HB 1503

CS

CHAMBER ACTION

1	The Commerce Council 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; changing the release dates for
10	certain data collected by the State Center for Health
11	Statistics; amending s. 408.909, F.S.; providing an
12	additional criterion for the Office of Insurance
13	Regulation to disapprove or withdraw approval of health
14	flex plans; amending s. 627.413, F.S.; authorizing
15	insurers and health maintenance organizations to offer
16	policies or contracts providing for a high deductible plan
17	meeting federal requirements and in conjunction with a
18	health savings account; amending s. 627.6402, F.S.;
19	revising provisions for healthy lifestyle rebates for an
20	individual health insurance policy; providing exceptions;
21	providing application; amending s. 627.6487, F.S.;
22	revising the definition of the term "eligible individual"
23	for purposes of obtaining coverage in the Florida Health
24	Insurance Plan; amending s. 627.64872, F.S.; revising
25	definitions; changing references to the Director of the
26	Office of Insurance Regulation to the Commissioner of
27	Insurance Regulation; deleting obsolete language;
28	providing additional eligibility criteria; reducing
29	premium rate limitations; revising requirements for
30	sources of additional revenue; authorizing the board to
31	cancel policies under inadequate funding conditions;
32	providing a limitation; defining the term "health
33	insurance" for purposes of certain assessments; providing
34	an exclusion; specifying a maximum provider reimbursement
35	rate; requiring licensed providers to accept assignment of
36	plan benefits and consider certain payments as payments in
37	full; authorizing the board to update a required actuarial
38	study; providing study criteria; amending s. 627.65626,
39	F.S.; revising criteria for healthy lifestyle rebates for
40	group and similar health insurance policies provided by
41	health insurers; providing exceptions; providing
42	application; amending s. 627.6692, F.S.; extending a time
43	period within which eligible employees may apply for
44	continuation of coverage; amending s. 627.6699, F.S.;
45	revising availability of coverage provision of the
46	Employee Health Care Access Act; including high deductible
47	plans meeting federal health savings account plan
48	requirements; revising membership of the board of the
49	small employer health reinsurance program; revising
50	certain reporting dates relating to program losses and
51	assessments; requiring the board to advise executive and
52	legislative entities on health insurance issues; providing
53	requirements; amending s. 641.27, F.S.; increasing the
54	interval at which the office examines health maintenance
55	organizations; deleting authorization for the office to
56	accept an audit report from a certified public accountant
57	in lieu of conducting its own examination; increasing an
58	expense limitation; amending s. 641.31, F.S.; revising
59	criteria for healthy lifestyle rebates for health
60	maintenance organizations; providing exceptions; providing
61	application; providing an appropriation; providing
62	application; providing an effective date.
63
64	Be It Enacted by the Legislature of the State of Florida:
65
66	Section 1.  Paragraph (l) of subsection (3) of section
67	408.05, Florida Statutes, is amended to read:
68	408.05  State Center for Health Statistics.--
69	(3)  COMPREHENSIVE HEALTH INFORMATION SYSTEM.--In order to
70	produce comparable and uniform health information and
71	statistics, the agency shall perform the following functions:
72	(l)  Develop, in conjunction with the State Comprehensive
73	Health Information System Advisory Council, and implement a
74	long-range plan for making available performance outcome and
75	financial data that will allow consumers to compare health care
76	services. The performance outcomes and financial data the agency
77	must make available shall include, but is not limited to,
78	pharmaceuticals, physicians, health care facilities, and health
79	plans and managed care entities. The agency shall submit the
80	initial plan to the Governor, the President of the Senate, and
81	the Speaker of the House of Representatives by January March 1,
82	2006 2005, and shall update the plan and report on the status of
83	its implementation annually thereafter. The agency shall also
84	make the plan and status report available to the public on its
85	Internet website. As part of the plan, the agency shall identify
86	the process and timeframes for implementation, any barriers to
87	implementation, and recommendations of changes in the law that
88	may be enacted by the Legislature to eliminate the barriers. As
89	preliminary elements of the plan, the agency shall:
90	1.  Make available performance outcome and patient charge
91	data collected from health care facilities pursuant to s.
92	408.061(1)(a) and (2). The agency shall determine which
93	conditions and procedures, performance outcomes, and patient
94	charge data to disclose based upon input from the council. When
95	determining which conditions and procedures are to be disclosed,
96	the council and the agency shall consider variation in costs,
97	variation in outcomes, and magnitude of variations and other
98	relevant information. When determining which performance
99	outcomes to disclose, the agency:
100	a.  Shall consider such factors as volume of cases; average
101	patient charges; average length of stay; complication rates;
102	mortality rates; and infection rates, among others, which shall
103	be adjusted for case mix and severity, if applicable.
104	b.  May consider such additional measures that are adopted
105	by the Centers for Medicare and Medicaid Studies, National
106	Quality Forum, the Joint Commission on Accreditation of
107	Healthcare Organizations, the Agency for Healthcare Research and
108	Quality, or a similar national entity that establishes standards
109	to measure the performance of health care providers, or by other
110	states.
