HB 1503

1	A bill to be entitled
2	An act relating to health insurance; amending s.
3	408.909,F.S.; providing an additional criterion for the
4	Office of Insurance Regulation to disapprove or withdraw
5	approval of health flex plans; amending s. 627.413, F.S.;
6	authorizing insurers and health maintenance organizations
7	to offer policies or contracts providing for a high
8	deductible plan meeting federal requirements and in
9	conjunction with a health savings account; creating s.
10	627.4141, F.S.; prohibiting mandatory arbitration
11	provisions in life and health insurance policies and
12	health maintenance organization contracts; amending s.
13	627.6487, F.S.; revising the definition of the term
14	"eligible individual" for purposes of obtaining coverage
15	in the Florida Health Insurance Plan; amending s.
16	627.64872, F.S.; revising definitions; changing references
17	to the Director of the Office of Insurance Regulation to
18	the Commissioner of Insurance Regulation; deleting
19	obsolete language; providing additional eligibility
20	criteria; reducing premium rate limitations; revising
21	requirements for sources of additional revenue;
22	authorizing the board to cancel policies under inadequate
23	funding conditions; providing a limitation; specifying a
24	maximum provider reimbursement rate; requiring licensed
25	providers to accept assignment of plan benefits and
26	consider certain payments as payments in full; amending s.
27	627.6515, F.S.; specifying nonapplication of certain
28	provisions to out-of-state group life and health policies
29	prohibiting mandatory arbitration requirements; amending
30	s. 627.6692, F.S.; extending a time period within which
31	eligible employees may apply for continuation of coverage;
32	amending s. 627.6699, F.S.; revising availability of
33	coverage provision of the Employee Health Care Access Act;
34	including high deductible plans meeting federal health
35	savings account plan requirements; revising membership of
36	the board of the small employer health reinsurance
37	program; revising certain reporting dates relating to
38	program losses and assessments; requiring the board to
39	advise executive and legislative entities on health
40	insurance issues; providing requirements; amending s.
41	641.27, F.S.; increasing the interval at which the office
42	examines health maintenance organizations; deleting
43	authorization for the office to accept an audit report
44	from a certified public accountant in lieu of conducting
45	its own examination; increasing an expense limitation;
46	amending s. 641.31, F.S.; authorizing the office to
47	disapprove or withdraw approval of health maintenance
48	contract forms not complying with a prohibition against
49	mandatory arbitration requirements; providing application;
50	providing an effective date.
51
52	Be It Enacted by the Legislature of the State of Florida:
53
54	Section 1.  Paragraph (b) of subsection (3) of section
55	408.909, Florida Statutes, is amended to read:
56	408.909  Health flex plans.--
57	(3)  PROGRAM.--The agency and the office shall each approve
58	or disapprove health flex plans that provide health care
59	coverage for eligible participants. A health flex plan may limit
60	or exclude benefits otherwise required by law for insurers
61	offering coverage in this state, may cap the total amount of
62	claims paid per year per enrollee, may limit the number of
63	enrollees, or may take any combination of those actions. A
64	health flex plan offering may include the option of a
65	catastrophic plan supplementing the health flex plan.
66	(b)  The office shall develop guidelines for the review of
67	health flex plan applications and provide regulatory oversight
68	of health flex plan advertisement and marketing procedures. The
69	office shall disapprove or shall withdraw approval of plans
70	that:
71	1.  Contain any ambiguous, inconsistent, or misleading
72	provisions or any exceptions or conditions that deceptively
73	affect or limit the benefits purported to be assumed in the
74	general coverage provided by the health flex plan;
75	2.  Provide benefits that are unreasonable in relation to
76	the premium charged or contain provisions that are unfair or
77	inequitable or contrary to the public policy of this state, that
78	encourage misrepresentation, or that result in unfair
79	discrimination in sales practices; or
80	3.  Cannot demonstrate that the health flex plan is
81	financially sound and that the applicant is able to underwrite
82	or finance the health care coverage provided.
83	4.  Cannot demonstrate that the applicant and its
84	management are in compliance with the standards required
85	pursuant to s. 624.404(3).
