HB 1503CS

CHAMBER ACTION




1The Commerce Council recommends the following:
2
3     Council/Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to health insurance; amending s. 408.05,
7F.S.; changing the due date for a report from the Agency
8for Health Care Administration regarding the State Center
9for Health Statistics; changing the release dates for
10certain data collected by the State Center for Health
11Statistics; amending s. 408.909, F.S.; providing an
12additional criterion for the Office of Insurance
13Regulation to disapprove or withdraw approval of health
14flex plans; amending s. 627.413, F.S.; authorizing
15insurers and health maintenance organizations to offer
16policies or contracts providing for a high deductible plan
17meeting federal requirements and in conjunction with a
18health savings account; amending s. 627.6402, F.S.;
19revising provisions for healthy lifestyle rebates for an
20individual health insurance policy; providing exceptions;
21providing application; amending s. 627.6487, F.S.;
22revising the definition of the term "eligible individual"
23for purposes of obtaining coverage in the Florida Health
24Insurance Plan; amending s. 627.64872, F.S.; revising
25definitions; changing references to the Director of the
26Office of Insurance Regulation to the Commissioner of
27Insurance Regulation; deleting obsolete language;
28providing additional eligibility criteria; reducing
29premium rate limitations; revising requirements for
30sources of additional revenue; authorizing the board to
31cancel policies under inadequate funding conditions;
32providing a limitation; defining the term "health
33insurance" for purposes of certain assessments; providing
34an exclusion; specifying a maximum provider reimbursement
35rate; requiring licensed providers to accept assignment of
36plan benefits and consider certain payments as payments in
37full; authorizing the board to update a required actuarial
38study; providing study criteria; amending s. 627.65626,
39F.S.; revising criteria for healthy lifestyle rebates for
40group and similar health insurance policies provided by
41health insurers; providing exceptions; providing
42application; amending s. 627.6692, F.S.; extending a time
43period within which eligible employees may apply for
44continuation of coverage; amending s. 627.6699, F.S.;
45revising availability of coverage provision of the
46Employee Health Care Access Act; including high deductible
47plans meeting federal health savings account plan
48requirements; revising membership of the board of the
49small employer health reinsurance program; revising
50certain reporting dates relating to program losses and
51assessments; requiring the board to advise executive and
52legislative entities on health insurance issues; providing
53requirements; amending s. 641.27, F.S.; increasing the
54interval at which the office examines health maintenance
55organizations; deleting authorization for the office to
56accept an audit report from a certified public accountant
57in lieu of conducting its own examination; increasing an
58expense limitation; amending s. 641.31, F.S.; revising
59criteria for healthy lifestyle rebates for health
60maintenance organizations; providing exceptions; providing
61application; providing an appropriation; providing
62application; providing an effective date.
63
64Be It Enacted by the Legislature of the State of Florida:
65
66     Section 1.  Paragraph (l) of subsection (3) of section
67408.05, Florida Statutes, is amended to read:
68     408.05  State Center for Health Statistics.--
69     (3)  COMPREHENSIVE HEALTH INFORMATION SYSTEM.--In order to
70produce comparable and uniform health information and
71statistics, the agency shall perform the following functions:
72     (l)  Develop, in conjunction with the State Comprehensive
73Health Information System Advisory Council, and implement a
74long-range plan for making available performance outcome and
75financial data that will allow consumers to compare health care
76services. The performance outcomes and financial data the agency
77must make available shall include, but is not limited to,
78pharmaceuticals, physicians, health care facilities, and health
79plans and managed care entities. The agency shall submit the
80initial plan to the Governor, the President of the Senate, and
81the Speaker of the House of Representatives by January March 1,
822006 2005, and shall update the plan and report on the status of
83its implementation annually thereafter. The agency shall also
84make the plan and status report available to the public on its
85Internet website. As part of the plan, the agency shall identify
86the process and timeframes for implementation, any barriers to
87implementation, and recommendations of changes in the law that
88may be enacted by the Legislature to eliminate the barriers. As
89preliminary elements of the plan, the agency shall:
90     1.  Make available performance outcome and patient charge
91data collected from health care facilities pursuant to s.
92408.061(1)(a) and (2). The agency shall determine which
93conditions and procedures, performance outcomes, and patient
94charge data to disclose based upon input from the council. When
95determining which conditions and procedures are to be disclosed,
96the council and the agency shall consider variation in costs,
97variation in outcomes, and magnitude of variations and other
98relevant information. When determining which performance
99outcomes to disclose, the agency:
100     a.  Shall consider such factors as volume of cases; average
101patient charges; average length of stay; complication rates;
102mortality rates; and infection rates, among others, which shall
103be adjusted for case mix and severity, if applicable.
104     b.  May consider such additional measures that are adopted
105by the Centers for Medicare and Medicaid Studies, National
106Quality Forum, the Joint Commission on Accreditation of
107Healthcare Organizations, the Agency for Healthcare Research and
108Quality, or a similar national entity that establishes standards
109to measure the performance of health care providers, or by other
110states.