111
112	When determining which patient charge data to disclose, the
113	agency shall consider such measures as average charge, average
114	net revenue per adjusted patient day, average cost per adjusted
115	patient day, and average cost per admission, among others.
116	2.  Make available performance measures, benefit design,
117	and premium cost data from health plans licensed pursuant to
118	chapter 627 or chapter 641. The agency shall determine which
119	performance outcome and member and subscriber cost data to
120	disclose, based upon input from the council. When determining
121	which data to disclose, the agency shall consider information
122	that may be required by either individual or group purchasers to
123	assess the value of the product, which may include membership
124	satisfaction, quality of care, current enrollment or membership,
125	coverage areas, accreditation status, premium costs, plan costs,
126	premium increases, range of benefits, copayments and
127	deductibles, accuracy and speed of claims payment, credentials
128	of physicians, number of providers, names of network providers,
129	and hospitals in the network. Health plans shall make available
130	to the agency any such data or information that is not currently
131	reported to the agency or the office.
132	3.  Determine the method and format for public disclosure
133	of data reported pursuant to this paragraph. The agency shall
134	make its determination based upon input from the Comprehensive
135	Health Information System Advisory Council. At a minimum, the
136	data shall be made available on the agency's Internet website in
137	a manner that allows consumers to conduct an interactive search
138	that allows them to view and compare the information for
139	specific providers. The website must include such additional
140	information as is determined necessary to ensure that the
141	website enhances informed decisionmaking among consumers and
142	health care purchasers, which shall include, at a minimum,
143	appropriate guidance on how to use the data and an explanation
144	of why the data may vary from provider to provider. The data
145	specified in subparagraph 1. shall be released no later than
146	January 1, 2006, for the reporting of infection rates, and no
147	later than October March 1, 2005, for mortality rates and
148	complication rates. The data specified in subparagraph 2. shall
149	be released no later than October March 1, 2006.
150	Section 2.  Paragraph (b) of subsection (3) of section
151	408.909, Florida Statutes, is amended to read:
152	408.909  Health flex plans.--
153	(3)  PROGRAM.--The agency and the office shall each approve
154	or disapprove health flex plans that provide health care
155	coverage for eligible participants. A health flex plan may limit
156	or exclude benefits otherwise required by law for insurers
157	offering coverage in this state, may cap the total amount of
158	claims paid per year per enrollee, may limit the number of
159	enrollees, or may take any combination of those actions. A
160	health flex plan offering may include the option of a
161	catastrophic plan supplementing the health flex plan.
162	(b)  The office shall develop guidelines for the review of
163	health flex plan applications and provide regulatory oversight
164	of health flex plan advertisement and marketing procedures. The
165	office shall disapprove or shall withdraw approval of plans
166	that:
167	1.  Contain any ambiguous, inconsistent, or misleading
168	provisions or any exceptions or conditions that deceptively
169	affect or limit the benefits purported to be assumed in the
170	general coverage provided by the health flex plan;
171	2.  Provide benefits that are unreasonable in relation to
172	the premium charged or contain provisions that are unfair or
173	inequitable or contrary to the public policy of this state, that
174	encourage misrepresentation, or that result in unfair
175	discrimination in sales practices; or
176	3.  Cannot demonstrate that the health flex plan is
177	financially sound and that the applicant is able to underwrite
178	or finance the health care coverage provided; or
179	4.  Cannot demonstrate that the applicant and its
180	management are in compliance with the standards required
181	pursuant to s. 624.404(3).
182	Section 3.  Subsection (6) is added to section 627.413,
183	Florida Statutes, to read:
184	627.413  Contents of policies, in general;
185	identification.--
186	(6)  Notwithstanding any other provision of the Florida
187	Insurance Code that is in conflict with federal requirements for
188	a health savings account qualified high deductible health plan,
189	an insurer, or a health maintenance organization subject to part
190	I of chapter 641, which is authorized to issue health insurance
191	in this state may offer for sale an individual or group policy
192	or contract that provides for a high deductible plan that meets
193	the federal requirements of a health savings account plan and
194	which is offered in conjunction with a health savings account.
195	Section 4.  Section 627.6402, Florida Statutes, is amended
196	to read:
197	627.6402  Insurance rebates for healthy lifestyles.--
198	(1)  Any rate, rating schedule, or rating manual for an
199	individual health insurance policy filed with the office may
200	shall provide for an appropriate rebate of premiums paid in the
201	last calendar year when the individual covered by such plan is
202	enrolled in and maintains participation in any health wellness,
203	maintenance, or improvement program approved by the health plan.