86	Section 2.  Subsection (6) is added to section 627.413,
87	Florida Statutes, to read:
88	627.413  Contents of policies, in general;
89	identification.--
90	(6)  Notwithstanding any other provision of the Florida
91	Insurance Code that is in conflict with federal requirements for
92	a health savings account qualified high deductible health plan,
93	an insurer, or a health maintenance organization subject to part
94	I of chapter 641, which is authorized to issue health insurance
95	in this state may offer for sale an individual or group policy
96	or contract that provides for a high deductible plan that meets
97	the federal requirements of a health savings account plan and
98	which is offered in conjunction with a health savings account.
99	Section 3.  Section 627.4141, Florida Statutes, is created
100	to read:
101	627.4141  Mandatory arbitration clauses prohibited.--No
102	insurer or health maintenance organization shall deliver or
103	issue for delivery a life or health insurance policy, including
104	group life and health contracts or certificates of coverage
105	issued or delivered to residents of this state and health
106	maintenance contracts in this state, which contains a provision
107	requiring the resolution of claims or disputes between the
108	insured and the insurer or health maintenance organization
109	through the use of mandatory binding arbitration.
110	Section 4.  Paragraph (b) of subsection (3) of section
111	627.6487, Florida Statutes, is amended to read:
112	627.6487  Guaranteed availability of individual health
113	insurance coverage to eligible individuals.--
114	(3)  For the purposes of this section, the term "eligible
115	individual" means an individual:
116	(b)  Who is not eligible for coverage under:
117	1.  A group health plan, as defined in s. 2791 of the
118	Public Health Service Act;
119	2.  A conversion policy or contract issued by an authorized
120	insurer or health maintenance organization under s. 627.6675 or
121	s. 641.3921, respectively, offered to an individual who is no
122	longer eligible for coverage under either an insured or self-
123	insured employer plan;
124	3.  Part A or part B of Title XVIII of the Social Security
125	Act; or
126	4.  A state plan under Title XIX of such act, or any
127	successor program, and does not have other health insurance
128	coverage; or
129	5.  The Florida Health Insurance Plan as specified in s.
130	627.64872 and such plan is accepting new enrollments;
131	Section 5.  Paragraphs (b), (c), and (n) of subsection (2)
132	and subsections (3), (6), (9), and (15) of section 627.64872,
133	Florida Statutes, are amended, subsection (20) of said section
134	is renumbered as subsection (21), and a new subsection (20) is
135	added to said section, to read:
136	627.64872  Florida Health Insurance Plan.--
137	(2)  DEFINITIONS.--As used in this section:
138	(b)  "Commissioner" means the Commissioner of Insurance
139	Regulation.
140	(c)  "Dependent" means a resident spouse or resident
141	unmarried child under the age of 19 years, a child who is a
142	student under the age of 25 years and who is financially
143	dependent upon the parent, or a child of any age who is disabled
144	and dependent upon the parent.
145	(c)  "Director" means the Director of the Office of
146	Insurance Regulation.
147	(n)  "Resident" means an individual who has been legally
148	domiciled in this state for a period of at least 6 months and
149	who physically resides in this state not less than 185 days per
150	year.
151	(3)  BOARD OF DIRECTORS.--
152	(a)  The plan shall operate subject to the supervision and
153	control of the board. The board shall consist of the
154	commissioner director or his or her designated representative,
155	who shall serve as a member of the board and shall be its chair,
156	and an additional eight members, five of whom shall be appointed
157	by the Governor, at least two of whom shall be individuals not
158	representative of insurers or health care providers, one of whom
159	shall be appointed by the President of the Senate, one of whom
160	shall be appointed by the Speaker of the House of
161	Representatives, and one of whom shall be appointed by the Chief
162	Financial Officer.
163	(b)  The term to be served on the board by the commissioner
164	Director of the Office of Insurance Regulation shall be
165	determined by continued employment in such position. The
166	remaining initial board members shall serve for a period of time
167	as follows: two members appointed by the Governor and the
168	members appointed by the President of the Senate and the Speaker
169	of the House of Representatives shall serve a term of 2 years;
170	and three members appointed by the Governor and the Chief
171	Financial Officer shall serve a term of 4 years. Subsequent
172	board members shall serve for a term of 3 years. A board
173	member's term shall continue until his or her successor is
174	appointed.
175	(c)  Vacancies on the board shall be filled by the
176	appointing authority, such authority being the Governor, the
177	President of the Senate, the Speaker of the House of
178	Representatives, or the Chief Financial Officer. The appointing
179	authority may remove board members for cause.