111
112When determining which patient charge data to disclose, the
113agency shall consider such measures as average charge, average
114net revenue per adjusted patient day, average cost per adjusted
115patient day, and average cost per admission, among others.
116     2.  Make available performance measures, benefit design,
117and premium cost data from health plans licensed pursuant to
118chapter 627 or chapter 641. The agency shall determine which
119performance outcome and member and subscriber cost data to
120disclose, based upon input from the council. When determining
121which data to disclose, the agency shall consider information
122that may be required by either individual or group purchasers to
123assess the value of the product, which may include membership
124satisfaction, quality of care, current enrollment or membership,
125coverage areas, accreditation status, premium costs, plan costs,
126premium increases, range of benefits, copayments and
127deductibles, accuracy and speed of claims payment, credentials
128of physicians, number of providers, names of network providers,
129and hospitals in the network. Health plans shall make available
130to the agency any such data or information that is not currently
131reported to the agency or the office.
132     3.  Determine the method and format for public disclosure
133of data reported pursuant to this paragraph. The agency shall
134make its determination based upon input from the Comprehensive
135Health Information System Advisory Council. At a minimum, the
136data shall be made available on the agency's Internet website in
137a manner that allows consumers to conduct an interactive search
138that allows them to view and compare the information for
139specific providers. The website must include such additional
140information as is determined necessary to ensure that the
141website enhances informed decisionmaking among consumers and
142health care purchasers, which shall include, at a minimum,
143appropriate guidance on how to use the data and an explanation
144of why the data may vary from provider to provider. The data
145specified in subparagraph 1. shall be released no later than
146January 1, 2006, for the reporting of infection rates, and no
147later than October March 1, 2005, for mortality rates and
148complication rates. The data specified in subparagraph 2. shall
149be released no later than October March 1, 2006.
150     Section 2.  Paragraph (b) of subsection (3) of section
151408.909, Florida Statutes, is amended to read:
152     408.909  Health flex plans.--
153     (3)  PROGRAM.--The agency and the office shall each approve
154or disapprove health flex plans that provide health care
155coverage for eligible participants. A health flex plan may limit
156or exclude benefits otherwise required by law for insurers
157offering coverage in this state, may cap the total amount of
158claims paid per year per enrollee, may limit the number of
159enrollees, or may take any combination of those actions. A
160health flex plan offering may include the option of a
161catastrophic plan supplementing the health flex plan.
162     (b)  The office shall develop guidelines for the review of
163health flex plan applications and provide regulatory oversight
164of health flex plan advertisement and marketing procedures. The
165office shall disapprove or shall withdraw approval of plans
166that:
167     1.  Contain any ambiguous, inconsistent, or misleading
168provisions or any exceptions or conditions that deceptively
169affect or limit the benefits purported to be assumed in the
170general coverage provided by the health flex plan;
171     2.  Provide benefits that are unreasonable in relation to
172the premium charged or contain provisions that are unfair or
173inequitable or contrary to the public policy of this state, that
174encourage misrepresentation, or that result in unfair
175discrimination in sales practices; or
176     3.  Cannot demonstrate that the health flex plan is
177financially sound and that the applicant is able to underwrite
178or finance the health care coverage provided; or
179     4.  Cannot demonstrate that the applicant and its
180management are in compliance with the standards required
181pursuant to s. 624.404(3).
182     Section 3.  Subsection (6) is added to section 627.413,
183Florida Statutes, to read:
184     627.413  Contents of policies, in general;
185identification.--
186     (6)  Notwithstanding any other provision of the Florida
187Insurance Code that is in conflict with federal requirements for
188a health savings account qualified high deductible health plan,
189an insurer, or a health maintenance organization subject to part
190I of chapter 641, which is authorized to issue health insurance
191in this state may offer for sale an individual or group policy
192or contract that provides for a high deductible plan that meets
193the federal requirements of a health savings account plan and
194which is offered in conjunction with a health savings account.
195     Section 4.  Section 627.6402, Florida Statutes, is amended
196to read:
197     627.6402  Insurance rebates for healthy lifestyles.--
198     (1)  Any rate, rating schedule, or rating manual for an
199individual health insurance policy filed with the office may
200shall provide for an appropriate rebate of premiums paid in the
201last calendar year when the individual covered by such plan is
202enrolled in and maintains participation in any health wellness,
203maintenance, or improvement program approved by the health plan.
204The rebate may be based on premiums paid in the last calendar
205year or the last policy year. The individual must provide
206evidence of demonstrative maintenance or improvement of the
207individual's health status as determined by assessments of
208agreed-upon health status indicators between the individual and
209the health insurer, including, but not limited to, reduction in
210weight, body mass index, and smoking cessation. Any rebate
211provided by the health insurer is presumed to be appropriate
212unless credible data demonstrates otherwise, or unless such
213rebate program requires the insured to incur costs to qualify
214for the rebate which equal or exceed the value of the rebate,
215but in no event shall the rebate not exceed 10 percent of paid
216premiums.
217     (2)  The premium rebate authorized by this section shall be
218effective for an insured on an annual basis, unless the
219individual fails to maintain or improve his or her health status
220while participating in an approved wellness program, or credible
221evidence demonstrates that the individual is not participating
222in the approved wellness program.
