 eligible employees
592	for purposes of determining an alternative modified community
593	rating.
594	b. If a carrier separates the experience of small employer
595	groups as provided in sub-subparagraph a., the rate to be
596	charged to small employer groups of less than 2 eligible
597	employees may not exceed 150 percent of the rate determined for
598	small employer groups of 2-50 eligible employees. However, the
599	carrier may charge excess losses of the experience pool
600	consisting of small employer groups with less than 2 eligible
601	employees to the experience pool consisting of small employer
602	groups with 2-50 eligible employees so that all losses are
603	allocated and the 150-percent rate limit on the experience pool
604	consisting of small employer groups with less than 2 eligible
605	employees is maintained. Notwithstanding s. 627.411(1), the rate
606	to be charged to a small employer group of fewer than 2 eligible
607	employees, insured as of July 1, 2002, may be up to 125 percent
608	of the rate determined for small employer groups of 2-50
609	eligible employees for the first annual renewal and 150 percent
610	for subsequent annual renewals.
611	(9) SMALL EMPLOYER CARRIER'S ELECTION TO BECOME A RISK-
612	ASSUMING CARRIER OR A REINSURING CARRIER.--
613	(a) A small employer carrier must elect to become either a
614	risk-assuming carrier or a reinsuring carrier. Each small
615	employer carrier must make an initial election, binding through
616	January 1, 1994. The carrier's initial election must be made no
617	later than October 31, 1992. By October 31, 1993, all small
618	employer carriers must file a final election, which is binding
619	for 2 years, from January 1, 1994, through December 31, 1995,
620	after which an election shall be binding for a period of 5
621	years.Any carrier that is not a small employer carrier on
622	October 31, 1992, and intends to become a small employer carrier
623	after October 31, 1992, must file its designation when it files
624	the forms and rates it intends to use for small employer group
625	health insurance; such designation shall be binding indefinitely
626	or until modified or withdrawnfor 2 years after the date of
627	approval of the forms and rates, and any subsequent designation
628	is binding for 5 years. The department may permit a carrier to
629	modify its election at any time for good cause shown, after a
630	hearing.
631	(10) ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER.--
632	(d) The department shall provide public notice of a small
633	employer carrier's filing adesignation of election under
634	subsection (9) to become a risk-assuming carrier and shall
635	provide at least a 21-day period for public comment upon receipt
636	of such filingprior to making a decision on the election. The
637	department shall hold a hearing on the election at the request
638	of the carrier.
639	(11) SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
640	(f) The program has the general powers and authority
641	granted under the laws of this state to insurance companies and
642	health maintenance organizations licensed to transact business,
643	except the power to issue health benefit plans directly to
644	groups or individuals. In addition thereto, the program has
645	specific authority to:
646	1. Enter into contracts as necessary or proper to carry
647	out the provisions and purposes of this act, including the
648	authority to enter into contracts with similar programs of other
649	states for the joint performance of common functions or with
650	persons or other organizations for the performance of
651	administrative functions.
652	2. Sue or be sued, including taking any legal action
653	necessary or proper for recovering any assessments and penalties
654	for, on behalf of, or against the program or any carrier.
655	3. Take any legal action necessary to avoid the payment of
656	improper claims against the program.
657	4. Issue reinsurance policies, in accordance with the
658	requirements of this act.
659	5. Establish rules, conditions, and procedures for
660	reinsurance risks under the program participation.
661	6. Establish actuarial functions as appropriate for the
662	operation of the program.
663	7. Assess participating carriers in accordance with
664	paragraph (j), and make advance interim assessments as may be
665	reasonable and necessary for organizational and interim
666	operating expenses. Interim assessments shall be credited as
667	offsets against any regular assessments due following the close
668	of the calendar year.
669	8. Appoint appropriate legal, actuarial, and other
670	committees as necessary to provide technical assistance in the
671	operation of the program, and in any other function within the
672	authority of the program.
673	9. Borrow money to effect the purposes of the program. Any
674	notes or other evidences of indebtedness of the program which
675	are not in default constitute legal investments for carriers and
676	may be carried as admitted assets.
677	10. To the extent necessary, increase the $5,000
678	deductible reinsurance requirement to adjust for the effects of
679	inflation. The program may evaluate the desirability of
680	establishing different levels of deductibles. If different
681	levels of deductibles are established, such levels and the
682	resulting premiums shall be approved by the department.
683	(g) A reinsuring carrier may reinsure with the program
684	coverage of an eligible employee of a small employer, or any
685	dependent of such an employee, subject to each of the following
686	provisions:
687	1. With respect to a standard and basic health care plan,
688	the program maymustreinsure the level of coverage provided;
689	and, with respect to any other plan, the program maymust
690	reinsure the coverage up to, but not exceeding, the level of
691	coverage provided under the standard and basic health care plan.
692	As an alternative to reinsuring the level of coverage provided
693	under the standard and basic health care plan, the program may
694	develop alternate levels of reinsurance designed to coordinate
695	with a reinsuring carrier’s existing reinsurance. The levels of
696	reinsurance and resulting premiums must be approved by the
697	department.