204	The rebate may be based on premiums paid in the last calendar
205	year or the last policy year. The individual must provide
206	evidence of demonstrative maintenance or improvement of the
207	individual's health status as determined by assessments of
208	agreed-upon health status indicators between the individual and
209	the health insurer, including, but not limited to, reduction in
210	weight, body mass index, and smoking cessation. Any rebate
211	provided by the health insurer is presumed to be appropriate
212	unless credible data demonstrates otherwise, or unless such
213	rebate program requires the insured to incur costs to qualify
214	for the rebate which equal or exceed the value of the rebate,
215	but in no event shall the rebate not exceed 10 percent of paid
216	premiums.
217	(2)  The premium rebate authorized by this section shall be
218	effective for an insured on an annual basis, unless the
219	individual fails to maintain or improve his or her health status
220	while participating in an approved wellness program, or credible
221	evidence demonstrates that the individual is not participating
222	in the approved wellness program.
223	(3)  The program shall be available for all policies issued
224	on or after July 1, 2005.
225	Section 5.  Paragraph (b) of subsection (3) of section
226	627.6487, Florida Statutes, is amended to read:
227	627.6487  Guaranteed availability of individual health
228	insurance coverage to eligible individuals.--
229	(3)  For the purposes of this section, the term "eligible
230	individual" 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
233	Public Health Service Act;
234	2.  A conversion policy or contract issued by an authorized
235	insurer or health maintenance organization under s. 627.6675 or
236	s. 641.3921, respectively, offered to an individual who is no
237	longer eligible for coverage under either an insured or self-
238	insured employer plan;
239	3.  Part A or part B of Title XVIII of the Social Security
240	Act; or
241	4.  A state plan under Title XIX of such act, or any
242	successor program, and does not have other health insurance
243	coverage; or
244	5.  The Florida Health Insurance Plan as specified in s.
245	627.64872 and such plan is accepting new enrollments. However, a
246	person whose previous coverage was under the Florida Health
247	Insurance Plan as specified in s. 627.64872 is not an eligible
248	individual as defined in s. 627.6487(3)(a);
249	Section 6.  Paragraphs (b), (c), and (n) of subsection (2)
250	and subsections (3), (6), (9), and (15) of section 627.64872,
251	Florida Statutes, are amended, subsection (20) of said section
252	is renumbered as subsection (21), and a new subsection (20) is
253	added 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
257	Regulation.
258	(c)  "Dependent" means a resident spouse or resident
259	unmarried child under the age of 19 years, a child who is a
260	student under the age of 25 years and who is financially
261	dependent upon the parent, or a child of any age who is disabled
262	and dependent upon the parent.
263	(c)  "Director" means the Director of the Office of
264	Insurance Regulation.
265	(n)  "Resident" means an individual who has been legally
266	domiciled in this state for a period of at least 6 months and
267	who physically resides in this state not less than 185 days per
268	year.
269	(3)  BOARD OF DIRECTORS.--
270	(a)  The plan shall operate subject to the supervision and
271	control of the board. The board shall consist of the
272	commissioner director or his or her designated representative,
273	who shall serve as a member of the board and shall be its chair,
274	and an additional eight members, five of whom shall be appointed
275	by the Governor, at least two of whom shall be individuals not
276	representative of insurers or health care providers, one of whom
277	shall be appointed by the President of the Senate, one of whom
278	shall be appointed by the Speaker of the House of
279	Representatives, and one of whom shall be appointed by the Chief
280	Financial Officer.
281	(b)  The term to be served on the board by the commissioner
282	Director of the Office of Insurance Regulation shall be
283	determined by continued employment in such position. The
284	remaining initial board members shall serve for a period of time
285	as follows: two members appointed by the Governor and the
286	members appointed by the President of the Senate and the Speaker
287	of the House of Representatives shall serve a term of 2 years;
288	and three members appointed by the Governor and the Chief
289	Financial Officer shall serve a term of 4 years. Subsequent
290	board members shall serve for a term of 3 years. A board
291	member's term shall continue until his or her successor is
292	appointed.
293	(c)  Vacancies on the board shall be filled by the
294	appointing authority, such authority being the Governor, the
295	President of the Senate, the Speaker of the House of
296	Representatives, or the Chief Financial Officer. The appointing
297	authority may remove board members for cause.
298	(d)  The commissioner director, or his or her recognized
299	representative, shall be responsible for any organizational
300	requirements necessary for the initial meeting of the board
301	which shall take place no later than September 1, 2004.
302	(e)  Members shall not be compensated in their capacity as
303	board members but shall be reimbursed for reasonable expenses
304	incurred in the necessary performance of their duties in
305	accordance with s. 112.061.