180	(d)  The commissioner director, or his or her recognized
181	representative, shall be responsible for any organizational
182	requirements necessary for the initial meeting of the board
183	which shall take place no later than September 1, 2004.
184	(e)  Members shall not be compensated in their capacity as
185	board members but shall be reimbursed for reasonable expenses
186	incurred in the necessary performance of their duties in
187	accordance with s. 112.061.
188	(f)  The board shall submit to the Financial Services
189	Commission a plan of operation for the plan and any amendments
190	thereto necessary or suitable to ensure the fair, reasonable,
191	and equitable administration of the plan. The plan of operation
192	shall ensure that the plan qualifies to apply for any available
193	funding from the Federal Government that adds to the financial
194	viability of the plan. The plan of operation shall become
195	effective upon approval in writing by the Financial Services
196	Commission consistent with the date on which the coverage under
197	this section must be made available. If the board fails to
198	submit a suitable plan of operation within 1 year after
199	implementation the appointment of the board of directors, or at
200	any time thereafter fails to submit suitable amendments to the
201	plan of operation, the Financial Services Commission shall adopt
202	such rules as are necessary or advisable to effectuate the
203	provisions of this section. Such rules shall continue in force
204	until modified by the office or superseded by a plan of
205	operation submitted by the board and approved by the Financial
206	Services Commission.
207	(6)  INTERIM REPORT; ANNUAL REPORT.--
208	(a)  By no later than December 1, 2004, the board shall
209	report to the Governor, the President of the Senate, and the
210	Speaker of the House of Representatives the results of an
211	actuarial study conducted by the board to determine, including,
212	but not limited to:
213	1.  The impact the creation of the plan will have on the
214	small group insurance market and the individual market on
215	premiums paid by insureds. This shall include an estimate of the
216	total anticipated aggregate savings for all small employers in
217	the state.
218	2.  The number of individuals the pool could reasonably
219	cover at various funding levels, specifically, the number of
220	people the pool may cover at each of those funding levels.
221	3.  A recommendation as to the best source of funding for
222	the anticipated deficits of the pool.
223	4.  The effect on the individual and small group market by
224	including in the Florida Health Insurance Plan persons eligible
225	for coverage under s. 627.6487, as well as the cost of including
226	these individuals.
227
228	The board shall take no action to implement the Florida Health
229	Insurance Plan, other than the completion of the actuarial study
230	authorized in this paragraph, until funds are appropriated for
231	startup cost and any projected deficits.
232	(b)  No later than December 1, 2005, and annually
233	thereafter, the board shall submit to the Governor, the
234	President of the Senate, the Speaker of the House of
235	Representatives, and the substantive legislative committees of
236	the Legislature a report which includes an independent actuarial
237	study to determine, including, but not be limited to:
238	(a)1.  The impact the creation of the plan has on the small
239	group and individual insurance market, specifically on the
240	premiums paid by insureds. This shall include an estimate of the
241	total anticipated aggregate savings for all small employers in
242	the state.
243	(b)2.  The actual number of individuals covered at the
244	current funding and benefit level, the projected number of
245	individuals that may seek coverage in the forthcoming fiscal
246	year, and the projected funding needed to cover anticipated
247	increase or decrease in plan participation.
248	3.  A recommendation as to the best source of funding for
249	the anticipated deficits of the pool.
250	(c)4.  A summarization of the activities of the plan in the
251	preceding calendar year, including the net written and earned
252	premiums, plan enrollment, the expense of administration, and
253	the paid and incurred losses.
254	(d)5.  A review of the operation of the plan as to whether
255	the plan has met the intent of this section.
256	(9)  ELIGIBILITY.--
257	(a)  Any individual person who is and continues to be a
258	resident of this state shall be eligible for coverage under the
259	plan if:
260	1.  Evidence is provided that the person received notices
261	of rejection or refusal to issue substantially similar coverage
262	for health reasons from at least two health insurers or health
263	maintenance organizations. A rejection or refusal by an insurer
264	offering only stop-loss, excess of loss, or reinsurance coverage
265	with respect to the applicant shall not be sufficient evidence
266	under this paragraph.