698	2. Except in the case of a late enrollee, a reinsuring
699	carrier may reinsure an eligible employee or dependent within 60
700	days after the commencement of the coverage of the small
701	employer. A newly employed eligible employee or dependent of a
702	small employer may be reinsured within 60 days after the
703	commencement of his or her coverage.
704	3. A small employer carrier may reinsure an entire
705	employer group within 60 days after the commencement of the
706	group's coverage under the plan. The carrier may choose to
707	reinsure newly eligible employees and dependents of the
708	reinsured group pursuant to subparagraph 1.
709	4. The program may evaluate the option of allowing a small
710	employer carrier to reinsure an entire employer group or an
711	eligible employee at the first or subsequent renewal date. Any
712	such option and the resulting premium must be approved by the
713	department.
714	5.4.The program may not reimburse a participating carrier
715	with respect to the claims of a reinsured employee or dependent
716	until the carrier has paid incurred claims of an amount equal to
717	the participating carrier’s selected deductible levelat least
718	$5,000 in a calendar year for benefits covered by the program.
719	In addition, the reinsuring carrier shall be responsible for 10
720	percent of the next $50,000 and 5 percent of the next $100,000
721	of incurred claims during a calendar year and the program shall
722	reinsure the remainder.
723	6.5.The board annually shall adjust the initial level of
724	claims and the maximum limit to be retained by the carrier to
725	reflect increases in costs and utilization within the standard
726	market for health benefit plans within the state. The adjustment
727	shall not be less than the annual change in the medical
728	component of the "Consumer Price Index for All Urban Consumers"
729	of the Bureau of Labor Statistics of the Department of Labor,
730	unless the board proposes and the department approves a lower
731	adjustment factor.
732	7.6.A small employer carrier may terminate reinsurance
733	for all reinsured employees or dependents on any plan
734	anniversary.
735	8.7.The premium rate charged for reinsurance by the
736	program to a health maintenance organization that is approved by
737	the Secretary of Health and Human Services as a federally
738	qualified health maintenance organization pursuant to 42 U.S.C.
739	s. 300e(c)(2)(A) and that, as such, is subject to requirements
740	that limit the amount of risk that may be ceded to the program,
741	which requirements are more restrictive than subparagraph 5.4.,
742	shall be reduced by an amount equal to that portion of the risk,
743	if any, which exceeds the amount set forth in subparagraph 5.4.
744	which may not be ceded to the program.
745	9.8.The board may consider adjustments to the premium
746	rates charged for reinsurance by the program for carriers that
747	use effective cost containment measures, including high-cost
748	case management, as defined by the board.
749	10.9.A reinsuring carrier shall apply its case-management
750	and claims-handling techniques, including, but not limited to,
751	utilization review, individual case management, preferred
752	provider provisions, other managed care provisions or methods of
753	operation, consistently with both reinsured business and
754	nonreinsured business.
755	(h)1. The board, as part of the plan of operation, shall
756	establish a methodology for determining premium rates to be
757	charged by the program for reinsuring small employers and
758	individuals pursuant to this section. The methodology shall
759	include a system for classification of small employers that
760	reflects the types of case characteristics commonly used by
761	small employer carriers in the state. The methodology shall
762	provide for the development of basic reinsurance premium rates,
763	which shall be multiplied by the factors set for them in this
764	paragraph to determine the premium rates for the program. The
765	basic reinsurance premium rates shall be established by the
766	board, subject to the approval of the department, and shall be
767	set at levels which reasonably approximate gross premiums
768	charged to small employers by small employer carriers for health
769	benefit plans with benefits similar to the standard and basic
770	health benefit plan. The premium rates set by the board may vary
771	by geographical area, as determined under this section, to
772	reflect differences in cost. The multiplying factors must be
773	established as follows:
774	a. The entire group may be reinsured for a rate that is
775	1.5 times the rate established by the board.
776	b. An eligible employee or dependent may be reinsured for
777	a rate that is 5 times the rate established by the board.
778	2. The board periodically shall review the methodology
779	established, including the system of classification and any
780	rating factors, to assure that it reasonably reflects the claims
781	experience of the program. The board may propose changes to the
782	rates which shall be subject to the approval of the department.
783	(j)1. Before SeptemberMarch1 of each calendar year, the
784	board shall determine and report to the department the program
785	net loss for the previous year, including administrative
786	expenses for that year, and the incurred losses for the year,
787	taking into account investment income and other appropriate
788	gains and losses.
789	2. Any net loss for the year shall be recouped by
790	assessment of the carriers, as follows:
791	a. The operating losses of the program shall be assessed
792	in the following order subject to the specified limitations. The
793	first tier of assessments shall be made against reinsuring
794	carriers in an amount which shall not exceed 5 percent of each
795	reinsuring carrier's premiums from health benefit plans covering
796	small employers. If such assessments have been collected and
797	additional moneys are needed, the board shall make a second tier
798	of assessments in an amount which shall not exceed 0.5 percent
799	of each carrier's health benefit plan premiums. Except as
800	provided in paragraph (n), risk-assuming carriers are exempt
801	from all assessments authorized pursuant to this section. The
802	amount paid by a reinsuring carrier for the first tier of
803	assessments shall be credited against any additional assessments
804	made.