306	(f)  The board shall submit to the Financial Services
307	Commission a plan of operation for the plan and any amendments
308	thereto necessary or suitable to ensure the fair, reasonable,
309	and equitable administration of the plan. The plan of operation
310	shall ensure that the plan qualifies to apply for any available
311	funding from the Federal Government that adds to the financial
312	viability of the plan. The plan of operation shall become
313	effective upon approval in writing by the Financial Services
314	Commission consistent with the date on which the coverage under
315	this section must be made available. If the board fails to
316	submit a suitable plan of operation within 1 year after
317	implementation the appointment of the board of directors, or at
318	any time thereafter fails to submit suitable amendments to the
319	plan of operation, the Financial Services Commission shall adopt
320	such rules as are necessary or advisable to effectuate the
321	provisions of this section. Such rules shall continue in force
322	until modified by the office or superseded by a plan of
323	operation submitted by the board and approved by the Financial
324	Services Commission.
325	(6)  INTERIM REPORT; ANNUAL REPORT.--
326	(a)  By no later than December 1, 2004, the board shall
327	report to the Governor, the President of the Senate, and the
328	Speaker of the House of Representatives the results of an
329	actuarial study conducted by the board to determine, including,
330	but not limited to:
331	1.  The impact the creation of the plan will have on the
332	small group insurance market and the individual market on
333	premiums paid by insureds. This shall include an estimate of the
334	total anticipated aggregate savings for all small employers in
335	the state.
336	2.  The number of individuals the pool could reasonably
337	cover at various funding levels, specifically, the number of
338	people the pool may cover at each of those funding levels.
339	3.  A recommendation as to the best source of funding for
340	the anticipated deficits of the pool.
341	4.  The effect on the individual and small group market by
342	including in the Florida Health Insurance Plan persons eligible
343	for coverage under s. 627.6487, as well as the cost of including
344	these individuals.
345
346	The board shall take no action to implement the Florida Health
347	Insurance Plan, other than the completion of the actuarial study
348	authorized in this paragraph, until funds are appropriated for
349	startup cost and any projected deficits.
350	(b)  No later than December 1, 2005, and annually
351	thereafter, the board shall submit to the Governor, the
352	President of the Senate, the Speaker of the House of
353	Representatives, and the substantive legislative committees of
354	the Legislature a report which includes an independent actuarial
355	study to determine, including, but not be limited to:
356	(a)1.  The impact the creation of the plan has on the small
357	group and individual insurance market, specifically on the
358	premiums paid by insureds. This shall include an estimate of the
359	total anticipated aggregate savings for all small employers in
360	the state.
361	(b)2.  The actual number of individuals covered at the
362	current funding and benefit level, the projected number of
363	individuals that may seek coverage in the forthcoming fiscal
364	year, and the projected funding needed to cover anticipated
365	increase or decrease in plan participation.
366	3.  A recommendation as to the best source of funding for
367	the anticipated deficits of the pool.
368	(c)4.  A summarization of the activities of the plan in the
369	preceding calendar year, including the net written and earned
370	premiums, plan enrollment, the expense of administration, and
371	the paid and incurred losses.
372	(d)5.  A review of the operation of the plan as to whether
373	the plan has met the intent of this section.
374	(9)  ELIGIBILITY.--
375	(a)  Any individual person who is and continues to be a
376	resident of this state shall be eligible for coverage under the
377	plan if:
378	1.  Evidence is provided that the person received notices
379	of rejection or refusal to issue substantially similar coverage
380	for health reasons from at least two health insurers or health
381	maintenance organizations. A rejection or refusal by an insurer
382	offering only stop-loss, excess of loss, or reinsurance coverage
383	with respect to the applicant shall not be sufficient evidence
384	under this paragraph.
385	2.  The person is enrolled in the Florida Comprehensive
386	Health Association as of the date the plan is implemented.
387	3.  Is an eligible individual as defined in s. 627.6487(3),
388	excluding s. 627.6487(3)(b)5.
389	(b)  Each resident dependent of a person who is eligible
390	for coverage under the plan shall also be eligible for such
391	coverage.
392	(c)  A person shall not be eligible for coverage under the
393	plan if:
394	1.  The person has or obtains health insurance coverage
395	substantially similar to or more comprehensive than a plan
396	policy, or would be eligible to obtain such coverage, unless a
397	person may maintain other coverage for the period of time the
398	person is satisfying any preexisting condition waiting period
399	under a plan policy or may maintain plan coverage for the period
400	of time the person is satisfying a preexisting condition waiting
401	period under another health insurance policy intended to replace
402	the plan policy;.
403	2.  The person is determined to be eligible for health care
404	benefits under Medicaid, Medicare, the state's children's health
405	insurance program, or any other federal, state, or local
406	government program that provides health benefits;
407	3.  The person voluntarily terminated plan coverage unless
408	12 months have elapsed since such termination;
409	4.  The person is an inmate or resident of a public
410	institution; or
411	5.  The person's premiums are paid for or reimbursed under
412	any government-sponsored program or by any government agency or
413	health care provider or by any health care provider sponsored or
414	affiliated organization.
415	(d)  Coverage shall cease:
416	1.  On the date a person is no longer a resident of this
417	state;
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
421	nonrenewal of the policy; or
422	5.  At the option of the plan, 30 days after the plan makes
423	any inquiry concerning the person's eligibility or place of
424	residence to which the person does not reply; or.
425	6.  Upon failure of the insured to pay for continued
426	coverage.
