HB 1503

CS

CHAMBER ACTION

1	The Insurance Committee recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to health insurance; amending s. 408.05,
7	F.S.; changing the due date for a report from the Agency
8	for Health Care Administration regarding the State Center
9	for Health Statistics; amending s. 408.909, F.S.;
10	providing an additional criterion for the Office of
11	Insurance Regulation to disapprove or withdraw approval of
12	health flex plans; amending s. 627.413, F.S.; authorizing
13	insurers and health maintenance organizations to offer
14	policies or contracts providing for a high deductible plan
15	meeting federal requirements and in conjunction with a
16	health savings account; amending s. 627.638, F.S.;
17	providing certain contract and claim form requirements for
18	direct payment to certain providers of emergency services
19	and care; amending s. 627.6487, F.S.; revising the
20	definition of the term "eligible individual" for purposes
21	of obtaining coverage in the Florida Health Insurance
22	Plan; amending s. 627.64872, F.S.; revising definitions;
23	changing references to the Director of the Office of
24	Insurance Regulation to the Commissioner of Insurance
25	Regulation; deleting obsolete language; providing
26	additional eligibility criteria; reducing premium rate
27	limitations; revising requirements for sources of
28	additional revenue; authorizing the board to cancel
29	policies under inadequate funding conditions; providing a
30	limitation; specifying a maximum provider reimbursement
31	rate; requiring licensed providers to accept assignment of
32	plan benefits and consider certain payments as payments in
33	full; amending s. 627.6692, F.S.; extending a time period
34	within which eligible employees may apply for continuation
35	of coverage; amending s. 627.6699, F.S.; revising
36	availability of coverage provision of the Employee Health
37	Care Access Act; including high deductible plans meeting
38	federal health savings account plan requirements; revising
39	membership of the board of the small employer health
40	reinsurance program; revising certain reporting dates
41	relating to program losses and assessments; requiring the
42	board to advise executive and legislative entities on
43	health insurance issues; providing requirements; amending
44	s. 641.27, F.S.; increasing the interval at which the
45	office examines health maintenance organizations; deleting
46	authorization for the office to accept an audit report
47	from a certified public accountant in lieu of conducting
48	its own examination; increasing an expense limitation;
49	repealing s. 627.6402, F.S.; relating to authorized
50	insurance rebates for healthy lifestyles; providing
51	application; providing an effective date.
52
53	Be It Enacted by the Legislature of the State of Florida:
54
55	Section 1.  Paragraph (l) of subsection (3) of section
56	408.05, Florida Statutes, is amended to read:
57	408.05  State Center for Health Statistics.--
58	(3)  COMPREHENSIVE HEALTH INFORMATION SYSTEM.--In order to
59	produce comparable and uniform health information and
60	statistics, the agency shall perform the following functions:
61	(l)  Develop, in conjunction with the State Comprehensive
62	Health Information System Advisory Council, and implement a
63	long-range plan for making available performance outcome and
64	financial data that will allow consumers to compare health care
65	services. The performance outcomes and financial data the agency
66	must make available shall include, but is not limited to,
67	pharmaceuticals, physicians, health care facilities, and health
68	plans and managed care entities. The agency shall submit the
69	initial plan to the Governor, the President of the Senate, and
70	the Speaker of the House of Representatives by January March 1,
71	2006 2005, and shall update the plan and report on the status of
72	its implementation annually thereafter. The agency shall also
73	make the plan and status report available to the public on its
74	Internet website. As part of the plan, the agency shall identify
75	the process and timeframes for implementation, any barriers to
76	implementation, and recommendations of changes in the law that
77	may be enacted by the Legislature to eliminate the barriers. As
78	preliminary elements of the plan, the agency shall:
79	1.  Make available performance outcome and patient charge
80	data collected from health care facilities pursuant to s.
81	408.061(1)(a) and (2). The agency shall determine which
82	conditions and procedures, performance outcomes, and patient
83	charge data to disclose based upon input from the council. When
84	determining which conditions and procedures are to be disclosed,
85	the council and the agency shall consider variation in costs,
86	variation in outcomes, and magnitude of variations and other
87	relevant information. When determining which performance
88	outcomes to disclose, the agency:
89	a.  Shall consider such factors as volume of cases; average
90	patient charges; average length of stay; complication rates;
91	mortality rates; and infection rates, among others, which shall
92	be adjusted for case mix and severity, if applicable.
93	b.  May consider such additional measures that are adopted
94	by the Centers for Medicare and Medicaid Studies, National
95	Quality Forum, the Joint Commission on Accreditation of
96	Healthcare Organizations, the Agency for Healthcare Research and
97	Quality, or a similar national entity that establishes standards
98	to measure the performance of health care providers, or by other
99	states.