805	b. The board shall equitably assess carriers for operating
806	losses of the plan based on market share. The board shall
807	annually assess each carrier a portion of the operating losses
808	of the plan. The first tier of assessments shall be determined
809	by multiplying the operating losses by a fraction, the numerator
810	of which equals the reinsuring carrier's earned premium
811	pertaining to direct writings of small employer health benefit
812	plans in the state during the calendar year for which the
813	assessment is levied, and the denominator of which equals the
814	total of all such premiums earned by reinsuring carriers in the
815	state during that calendar year. The second tier of assessments
816	shall be based on the premiums that all carriers, except risk-
817	assuming carriers, earned on all health benefit plans written in
818	this state. The board may levy interim assessments against
819	carriers to ensure the financial ability of the plan to cover
820	claims expenses and administrative expenses paid or estimated to
821	be paid in the operation of the plan for the calendar year prior
822	to the association's anticipated receipt of annual assessments
823	for that calendar year. Any interim assessment is due and
824	payable within 30 days after receipt by a carrier of the interim
825	assessment notice. Interim assessment payments shall be credited
826	against the carrier's annual assessment. Health benefit plan
827	premiums and benefits paid by a carrier that are less than an
828	amount determined by the board to justify the cost of collection
829	may not be considered for purposes of determining assessments.
830	c. Subject to the approval of the department, the board
831	shall make an adjustment to the assessment formula for
832	reinsuring carriers that are approved as federally qualified
833	health maintenance organizations by the Secretary of Health and
834	Human Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the
835	extent, if any, that restrictions are placed on them that are
836	not imposed on other small employer carriers.
837	3. Before SeptemberMarch1 of each year, the board shall
838	determine and file with the department an estimate of the
839	assessments needed to fund the losses incurred by the program in
840	the previous calendar year.
841	4. If the board determines that the assessments needed to
842	fund the losses incurred by the program in the previous calendar
843	year will exceed the amount specified in subparagraph 2., the
844	board shall evaluate the operation of the program and report its
845	findings, including any recommendations for changes to the plan
846	of operation, to the department within 24090days following the
847	end of the calendar year in which the losses were incurred. The
848	evaluation shall include an estimate of future assessments, the
849	administrative costs of the program, the appropriateness of the
850	premiums charged and the level of carrier retention under the
851	program, and the costs of coverage for small employers. If the
852	board fails to file a report with the department within 24090
853	days following the end of the applicable calendar year, the
854	department may evaluate the operations of the program and
855	implement such amendments to the plan of operation the
856	department deems necessary to reduce future losses and
857	assessments.
858	5. If assessments exceed the amount of the actual losses
859	and administrative expenses of the program, the excess shall be
860	held as interest and used by the board to offset future losses
861	or to reduce program premiums. As used in this paragraph, the
862	term "future losses" includes reserves for incurred but not
863	reported claims.
864	6. Each carrier's proportion of the assessment shall be
865	determined annually by the board, based on annual statements and
866	other reports considered necessary by the board and filed by the
867	carriers with the board.
868	7. Provision shall be made in the plan of operation for
869	the imposition of an interest penalty for late payment of an
870	assessment.
871	8. A carrier may seek, from the commissioner, a deferment,
872	in whole or in part, from any assessment made by the board. The
873	department may defer, in whole or in part, the assessment of a
874	carrier if, in the opinion of the department, the payment of the
875	assessment would place the carrier in a financially impaired
876	condition. If an assessment against a carrier is deferred, in
877	whole or in part, the amount by which the assessment is deferred
878	may be assessed against the other carriers in a manner
879	consistent with the basis for assessment set forth in this
880	section. The carrier receiving such deferment remains liable to
881	the program for the amount deferred and is prohibited from
882	reinsuring any individuals or groups in the program if it fails
883	to pay assessments.
884	Section 12. Section 627.911, Florida Statutes, is amended
885	to read:
886	627.911 Scope of this part.--Any insurer or health
887	maintenance organizationtransacting insurance in this state
888	shall report information as required by this part.
889	Section 13. Section 627.9175, Florida Statutes, is amended
890	to read:
891	627.9175 Reports of information on health insurance.--
892	(1) Each authorized health insurer or health maintenance
893	organization shall submit annually to the department information
894	concerningas to policies of individual health insurance
895	coverage being issued or currently in force in this state. The
896	information shall include information related to premium, number
897	of policies, and covered lives for such policies and other
898	information necessary to analyze trends in enrollment, premiums,
899	and claim costs.
900	(2) The required information shall be broken down by
901	market segment, to include:
902	(a) Health insurance issuer, company, or contact person or
903	agent.
904	(b) All health insurance products issued or in force,
905	including, but not limited to:
906	1. Direct premiums earned.
907	2. Direct losses incurred.
908	3. Direct premiums earned for new business issued during
909	the year.
910	4. Number of policies.
911	5. Number of certificates.
912	6. Number of total covered lives.