427	(e)  Except under the circumstances described in this
428	subsection, coverage of a person who ceases to meet the
429	eligibility requirements of this subsection shall be terminated
430	at the end of the policy period for which the necessary premiums
431	have been paid.
432	(15)  FUNDING OF THE PLAN.--
433	(a)  Premiums.--
434	1.  The plan shall establish premium rates for plan
435	coverage as provided in this section. Separate schedules of
436	premium rates based on age, sex, and geographical location may
437	apply for individual risks. Premium rates and schedules shall be
438	submitted to the office for approval prior to use.
439	2.  Initial rates for plan coverage shall be limited to no
440	more than 200 percent 300 percent of rates established for
441	individual standard risks as specified in s. 627.6675(3)(c).
442	Subject to the limits provided in this paragraph, subsequent
443	rates shall be established to provide fully for the expected
444	costs of claims, including recovery of prior losses, expenses of
445	operation, investment income of claim reserves, and any other
446	cost factors subject to the limitations described herein, but in
447	no event shall premiums exceed the 200-percent 300-percent rate
448	limitation provided in this section. Notwithstanding the 200-
449	percent 300-percent rate limitation, sliding scale premium
450	surcharges based upon the insured's income may apply to all
451	enrollees, except those made eligible for coverage by
452	subparagraph (9)(a)3.
453	3.  For the purposes of determining assessments under this
454	section, the term "health insurance" means any hospital and
455	medical expense incurred policy, minimum premium plan, stop-loss
456	coverage, health maintenance organization contract, prepaid
457	health clinic contract, multiple-employer welfare arrangement
458	contract, or fraternal benefit society health benefits contract,
459	whether sold as an individual or group policy or contract. The
460	term does not include a policy covering medical payment coverage
461	or personal injury protection coverage in a motor vehicle
462	policy, coverage issued as a supplement to liability insurance,
463	or workers' compensation.
464	(b)  Sources of additional revenue.--Any deficit incurred
465	by the plan shall be primarily funded through amounts
466	appropriated by the Legislature from general revenue sources,
467	including, but not limited to, a portion of the annual growth in
468	existing net insurance premium taxes in an amount not less than
469	the anticipated losses and reserve requirements for existing
470	policyholders. The board shall operate the plan in such a manner
471	that the estimated cost of providing health insurance during any
472	fiscal year will not exceed total income the plan expects to
473	receive from policy premiums and funds appropriated by the
474	Legislature, including any interest on investments. After
475	determining the amount of funds appropriated to the board for a
476	fiscal year, the board shall estimate the number of new policies
477	it believes the plan has the financial capacity to insure during
478	that year so that costs do not exceed income. The board shall
479	take steps necessary to ensure that plan enrollment does not
480	exceed the number of residents it has estimated it has the
481	financial capacity to insure.
482	(c)  In the event of inadequate funding, the board may
483	cancel existing policies on a nondiscriminatory basis as
484	necessary to remedy the situation. No policy may be canceled if
485	a covered individual is currently making a claim.
486	(20)  PROVIDER REIMBURSEMENT.--Notwithstanding any other
487	provision of law, the maximum reimbursement rate to health care
488	providers for all covered, medically necessary services shall be
489	100 percent of Medicare's allowed payment amount for that
490	particular provider and service. All licensed providers in this
491	state shall accept assignment of plan benefits and consider the
492	Medicare allowed payment amount as payment in full. By no later
493	than December 1, 2005, the board shall update the actuarial
494	study required by s. 627.64872(6), to include the impact of
495	alternative methods of actuarially sound risk adjusted provider
496	reimbursement methodologies, including capitated prepaid
497	arrangements, that take into account such factors as age, sex,
498	geographic variations, case mix, and access to specialty medical
499	care. The board shall submit the updated actuarial study to the
500	Governor, the President of the Senate, and the Speaker of the
501	House no later than December 1, 2005.
502	Section 7.  Section 627.65626, Florida Statutes, is amended
503	to read:
504	627.65626  Insurance rebates for healthy lifestyles.--
505	(1)  Any rate, rating schedule, or rating manual for a
506	health insurance policy, which provides creditable coverage as
507	defined in s. 627.6561(5), filed with the office shall provide
508	for an appropriate rebate of premiums paid in the last policy
509	year, contract year, or calendar year when the majority of
510	members of a health plan have enrolled and maintained
511	participation in any health wellness, maintenance, or
512	improvement program offered by the group policyholder and the
513	health plan employer. The rebate may be based upon premiums paid
514	in the last calendar year or policy year. The group employer
515	must provide evidence of demonstrative maintenance or
516	improvement of the enrollees' health status as determined by
517	assessments of agreed-upon health status indicators between the
518	policyholder employer and the health insurer, including, but not
519	limited to, reduction in weight, body mass index, and smoking
520	cessation. Any rebate provided by the health insurer is presumed
521	to be appropriate unless credible data demonstrates otherwise or
522	unless such rebate program requires the insured to incur costs
523	to qualify for the rebate which equal or exceed the value of the
524	rebate, but in no event shall the rebate not exceed 10 percent
525	of paid premiums.