100
101	When determining which patient charge data to disclose, the
102	agency shall consider such measures as average charge, average
103	net revenue per adjusted patient day, average cost per adjusted
104	patient day, and average cost per admission, among others.
105	2.  Make available performance measures, benefit design,
106	and premium cost data from health plans licensed pursuant to
107	chapter 627 or chapter 641. The agency shall determine which
108	performance outcome and member and subscriber cost data to
109	disclose, based upon input from the council. When determining
110	which data to disclose, the agency shall consider information
111	that may be required by either individual or group purchasers to
112	assess the value of the product, which may include membership
113	satisfaction, quality of care, current enrollment or membership,
114	coverage areas, accreditation status, premium costs, plan costs,
115	premium increases, range of benefits, copayments and
116	deductibles, accuracy and speed of claims payment, credentials
117	of physicians, number of providers, names of network providers,
118	and hospitals in the network. Health plans shall make available
119	to the agency any such data or information that is not currently
120	reported to the agency or the office.
121	3.  Determine the method and format for public disclosure
122	of data reported pursuant to this paragraph. The agency shall
123	make its determination based upon input from the Comprehensive
124	Health Information System Advisory Council. At a minimum, the
125	data shall be made available on the agency's Internet website in
126	a manner that allows consumers to conduct an interactive search
127	that allows them to view and compare the information for
128	specific providers. The website must include such additional
129	information as is determined necessary to ensure that the
130	website enhances informed decisionmaking among consumers and
131	health care purchasers, which shall include, at a minimum,
132	appropriate guidance on how to use the data and an explanation
133	of why the data may vary from provider to provider. The data
134	specified in subparagraph 1. shall be released no later than
135	March 1, 2005. The data specified in subparagraph 2. shall be
136	released no later than March 1, 2006.
137	Section 2.  Paragraph (b) of subsection (3) of section
138	408.909, Florida Statutes, is amended to read:
139	408.909  Health flex plans.--
140	(3)  PROGRAM.--The agency and the office shall each approve
141	or disapprove health flex plans that provide health care
142	coverage for eligible participants. A health flex plan may limit
143	or exclude benefits otherwise required by law for insurers
144	offering coverage in this state, may cap the total amount of
145	claims paid per year per enrollee, may limit the number of
146	enrollees, or may take any combination of those actions. A
147	health flex plan offering may include the option of a
148	catastrophic plan supplementing the health flex plan.
149	(b)  The office shall develop guidelines for the review of
150	health flex plan applications and provide regulatory oversight
151	of health flex plan advertisement and marketing procedures. The
152	office shall disapprove or shall withdraw approval of plans
153	that:
154	1.  Contain any ambiguous, inconsistent, or misleading
155	provisions or any exceptions or conditions that deceptively
156	affect or limit the benefits purported to be assumed in the
157	general coverage provided by the health flex plan;
158	2.  Provide benefits that are unreasonable in relation to
159	the premium charged or contain provisions that are unfair or
160	inequitable or contrary to the public policy of this state, that
161	encourage misrepresentation, or that result in unfair
162	discrimination in sales practices; or
163	3.  Cannot demonstrate that the health flex plan is
164	financially sound and that the applicant is able to underwrite
165	or finance the health care coverage provided; or
166	4.  Cannot demonstrate that the applicant and its
167	management are in compliance with the standards required
168	pursuant to s. 624.404(3).
169	Section 3.  Subsection (6) is added to section 627.413,
170	Florida Statutes, to read:
171	627.413  Contents of policies, in general;
172	identification.--
173	(6)  Notwithstanding any other provision of the Florida
174	Insurance Code that is in conflict with federal requirements for
175	a health savings account qualified high deductible health plan,
176	an insurer, or a health maintenance organization subject to part
177	I of chapter 641, which is authorized to issue health insurance
178	in this state may offer for sale an individual or group policy
179	or contract that provides for a high deductible plan that meets
180	the federal requirements of a health savings account plan and
181	which is offered in conjunction with a health savings account.
182	Section 4.  Subsection (2) of section 627.638, Florida
183	Statutes, is amended to read:
184	627.638  Direct payment for hospital, medical services.--
185	(2)  Whenever, in any health insurance claim form, an
186	insured specifically authorizes payment of benefits directly to
187	any recognized hospital or physician, the insurer shall make
188	such payment to the designated provider of such services, unless
189	otherwise provided in the insurance contract. The insurance
190	contract cannot prohibit, and claims forms must provide option
191	for, the payment of benefits directly to a recognized hospital
192	or physician for care provided pursuant to s. 395.1041.