913	(a) A summary of typical benefits, exclusions, and
914	limitations for each type of individual policy form currently
915	being issued in the state. The summary shall include, as
916	appropriate:
917	1. The deductible amount;
918	2. The coinsurance percentage;
919	3. The out-of-pocket maximum;
920	4. Outpatient benefits;
921	5. Inpatient benefits; and
922	6. Any exclusions for preexisting conditions.
923
924	The department shall determine other appropriate benefits,
925	exclusions, and limitations to be reported for inclusion in the
926	consumer's guide published pursuant to this section.
927	(b) A schedule of rates for each type of individual policy
928	form reflecting typical variations by age, sex, region of the
929	state, or any other applicable factor which is in use and is
930	determined to be appropriate for inclusion by the department.
931
932	The department shall provide by rule a uniform format for the
933	submission of this information in order to allow for meaningful
934	comparisons of premiums charged for comparable benefits.
935	(3)The department shall publish annually a consumer's
936	guide which summarizes and compares the information required to
937	be reported under this subsection.
938	(2)(a) Every insurer transacting health insurance in this
939	state shall report annually to the department, not later than
940	April 1, information relating to any measure the insurer has
941	implemented or proposes to implement during the next calendar
942	year for the purpose of containing health insurance costs or
943	cost increases. The reports shall identify each measure and the
944	forms to which the measure is applied, shall provide an
945	explanation as to how the measure is used, and shall provide an
946	estimate of the cost effect of the measure.
947	(b) The department shall promulgate forms to be used by
948	insurers in reporting information pursuant to this subsection
949	and shall utilize such forms to analyze the effects of health
950	care cost containment programs used by health insurers in this
951	state.
952	(4)(c)The department shall analyze the data reported
953	under this subsection (2)and shall annually make available to
954	the public a summary of its findings as to the types of cost
955	containment measures reported and the estimated effect of these
956	measures.
957	Section 14. Section 627.9403, Florida Statutes, is amended
958	to read:
959	627.9403 Scope.--The provisions of this part shall apply
960	to long-term care insurance policies delivered or issued for
961	delivery in this state, and to policies delivered or issued for
962	delivery outside this state to the extent provided in s.
963	627.9406, by an insurer, a fraternal benefit society as defined
964	in s. 632.601, a health maintenance organization as defined in
965	s. 641.19, a prepaid health clinic as defined in s. 641.402, or
966	a multiple-employer welfare arrangement as defined in s.
967	624.437. A policy which is advertised, marketed, or offered as a
968	long-term care policy and as a Medicare supplement policy shall
969	meet the requirements of this part and the requirements of ss.
970	627.671-627.675 and, to the extent of a conflict, be subject to
971	the requirement that is more favorable to the policyholder or
972	certificateholder. The provisions of this part shall not apply
973	to a continuing care contract issued pursuant to chapter 651 and
974	shall not apply to guaranteed renewable policies issued prior to
975	October 1, 1988. Any limited benefit policy that limits coverage
976	to care in a nursing home or to one or more lower levels of care
977	required or authorized to be provided by this part or by
978	department rule must meet all requirements of this part that
979	apply to long-term care insurance policies, except ss.
980	627.9407(3)(c), (9), (10)(f), and (12) and 627.94073(2). If the
981	limited benefit policy does not provide coverage for care in a
982	nursing home, but does provide coverage for one or more lower
983	levels of care, the policy shall also be exempt from the
984	requirements of s. 627.9407(3)(d).
985	Section 15. Subsection (5) of section 636.016, Florida
986	Statutes, is amended to read:
987	636.016 Prepaid limited health service contracts.--For any
988	entity licensed prior to October 1, 1993, all subscriber
989	contracts in force at such time shall be in compliance with this
990	section upon renewal of such contract.
991	(5)(a)1. If a prepaid limited health service organization
992	offers coverage for dependent children of the contract holder,
993	the policy must insure a dependent child of the contract holder
994	at least until the end of the calendar year in which the child
995	reaches the age of 25, if:
996	a. The child is dependent upon the contract holder for
997	support.
998	b. The child is living in the household of the contract
999	holder or the child is a full-time or part-time student.
1000	2. Nothing in this section affects or preempts a prepaid
1001	limited health service organization's right to medically
1002	underwrite or charge the appropriate premium.
1003	(b)1. A contract that provides coverage for a family
1004	member of the contract holder shall, as to such family member's
1005	coverage, provide that benefits applicable to children of the
1006	contract holder also apply to an adopted child or a foster child
1007	of the contract holder placed in compliance with chapter 63 from
1008	the moment of placement in the residence of the contract holder.
1009	Except in the case of a foster child, the policy may not exclude
1010	coverage for any preexisting condition of the child. In the case
1011	of a newborn child, coverage begins at the moment of birth if a
1012	written agreement to adopt such child has been entered into by
1013	the contract holder prior to the birth of the child, whether or
1014	not the agreement is enforceable. This section does not require
1015	coverage for an adopted child who is not ultimately placed in
1016	the residence of the contract holder in compliance with chapter
1017	63.