526	(2)  The premium rebate authorized by this section shall be
527	effective for an insured on an annual basis unless the number of
528	participating employees or members on the policy renewal
529	anniversary becomes less than the majority of the employees or
530	members eligible for participation in the wellness program.
531	(3)  The program shall be available for all policies issued
532	on or after July 1, 2005.
533	Section 8.  Paragraphs (d) and (j) of subsection (5) of
534	section 627.6692, Florida Statutes, are amended to read:
535	627.6692  Florida Health Insurance Coverage Continuation
536	Act.--
537	(5)  CONTINUATION OF COVERAGE UNDER GROUP HEALTH PLANS.--
538	(d)1.  A qualified beneficiary must give written notice to
539	the insurance carrier within 63 30 days after the occurrence of
540	a qualifying event. Unless otherwise specified in the notice, a
541	notice by any qualified beneficiary constitutes notice on behalf
542	of all qualified beneficiaries. The written notice must inform
543	the insurance carrier of the occurrence and type of the
544	qualifying event giving rise to the potential election by a
545	qualified beneficiary of continuation of coverage under the
546	group health plan issued by that insurance carrier, except that
547	in cases where the covered employee has been involuntarily
548	discharged, the nature of such discharge need not be disclosed.
549	The written notice must, at a minimum, identify the employer,
550	the group health plan number, the name and address of all
551	qualified beneficiaries, and such other information required by
552	the insurance carrier under the terms of the group health plan
553	or the commission by rule, to the extent that such information
554	is known by the qualified beneficiary.
555	2.  Within 14 days after the receipt of written notice
556	under subparagraph 1., the insurance carrier shall send each
557	qualified beneficiary by certified mail an election and premium
558	notice form, approved by the office, which form must provide for
559	the qualified beneficiary's election or nonelection of
560	continuation of coverage under the group health plan and the
561	applicable premium amount due after the election to continue
562	coverage. This subparagraph does not require separate mailing of
563	notices to qualified beneficiaries residing in the same
564	household, but requires a separate mailing for each separate
565	household.
566	(j)  Notwithstanding paragraph (b), if a qualified
567	beneficiary in the military reserve or National Guard has
568	elected to continue coverage and is thereafter called to active
569	duty and the coverage under the group plan is terminated by the
570	beneficiary or the carrier due to the qualified beneficiary
571	becoming eligible for TRICARE (the health care program provided
572	by the United States Defense Department), the 18-month period or
573	such other applicable maximum time period for which the
574	qualified beneficiary would otherwise be entitled to continue
575	coverage is tolled during the time that he or she is covered
576	under the TRICARE program. Within 63 30 days after the federal
577	TRICARE coverage terminates, the qualified beneficiary may elect
578	to continue coverage under the group health plan, retroactively
579	to the date coverage terminated under TRICARE, for the remainder
580	of the 18-month period or such other applicable time period,
581	subject to termination of coverage at the earliest of the
582	conditions 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
585	Statutes, 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
590	transacting business in this state:
591	1.  Offer and issue all small employer health benefit plans
592	on a guaranteed-issue basis to every eligible small employer,
593	with 2 to 50 eligible employees, that elects to be covered under
594	such plan, agrees to make the required premium payments, and
595	satisfies the other provisions of the plan. A rider for
596	additional or increased benefits may be medically underwritten
597	and may only be added to the standard health benefit plan. The
598	increased rate charged for the additional or increased benefit
599	must be rated in accordance with this section.
600	2.  In the absence of enrollment availability in the
601	Florida Health Insurance Plan, offer and issue basic and
602	standard small employer health benefit plans and a high
603	deductible plan that meets the requirements of a health savings
604	account plan or health reimbursement account as defined by
605	federal law, on a guaranteed-issue basis, during a 31-day open
606	enrollment period of August 1 through August 31 of each year, to
607	every eligible small employer, with fewer than two eligible
608	employees, which small employer is not formed primarily for the
609	purpose of buying health insurance and which elects to be
610	covered under such plan, agrees to make the required premium
611	payments, and satisfies the other provisions of the plan.
612	Coverage provided under this subparagraph shall begin on October
613	1 of the same year as the date of enrollment, unless the small
614	employer carrier and the small employer agree to a different
615	date. A rider for additional or increased benefits may be
616	medically underwritten and may only be added to the standard
617	health benefit plan. The increased rate charged for the
618	additional or increased benefit must be rated in accordance with
619	this section. For purposes of this subparagraph, a person, his
620	or her spouse, and his or her dependent children constitute a
621	single eligible employee if that person and spouse are employed
622	by the same small employer and either that person or his or her
623	spouse has a normal work week of less than 25 hours. Any right
624	to an open enrollment of health benefit coverage for groups of
625	fewer than two employees, pursuant to this section, shall remain
626	in full force and effect in the absence of the availability of
627	new enrollment into the Florida Health Insurance Plan.