193	Section 5.  Paragraph (b) of subsection (3) of section
194	627.6487, Florida Statutes, is amended to read:
195	627.6487  Guaranteed availability of individual health
196	insurance coverage to eligible individuals.--
197	(3)  For the purposes of this section, the term "eligible
198	individual" means an individual:
199	(b)  Who is not eligible for coverage under:
200	1.  A group health plan, as defined in s. 2791 of the
201	Public Health Service Act;
202	2.  A conversion policy or contract issued by an authorized
203	insurer or health maintenance organization under s. 627.6675 or
204	s. 641.3921, respectively, offered to an individual who is no
205	longer eligible for coverage under either an insured or self-
206	insured employer plan;
207	3.  Part A or part B of Title XVIII of the Social Security
208	Act; or
209	4.  A state plan under Title XIX of such act, or any
210	successor program, and does not have other health insurance
211	coverage; or
212	5.  The Florida Health Insurance Plan as specified in s.
213	627.64872 and such plan is accepting new enrollments. However, a
214	person whose previous coverage was under the Florida Health
215	Insurance Plan as specified in s. 627.64872 is not an eligible
216	individual as defined in s. 627.6487(3)(a);
217	Section 6.  Paragraphs (b), (c), and (n) of subsection (2)
218	and subsections (3), (6), (9), and (15) of section 627.64872,
219	Florida Statutes, are amended, subsection (20) of said section
220	is renumbered as subsection (21), and a new subsection (20) is
221	added to said section, to read:
222	627.64872  Florida Health Insurance Plan.--
223	(2)  DEFINITIONS.--As used in this section:
224	(b)  "Commissioner" means the Commissioner of Insurance
225	Regulation.
226	(c)  "Dependent" means a resident spouse or resident
227	unmarried child under the age of 19 years, a child who is a
228	student under the age of 25 years and who is financially
229	dependent upon the parent, or a child of any age who is disabled
230	and dependent upon the parent.
231	(c)  "Director" means the Director of the Office of
232	Insurance Regulation.
233	(n)  "Resident" means an individual who has been legally
234	domiciled in this state for a period of at least 6 months and
235	who physically resides in this state not less than 185 days per
236	year.
237	(3)  BOARD OF DIRECTORS.--
238	(a)  The plan shall operate subject to the supervision and
239	control of the board. The board shall consist of the
240	commissioner director or his or her designated representative,
241	who shall serve as a member of the board and shall be its chair,
242	and an additional eight members, five of whom shall be appointed
243	by the Governor, at least two of whom shall be individuals not
244	representative of insurers or health care providers, one of whom
245	shall be appointed by the President of the Senate, one of whom
246	shall be appointed by the Speaker of the House of
247	Representatives, and one of whom shall be appointed by the Chief
248	Financial Officer.
249	(b)  The term to be served on the board by the commissioner
250	Director of the Office of Insurance Regulation shall be
251	determined by continued employment in such position. The
252	remaining initial board members shall serve for a period of time
253	as follows: two members appointed by the Governor and the
254	members appointed by the President of the Senate and the Speaker
255	of the House of Representatives shall serve a term of 2 years;
256	and three members appointed by the Governor and the Chief
257	Financial Officer shall serve a term of 4 years. Subsequent
258	board members shall serve for a term of 3 years. A board
259	member's term shall continue until his or her successor is
260	appointed.
261	(c)  Vacancies on the board shall be filled by the
262	appointing authority, such authority being the Governor, the
263	President of the Senate, the Speaker of the House of
264	Representatives, or the Chief Financial Officer. The appointing
265	authority may remove board members for cause.
266	(d)  The commissioner director, or his or her recognized
267	representative, shall be responsible for any organizational
268	requirements necessary for the initial meeting of the board
269	which shall take place no later than September 1, 2004.
270	(e)  Members shall not be compensated in their capacity as
271	board members but shall be reimbursed for reasonable expenses
272	incurred in the necessary performance of their duties in
273	accordance with s. 112.061.