1018	2. A contract may require the contract holder to notify
1019	the insurer of the birth or placement of an adopted child within
1020	a specified time period of not less than 30 days after the birth
1021	or placement in the residence of a child adopted by the contract
1022	holder. If timely notice is given, the insurer may not charge an
1023	additional premium for coverage of the child for the duration of
1024	the notice period. If timely notice is not given, the insurer
1025	may charge an additional premium from the date of birth or
1026	placement. If notice is given within 60 days after the birth or
1027	placement of the child, the insurer may not deny coverage for
1028	the child due to the failure of the contract holder to timely
1029	notify the insurer of the birth or placement of the child.
1030	3. If the policy does not require the contract holder to
1031	notify the insurer of the birth or placement of an adopted child
1032	within a specified time period, the insurer may not deny
1033	coverage for such child or retroactively charge the contract
1034	holder an additional premium for such child. However, the
1035	insurer may prospectively charge the contract holder an
1036	additional premium for the child if the insurer provides at
1037	least 45 days' notice of the additional premium required.
1038	4. In order to increase access to postnatal, infant, and
1039	pediatric health care for all children placed in court-ordered
1040	custody, including foster children, all health insurance
1041	policies that provide coverage for a family member of the
1042	contract holder shall, as to such family member's coverage,
1043	provide that benefits applicable for children shall be payable
1044	with respect to a foster child or other child in court-ordered
1045	temporary or other custody of the contract holder.
1046	(c) A contract that provides that coverage of a dependent
1047	child shall terminate upon attainment of the limiting age for
1048	dependent children specified in the contract shall also provide
1049	in substance that attainment of the limiting age does not
1050	terminate the coverage of the child while the child continues to
1051	be:
1052	1. Incapable of self-sustaining employment by reason of
1053	mental retardation or physical handicap.
1054	2. Chiefly dependent upon the contract holder or
1055	subscriber for support and maintenance.
1056
1057	If a claim is denied under a contract for the stated reason that
1058	the child has attained the limiting age for dependent children
1059	specified in the contract, the notice of denial must state that
1060	the contract holder has the burden of establishing that the
1061	child continues to meet the criteria specified in subparagraphs
1062	1. and 2.All prepaid limited health service coverage, benefits,
1063	or services for a member of the family of the subscriber must,
1064	as to such family member's coverage, benefits, or services,
1065	provide also that the coverage, benefits, or services applicable
1066	for children will be provided with respect to a preenrolled
1067	newborn child of the subscriber, or covered family member of the
1068	subscriber, from the moment of birth, or adoption pursuant to
1069	chapter 63.
1070	Section 16. Subsections (9) through (17) of section
1071	641.31, Florida Statutes, are amended to read:
1072	641.31 Health maintenance contracts.--
1073	(9)(a)1. If a health maintenance organization offers
1074	coverage for dependent children of the subscriber, the policy
1075	must cover a dependent child of the subscriber at least until
1076	the end of the calendar year in which the child reaches the age
1077	of 25, if:
1078	a. The child is dependent upon the subscriber for support.
1079	b. The child is living in the household of the subscriber,
1080	or the child is a full-time or part-time student.
1081	2. Nothing in this paragraph affects or preempts a health
1082	maintenance organization's right to medically underwrite or
1083	charge the appropriate premium.
1084	(b)1. A contract that provides coverage for a family
1085	member of the subscriber shall, as to such family member's
1086	coverage, provide that benefits applicable to children of the
1087	subscriber also apply to an adopted child or a foster child of
1088	the subscriber placed in compliance with chapter 63 from the
1089	moment of placement in the residence of the subscriber. Except
1090	in the case of a foster child, the policy may not exclude
1091	coverage for any preexisting condition of the child. In the case
1092	of a newborn child, coverage begins at the moment of birth if a
1093	written agreement to adopt such child has been entered into by
1094	the subscriber prior to the birth of the child, whether or not
1095	the agreement is enforceable. This section does not require
1096	coverage for an adopted child who is not ultimately placed in
1097	the residence of the subscriber in compliance with chapter 63.
1098	2. A contract may require the subscriber to notify the
1099	health maintenance organization of the birth or placement of an
1100	adopted child within a specified time period of not less than 30
1101	days after the birth or placement in the residence of a child
1102	adopted by the subscriber. If timely notice is given, the health
1103	maintenance organization may not charge an additional premium
1104	for coverage of the child for the duration of the notice period.
1105	If timely notice is not given, the health maintenance
1106	organization may charge an additional premium from the date of
1107	birth or placement. If notice is given within 60 days after the
1108	birth or placement of the child, the health maintenance
1109	organization may not deny coverage for the child due to the
1110	failure of the subscriber to timely notify the health
1111	maintenance organization of the birth or placement of the child.
1112	3. If the policy does not require the subscriber to notify
1113	the health maintenance organization of the birth or placement of
1114	an adopted child within a specified time period, the health
1115	maintenance organization may not deny coverage for such child or
1116	retroactively charge the subscriber an additional premium for
1117	such child. However, the health maintenance organization may
1118	prospectively charge the subscriber an additional premium for
1119	the child if the health maintenance organization provides at
1120	least 45 days' notice of the additional premium required.