628	3.  This paragraph does not limit a carrier's ability to
629	offer other health benefit plans to small employers if the
630	standard and basic health benefit plans are offered and
631	rejected.
632	(11)  SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
633	(b)1.  The program shall operate subject to the supervision
634	and control of the board.
635	2.  Effective upon this act becoming a law, the board shall
636	consist of the director of the office or his or her designee,
637	who shall serve as the chairperson, and 13 additional members
638	who are representatives of carriers and insurance agents and are
639	appointed by the director of the office and serve as follows:
640	a.  Five members shall be representatives of health
641	insurers licensed under chapter 624 or chapter 641. Two members
642	shall be agents who are actively engaged in the sale of health
643	insurance. Four members shall be employers or representatives of
644	employers. One member shall be a person covered under an
645	individual health insurance policy issued by a licensed insurer
646	in this state. One member shall represent the Agency for Health
647	Care Administration and shall be recommended by the Secretary of
648	Health Care Administration. The director of the office shall
649	include representatives of small employer carriers subject to
650	assessment under this subsection. If two or more carriers elect
651	to be risk-assuming carriers, the membership must include at
652	least two representatives of risk-assuming carriers; if one
653	carrier is risk-assuming, one member must be a representative of
654	such carrier. At least one member must be a carrier who is
655	subject to the assessments, but is not a small employer carrier.
656	Subject to such restrictions, at least five members shall be
657	selected from individuals recommended by small employer carriers
658	pursuant to procedures provided by rule of the commission. Three
659	members shall be selected from a list of health insurance
660	carriers that issue individual health insurance policies. At
661	least two of the three members selected must be reinsuring
662	carriers. Two members shall be selected from a list of insurance
663	agents who are actively engaged in the sale of health insurance.
664	b.  A member appointed under this subparagraph shall serve
665	a term of 4 years and shall continue in office until the
666	member's successor takes office, except that, in order to
667	provide for staggered terms, the director of the office shall
668	designate two of the initial appointees under this subparagraph
669	to serve terms of 2 years and shall designate three of the
670	initial appointees under this subparagraph to serve terms of 3
671	years.
672	3.  The director of the office may remove a member for
673	cause.
674	4.  Vacancies on the board shall be filled in the same
675	manner as the original appointment for the unexpired portion of
676	the term.
677	5.  The director of the office may require an entity that
678	recommends persons for appointment to submit additional lists of
679	recommended appointees.
680	(j)1.  Before July March 1 of each calendar year, the board
681	shall determine and report to the office the program net loss
682	for the previous year, including administrative expenses for
683	that year, and the incurred losses for the year, taking into
684	account investment income and other appropriate gains and
685	losses.
686	2.  Any net loss for the year shall be recouped by
687	assessment of the carriers, as follows:
688	a.  The operating losses of the program shall be assessed
689	in the following order subject to the specified limitations. The
690	first tier of assessments shall be made against reinsuring
691	carriers in an amount which shall not exceed 5 percent of each
692	reinsuring carrier's premiums from health benefit plans covering
693	small employers. If such assessments have been collected and
694	additional moneys are needed, the board shall make a second tier
695	of assessments in an amount which shall not exceed 0.5 percent
696	of each carrier's health benefit plan premiums. Except as
697	provided in paragraph (n), risk-assuming carriers are exempt
698	from all assessments authorized pursuant to this section. The
699	amount paid by a reinsuring carrier for the first tier of
700	assessments shall be credited against any additional assessments
701	made.
702	b.  The board shall equitably assess carriers for operating
703	losses of the plan based on market share. The board shall
704	annually assess each carrier a portion of the operating losses
705	of the plan. The first tier of assessments shall be determined
706	by multiplying the operating losses by a fraction, the numerator
707	of which equals the reinsuring carrier's earned premium
708	pertaining to direct writings of small employer health benefit
709	plans in the state during the calendar year for which the
710	assessment is levied, and the denominator of which equals the
711	total of all such premiums earned by reinsuring carriers in the
712	state during that calendar year. The second tier of assessments
713	shall be based on the premiums that all carriers, except risk-
714	assuming carriers, earned on all health benefit plans written in
715	this state. The board may levy interim assessments against
716	carriers to ensure the financial ability of the plan to cover
717	claims expenses and administrative expenses paid or estimated to
718	be paid in the operation of the plan for the calendar year prior
719	to the association's anticipated receipt of annual assessments
720	for that calendar year. Any interim assessment is due and
721	payable within 30 days after receipt by a carrier of the interim
722	assessment notice. Interim assessment payments shall be credited
723	against the carrier's annual assessment. Health benefit plan
724	premiums and benefits paid by a carrier that are less than an
725	amount determined by the board to justify the cost of collection
726	may not be considered for purposes of determining assessments.