274	(f)  The board shall submit to the Financial Services
275	Commission a plan of operation for the plan and any amendments
276	thereto necessary or suitable to ensure the fair, reasonable,
277	and equitable administration of the plan. The plan of operation
278	shall ensure that the plan qualifies to apply for any available
279	funding from the Federal Government that adds to the financial
280	viability of the plan. The plan of operation shall become
281	effective upon approval in writing by the Financial Services
282	Commission consistent with the date on which the coverage under
283	this section must be made available. If the board fails to
284	submit a suitable plan of operation within 1 year after
285	implementation the appointment of the board of directors, or at
286	any time thereafter fails to submit suitable amendments to the
287	plan of operation, the Financial Services Commission shall adopt
288	such rules as are necessary or advisable to effectuate the
289	provisions of this section. Such rules shall continue in force
290	until modified by the office or superseded by a plan of
291	operation submitted by the board and approved by the Financial
292	Services Commission.
293	(6)  INTERIM REPORT; ANNUAL REPORT.--
294	(a)  By no later than December 1, 2004, the board shall
295	report to the Governor, the President of the Senate, and the
296	Speaker of the House of Representatives the results of an
297	actuarial study conducted by the board to determine, including,
298	but not limited to:
299	1.  The impact the creation of the plan will have on the
300	small group insurance market and the individual market on
301	premiums paid by insureds. This shall include an estimate of the
302	total anticipated aggregate savings for all small employers in
303	the state.
304	2.  The number of individuals the pool could reasonably
305	cover at various funding levels, specifically, the number of
306	people the pool may cover at each of those funding levels.
307	3.  A recommendation as to the best source of funding for
308	the anticipated deficits of the pool.
309	4.  The effect on the individual and small group market by
310	including in the Florida Health Insurance Plan persons eligible
311	for coverage under s. 627.6487, as well as the cost of including
312	these individuals.
313
314	The board shall take no action to implement the Florida Health
315	Insurance Plan, other than the completion of the actuarial study
316	authorized in this paragraph, until funds are appropriated for
317	startup cost and any projected deficits.
318	(b)  No later than December 1, 2005, and annually
319	thereafter, the board shall submit to the Governor, the
320	President of the Senate, the Speaker of the House of
321	Representatives, and the substantive legislative committees of
322	the Legislature a report which includes an independent actuarial
323	study to determine, including, but not be limited to:
324	(a)1.  The impact the creation of the plan has on the small
325	group and individual insurance market, specifically on the
326	premiums paid by insureds. This shall include an estimate of the
327	total anticipated aggregate savings for all small employers in
328	the state.
329	(b)2.  The actual number of individuals covered at the
330	current funding and benefit level, the projected number of
331	individuals that may seek coverage in the forthcoming fiscal
332	year, and the projected funding needed to cover anticipated
333	increase or decrease in plan participation.
334	3.  A recommendation as to the best source of funding for
335	the anticipated deficits of the pool.
336	(c)4.  A summarization of the activities of the plan in the
337	preceding calendar year, including the net written and earned
338	premiums, plan enrollment, the expense of administration, and
339	the paid and incurred losses.
340	(d)5.  A review of the operation of the plan as to whether
341	the plan has met the intent of this section.
342	(9)  ELIGIBILITY.--
343	(a)  Any individual person who is and continues to be a
344	resident of this state shall be eligible for coverage under the
345	plan if:
346	1.  Evidence is provided that the person received notices
347	of rejection or refusal to issue substantially similar coverage
348	for health reasons from at least two health insurers or health
349	maintenance organizations. A rejection or refusal by an insurer
350	offering only stop-loss, excess of loss, or reinsurance coverage
351	with respect to the applicant shall not be sufficient evidence
352	under this paragraph.
353	2.  The person is enrolled in the Florida Comprehensive
354	Health Association as of the date the plan is implemented.
355	3.  Is an eligible individual as defined in s. 627.6487(3),
356	excluding s. 627.6487(3)(b)5.
357	(b)  Each resident dependent of a person who is eligible
358	for coverage under the plan shall also be eligible for such
359	coverage.
360	(c)  A person shall not be eligible for coverage under the
361	plan if:
362	1.  The person has or obtains health insurance coverage
363	substantially similar to or more comprehensive than a plan
364	policy, or would be eligible to obtain such coverage, unless a
365	person may maintain other coverage for the period of time the
366	person is satisfying any preexisting condition waiting period
367	under a plan policy or may maintain plan coverage for the period
368	of time the person is satisfying a preexisting condition waiting
369	period under another health insurance policy intended to replace
370	the plan policy;.
371	2.  The person is determined to be eligible for health care
372	benefits under Medicaid, Medicare, the state's children's health
373	insurance program, or any other federal, state, or local
374	government program that provides health benefits;
375	3.  The person voluntarily terminated plan coverage unless
376	12 months have elapsed since such termination;
377	4.  The person is an inmate or resident of a public
378	institution; or
379	5.  The person's premiums are paid for or reimbursed under
380	any government-sponsored program or by any government agency or
381	health care provider or by any health care provider sponsored or
382	affiliated organization.