1121	4. In order to increase access to postnatal, infant, and
1122	pediatric health care for all children placed in court-ordered
1123	custody, including foster children, all health insurance
1124	policies that provide coverage for a family member of the
1125	subscriber shall, as to such family member's coverage, provide
1126	that benefits applicable for children shall be payable with
1127	respect to a foster child or other child in court-ordered
1128	temporary or other custody of the subscriber.
1129	(10) A contract that provides that coverage of a dependent
1130	child shall terminate upon attainment of the limiting age for
1131	dependent children specified in the contract shall also provide
1132	in substance that attainment of the limiting age does not
1133	terminate the coverage of the child while the child continues to
1134	be:
1135	(a) Incapable of self-sustaining employment by reason of
1136	mental retardation or physical handicap.
1137	(b) Chiefly dependent upon the subscriber for support and
1138	maintenance.
1139
1140	If a claim is denied under a contract for the stated reason that
1141	the child has attained the limiting age for dependent children
1142	specified in the contract, the notice of denial must state that
1143	the subscriber has the burden of establishing that the child
1144	continues to meet the criteria specified in paragraphs (a) and
1145	(b).All health maintenance contracts that provide coverage,
1146	benefits, or services for a member of the family of the
1147	subscriber must, as to such family member's coverage, benefits,
1148	or services, provide also that the coverage, benefits, or
1149	services applicable for children must be provided with respect
1150	to a newborn child of the subscriber, or covered family member
1151	of the subscriber, from the moment of birth. However, with
1152	respect to a newborn child of a covered family member other than
1153	the spouse of the insured or subscriber, the coverage for the
1154	newborn child terminates 18 months after the birth of the
1155	newborn child. The coverage, benefits, or services for newborn
1156	children must consist of coverage for injury or sickness,
1157	including the necessary care or treatment of medically diagnosed
1158	congenital defects, birth abnormalities, or prematurity, and
1159	transportation costs of the newborn to and from the nearest
1160	appropriate facility appropriately staffed and equipped to treat
1161	the newborn's condition, when such transportation is certified
1162	by the attending physician as medically necessary to protect the
1163	health and safety of the newborn child.
1164	(a) A contract may require the subscriber to notify the
1165	plan of the birth of a child within a time period, as specified
1166	in the contract, of not less than 30 days after the birth, or a
1167	contract may require the preenrollment of a newborn prior to
1168	birth. However, if timely notice is given, a plan may not charge
1169	an additional premium for additional coverage of the newborn
1170	child for not less than 30 days after the birth of the child. If
1171	timely notice is not given, the plan may charge an additional
1172	premium from the date of birth. If notice is given within 60
1173	days of the birth of the child, the contract may not deny
1174	coverage of the child due to failure of the subscriber to timely
1175	notify the plan of the birth of the child or to preenroll the
1176	child.
1177	(b) If the contract does not require the subscriber to
1178	notify the plan of the birth of a child within a specified time
1179	period, the plan may not deny coverage of the child nor may it
1180	retroactively charge the subscriber an additional premium for
1181	the child; however, the contract may prospectively charge the
1182	member an additional premium for the child if the plan provides
1183	at least 45 days' notice of the additional charge.
1184	(11)(10)No alteration of any written application for any
1185	health maintenance contract shall be made by any person other
1186	than the applicant without his or her written consent, except
1187	that insertions may be made by the health maintenance
1188	organization, for administrative purposes only, in such manner
1189	as to indicate clearly that such insertions are not to be
1190	ascribed to the applicant.
1191	(12)(11)No contract shall contain any waiver of rights or
1192	benefits provided to or available to subscribers under the
1193	provisions of any law or rule applicable to health maintenance
1194	organizations.
1195	(13)(12)Each health maintenance contract, certificate, or
1196	member handbook shall state that emergency services and care
1197	shall be provided to subscribers in emergency situations not
1198	permitting treatment through the health maintenance
1199	organization's providers, without prior notification to and
1200	approval of the organization. Not less than 75 percent of the
1201	reasonable charges for covered services and supplies shall be
1202	paid by the organization, up to the subscriber contract benefit
1203	limits. Payment also may be subject to additional applicable
1204	copayment provisions, not to exceed $100 per claim. The health
1205	maintenance contract, certificate, or member handbook shall
1206	contain the definitions of "emergency services and care" and
1207	"emergency medical condition" as specified in s. 641.19(7) and
1208	(8), shall describe procedures for determination by the health
1209	maintenance organization of whether the services qualify for
1210	reimbursement as emergency services and care, and shall contain
1211	specific examples of what does constitute an emergency. In
1212	providing for emergency services and care as a covered service,
1213	a health maintenance organization shall be governed by s.
1214	641.513.
1215	(14)(13)In addition to the requirements of this section,
1216	with respect to a person who is entitled to have payments for
1217	health care costs made under Medicare, Title XVIII of the Social
1218	Security Act ("Medicare"), parts A and/or B:
1219	(a) The health maintenance organization shall mail or
1220	deliver notification to the Medicare beneficiary of the date of
1221	enrollment in the health maintenance organization within 10 days
1222	after receiving notification of enrollment approval from the
1223	United States Department of Health and Human Services, Health
1224	Care Financing Administration. When a Medicare beneficiary who
1225	is a subscriber of the health maintenance organization requests
1226	disenrollment from the organization, the organization shall mail
1227	or deliver to the beneficiary notice of the effective date of
1228	the disenrollment within 10 days after receipt of the written
1229	disenrollment request. The health maintenance organization shall
1230	forward the disenrollment request to the United States
1231	Department of Health and Human Services, Health Care Financing
1232	Administration, in a timely manner so as to effectuate the next
1233	available disenrollment date, as prescribed by such federal
1234	agency.