267	2.  The person is enrolled in the Florida Comprehensive
268	Health Association as of the date the plan is implemented.
269	3.  Is an eligible individual as defined in s. 627.6487(3),
270	excluding s. 627.6487(3)(b)(5).
271	(b)  Each resident dependent of a person who is eligible
272	for coverage under the plan shall also be eligible for such
273	coverage.
274	(c)  A person shall not be eligible for coverage under the
275	plan if:
276	1.  The person has or obtains health insurance coverage
277	substantially similar to or more comprehensive than a plan
278	policy, or would be eligible to obtain such coverage, unless a
279	person may maintain other coverage for the period of time the
280	person is satisfying any preexisting condition waiting period
281	under a plan policy or may maintain plan coverage for the period
282	of time the person is satisfying a preexisting condition waiting
283	period under another health insurance policy intended to replace
284	the plan policy.
285	2.  The person is determined to be eligible for health care
286	benefits under Medicaid, Medicare, the state's children's health
287	insurance program, or any other federal, state, or local
288	government program that provides health benefits;
289	3.  The person voluntarily terminated plan coverage unless
290	12 months have elapsed since such termination;
291	4.  The person is an inmate or resident of a public
292	institution; or
293	5.  The person's premiums are paid for or reimbursed under
294	any government-sponsored program or by any government agency or
295	health care provider or by any health care provider sponsored or
296	affiliated organization.
297	(d)  Coverage shall cease:
298	1.  On the date a person is no longer a resident of this
299	state;
300	2.  On the date a person requests coverage to end;
301	3.  Upon the death of the covered person;
302	4.  On the date state law requires cancellation or
303	nonrenewal of the policy; or
304	5.  At the option of the plan, 30 days after the plan makes
305	any inquiry concerning the person's eligibility or place of
306	residence to which the person does not reply; or.
307	6.  Upon failure of the insured to pay for continued
308	coverage.
309	(e)  Except under the circumstances described in this
310	subsection, coverage of a person who ceases to meet the
311	eligibility requirements of this subsection shall be terminated
312	at the end of the policy period for which the necessary premiums
313	have been paid.
314	(15)  FUNDING OF THE PLAN.--
315	(a)  Premiums.--
316	1.  The plan shall establish premium rates for plan
317	coverage as provided in this section. Separate schedules of
318	premium rates based on age, sex, and geographical location may
319	apply for individual risks. Premium rates and schedules shall be
320	submitted to the office for approval prior to use.
321	2.  Initial rates for plan coverage shall be limited to no
322	more than 200-percent 300 percent of rates established for
323	individual standard risks as specified in s. 627.6675(3)(c).
324	Subject to the limits provided in this paragraph, subsequent
325	rates shall be established to provide fully for the expected
326	costs of claims, including recovery of prior losses, expenses of
327	operation, investment income of claim reserves, and any other
328	cost factors subject to the limitations described herein, but in
329	no event shall premiums exceed the 200-percent 300-percent rate
330	limitation provided in this section. Notwithstanding the 200-
331	percent 300-percent rate limitation, sliding scale premium
332	surcharges based upon the insured's income may apply to all
333	enrollees.
334	(b)  Sources of additional revenue.--Any deficit incurred
335	by the plan shall be primarily funded through amounts
336	appropriated by the Legislature from general revenue sources,
337	including, but not limited to, a portion of the annual growth in
338	existing net insurance premium taxes in an amount not less than
339	the anticipated losses and reserve requirements for existing
340	policyholders. The board shall operate the plan in such a manner
341	that the estimated cost of providing health insurance during any
342	fiscal year will not exceed total income the plan expects to
343	receive from policy premiums and funds appropriated by the
344	Legislature, including any interest on investments. After
345	determining the amount of funds appropriated to the board for a
346	fiscal year, the board shall estimate the number of new policies
347	it believes the plan has the financial capacity to insure during
348	that year so that costs do not exceed income. The board shall
349	take steps necessary to ensure that plan enrollment does not
350	exceed the number of residents it has estimated it has the
351	financial capacity to insure.
352	(c)  In the event of inadequate funding, the board may
353	cancel existing policies on a nondiscriminatory basis as
354	necessary to remedy the situation. No policy may be canceled if
355	a covered individual is currently making a claim.
