HB 1081

1	A bill to be entitled
2	An act relating to discount medical plan organizations;
3	amending s. 636.202, F.S.; revising a definition; amending
4	s. 636.204, F.S.; revising provisions relating to
5	licensure requirements to do business as a discount
6	medical plan organization; amending s. 636.206, F.S.;
7	providing that discount medical plan organizations are not
8	subject to the Florida Insurance Code for purposes of
9	examination and investigation; creating s. 636.207, F.S.;
10	providing for applicability of pt. II of ch. 636, F.S.;
11	amending s. 636.208, F.S.; revising provisions relating to
12	reimbursement of certain charges and fees upon
13	cancellation of membership in the plan; amending s.
14	636.210, F.S.; revising prohibitions relating to
15	advertising; amending s. 636.212, F.S.; revising
16	provisions relating to disclosures to prospective members;
17	amending s. 636.214, F.S.; revising provisions relating to
18	provider agreements; amending s. 636.216, F.S.; providing
19	conditions for approval of charges and forms; deleting a
20	provision relating to request for a hearing; amending s.
21	636.218, F.S.; revising requirements for information to be
22	included in annual reports; creating s. 636.223, F.S.;
23	providing for administrative penalties; amending s.
24	636.228, F.S.; specifying marketing requirements of
25	discount medical plans; providing limitations; amending s.
26	636.230, F.S.; specifying fee disclosure requirements for
27	bundling discount medical plans with other products;
28	amending s. 636.236, F.S.; requiring discount medical plan
29	organizations to maintain surety bonds; providing
30	conditions for substituting deposited securities for
31	surety bonds; amending s. 636.238, F.S.; revising
32	penalties; repealing s. 636.242, F.S., relating to civil
33	remedies; providing an effective date.
34
35	Be It Enacted by the Legislature of the State of Florida:
36
37	Section 1.  Subsection (2) of section 636.202, Florida
38	Statutes, is amended to read:
39	636.202  Definitions.--As used in this part, the term:
40	(2)  "Discount medical plan organization" means an entity
41	which, in exchange for fees, dues, charges, or other
42	consideration, provides access for plan members to providers of
43	medical services and the right to receive medical services from
44	those providers at a discount. The term "discount medical plan"
45	does not include any product regulated under chapter 627,
46	chapter 641, or part I of this chapter.
47	Section 2.  Subsections (1) and (2) of section 636.204,
48	Florida Statutes, are amended to read:
49	636.204  License required.--
50	(1)  Before doing business in this state as a discount
51	medical plan organization, an entity must be a corporation, a
52	limited liability company incorporated under the laws of this
53	state, or, if a partnership or foreign entity corporation,
54	authorized to transact business in this state, and must be
55	licensed by the office possess a license as a discount medical
56	plan organization or be licensed by the office pursuant to
57	chapter 624, part I of chapter 636, or chapter 641 from the
58	office.
59	(2)  An application for a license to operate as a discount
60	medical plan organization must be filed with the office on a
61	form prescribed by the commission. Such application must be
62	sworn to by an officer or authorized representative of the
63	applicant and be accompanied by the following, if applicable:
64	(a)  A copy of the applicant's articles of incorporation,
65	including all amendments, or other organizing documents.
66	(b)  A copy of the applicant's corporation's bylaws.
67	(c)  A list of the names, addresses, official positions,
68	and biographical information of the individuals who are
69	responsible for conducting the applicant's affairs, including,
70	but not limited to, all members of the board of directors, board
71	of trustees, executive committee, or other governing board or
72	committee, the officers, contracted management company
73	personnel, and any person or entity owning or having the right
74	to acquire 10 percent or more of the voting securities of the
75	applicant. Such listing must fully disclose the extent and
76	nature of any contracts or arrangements between any individual
77	who is responsible for conducting the applicant's affairs and
78	the discount medical plan organization, including any possible
79	conflicts of interest.
80	(d)  A complete biographical statement, on forms prescribed
81	by the commission, an independent investigation report, and a
82	set of fingerprints, as provided in chapter 624, with respect to
83	each individual identified under paragraph (c).