1235	(b) The health maintenance contract, certificate, or
1236	member handbook shall be delivered to the subscriber no later
1237	than the earlier of 10 working days after the health maintenance
1238	organization and the Health Care Financing Administration of the
1239	United States Department of Health and Human Services approve
1240	the subscriber's enrollment application or the effective date of
1241	coverage of the subscriber under the health maintenance
1242	contract. However, if notice from the Health Care Financing
1243	Administration of its approval of the subscriber's enrollment
1244	application is received by the health maintenance organization
1245	after the effective coverage date prescribed by the Health Care
1246	Financing Administration, the health maintenance organization
1247	shall deliver the contract, certificate, or member handbook to
1248	the subscriber within 10 days after receiving such notice. When
1249	a Medicare recipient is enrolled in a health maintenance
1250	organization program, the contract, certificate, or member
1251	handbook shall be accompanied by a health maintenance
1252	organization identification sticker with instruction to the
1253	Medicare beneficiary to place the sticker on the Medicare
1254	identification card.
1255	(15)(14)Whenever a subscriber of a health maintenance
1256	organization is also a Medicaid recipient, the health
1257	maintenance organization's coverage shall be primary to the
1258	recipient's Medicaid benefits and the organization shall be a
1259	third party subject to the provisions of s. 409.910(4).
1260	(16)(15)(a) All health maintenance contracts,
1261	certificates, and member handbooks shall contain the following
1262	provision:
1263
1264	"Grace Period: This contract has a (insert a number not
1265	less than 10) day grace period. This provision means that if any
1266	required premium is not paid on or before the date it is due, it
1267	may be paid during the following grace period. During the grace
1268	period, the contract will stay in force."
1269
1270	(b) The required provision of paragraph (a) shall not
1271	apply to certificates or member handbooks delivered to
1272	individual subscribers under a group health maintenance contract
1273	when the employer or other person who will hold the contract on
1274	behalf of the subscriber group pays the entire premium for the
1275	individual subscribers. However, such required provision shall
1276	apply to the group health maintenance contract.
1277	(17)(16)The contracts must clearly disclose the intent of
1278	the health maintenance organization as to the applicability or
1279	nonapplicability of coverage to preexisting conditions. If
1280	coverage of the contract is not to be applicable to preexisting
1281	conditions, the contract shall specify, in substance, that
1282	coverage pertains solely to accidental bodily injuries resulting
1283	from accidents occurring after the effective date of coverage
1284	and that sicknesses are limited to those which first manifest
1285	themselves subsequent to the effective date of coverage.
1286	(17) All health maintenance contracts that provide
1287	coverage for a member of the family of the subscriber, shall, as
1288	to such family member's coverage, provide that coverage,
1289	benefits, or services applicable for children shall be provided
1290	with respect to an adopted child of the subscriber, which child
1291	is placed in compliance with chapter 63, from the moment of
1292	placement in the residence of the subscriber. Such contracts may
1293	not exclude coverage for any preexisting condition of the child.
1294	In the case of a newborn child, coverage shall begin from the
1295	moment of birth if a written agreement to adopt such child has
1296	been entered into by the subscriber prior to the birth of the
1297	child, whether or not such agreement is enforceable. However,
1298	coverage for such child shall not be required in the event that
1299	the child is not ultimately placed in the residence of the
1300	subscriber in compliance with chapter 63.
1301	Section 17. Section 641.3101, Florida Statutes, is amended
1302	to read:
1303	641.3101 Additional contract contents.--
1304	(1)A health maintenance contract may contain additional
1305	provisions not inconsistent with this part which are:
1306	(a)(1)Necessary, on account of the manner in which the
1307	organization is constituted or operated, in order to state the
1308	rights and obligations of the parties to the contract; or
1309	(b)(2)Desired by the organization and neither prohibited
1310	by law nor in conflict with any provisions required to be
1311	included therein.
1312	(2) A health maintenance contract that uses a specific
1313	methodology for payment of claims shall comply with s. 627.6044.
1314	Section 18. Section 641.31075, Florida Statutes, is
1315	created to read:
1316	641.31075 Replacement.--
1317	(1) Any health maintenance organization that is replacing
1318	any other group health coverage with its group health
1319	maintenance coverage shall comply with s. 627.666.
1320	(2) Any health maintenance organization that is replacing
1321	any other individual health coverage with its individual health
1322	maintenance coverage shall comply with s. 627.6045.