383	(d)  Coverage shall cease:
384	1.  On the date a person is no longer a resident of this
385	state;
386	2.  On the date a person requests coverage to end;
387	3.  Upon the death of the covered person;
388	4.  On the date state law requires cancellation or
389	nonrenewal of the policy; or
390	5.  At the option of the plan, 30 days after the plan makes
391	any inquiry concerning the person's eligibility or place of
392	residence to which the person does not reply; or.
393	6.  Upon failure of the insured to pay for continued
394	coverage.
395	(e)  Except under the circumstances described in this
396	subsection, coverage of a person who ceases to meet the
397	eligibility requirements of this subsection shall be terminated
398	at the end of the policy period for which the necessary premiums
399	have been paid.
400	(15)  FUNDING OF THE PLAN.--
401	(a)  Premiums.--
402	1.  The plan shall establish premium rates for plan
403	coverage as provided in this section. Separate schedules of
404	premium rates based on age, sex, and geographical location may
405	apply for individual risks. Premium rates and schedules shall be
406	submitted to the office for approval prior to use.
407	2.  Initial rates for plan coverage shall be limited to no
408	more than 200 percent 300 percent of rates established for
409	individual standard risks as specified in s. 627.6675(3)(c).
410	Subject to the limits provided in this paragraph, subsequent
411	rates shall be established to provide fully for the expected
412	costs of claims, including recovery of prior losses, expenses of
413	operation, investment income of claim reserves, and any other
414	cost factors subject to the limitations described herein, but in
415	no event shall premiums exceed the 200-percent 300-percent rate
416	limitation provided in this section. Notwithstanding the 200-
417	percent 300-percent rate limitation, sliding scale premium
418	surcharges based upon the insured's income may apply to all
419	enrollees.
420	(b)  Sources of additional revenue.--Any deficit incurred
421	by the plan shall be primarily funded through amounts
422	appropriated by the Legislature from general revenue sources,
423	including, but not limited to, a portion of the annual growth in
424	existing net insurance premium taxes in an amount not less than
425	the anticipated losses and reserve requirements for existing
426	policyholders. The board shall operate the plan in such a manner
427	that the estimated cost of providing health insurance during any
428	fiscal year will not exceed total income the plan expects to
429	receive from policy premiums and funds appropriated by the
430	Legislature, including any interest on investments. After
431	determining the amount of funds appropriated to the board for a
432	fiscal year, the board shall estimate the number of new policies
433	it believes the plan has the financial capacity to insure during
434	that year so that costs do not exceed income. The board shall
435	take steps necessary to ensure that plan enrollment does not
436	exceed the number of residents it has estimated it has the
437	financial capacity to insure.
438	(c)  In the event of inadequate funding, the board may
439	cancel existing policies on a nondiscriminatory basis as
440	necessary to remedy the situation. No policy may be canceled if
441	a covered individual is currently making a claim.
442	(20)  PROVIDER REIMBURSEMENT.--Notwithstanding any other
443	provision of law, the maximum reimbursement rate to health care
444	providers for all covered, medically necessary services shall be
445	100 percent of Medicare's allowed payment amount for that
446	particular provider and service. All licensed providers in this
447	state shall accept assignment of plan benefits and consider the
448	Medicare allowed payment amount as payment in full.
449	Section 7.  Paragraphs (d) and (j) of subsection (5) of
450	section 627.6692, Florida Statutes, are amended to read:
451	627.6692  Florida Health Insurance Coverage Continuation
452	Act.--
453	(5)  CONTINUATION OF COVERAGE UNDER GROUP HEALTH PLANS.--
454	(d)1.  A qualified beneficiary must give written notice to
455	the insurance carrier within 63 30 days after the occurrence of
456	a qualifying event. Unless otherwise specified in the notice, a
457	notice by any qualified beneficiary constitutes notice on behalf
458	of all qualified beneficiaries. The written notice must inform
459	the insurance carrier of the occurrence and type of the
460	qualifying event giving rise to the potential election by a
461	qualified beneficiary of continuation of coverage under the
462	group health plan issued by that insurance carrier, except that
463	in cases where the covered employee has been involuntarily
464	discharged, the nature of such discharge need not be disclosed.
465	The written notice must, at a minimum, identify the employer,
466	the group health plan number, the name and address of all
467	qualified beneficiaries, and such other information required by
468	the insurance carrier under the terms of the group health plan
469	or the commission by rule, to the extent that such information
470	is known by the qualified beneficiary.