356	(20)  PROVIDER REIMBURSEMENT.--Notwithstanding any other
357	provision of law, the maximum reimbursement rate to health care
358	providers for all covered, medically necessary services shall be
359	100 percent of Medicare's allowed payment amount for that
360	particular provider and service. All licensed providers in this
361	state shall accept assignment of plan benefits and consider the
362	Medicare allowed payment amount as payment in full.
363	Section 6.  Paragraph (c) of subsection (2) of section
364	627.6515, Florida Statutes, is amended to read:
365	627.6515  Out-of-state groups.--
366	(2)  Except as otherwise provided in this part, this part
367	does not apply to a group health insurance policy issued or
368	delivered outside this state under which a resident of this
369	state is provided coverage if:
370	(c)  The policy provides the benefits specified in ss.
371	627.419, 627.6574, 627.6575, 627.6579, 627.6612, 627.66121,
372	627.66122, 627.6613, 627.667, 627.6675, 627.6691, and 627.66911
373	and complies with s. 627.4141.
374	Section 7.  Paragraphs (d) and (j) of subsection (5) of
375	section 627.6692, Florida Statutes, are amended to read:
376	627.6692  Florida Health Insurance Coverage Continuation
377	Act.--
378	(5)  CONTINUATION OF COVERAGE UNDER GROUP HEALTH PLANS.--
379	(d)1.  A qualified beneficiary must give written notice to
380	the insurance carrier within 63 30 days after the occurrence of
381	a qualifying event. Unless otherwise specified in the notice, a
382	notice by any qualified beneficiary constitutes notice on behalf
383	of all qualified beneficiaries. The written notice must inform
384	the insurance carrier of the occurrence and type of the
385	qualifying event giving rise to the potential election by a
386	qualified beneficiary of continuation of coverage under the
387	group health plan issued by that insurance carrier, except that
388	in cases where the covered employee has been involuntarily
389	discharged, the nature of such discharge need not be disclosed.
390	The written notice must, at a minimum, identify the employer,
391	the group health plan number, the name and address of all
392	qualified beneficiaries, and such other information required by
393	the insurance carrier under the terms of the group health plan
394	or the commission by rule, to the extent that such information
395	is known by the qualified beneficiary.
396	2.  Within 14 days after the receipt of written notice
397	under subparagraph 1., the insurance carrier shall send each
398	qualified beneficiary by certified mail an election and premium
399	notice form, approved by the office, which form must provide for
400	the qualified beneficiary's election or nonelection of
401	continuation of coverage under the group health plan and the
402	applicable premium amount due after the election to continue
403	coverage. This subparagraph does not require separate mailing of
404	notices to qualified beneficiaries residing in the same
405	household, but requires a separate mailing for each separate
406	household.
407	(j)  Notwithstanding paragraph (b), if a qualified
408	beneficiary in the military reserve or National Guard has
409	elected to continue coverage and is thereafter called to active
410	duty and the coverage under the group plan is terminated by the
411	beneficiary or the carrier due to the qualified beneficiary
412	becoming eligible for TRICARE (the health care program provided
413	by the United States Defense Department), the 18-month period or
414	such other applicable maximum time period for which the
415	qualified beneficiary would otherwise be entitled to continue
416	coverage is tolled during the time that he or she is covered
417	under the TRICARE program. Within 63 30 days after the federal
418	TRICARE coverage terminates, the qualified beneficiary may elect
419	to continue coverage under the group health plan, retroactively
420	to the date coverage terminated under TRICARE, for the remainder
421	of the 18-month period or such other applicable time period,
422	subject to termination of coverage at the earliest of the
423	conditions specified in paragraph (b).
424	Section 8.  Paragraph (c) of subsection (5) and paragraphs
425	(b) and (j) of subsection (11) of section 627.6699, Florida
426	Statutes, are amended, and paragraph (o) is added to subsection
427	(11) of said section, to read:
428	627.6699  Employee Health Care Access Act.--
429	(5)  AVAILABILITY OF COVERAGE.--
430	(c)  Every small employer carrier must, as a condition of
431	transacting business in this state:
432	1.  Offer and issue all small employer health benefit plans
433	on a guaranteed-issue basis to every eligible small employer,
434	with 2 to 50 eligible employees, that elects to be covered under
435	such plan, agrees to make the required premium payments, and
436	satisfies the other provisions of the plan. A rider for
437	additional or increased benefits may be medically underwritten
438	and may only be added to the standard health benefit plan. The
439	increased rate charged for the additional or increased benefit
440	must be rated in accordance with this section.