223     (3)  The program shall be available for all policies issued
224on or after July 1, 2005.
225     Section 5.  Paragraph (b) of subsection (3) of section
226627.6487, Florida Statutes, is amended to read:
227     627.6487  Guaranteed availability of individual health
228insurance coverage to eligible individuals.--
229     (3)  For the purposes of this section, the term "eligible
230individual" means an individual:
231     (b)  Who is not eligible for coverage under:
232     1.  A group health plan, as defined in s. 2791 of the
233Public Health Service Act;
234     2.  A conversion policy or contract issued by an authorized
235insurer or health maintenance organization under s. 627.6675 or
236s. 641.3921, respectively, offered to an individual who is no
237longer eligible for coverage under either an insured or self-
238insured employer plan;
239     3.  Part A or part B of Title XVIII of the Social Security
240Act; or
241     4.  A state plan under Title XIX of such act, or any
242successor program, and does not have other health insurance
243coverage; or
244     5.  The Florida Health Insurance Plan as specified in s.
245627.64872 and such plan is accepting new enrollments. However, a
246person whose previous coverage was under the Florida Health
247Insurance Plan as specified in s. 627.64872 is not an eligible
248individual as defined in s. 627.6487(3)(a);
249     Section 6.  Paragraphs (b), (c), and (n) of subsection (2)
250and subsections (3), (6), (9), and (15) of section 627.64872,
251Florida Statutes, are amended, subsection (20) of said section
252is renumbered as subsection (21), and a new subsection (20) is
253added to said section, to read:
254     627.64872  Florida Health Insurance Plan.--
255     (2)  DEFINITIONS.--As used in this section:
256     (b)  "Commissioner" means the Commissioner of Insurance
257Regulation.
258     (c)  "Dependent" means a resident spouse or resident
259unmarried child under the age of 19 years, a child who is a
260student under the age of 25 years and who is financially
261dependent upon the parent, or a child of any age who is disabled
262and dependent upon the parent.
263     (c)  "Director" means the Director of the Office of
264Insurance Regulation.
265     (n)  "Resident" means an individual who has been legally
266domiciled in this state for a period of at least 6 months and
267who physically resides in this state not less than 185 days per
268year.
269     (3)  BOARD OF DIRECTORS.--
270     (a)  The plan shall operate subject to the supervision and
271control of the board. The board shall consist of the
272commissioner director or his or her designated representative,
273who shall serve as a member of the board and shall be its chair,
274and an additional eight members, five of whom shall be appointed
275by the Governor, at least two of whom shall be individuals not
276representative of insurers or health care providers, one of whom
277shall be appointed by the President of the Senate, one of whom
278shall be appointed by the Speaker of the House of
279Representatives, and one of whom shall be appointed by the Chief
280Financial Officer.
281     (b)  The term to be served on the board by the commissioner
282Director of the Office of Insurance Regulation shall be
283determined by continued employment in such position. The
284remaining initial board members shall serve for a period of time
285as follows: two members appointed by the Governor and the
286members appointed by the President of the Senate and the Speaker
287of the House of Representatives shall serve a term of 2 years;
288and three members appointed by the Governor and the Chief
289Financial Officer shall serve a term of 4 years. Subsequent
290board members shall serve for a term of 3 years. A board
291member's term shall continue until his or her successor is
292appointed.
293     (c)  Vacancies on the board shall be filled by the
294appointing authority, such authority being the Governor, the
295President of the Senate, the Speaker of the House of
296Representatives, or the Chief Financial Officer. The appointing
297authority may remove board members for cause.
298     (d)  The commissioner director, or his or her recognized
299representative, shall be responsible for any organizational
300requirements necessary for the initial meeting of the board
301which shall take place no later than September 1, 2004.
302     (e)  Members shall not be compensated in their capacity as
303board members but shall be reimbursed for reasonable expenses
304incurred in the necessary performance of their duties in
305accordance with s. 112.061.
306     (f)  The board shall submit to the Financial Services
307Commission a plan of operation for the plan and any amendments
308thereto necessary or suitable to ensure the fair, reasonable,
309and equitable administration of the plan. The plan of operation
310shall ensure that the plan qualifies to apply for any available
311funding from the Federal Government that adds to the financial
312viability of the plan. The plan of operation shall become
313effective upon approval in writing by the Financial Services
314Commission consistent with the date on which the coverage under
315this section must be made available. If the board fails to
316submit a suitable plan of operation within 1 year after
317implementation the appointment of the board of directors, or at
318any time thereafter fails to submit suitable amendments to the
319plan of operation, the Financial Services Commission shall adopt
320such rules as are necessary or advisable to effectuate the
321provisions of this section. Such rules shall continue in force
322until modified by the office or superseded by a plan of
323operation submitted by the board and approved by the Financial
324Services Commission.