471	2.  Within 14 days after the receipt of written notice
472	under subparagraph 1., the insurance carrier shall send each
473	qualified beneficiary by certified mail an election and premium
474	notice form, approved by the office, which form must provide for
475	the qualified beneficiary's election or nonelection of
476	continuation of coverage under the group health plan and the
477	applicable premium amount due after the election to continue
478	coverage. This subparagraph does not require separate mailing of
479	notices to qualified beneficiaries residing in the same
480	household, but requires a separate mailing for each separate
481	household.
482	(j)  Notwithstanding paragraph (b), if a qualified
483	beneficiary in the military reserve or National Guard has
484	elected to continue coverage and is thereafter called to active
485	duty and the coverage under the group plan is terminated by the
486	beneficiary or the carrier due to the qualified beneficiary
487	becoming eligible for TRICARE (the health care program provided
488	by the United States Defense Department), the 18-month period or
489	such other applicable maximum time period for which the
490	qualified beneficiary would otherwise be entitled to continue
491	coverage is tolled during the time that he or she is covered
492	under the TRICARE program. Within 63 30 days after the federal
493	TRICARE coverage terminates, the qualified beneficiary may elect
494	to continue coverage under the group health plan, retroactively
495	to the date coverage terminated under TRICARE, for the remainder
496	of the 18-month period or such other applicable time period,
497	subject to termination of coverage at the earliest of the
498	conditions specified in paragraph (b).
499	Section 8.  Paragraph (c) of subsection (5) and paragraphs
500	(b) and (j) of subsection (11) of section 627.6699, Florida
501	Statutes, are amended, and paragraph (o) is added to subsection
502	(11) of said section, to read:
503	627.6699  Employee Health Care Access Act.--
504	(5)  AVAILABILITY OF COVERAGE.--
505	(c)  Every small employer carrier must, as a condition of
506	transacting business in this state:
507	1.  Offer and issue all small employer health benefit plans
508	on a guaranteed-issue basis to every eligible small employer,
509	with 2 to 50 eligible employees, that elects to be covered under
510	such plan, agrees to make the required premium payments, and
511	satisfies the other provisions of the plan. A rider for
512	additional or increased benefits may be medically underwritten
513	and may only be added to the standard health benefit plan. The
514	increased rate charged for the additional or increased benefit
515	must be rated in accordance with this section.
516	2.  In the absence of enrollment availability in the
517	Florida Health Insurance Plan, offer and issue basic and
518	standard small employer health benefit plans and a high
519	deductible plan that meets the requirements of a health savings
520	account plan or health reimbursement account as defined by
521	federal law, on a guaranteed-issue basis, during a 31-day open
522	enrollment period of August 1 through August 31 of each year, to
523	every eligible small employer, with fewer than two eligible
524	employees, which small employer is not formed primarily for the
525	purpose of buying health insurance and which elects to be
526	covered under such plan, agrees to make the required premium
527	payments, and satisfies the other provisions of the plan.
528	Coverage provided under this subparagraph shall begin on October
529	1 of the same year as the date of enrollment, unless the small
530	employer carrier and the small employer agree to a different
531	date. A rider for additional or increased benefits may be
532	medically underwritten and may only be added to the standard
533	health benefit plan. The increased rate charged for the
534	additional or increased benefit must be rated in accordance with
535	this section. For purposes of this subparagraph, a person, his
536	or her spouse, and his or her dependent children constitute a
537	single eligible employee if that person and spouse are employed
538	by the same small employer and either that person or his or her
539	spouse has a normal work week of less than 25 hours. Any right
540	to an open enrollment of health benefit coverage for groups of
541	fewer than two employees, pursuant to this section, shall remain
542	in full force and effect in the absence of the availability of
543	new enrollment into the Florida Health Insurance Plan.
544	3.  This paragraph does not limit a carrier's ability to
545	offer other health benefit plans to small employers if the
546	standard and basic health benefit plans are offered and
547	rejected.
548	(11)  SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
549	(b)1.  The program shall operate subject to the supervision
550	and control of the board.
551	2.  Effective upon this act becoming a law, the board shall
552	consist of the director of the office or his or her designee,
553	who shall serve as the chairperson, and 13 additional members
554	who are representatives of carriers and insurance agents and are
555	appointed by the director of the office and serve as follows:
556	a.  Five members shall be representatives of health
557	insurers licensed under chapter 624 or chapter 641. Two members
558	shall be agents who are actively engaged in the sale of health
559	insurance. Four members shall be employers or representatives of
560	employers. One member shall be a person covered under an
561	individual health insurance policy issued by a licensed insurer
562	in this state. One member shall represent the Agency for Health
563	Care Administration and shall be recommended by the Secretary of
564	Health Care Administration. The director of the office shall
565	include representatives of small employer carriers subject to
566	assessment under this subsection. If two or more carriers elect
567	to be risk-assuming carriers, the membership must include at
568	least two representatives of risk-assuming carriers; if one
569	carrier is risk-assuming, one member must be a representative of
570	such carrier. At least one member must be a carrier who is
571	subject to the assessments, but is not a small employer carrier.