441	2.  In the absence of enrollment availability in the
442	Florida Health Insurance Plan, offer and issue basic and
443	standard small employer health benefit plans and a high
444	deductible plan that meets the requirements of a health savings
445	account plan as defined by federal law, on a guaranteed-issue
446	basis, during a 31-day open enrollment period of August 1
447	through August 31 of each year, to every eligible small
448	employer, with fewer than two eligible employees, which small
449	employer is not formed primarily for the purpose of buying
450	health insurance and which elects to be covered under such plan,
451	agrees to make the required premium payments, and satisfies the
452	other provisions of the plan. Coverage provided under this
453	subparagraph shall begin on October 1 of the same year as the
454	date of enrollment, unless the small employer carrier and the
455	small employer agree to a different date. A rider for additional
456	or increased benefits may be medically underwritten and may only
457	be added to the standard health benefit plan. The increased rate
458	charged for the additional or increased benefit must be rated in
459	accordance with this section. For purposes of this subparagraph,
460	a person, his or her spouse, and his or her dependent children
461	constitute a single eligible employee if that person and spouse
462	are employed by the same small employer and either that person
463	or his or her spouse has a normal work week of less than 25
464	hours. Any right to an open enrollment of health benefit
465	coverage for groups of fewer than two employees, pursuant to
466	this section, shall remain in full force and effect in the
467	absence of the availability of new enrollment into the Florida
468	Health Insurance Plan.
469	3.  This paragraph does not limit a carrier's ability to
470	offer other health benefit plans to small employers if the
471	standard and basic health benefit plans are offered and
472	rejected.
473	(11)  SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
474	(b)1.  The program shall operate subject to the supervision
475	and control of the board.
476	2.  Effective upon this act becoming a law, the board shall
477	consist of the director of the office or his or her designee,
478	who shall serve as the chairperson, and 13 additional members
479	who are representatives of carriers and insurance agents and are
480	appointed by the director of the office and serve as follows:
481	a.  Five members shall be representatives of health
482	insurers licensed under chapter 624 or chapter 641. Two members
483	shall be agents who are actively engaged in the sale of health
484	insurance. Four members shall be employers or representatives of
485	employers. One member shall be a person covered under an
486	individual health insurance policy issued by a licensed insurer
487	in this state. One member shall represent the Agency for Health
488	Care Administration and shall be recommended by the Secretary of
489	Health Care Administration. The director of the office shall
490	include representatives of small employer carriers subject to
491	assessment under this subsection. If two or more carriers elect
492	to be risk-assuming carriers, the membership must include at
493	least two representatives of risk-assuming carriers; if one
494	carrier is risk-assuming, one member must be a representative of
495	such carrier. At least one member must be a carrier who is
496	subject to the assessments, but is not a small employer carrier.
497	Subject to such restrictions, at least five members shall be
498	selected from individuals recommended by small employer carriers
499	pursuant to procedures provided by rule of the commission. Three
500	members shall be selected from a list of health insurance
501	carriers that issue individual health insurance policies. At
502	least two of the three members selected must be reinsuring
503	carriers. Two members shall be selected from a list of insurance
504	agents who are actively engaged in the sale of health insurance.
505	b.  A member appointed under this subparagraph shall serve
506	a term of 4 years and shall continue in office until the
507	member's successor takes office, except that, in order to
508	provide for staggered terms, the director of the office shall
509	designate two of the initial appointees under this subparagraph
510	to serve terms of 2 years and shall designate three of the
511	initial appointees under this subparagraph to serve terms of 3
512	years.
513	3.  The director of the office may remove a member for
514	cause.
515	4.  Vacancies on the board shall be filled in the same
516	manner as the original appointment for the unexpired portion of
517	the term.
518	5.  The director of the office may require an entity that
519	recommends persons for appointment to submit additional lists of
520	recommended appointees.
521	(j)1.  Before July March 1 of each calendar year, the board
522	shall determine and report to the office the program net loss
523	for the previous year, including administrative expenses for
524	that year, and the incurred losses for the year, taking into
525	account investment income and other appropriate gains and
526	losses.