325     (6)  INTERIM REPORT; ANNUAL REPORT.--
326     (a)  By no later than December 1, 2004, the board shall
327report to the Governor, the President of the Senate, and the
328Speaker of the House of Representatives the results of an
329actuarial study conducted by the board to determine, including,
330but not limited to:
331     1.  The impact the creation of the plan will have on the
332small group insurance market and the individual market on
333premiums paid by insureds. This shall include an estimate of the
334total anticipated aggregate savings for all small employers in
335the state.
336     2.  The number of individuals the pool could reasonably
337cover at various funding levels, specifically, the number of
338people the pool may cover at each of those funding levels.
339     3.  A recommendation as to the best source of funding for
340the anticipated deficits of the pool.
341     4.  The effect on the individual and small group market by
342including in the Florida Health Insurance Plan persons eligible
343for coverage under s. 627.6487, as well as the cost of including
344these individuals.
345
346The board shall take no action to implement the Florida Health
347Insurance Plan, other than the completion of the actuarial study
348authorized in this paragraph, until funds are appropriated for
349startup cost and any projected deficits.
350     (b)  No later than December 1, 2005, and annually
351thereafter, the board shall submit to the Governor, the
352President of the Senate, the Speaker of the House of
353Representatives, and the substantive legislative committees of
354the Legislature a report which includes an independent actuarial
355study to determine, including, but not be limited to:
356     (a)1.  The impact the creation of the plan has on the small
357group and individual insurance market, specifically on the
358premiums paid by insureds. This shall include an estimate of the
359total anticipated aggregate savings for all small employers in
360the state.
361     (b)2.  The actual number of individuals covered at the
362current funding and benefit level, the projected number of
363individuals that may seek coverage in the forthcoming fiscal
364year, and the projected funding needed to cover anticipated
365increase or decrease in plan participation.
366     3.  A recommendation as to the best source of funding for
367the anticipated deficits of the pool.
368     (c)4.  A summarization of the activities of the plan in the
369preceding calendar year, including the net written and earned
370premiums, plan enrollment, the expense of administration, and
371the paid and incurred losses.
372     (d)5.  A review of the operation of the plan as to whether
373the plan has met the intent of this section.
374     (9)  ELIGIBILITY.--
375     (a)  Any individual person who is and continues to be a
376resident of this state shall be eligible for coverage under the
377plan if:
378     1.  Evidence is provided that the person received notices
379of rejection or refusal to issue substantially similar coverage
380for health reasons from at least two health insurers or health
381maintenance organizations. A rejection or refusal by an insurer
382offering only stop-loss, excess of loss, or reinsurance coverage
383with respect to the applicant shall not be sufficient evidence
384under this paragraph.
385     2.  The person is enrolled in the Florida Comprehensive
386Health Association as of the date the plan is implemented.
387     3.  Is an eligible individual as defined in s. 627.6487(3),
388excluding s. 627.6487(3)(b)5.
389     (b)  Each resident dependent of a person who is eligible
390for coverage under the plan shall also be eligible for such
391coverage.
392     (c)  A person shall not be eligible for coverage under the
393plan if:
394     1.  The person has or obtains health insurance coverage
395substantially similar to or more comprehensive than a plan
396policy, or would be eligible to obtain such coverage, unless a
397person may maintain other coverage for the period of time the
398person is satisfying any preexisting condition waiting period
399under a plan policy or may maintain plan coverage for the period
400of time the person is satisfying a preexisting condition waiting
401period under another health insurance policy intended to replace
402the plan policy;.
403     2.  The person is determined to be eligible for health care
404benefits under Medicaid, Medicare, the state's children's health
405insurance program, or any other federal, state, or local
406government program that provides health benefits;
407     3.  The person voluntarily terminated plan coverage unless
40812 months have elapsed since such termination;
409     4.  The person is an inmate or resident of a public
410institution; or
411     5.  The person's premiums are paid for or reimbursed under
412any government-sponsored program or by any government agency or
413health care provider or by any health care provider sponsored or
414affiliated organization.
415     (d)  Coverage shall cease:
416     1.  On the date a person is no longer a resident of this
417state;
418     2.  On the date a person requests coverage to end;
419     3.  Upon the death of the covered person;
420     4.  On the date state law requires cancellation or
421nonrenewal of the policy; or
422     5.  At the option of the plan, 30 days after the plan makes
423any inquiry concerning the person's eligibility or place of
424residence to which the person does not reply; or.
425     6.  Upon failure of the insured to pay for continued
426coverage.
427     (e)  Except under the circumstances described in this
428subsection, coverage of a person who ceases to meet the
429eligibility requirements of this subsection shall be terminated
430at the end of the policy period for which the necessary premiums
431have been paid.
432     (15)  FUNDING OF THE PLAN.--
433     (a)  Premiums.--
434     1.  The plan shall establish premium rates for plan
435coverage as provided in this section. Separate schedules of
436premium rates based on age, sex, and geographical location may
437apply for individual risks. Premium rates and schedules shall be
438submitted to the office for approval prior to use.
439     2.  Initial rates for plan coverage shall be limited to no
440more than 200 percent 300 percent of rates established for
441individual standard risks as specified in s. 627.6675(3)(c).