1323	Section 19. Subsection (1) of section 641.3111, Florida
1324	Statutes, is amended to read:
1325	641.3111 Extension of benefits.--
1326	(1) Every group health maintenance contract shall provide
1327	that termination of the contract shall be without prejudice to
1328	any continuous loss which commenced while the contract was in
1329	force, but any extension of benefits beyond the period the
1330	contract was in force may be predicated upon the continuous
1331	total disability of the subscriber and may be limited to payment
1332	for the treatment of a specific accident or illness incurred
1333	while the subscriber was a member. The extension is required
1334	regardless of whether the group contract holder or other entity
1335	secures replacement coverage from a new insurer or health
1336	maintenance organization or foregoes the provision of coverage.
1337	The required provision must provide for continuation of contract
1338	benefits in connection with the treatment of a specific accident
1339	or illness incurred while the contract was in effect.Such
1340	extension of benefits may be limited to the occurrence of the
1341	earliest of the following events:
1342	(a) The expiration of 12 months.
1343	(b) Such time as the member is no longer totally disabled.
1344	(c) A succeeding carrier elects to provide replacement
1345	coverage without limitation as to the disability condition.
1346	(d) The maximum benefits payable under the contract have
1347	been paid.
1348	Section 20. Subsection (15) is added to section 641.3903,
1349	Florida Statutes, to read:
1350	641.3903 Unfair methods of competition and unfair or
1351	deceptive acts or practices defined.--The following are defined
1352	as unfair methods of competition and unfair or deceptive acts or
1353	practices:
1354	(15) MANDATORY ARBITRATION.--For a managed care provider
1355	or prepaid limited health service organization, issuing a
1356	contract or service agreement which requires the submission of
1357	disputes between the parties to the contract or service
1358	agreement to arbitration.
1359	Section 21. Subsection (9) is added to section 641.441,
1360	Florida Statutes, to read:
1361	641.441 Unfair methods of competition and unfair or
1362	deceptive acts or practices defined.--The following are defined
1363	as unfair methods of competition and unfair or deceptive acts or
1364	practices:
1365	(9)_MANDATORY ARBITRATION.--For a prepaid health clinic,
1366	issuing a policy or a contract which requires the submission of
1367	disputes between the parties to the policy or contract to
1368	arbitration.
1369	Section 22. Subsection (4) of section 627.651, Florida
1370	Statutes, is amended to read:
1371	627.651 Group contracts and plans of self-insurance must
1372	meet group requirements.--
1373	(4) This section does not apply to any plan which is
1374	established or maintained by an individual employer in
1375	accordance with the Employee Retirement Income Security Act of
1376	1974, Pub. L. No. 93-406, or to a multiple-employer welfare
1377	arrangement as defined in s. 624.437(1), except that a multiple-
1378	employer welfare arrangement shall comply with ss. 627.419,
1379	627.657, 627.6575, 627.6578, 627.6579, 627.6612, 627.66121,
1380	627.66122, 627.6615, 627.6616, and 627.662(8)(7). This
1381	subsection does not allow an authorized insurer to issue a group
1382	health insurance policy or certificate which does not comply
1383	with this part.
1384	Section 23. Subsection (1) of section 641.2018, Florida
1385	Statutes, is amended to read:
1386	641.2018 Limited coverage for home health care
1387	authorized.--
1388	(1) Notwithstanding other provisions of this chapter, a
1389	health maintenance organization may issue a contract that limits
1390	coverage to home health care services only. The organization and
1391	the contract shall be subject to all of the requirements of this
1392	part that do not require or otherwise apply to specific benefits
1393	other than home care services. To this extent, all of the
1394	requirements of this part apply to any organization or contract
1395	that limits coverage to home care services, except the
1396	requirements for providing comprehensive health care services as
1397	provided in ss. 641.19(4), (12), and (13), and 641.31(1), except
1398	ss. 641.31(9),(13)(12), (17),(18), (19), (20), (21), and (24)
1399	and 641.31095.
1400	Section 24. Section 641.3107, Florida Statutes, is amended
1401	to read:
1402	641.3107 Delivery of contract.--Unless delivered upon
1403	execution or issuance, a health maintenance contract,
1404	certificate of coverage, or member handbook shall be mailed or
1405	delivered to the subscriber or, in the case of a group health
1406	maintenance contract, to the employer or other person who will
1407	hold the contract on behalf of the subscriber group within 10
1408	working days from approval of the enrollment form by the health
1409	maintenance organization or by the effective date of coverage,
1410	whichever occurs first. However, if the employer or other person
1411	who will hold the contract on behalf of the subscriber group
1412	requires retroactive enrollment of a subscriber, the
1413	organization shall deliver the contract, certificate, or member
1414	handbook to the subscriber within 10 days after receiving notice
1415	from the employer of the retroactive enrollment. This section
1416	does not apply to the delivery of those contracts specified in
1417	s. 641.31(14)(13).
1418	Section 25. Subsection (4) of section 641.513, Florida
1419	Statutes, is amended to read:
1420	641.513 Requirements for providing emergency services and
1421	care.--
1422	(4) A subscriber may be charged a reasonable copayment, as
1423	provided in s. 641.31(13)(12), for the use of an emergency room.
1424	Such reimbursement shall be net of any applicable copayment
1425	authorized pursuant to this subsection.
1426	Section 26. This act shall take effect upon becoming a
1427	law.