527	2.  Any net loss for the year shall be recouped by
528	assessment of the carriers, as follows:
529	a.  The operating losses of the program shall be assessed
530	in the following order subject to the specified limitations. The
531	first tier of assessments shall be made against reinsuring
532	carriers in an amount which shall not exceed 5 percent of each
533	reinsuring carrier's premiums from health benefit plans covering
534	small employers. If such assessments have been collected and
535	additional moneys are needed, the board shall make a second tier
536	of assessments in an amount which shall not exceed 0.5 percent
537	of each carrier's health benefit plan premiums. Except as
538	provided in paragraph (n), risk-assuming carriers are exempt
539	from all assessments authorized pursuant to this section. The
540	amount paid by a reinsuring carrier for the first tier of
541	assessments shall be credited against any additional assessments
542	made.
543	b.  The board shall equitably assess carriers for operating
544	losses of the plan based on market share. The board shall
545	annually assess each carrier a portion of the operating losses
546	of the plan. The first tier of assessments shall be determined
547	by multiplying the operating losses by a fraction, the numerator
548	of which equals the reinsuring carrier's earned premium
549	pertaining to direct writings of small employer health benefit
550	plans in the state during the calendar year for which the
551	assessment is levied, and the denominator of which equals the
552	total of all such premiums earned by reinsuring carriers in the
553	state during that calendar year. The second tier of assessments
554	shall be based on the premiums that all carriers, except risk-
555	assuming carriers, earned on all health benefit plans written in
556	this state. The board may levy interim assessments against
557	carriers to ensure the financial ability of the plan to cover
558	claims expenses and administrative expenses paid or estimated to
559	be paid in the operation of the plan for the calendar year prior
560	to the association's anticipated receipt of annual assessments
561	for that calendar year. Any interim assessment is due and
562	payable within 30 days after receipt by a carrier of the interim
563	assessment notice. Interim assessment payments shall be credited
564	against the carrier's annual assessment. Health benefit plan
565	premiums and benefits paid by a carrier that are less than an
566	amount determined by the board to justify the cost of collection
567	may not be considered for purposes of determining assessments.
568	c.  Subject to the approval of the office, the board shall
569	make an adjustment to the assessment formula for reinsuring
570	carriers that are approved as federally qualified health
571	maintenance organizations by the Secretary of Health and Human
572	Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,
573	if any, that restrictions are placed on them that are not
574	imposed on other small employer carriers.
575	3.  Before July March 1 of each year, the board shall
576	determine and file with the office an estimate of the
577	assessments needed to fund the losses incurred by the program in
578	the previous calendar year.
579	4.  If the board determines that the assessments needed to
580	fund the losses incurred by the program in the previous calendar
581	year will exceed the amount specified in subparagraph 2., the
582	board shall evaluate the operation of the program and report its
583	findings, including any recommendations for changes to the plan
584	of operation, to the office within 180 90 days following the end
585	of the calendar year in which the losses were incurred. The
586	evaluation shall include an estimate of future assessments, the
587	administrative costs of the program, the appropriateness of the
588	premiums charged and the level of carrier retention under the
589	program, and the costs of coverage for small employers. If the
590	board fails to file a report with the office within 180 90 days
591	following the end of the applicable calendar year, the office
592	may evaluate the operations of the program and implement such
593	amendments to the plan of operation the office deems necessary
594	to reduce future losses and assessments.
595	5.  If assessments exceed the amount of the actual losses
596	and administrative expenses of the program, the excess shall be
597	held as interest and used by the board to offset future losses
598	or to reduce program premiums. As used in this paragraph, the
599	term "future losses" includes reserves for incurred but not
600	reported claims.
601	6.  Each carrier's proportion of the assessment shall be
602	determined annually by the board, based on annual statements and
603	other reports considered necessary by the board and filed by the
604	carriers with the board.
605	7.  Provision shall be made in the plan of operation for
606	the imposition of an interest penalty for late payment of an
607	assessment.
608	8.  A carrier may seek, from the office, a deferment, in
609	whole or in part, from any assessment made by the board. The
610	office may defer, in whole or in part, the assessment of a
611	carrier if, in the opinion of the office, the payment of the
612	assessment would place the carrier in a financially impaired
613	condition. If an assessment against a carrier is deferred, in
614	whole or in part, the amount by which the assessment is deferred
615	may be assessed against the other carriers in a manner
616	consistent with the basis for assessment set forth in this
617	section. The carrier receiving such deferment remains liable to
618	the program for the amount deferred and is prohibited from
619	reinsuring any individuals or groups in the program if it fails
620	to pay assessments.