84	(e)  A statement generally describing the applicant, its
85	facilities and personnel, and the medical services to be
86	offered.
87	(f)  A copy of the form of all contracts made or to be made
88	between the applicant and any providers or provider networks
89	regarding the provision of medical services to members.
90	(g)  A copy of the form of any contract made or arrangement
91	to be made between the applicant and any person listed in
92	paragraph (c).
93	(h)  A copy of the form of any contract made or to be made
94	between the applicant and any person, corporation, partnership,
95	or other entity for the performance on the applicant's behalf of
96	any function, including, but not limited to, marketing,
97	administration, enrollment, investment management, and
98	subcontracting for the provision of health services to members.
99	(i)  A copy of the applicant's most recent financial
100	statements audited by an independent certified public
101	accountant. An applicant that is a subsidiary of a parent entity
102	that prepares audited financial statements reflecting the
103	consolidated operations of the parent entity and the subsidiary
104	may submit a copy of the parent entity's most recent audited
105	financial statements if the parent entity also issues a written
106	guaranty that the minimum capital requirements of the applicant
107	required by this part will be met.
108	(j)  A description of the proposed method of marketing.
109	(k)  A description of the subscriber complaint procedures
110	to be established and maintained.
111	(l)  The fee for issuance of a license.
112	(m)  Such other information as the commission or office may
113	reasonably require to make the determinations required by this
114	part.
115	Section 3.  Section 636.206, Florida Statutes, is amended
116	to read:
117	636.206  Examinations and investigations.--
118	(1)  The office may examine or investigate the business and
119	affairs of any discount medical plan organization. The office
120	may order any discount medical plan organization or applicant to
121	produce any records, books, files, advertising and solicitation
122	materials, or other information and may take statements under
123	oath to determine whether the discount medical plan organization
124	or applicant is in violation of the law or is acting contrary to
125	the public interest. The expenses incurred in conducting any
126	examination or investigation must be paid by the discount
127	medical plan organization or applicant. Examinations and
128	investigations must be conducted as provided in chapter 624, and
129	discount medical plan organizations are subject to all
130	applicable provisions of the insurance code.
131	(2)  Failure by the discount medical plan organization to
132	pay the expenses incurred under subsection (1) is grounds for
133	denial or revocation.
134	Section 4.  Section 636.207, Florida Statutes, is created
135	to read:
136	636.207  Applicability of part.--Except as otherwise
137	provided in this part, discount medical plan organizations are
138	governed by the provisions of this part and are exempt from the
139	Florida Insurance Code unless specifically referenced.
140	Section 5.  Section 636.208, Florida Statutes, is amended
141	to read:
142	636.208  Fees; charges; reimbursement.--
143	(1)  A discount medical plan organization may charge a
144	periodic charge as well as a reasonable one-time processing fee
145	for a discount medical plan and a periodic charge. If a discount
146	medical plan charges for a time period in excess of 1 month, the
147	plan must, in the event of cancellation of the membership by
148	either party, make a pro rata reimbursement of the fees to the
149	member.
150	(2)  If the member cancels his or her membership in the
151	discount medical plan organization within the first 30 days
152	after the effective date of enrollment in the plan, the member
153	shall receive a reimbursement of all periodic charges upon
154	return of the discount card to the discount medical plan
155	organization.
156	(3)  If the discount medical plan organization cancels a
157	membership for any reason other than nonpayment of fees by the
158	member, the discount medical plan organization shall make a pro
159	rata reimbursement of all periodic charges to the member.
160	(4)  In addition to the reimbursement of periodic charges
161	for the reasons stated in subsections (2) and (3), a discount
162	medical plan organization shall also reimburse the member for
163	any portion of a one-time processing fee that exceeds $30 per
164	year.