442Subject to the limits provided in this paragraph, subsequent
443rates shall be established to provide fully for the expected
444costs of claims, including recovery of prior losses, expenses of
445operation, investment income of claim reserves, and any other
446cost factors subject to the limitations described herein, but in
447no event shall premiums exceed the 200-percent 300-percent rate
448limitation provided in this section. Notwithstanding the 200-
449percent 300-percent rate limitation, sliding scale premium
450surcharges based upon the insured's income may apply to all
451enrollees, except those made eligible for coverage by
452subparagraph (9)(a)3.
453     3.  For the purposes of determining assessments under this
454section, the term "health insurance" means any hospital and
455medical expense incurred policy, minimum premium plan, stop-loss
456coverage, health maintenance organization contract, prepaid
457health clinic contract, multiple-employer welfare arrangement
458contract, or fraternal benefit society health benefits contract,
459whether sold as an individual or group policy or contract. The
460term does not include a policy covering medical payment coverage
461or personal injury protection coverage in a motor vehicle
462policy, coverage issued as a supplement to liability insurance,
463or workers' compensation.
464     (b)  Sources of additional revenue.--Any deficit incurred
465by the plan shall be primarily funded through amounts
466appropriated by the Legislature from general revenue sources,
467including, but not limited to, a portion of the annual growth in
468existing net insurance premium taxes in an amount not less than
469the anticipated losses and reserve requirements for existing
470policyholders. The board shall operate the plan in such a manner
471that the estimated cost of providing health insurance during any
472fiscal year will not exceed total income the plan expects to
473receive from policy premiums and funds appropriated by the
474Legislature, including any interest on investments. After
475determining the amount of funds appropriated to the board for a
476fiscal year, the board shall estimate the number of new policies
477it believes the plan has the financial capacity to insure during
478that year so that costs do not exceed income. The board shall
479take steps necessary to ensure that plan enrollment does not
480exceed the number of residents it has estimated it has the
481financial capacity to insure.
482     (c)  In the event of inadequate funding, the board may
483cancel existing policies on a nondiscriminatory basis as
484necessary to remedy the situation. No policy may be canceled if
485a covered individual is currently making a claim.
486     (20)  PROVIDER REIMBURSEMENT.--Notwithstanding any other
487provision of law, the maximum reimbursement rate to health care
488providers for all covered, medically necessary services shall be
489100 percent of Medicare's allowed payment amount for that
490particular provider and service. All licensed providers in this
491state shall accept assignment of plan benefits and consider the
492Medicare allowed payment amount as payment in full. By no later
493than December 1, 2005, the board shall update the actuarial
494study required by s. 627.64872(6), to include the impact of
495alternative methods of actuarially sound risk adjusted provider
496reimbursement methodologies, including capitated prepaid
497arrangements, that take into account such factors as age, sex,
498geographic variations, case mix, and access to specialty medical
499care. The board shall submit the updated actuarial study to the
500Governor, the President of the Senate, and the Speaker of the
501House no later than December 1, 2005.
502     Section 7.  Section 627.65626, Florida Statutes, is amended
503to read:
504     627.65626  Insurance rebates for healthy lifestyles.--
505     (1)  Any rate, rating schedule, or rating manual for a
506health insurance policy, which provides creditable coverage as
507defined in s. 627.6561(5), filed with the office shall provide
508for an appropriate rebate of premiums paid in the last policy
509year, contract year, or calendar year when the majority of
510members of a health plan have enrolled and maintained
511participation in any health wellness, maintenance, or
512improvement program offered by the group policyholder and the
513health plan employer. The rebate may be based upon premiums paid
514in the last calendar year or policy year. The group employer
515must provide evidence of demonstrative maintenance or
516improvement of the enrollees' health status as determined by
517assessments of agreed-upon health status indicators between the
518policyholder employer and the health insurer, including, but not
519limited to, reduction in weight, body mass index, and smoking
520cessation. Any rebate provided by the health insurer is presumed
521to be appropriate unless credible data demonstrates otherwise or
522unless such rebate program requires the insured to incur costs
523to qualify for the rebate which equal or exceed the value of the
524rebate, but in no event shall the rebate not exceed 10 percent
525of paid premiums.
526     (2)  The premium rebate authorized by this section shall be
527effective for an insured on an annual basis unless the number of
528participating employees or members on the policy renewal
529anniversary becomes less than the majority of the employees or
530members eligible for participation in the wellness program.
531     (3)  The program shall be available for all policies issued
532on or after July 1, 2005.
533     Section 8.  Paragraphs (d) and (j) of subsection (5) of
534section 627.6692, Florida Statutes, are amended to read:
535     627.6692  Florida Health Insurance Coverage Continuation
536Act.--
537     (5)  CONTINUATION OF COVERAGE UNDER GROUP HEALTH PLANS.--
538     (d)1.  A qualified beneficiary must give written notice to
539the insurance carrier within 63 30 days after the occurrence of
540a qualifying event. Unless otherwise specified in the notice, a
541notice by any qualified beneficiary constitutes notice on behalf
542of all qualified beneficiaries. The written notice must inform
543the insurance carrier of the occurrence and type of the
544qualifying event giving rise to the potential election by a
545qualified beneficiary of continuation of coverage under the
546group health plan issued by that insurance carrier, except that
547in cases where the covered employee has been involuntarily
548discharged, the nature of such discharge need not be disclosed.