621	(o)  The board shall advise the office, the agency, the
622	department, and other executive and legislative entities on
623	health insurance issues. Specifically, the board shall:
624	1.  Provide a forum for stakeholders, consisting of
625	insurers, employers, agents, consumers, and regulators, in the
626	private health insurance market in this state.
627	2.  Review and recommend strategies to improve the
628	functioning of the health insurance markets in this state with a
629	specific focus on market stability, access, and pricing.
630	3.  Make recommendations to the office for legislation
631	addressing health insurance market issues and provide comments
632	on health insurance legislation proposed by the office.
633	4.  Meet at least three times each year. One meeting shall
634	be held to hear reports and to secure public comment on the
635	health insurance market, to develop any legislation needed to
636	address health insurance market issues, and to provide comments
637	on health insurance legislation proposed by the office.
638	5.  By September 1 each year, issue a report to the office
639	on the state of the health insurance market. The report shall
640	include recommendations for changes in the health insurance
641	market, results from implementation of previous recommendations
642	and information on health insurance markets.
643	Section 9.  Subsection (1) of section 641.27, Florida
644	Statutes, is amended to read:
645	641.27  Examination by the department.--
646	(1)  The office shall examine the affairs, transactions,
647	accounts, business records, and assets of any health maintenance
648	organization as often as it deems it expedient for the
649	protection of the people of this state, but not less frequently
650	than once every 5 3 years. In lieu of making its own financial
651	examination, the office may accept an independent certified
652	public accountant's audit report prepared on a statutory
653	accounting basis consistent with this part. However, except when
654	the medical records are requested and copies furnished pursuant
655	to s. 456.057, medical records of individuals and records of
656	physicians providing service under contract to the health
657	maintenance organization shall not be subject to audit, although
658	they may be subject to subpoena by court order upon a showing of
659	good cause. For the purpose of examinations, the office may
660	administer oaths to and examine the officers and agents of a
661	health maintenance organization concerning its business and
662	affairs. The examination of each health maintenance organization
663	by the office shall be subject to the same terms and conditions
664	as apply to insurers under chapter 624. In no event shall
665	expenses of all examinations exceed a maximum of $50,000 $20,000
666	for any 1-year period. Any rehabilitation, liquidation,
667	conservation, or dissolution of a health maintenance
668	organization shall be conducted under the supervision of the
669	department, which shall have all power with respect thereto
670	granted to it under the laws governing the rehabilitation,
671	liquidation, reorganization, conservation, or dissolution of
672	life insurance companies.
673	Section 10.  Paragraph (c) of subsection (3) of section
674	641.31, Florida Statutes, is amended to read:
675	641.31  Health maintenance contracts.--
676	(3)
677	(c)  The office shall disapprove any form filed under this
678	subsection, or withdraw any previous approval thereof, if the
679	form:
680	1.  Is in any respect in violation of, or does not comply
681	with, any provision of this part or rule adopted thereunder.
682	2.  Contains or incorporates by reference, where such
683	incorporation is otherwise permissible, any inconsistent,
684	ambiguous, or misleading clauses or exceptions and conditions
685	which deceptively affect the risk purported to be assumed in the
686	general coverage of the contract.
687	3.  Has any title, heading, or other indication of its
688	provisions which is misleading.
689	4.  Is printed or otherwise reproduced in such a manner as
690	to render any material provision of the form substantially
691	illegible.
692	5.  Contains provisions which are unfair, inequitable, or
693	contrary to the public policy of this state or which encourage
694	misrepresentation.
695	6.  Excludes coverage for human immunodeficiency virus
696	infection or acquired immune deficiency syndrome or contains
697	limitations in the benefits payable, or in the terms or
698	conditions of such contract, for human immunodeficiency virus
699	infection or acquired immune deficiency syndrome which are
700	different than those which apply to any other sickness or
701	medical condition.
702	7.  Is not in compliance with s. 627.4141.
703	Section 11.  This act shall take effect July 1, 2005, and
704	shall apply to all policies or contracts issued or renewed on or
705	after July 1, 2005.

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