165	Section 6.  Paragraphs (a) and (b) of subsection (1) of
166	section 636.210, Florida Statutes, are amended to read:
167	636.210  Prohibited activities of a discount medical plan
168	organization.--
169	(1)  A discount medical plan organization may not:
170	(a)  Use in its advertisements, marketing material,
171	brochures, and discount cards the term "insurance" except as
172	otherwise provided in this part or as a disclaimer of any
173	relationship between discount medical plan organization benefits
174	and insurance;
175	(b)  Use in its advertisements, marketing material,
176	brochures, and discount cards the terms "health plan,"
177	"coverage," "copay," "copayments," "preexisting conditions,"
178	"guaranteed issue," "premium," "enrollment," "PPO," "preferred
179	provider organization," or other terms in a manner that could
180	reasonably mislead a person into believing the discount medical
181	plan was health insurance;
182	Section 7.  Section 636.212, Florida Statutes, is amended
183	to read:
184	636.212  Disclosures.--The following disclosures must be
185	made in writing to any prospective member and must be on the
186	first page of any advertisements, marketing materials, or
187	brochures relating to a discount medical plan. The disclosures
188	must be printed in not less than 12-point type or no smaller
189	than the largest type on the page if larger than 12-point type:
190	(1)  That the plan is not a health insurance policy.
191	(2)  That the plan provides discounts at certain health
192	care providers for medical services.
193	(3)  That the plan does not make payments directly to the
194	providers of medical services.
195	(4)  That the plan member is obligated to pay for all
196	health care services but will receive a discount from those
197	health care providers who have contracted with the discount plan
198	organization.
199	(5)  The corporate name and address the locations of the
200	licensed discount medical plan organization.
201
202	If the initial contract is made by telephone, the disclosures
203	required by this section shall be made orally and provided in
204	the initial written materials that describe the benefits under
205	the discount medical plan provided to the prospective or new
206	member.
207	Section 8.  Subsections (2) and (4) of section 636.214,
208	Florida Statutes, are amended to read:
209	636.214  Provider agreements.--
210	(2)  A provider agreement between a discount medical plan
211	organization and a provider must provide the following:
212	(a)  A list of the services and products to be provided at
213	a discount.
214	(b)  The amount or amounts of the discounts or,
215	alternatively, a fee schedule which reflects the provider's
216	discounted rates.
217	(c)  That the provider will not charge members more than
218	the discounted rates.
219	(4)  The discount medical plan organization shall maintain
220	a copy of each active provider agreement into which it has
221	entered.
222	Section 9.  Subsection (4) of section 636.216, Florida
223	Statutes, is amended to read:
224	636.216  Charge or form filings.--
225	(4)  A charge or form is considered approved on the 60th
226	day after its date of filing unless it has been previously
227	disapproved by the office. The office shall disapprove any form
228	that does not meet the requirements of this part or that is
229	unreasonable, discriminatory, misleading, or unfair. If such
230	filings are disapproved, the office shall notify the discount
231	medical plan organization and shall specify in the notice the
232	reasons for disapproval. The discount medical plan organization
233	has 21 days from the date of receipt of notice to request a
234	hearing before the office pursuant to chapter 120.
235	Section 10.  Subsection (2) of section 636.218, Florida
236	Statutes, is amended to read:
237	636.218  Annual reports.--
238	(2)  Such reports must be on forms prescribed by the
239	commission and must include:
240	(a)  A sworn affidavit, signed by a company officer,
241	certifying that the discount medical plan organization is in
242	compliance with s. 636.220(1). Audited financial statements
243	prepared in accordance with generally accepted accounting
244	principles certified by an independent certified public
245	accountant, including the organization's balance sheet, income
246	statement, and statement of changes in cash flow for the
247	preceding year.
248	(b)  If different from the initial application or the last
249	annual report, a list of the names and residence addresses of
250	all persons responsible for the conduct of the organization's
251	affairs, together with a disclosure of the extent and nature of
252	any contracts or arrangements between such persons and the
253	discount medical plan organization, including any possible
254	conflicts of interest.
255	(c)  The number of discount medical plan members in the
256	state.
257	(d)  Such other information relating to the performance of
258	the discount medical plan organization as is reasonably required
259	by the commission or office.