549The written notice must, at a minimum, identify the employer,
550the group health plan number, the name and address of all
551qualified beneficiaries, and such other information required by
552the insurance carrier under the terms of the group health plan
553or the commission by rule, to the extent that such information
554is known by the qualified beneficiary.
555     2.  Within 14 days after the receipt of written notice
556under subparagraph 1., the insurance carrier shall send each
557qualified beneficiary by certified mail an election and premium
558notice form, approved by the office, which form must provide for
559the qualified beneficiary's election or nonelection of
560continuation of coverage under the group health plan and the
561applicable premium amount due after the election to continue
562coverage. This subparagraph does not require separate mailing of
563notices to qualified beneficiaries residing in the same
564household, but requires a separate mailing for each separate
565household.
566     (j)  Notwithstanding paragraph (b), if a qualified
567beneficiary in the military reserve or National Guard has
568elected to continue coverage and is thereafter called to active
569duty and the coverage under the group plan is terminated by the
570beneficiary or the carrier due to the qualified beneficiary
571becoming eligible for TRICARE (the health care program provided
572by the United States Defense Department), the 18-month period or
573such other applicable maximum time period for which the
574qualified beneficiary would otherwise be entitled to continue
575coverage is tolled during the time that he or she is covered
576under the TRICARE program. Within 63 30 days after the federal
577TRICARE coverage terminates, the qualified beneficiary may elect
578to continue coverage under the group health plan, retroactively
579to the date coverage terminated under TRICARE, for the remainder
580of the 18-month period or such other applicable time period,
581subject to termination of coverage at the earliest of the
582conditions specified in paragraph (b).
583     Section 9.  Paragraph (c) of subsection (5) and paragraphs
584(b) and (j) of subsection (11) of section 627.6699, Florida
585Statutes, are amended, and paragraph (o) is added to subsection
586(11) of said section, to read:
587     627.6699  Employee Health Care Access Act.--
588     (5)  AVAILABILITY OF COVERAGE.--
589     (c)  Every small employer carrier must, as a condition of
590transacting business in this state:
591     1.  Offer and issue all small employer health benefit plans
592on a guaranteed-issue basis to every eligible small employer,
593with 2 to 50 eligible employees, that elects to be covered under
594such plan, agrees to make the required premium payments, and
595satisfies the other provisions of the plan. A rider for
596additional or increased benefits may be medically underwritten
597and may only be added to the standard health benefit plan. The
598increased rate charged for the additional or increased benefit
599must be rated in accordance with this section.
600     2.  In the absence of enrollment availability in the
601Florida Health Insurance Plan, offer and issue basic and
602standard small employer health benefit plans and a high
603deductible plan that meets the requirements of a health savings
604account plan or health reimbursement account as defined by
605federal law, on a guaranteed-issue basis, during a 31-day open
606enrollment period of August 1 through August 31 of each year, to
607every eligible small employer, with fewer than two eligible
608employees, which small employer is not formed primarily for the
609purpose of buying health insurance and which elects to be
610covered under such plan, agrees to make the required premium
611payments, and satisfies the other provisions of the plan.
612Coverage provided under this subparagraph shall begin on October
6131 of the same year as the date of enrollment, unless the small
614employer carrier and the small employer agree to a different
615date. A rider for additional or increased benefits may be
616medically underwritten and may only be added to the standard
617health benefit plan. The increased rate charged for the
618additional or increased benefit must be rated in accordance with
619this section. For purposes of this subparagraph, a person, his
620or her spouse, and his or her dependent children constitute a
621single eligible employee if that person and spouse are employed
622by the same small employer and either that person or his or her
623spouse has a normal work week of less than 25 hours. Any right
624to an open enrollment of health benefit coverage for groups of
625fewer than two employees, pursuant to this section, shall remain
626in full force and effect in the absence of the availability of
627new enrollment into the Florida Health Insurance Plan.
628     3.  This paragraph does not limit a carrier's ability to
629offer other health benefit plans to small employers if the
630standard and basic health benefit plans are offered and
631rejected.
632     (11)  SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
633     (b)1.  The program shall operate subject to the supervision
634and control of the board.
635     2.  Effective upon this act becoming a law, the board shall
636consist of the director of the office or his or her designee,
637who shall serve as the chairperson, and 13 additional members
638who are representatives of carriers and insurance agents and are
639appointed by the director of the office and serve as follows:
640     a.  Five members shall be representatives of health
641insurers licensed under chapter 624 or chapter 641. Two members
642shall be agents who are actively engaged in the sale of health
643insurance. Four members shall be employers or representatives of
644employers. One member shall be a person covered under an
645individual health insurance policy issued by a licensed insurer
646in this state. One member shall represent the Agency for Health
647Care Administration and shall be recommended by the Secretary of
648Health Care Administration. The director of the office shall
649include representatives of small employer carriers subject to
650assessment under this subsection. If two or more carriers elect
651to be risk-assuming carriers, the membership must include at
652least two representatives of risk-assuming carriers; if one
653carrier is risk-assuming, one member must be a representative of
654such carrier. At least one member must be a carrier who is
655subject to the assessments, but is not a small employer carrier.