572	Subject to such restrictions, at least five members shall be
573	selected from individuals recommended by small employer carriers
574	pursuant to procedures provided by rule of the commission. Three
575	members shall be selected from a list of health insurance
576	carriers that issue individual health insurance policies. At
577	least two of the three members selected must be reinsuring
578	carriers. Two members shall be selected from a list of insurance
579	agents who are actively engaged in the sale of health insurance.
580	b.  A member appointed under this subparagraph shall serve
581	a term of 4 years and shall continue in office until the
582	member's successor takes office, except that, in order to
583	provide for staggered terms, the director of the office shall
584	designate two of the initial appointees under this subparagraph
585	to serve terms of 2 years and shall designate three of the
586	initial appointees under this subparagraph to serve terms of 3
587	years.
588	3.  The director of the office may remove a member for
589	cause.
590	4.  Vacancies on the board shall be filled in the same
591	manner as the original appointment for the unexpired portion of
592	the term.
593	5.  The director of the office may require an entity that
594	recommends persons for appointment to submit additional lists of
595	recommended appointees.
596	(j)1.  Before July March 1 of each calendar year, the board
597	shall determine and report to the office the program net loss
598	for the previous year, including administrative expenses for
599	that year, and the incurred losses for the year, taking into
600	account investment income and other appropriate gains and
601	losses.
602	2.  Any net loss for the year shall be recouped by
603	assessment of the carriers, as follows:
604	a.  The operating losses of the program shall be assessed
605	in the following order subject to the specified limitations. The
606	first tier of assessments shall be made against reinsuring
607	carriers in an amount which shall not exceed 5 percent of each
608	reinsuring carrier's premiums from health benefit plans covering
609	small employers. If such assessments have been collected and
610	additional moneys are needed, the board shall make a second tier
611	of assessments in an amount which shall not exceed 0.5 percent
612	of each carrier's health benefit plan premiums. Except as
613	provided in paragraph (n), risk-assuming carriers are exempt
614	from all assessments authorized pursuant to this section. The
615	amount paid by a reinsuring carrier for the first tier of
616	assessments shall be credited against any additional assessments
617	made.
618	b.  The board shall equitably assess carriers for operating
619	losses of the plan based on market share. The board shall
620	annually assess each carrier a portion of the operating losses
621	of the plan. The first tier of assessments shall be determined
622	by multiplying the operating losses by a fraction, the numerator
623	of which equals the reinsuring carrier's earned premium
624	pertaining to direct writings of small employer health benefit
625	plans in the state during the calendar year for which the
626	assessment is levied, and the denominator of which equals the
627	total of all such premiums earned by reinsuring carriers in the
628	state during that calendar year. The second tier of assessments
629	shall be based on the premiums that all carriers, except risk-
630	assuming carriers, earned on all health benefit plans written in
631	this state. The board may levy interim assessments against
632	carriers to ensure the financial ability of the plan to cover
633	claims expenses and administrative expenses paid or estimated to
634	be paid in the operation of the plan for the calendar year prior
635	to the association's anticipated receipt of annual assessments
636	for that calendar year. Any interim assessment is due and
637	payable within 30 days after receipt by a carrier of the interim
638	assessment notice. Interim assessment payments shall be credited
639	against the carrier's annual assessment. Health benefit plan
640	premiums and benefits paid by a carrier that are less than an
641	amount determined by the board to justify the cost of collection
642	may not be considered for purposes of determining assessments.
643	c.  Subject to the approval of the office, the board shall
644	make an adjustment to the assessment formula for reinsuring
645	carriers that are approved as federally qualified health
646	maintenance organizations by the Secretary of Health and Human
647	Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,
648	if any, that restrictions are placed on them that are not
649	imposed on other small employer carriers.
650	3.  Before July March 1 of each year, the board shall
651	determine and file with the office an estimate of the
652	assessments needed to fund the losses incurred by the program in
653	the previous calendar year.