260	Section 11.  Section 636.223, Florida Statutes, is created
261	to read:
262	636.223  Administrative penalty.--In lieu of suspending or
263	revoking a certificate of authority, whenever any discount
264	medical plan organization has been found to have violated any
265	provision of this part, the office may:
266	(1)  Issue and cause to be served upon the organization
267	charged with the violation a copy of such findings and an order
268	requiring such organization to cease and desist from engaging in
269	the act or practice that constitutes the violation.
270	(2)  Impose a monetary penalty of not less that $100 for
271	each violation, but not to exceed an aggregate penalty of
272	$50,000.
273	Section 12.  Subsection (2) of section 636.228, Florida
274	Statutes, is amended to read:
275	636.228  Marketing of discount medical plans.--
276	(2)  The discount medical plan organization shall have an
277	executed written agreement with a marketer prior to the
278	marketer's marketing, promoting, selling, or distributing the
279	discount medical plan. Such agreement shall prohibit the
280	marketer from using marketing materials, brochures, and discount
281	cards without the approval in writing by the discount medical
282	plan organization. The discount medical plan organization shall
283	be bound by and shall be responsible and financially liable for
284	any acts of its marketers, within the scope of the marketers'
285	agency, that do not comply with the provisions of this part.
286	Section 13.  Section 636.230, Florida Statutes, is amended
287	to read:
288	636.230  Bundling discount medical plans with other
289	insurance products.--When a marketer or discount medical plan
290	organization sells a discount medical plan together with any
291	other product, the fees for the discount medical plan each
292	individual product must be provided in writing to the member if
293	the fees exceed $30 and itemized.
294	Section 14.  Section 636.236, Florida Statutes, is amended
295	to read:
296	636.236  Surety bond or security deposit.--
297	(1)  Each discount medical plan organization licensed
298	pursuant to the provisions of this part must maintain in force a
299	surety bond in its own name in an amount not less than $35,000
300	to be used at the discretion of the office to protect the
301	financial interests of members who may be adversely affected by
302	the insolvency of a discount medical plan organization. The bond
303	must be issued by an insurance company that is licensed to do
304	business in this state.
305	(2)(1)  In lieu of the bond specified in subsection (1), a
306	licensed discount medical plan organization may must deposit and
307	maintain deposited in trust with the department securities
308	eligible for deposit under s. 625.52, having at all times a
309	value of not less than $35,000, for use by the office in
310	protecting plan members. If a licensed discount medical plan
311	organization substitutes its deposited securities under this
312	subsection with a surety bond authorized in subsection (1), such
313	deposited securities shall be returned to the discount medical
314	plan organization no later than 45 days following the effective
315	date of the surety bond.
316	(3)(2)  No judgment creditor or other claimant of a
317	discount medical plan organization, other than the office or
318	department, shall have the right to levy upon any of the assets
319	or securities held in this state as a deposit under subsections
320	subsection (1) and (2).
321	Section 15.  Section 636.238, Florida Statutes, is amended
322	to read:
323	636.238  Penalties for violation of this part.--
324	(1)  Except as provided in subsection (2), a person who
325	willfully violates any provision of this part commits a
326	misdemeanor of the second degree, punishable as provided in s.
327	775.082 or s. 775.083.
328	(2)  A person who operates as or aids and abets another
329	operating as a discount medical plan organization in violation
330	of s. 636.204(1) commits a felony punishable as provided for in
331	s. 624.401(4)(b), as if the unlicensed discount medical plan
332	organization were an unauthorized insurer, and the fees, dues,
333	charges, or other consideration collected from the members by
334	the unlicensed discount medical plan organization or marketer
335	were insurance premium.
336	(3)  A person who collects fees for purported membership in
337	a discount medical plan but purposefully fails to provide the
338	promised benefits commits a theft, punishable as provided in s.
339	812.014.
340	Section 16.  Section 636.242, Florida Statutes, is
341	repealed.
342	Section 17.  This act shall take effect upon becoming a
343	law.

CODING: Words stricken are deletions; words underlined are additions.