656Subject to such restrictions, at least five members shall be
657selected from individuals recommended by small employer carriers
658pursuant to procedures provided by rule of the commission. Three
659members shall be selected from a list of health insurance
660carriers that issue individual health insurance policies. At
661least two of the three members selected must be reinsuring
662carriers. Two members shall be selected from a list of insurance
663agents who are actively engaged in the sale of health insurance.
664     b.  A member appointed under this subparagraph shall serve
665a term of 4 years and shall continue in office until the
666member's successor takes office, except that, in order to
667provide for staggered terms, the director of the office shall
668designate two of the initial appointees under this subparagraph
669to serve terms of 2 years and shall designate three of the
670initial appointees under this subparagraph to serve terms of 3
671years.
672     3.  The director of the office may remove a member for
673cause.
674     4.  Vacancies on the board shall be filled in the same
675manner as the original appointment for the unexpired portion of
676the term.
677     5.  The director of the office may require an entity that
678recommends persons for appointment to submit additional lists of
679recommended appointees.
680     (j)1.  Before July March 1 of each calendar year, the board
681shall determine and report to the office the program net loss
682for the previous year, including administrative expenses for
683that year, and the incurred losses for the year, taking into
684account investment income and other appropriate gains and
685losses.
686     2.  Any net loss for the year shall be recouped by
687assessment of the carriers, as follows:
688     a.  The operating losses of the program shall be assessed
689in the following order subject to the specified limitations. The
690first tier of assessments shall be made against reinsuring
691carriers in an amount which shall not exceed 5 percent of each
692reinsuring carrier's premiums from health benefit plans covering
693small employers. If such assessments have been collected and
694additional moneys are needed, the board shall make a second tier
695of assessments in an amount which shall not exceed 0.5 percent
696of each carrier's health benefit plan premiums. Except as
697provided in paragraph (n), risk-assuming carriers are exempt
698from all assessments authorized pursuant to this section. The
699amount paid by a reinsuring carrier for the first tier of
700assessments shall be credited against any additional assessments
701made.
702     b.  The board shall equitably assess carriers for operating
703losses of the plan based on market share. The board shall
704annually assess each carrier a portion of the operating losses
705of the plan. The first tier of assessments shall be determined
706by multiplying the operating losses by a fraction, the numerator
707of which equals the reinsuring carrier's earned premium
708pertaining to direct writings of small employer health benefit
709plans in the state during the calendar year for which the
710assessment is levied, and the denominator of which equals the
711total of all such premiums earned by reinsuring carriers in the
712state during that calendar year. The second tier of assessments
713shall be based on the premiums that all carriers, except risk-
714assuming carriers, earned on all health benefit plans written in
715this state. The board may levy interim assessments against
716carriers to ensure the financial ability of the plan to cover
717claims expenses and administrative expenses paid or estimated to
718be paid in the operation of the plan for the calendar year prior
719to the association's anticipated receipt of annual assessments
720for that calendar year. Any interim assessment is due and
721payable within 30 days after receipt by a carrier of the interim
722assessment notice. Interim assessment payments shall be credited
723against the carrier's annual assessment. Health benefit plan
724premiums and benefits paid by a carrier that are less than an
725amount determined by the board to justify the cost of collection
726may not be considered for purposes of determining assessments.
727     c.  Subject to the approval of the office, the board shall
728make an adjustment to the assessment formula for reinsuring
729carriers that are approved as federally qualified health
730maintenance organizations by the Secretary of Health and Human
731Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,
732if any, that restrictions are placed on them that are not
733imposed on other small employer carriers.
734     3.  Before July March 1 of each year, the board shall
735determine and file with the office an estimate of the
736assessments needed to fund the losses incurred by the program in
737the previous calendar year.
738     4.  If the board determines that the assessments needed to
739fund the losses incurred by the program in the previous calendar
740year will exceed the amount specified in subparagraph 2., the
741board shall evaluate the operation of the program and report its
742findings, including any recommendations for changes to the plan
743of operation, to the office within 180 90 days following the end
744of the calendar year in which the losses were incurred. The
745evaluation shall include an estimate of future assessments, the
746administrative costs of the program, the appropriateness of the
747premiums charged and the level of carrier retention under the
748program, and the costs of coverage for small employers. If the
749board fails to file a report with the office within 180 90 days
750following the end of the applicable calendar year, the office
751may evaluate the operations of the program and implement such
752amendments to the plan of operation the office deems necessary
753to reduce future losses and assessments.
754     5.  If assessments exceed the amount of the actual losses
755and administrative expenses of the program, the excess shall be
756held as interest and used by the board to offset future losses
757or to reduce program premiums. As used in this paragraph, the
758term "future losses" includes reserves for incurred but not
759reported claims.
760     6.  Each carrier's proportion of the assessment shall be
761determined annually by the board, based on annual statements and
762other reports considered necessary by the board and filed by the
763carriers with the board.