654	4.  If the board determines that the assessments needed to
655	fund the losses incurred by the program in the previous calendar
656	year will exceed the amount specified in subparagraph 2., the
657	board shall evaluate the operation of the program and report its
658	findings, including any recommendations for changes to the plan
659	of operation, to the office within 180 90 days following the end
660	of the calendar year in which the losses were incurred. The
661	evaluation shall include an estimate of future assessments, the
662	administrative costs of the program, the appropriateness of the
663	premiums charged and the level of carrier retention under the
664	program, and the costs of coverage for small employers. If the
665	board fails to file a report with the office within 180 90 days
666	following the end of the applicable calendar year, the office
667	may evaluate the operations of the program and implement such
668	amendments to the plan of operation the office deems necessary
669	to reduce future losses and assessments.
670	5.  If assessments exceed the amount of the actual losses
671	and administrative expenses of the program, the excess shall be
672	held as interest and used by the board to offset future losses
673	or to reduce program premiums. As used in this paragraph, the
674	term "future losses" includes reserves for incurred but not
675	reported claims.
676	6.  Each carrier's proportion of the assessment shall be
677	determined annually by the board, based on annual statements and
678	other reports considered necessary by the board and filed by the
679	carriers with the board.
680	7.  Provision shall be made in the plan of operation for
681	the imposition of an interest penalty for late payment of an
682	assessment.
683	8.  A carrier may seek, from the office, a deferment, in
684	whole or in part, from any assessment made by the board. The
685	office may defer, in whole or in part, the assessment of a
686	carrier if, in the opinion of the office, the payment of the
687	assessment would place the carrier in a financially impaired
688	condition. If an assessment against a carrier is deferred, in
689	whole or in part, the amount by which the assessment is deferred
690	may be assessed against the other carriers in a manner
691	consistent with the basis for assessment set forth in this
692	section. The carrier receiving such deferment remains liable to
693	the program for the amount deferred and is prohibited from
694	reinsuring any individuals or groups in the program if it fails
695	to pay assessments.
696	(o)  The board shall advise the office, the agency, the
697	department, and other executive and legislative entities on
698	health insurance issues. Specifically, the board shall:
699	1.  Provide a forum for stakeholders, consisting of
700	insurers, employers, agents, consumers, and regulators, in the
701	private health insurance market in this state.
702	2.  Review and recommend strategies to improve the
703	functioning of the health insurance markets in this state with a
704	specific focus on market stability, access, and pricing.
705	3.  Make recommendations to the office for legislation
706	addressing health insurance market issues and provide comments
707	on health insurance legislation proposed by the office.
708	4.  Meet at least three times each year. One meeting shall
709	be held to hear reports and to secure public comment on the
710	health insurance market, to develop any legislation needed to
711	address health insurance market issues, and to provide comments
712	on health insurance legislation proposed by the office.
713	5.  By September 1 each year, issue a report to the office
714	on the state of the health insurance market. The report shall
715	include recommendations for changes in the health insurance
716	market, results from implementation of previous recommendations
717	and information on health insurance markets.
718	Section 9.  Subsection (1) of section 641.27, Florida
719	Statutes, is amended to read:
720	641.27  Examination by the department.--
721	(1)  The office shall examine the affairs, transactions,
722	accounts, business records, and assets of any health maintenance
723	organization as often as it deems it expedient for the
724	protection of the people of this state, but not less frequently
725	than once every 5 3 years. In lieu of making its own financial
726	examination, the office may accept an independent certified
727	public accountant's audit report prepared on a statutory
728	accounting basis consistent with this part. However, except when
729	the medical records are requested and copies furnished pursuant
730	to s. 456.057, medical records of individuals and records of
731	physicians providing service under contract to the health
732	maintenance organization shall not be subject to audit, although
733	they may be subject to subpoena by court order upon a showing of
734	good cause. For the purpose of examinations, the office may
735	administer oaths to and examine the officers and agents of a
736	health maintenance organization concerning its business and
737	affairs. The examination of each health maintenance organization
738	by the office shall be subject to the same terms and conditions
739	as apply to insurers under chapter 624. In no event shall
740	expenses of all examinations exceed a maximum of $50,000 $20,000
741	for any 1-year period. Any rehabilitation, liquidation,
742	conservation, or dissolution of a health maintenance
743	organization shall be conducted under the supervision of the
744	department, which shall have all power with respect thereto
745	granted to it under the laws governing the rehabilitation,
746	liquidation, reorganization, conservation, or dissolution of
747	life insurance companies.
748	Section 10.  Section 627.6402, Florida Statutes, is
749	repealed.
750	Section 11.  This act shall take effect July 1, 2005, and
751	shall apply to all policies or contracts issued or renewed on or
752	after July 1, 2005.

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