764     7.  Provision shall be made in the plan of operation for
765the imposition of an interest penalty for late payment of an
766assessment.
767     8.  A carrier may seek, from the office, a deferment, in
768whole or in part, from any assessment made by the board. The
769office may defer, in whole or in part, the assessment of a
770carrier if, in the opinion of the office, the payment of the
771assessment would place the carrier in a financially impaired
772condition. If an assessment against a carrier is deferred, in
773whole or in part, the amount by which the assessment is deferred
774may be assessed against the other carriers in a manner
775consistent with the basis for assessment set forth in this
776section. The carrier receiving such deferment remains liable to
777the program for the amount deferred and is prohibited from
778reinsuring any individuals or groups in the program if it fails
779to pay assessments.
780     (o)  The board shall advise the office, the agency, the
781department, and other executive and legislative entities on
782health insurance issues. Specifically, the board shall:
783     1.  Provide a forum for stakeholders, consisting of
784insurers, employers, agents, consumers, and regulators, in the
785private health insurance market in this state.
786     2.  Review and recommend strategies to improve the
787functioning of the health insurance markets in this state with a
788specific focus on market stability, access, and pricing.
789     3.  Make recommendations to the office for legislation
790addressing health insurance market issues and provide comments
791on health insurance legislation proposed by the office.
792     4.  Meet at least three times each year. One meeting shall
793be held to hear reports and to secure public comment on the
794health insurance market, to develop any legislation needed to
795address health insurance market issues, and to provide comments
796on health insurance legislation proposed by the office.
797     5.  By September 1 each year, issue a report to the office
798on the state of the health insurance market. The report shall
799include recommendations for changes in the health insurance
800market, results from implementation of previous recommendations
801and information on health insurance markets.
802     Section 10.  Subsection (1) of section 641.27, Florida
803Statutes, is amended to read:
804     641.27  Examination by the department.--
805     (1)  The office shall examine the affairs, transactions,
806accounts, business records, and assets of any health maintenance
807organization as often as it deems it expedient for the
808protection of the people of this state, but not less frequently
809than once every 5 3 years. In lieu of making its own financial
810examination, the office may accept an independent certified
811public accountant's audit report prepared on a statutory
812accounting basis consistent with this part. However, except when
813the medical records are requested and copies furnished pursuant
814to s. 456.057, medical records of individuals and records of
815physicians providing service under contract to the health
816maintenance organization shall not be subject to audit, although
817they may be subject to subpoena by court order upon a showing of
818good cause. For the purpose of examinations, the office may
819administer oaths to and examine the officers and agents of a
820health maintenance organization concerning its business and
821affairs. The examination of each health maintenance organization
822by the office shall be subject to the same terms and conditions
823as apply to insurers under chapter 624. In no event shall
824expenses of all examinations exceed a maximum of $50,000 $20,000
825for any 1-year period. Any rehabilitation, liquidation,
826conservation, or dissolution of a health maintenance
827organization shall be conducted under the supervision of the
828department, which shall have all power with respect thereto
829granted to it under the laws governing the rehabilitation,
830liquidation, reorganization, conservation, or dissolution of
831life insurance companies.
832     Section 11.  Subsection (40) of section 641.31, Florida
833Statutes, is amended to read:
834     641.31  Health maintenance contracts.--
835     (40)(a)  Any group rate, rating schedule, or rating manual
836for a health maintenance organization policy, which provides
837creditable coverage as defined in s. 627.6561(5), filed with the
838office shall provide for an appropriate rebate of premiums paid
839in the last contract calendar year when the majority of the
840members of a health individual covered by such plan are is
841enrolled in and maintain maintains participation in any health
842wellness, maintenance, or improvement program offered by the
843group contract holder approved by the health plan. The group
844individual must provide evidence of demonstrative maintenance or
845improvement of his or her health status as determined by
846assessments of agreed-upon health status indicators between the
847group individual and the health insurer, including, but not
848limited to, reduction in weight, body mass index, and smoking
849cessation. Any rebate provided by the health maintenance
850organization insurer is presumed to be appropriate unless
851credible data demonstrates otherwise or unless such rebate
852program requires the insured to incur costs to qualify for the
853rebate which equal or exceed the value of the rebate, but in no
854event shall the rebate not exceed 10 percent of paid premiums.
855     (b)  The premium rebate authorized by this section shall be
856effective for a subscriber an insured on an annual basis, unless
857the number of participating members on the contract renewal
858anniversary becomes less than the majority of the members
859eligible for participation in the wellness program individual
860fails to maintain or improve his or her health status while
861participating in an approved wellness program, or credible
862evidence demonstrates that the individual is not participating
863in the approved wellness program.
864     (c)  The program shall be available for all contracts
865issued on or after July 1, 2005.
866     Section 12.  The sum of $5 million is appropriated from the
867General Revenue Fund to the Florida Health Insurance Plan for
868the purposes of implementing the plan.
869     Section 13.  This act shall take effect July 1, 2005, and
870shall apply to all policies or contracts issued or renewed on or
871after July 1, 2005.


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