727	c.  Subject to the approval of the office, the board shall
728	make an adjustment to the assessment formula for reinsuring
729	carriers that are approved as federally qualified health
730	maintenance organizations by the Secretary of Health and Human
731	Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,
732	if any, that restrictions are placed on them that are not
733	imposed on other small employer carriers.
734	3.  Before July March 1 of each year, the board shall
735	determine and file with the office an estimate of the
736	assessments needed to fund the losses incurred by the program in
737	the previous calendar year.
738	4.  If the board determines that the assessments needed to
739	fund the losses incurred by the program in the previous calendar
740	year will exceed the amount specified in subparagraph 2., the
741	board shall evaluate the operation of the program and report its
742	findings, including any recommendations for changes to the plan
743	of operation, to the office within 180 90 days following the end
744	of the calendar year in which the losses were incurred. The
745	evaluation shall include an estimate of future assessments, the
746	administrative costs of the program, the appropriateness of the
747	premiums charged and the level of carrier retention under the
748	program, and the costs of coverage for small employers. If the
749	board fails to file a report with the office within 180 90 days
750	following the end of the applicable calendar year, the office
751	may evaluate the operations of the program and implement such
752	amendments to the plan of operation the office deems necessary
753	to reduce future losses and assessments.
754	5.  If assessments exceed the amount of the actual losses
755	and administrative expenses of the program, the excess shall be
756	held as interest and used by the board to offset future losses
757	or to reduce program premiums. As used in this paragraph, the
758	term "future losses" includes reserves for incurred but not
759	reported claims.
760	6.  Each carrier's proportion of the assessment shall be
761	determined annually by the board, based on annual statements and
762	other reports considered necessary by the board and filed by the
763	carriers with the board.
764	7.  Provision shall be made in the plan of operation for
765	the imposition of an interest penalty for late payment of an
766	assessment.
767	8.  A carrier may seek, from the office, a deferment, in
768	whole or in part, from any assessment made by the board. The
769	office may defer, in whole or in part, the assessment of a
770	carrier if, in the opinion of the office, the payment of the
771	assessment would place the carrier in a financially impaired
772	condition. If an assessment against a carrier is deferred, in
773	whole or in part, the amount by which the assessment is deferred
774	may be assessed against the other carriers in a manner
775	consistent with the basis for assessment set forth in this
776	section. The carrier receiving such deferment remains liable to
777	the program for the amount deferred and is prohibited from
778	reinsuring any individuals or groups in the program if it fails
779	to pay assessments.
780	(o)  The board shall advise the office, the agency, the
781	department, and other executive and legislative entities on
782	health insurance issues. Specifically, the board shall:
783	1.  Provide a forum for stakeholders, consisting of
784	insurers, employers, agents, consumers, and regulators, in the
785	private health insurance market in this state.
786	2.  Review and recommend strategies to improve the
787	functioning of the health insurance markets in this state with a
788	specific focus on market stability, access, and pricing.
789	3.  Make recommendations to the office for legislation
790	addressing health insurance market issues and provide comments
791	on health insurance legislation proposed by the office.
792	4.  Meet at least three times each year. One meeting shall
793	be held to hear reports and to secure public comment on the
794	health insurance market, to develop any legislation needed to
795	address health insurance market issues, and to provide comments
796	on health insurance legislation proposed by the office.
797	5.  By September 1 each year, issue a report to the office
798	on the state of the health insurance market. The report shall
799	include recommendations for changes in the health insurance
800	market, results from implementation of previous recommendations
801	and information on health insurance markets.
802	Section 10.  Subsection (1) of section 641.27, Florida
803	Statutes, is amended to read:
804	641.27  Examination by the department.--
805	(1)  The office shall examine the affairs, transactions,
806	accounts, business records, and assets of any health maintenance
807	organization as often as it deems it expedient for the
808	protection of the people of this state, but not less frequently
809	than once every 5 3 years. In lieu of making its own financial
810	examination, the office may accept an independent certified
811	public accountant's audit report prepared on a statutory
812	accounting basis consistent with this part. However, except when
813	the medical records are requested and copies furnished pursuant
814	to s. 456.057, medical records of individuals and records of
815	physicians providing service under contract to the health
816	maintenance organization shall not be subject to audit, although
817	they may be subject to subpoena by court order upon a showing of
818	good cause. For the purpose of examinations, the office may
819	administer oaths to and examine the officers and agents of a
820	health maintenance organization concerning its business and
821	affairs. The examination of each health maintenance organization
822	by the office shall be subject to the same terms and conditions
823	as apply to insurers under chapter 624. In no event shall
824	expenses of all examinations exceed a maximum of $50,000 $20,000
825	for any 1-year period. Any rehabilitation, liquidation,
826	conservation, or dissolution of a health maintenance
827	organization shall be conducted under the supervision of the
828	department, which shall have all power with respect thereto
829	granted to it under the laws governing the rehabilitation,
830	liquidation, reorganization, conservation, or dissolution of
831	life insurance companies.
832	Section 11.  Subsection (40) of section 641.31, Florida
833	Statutes, is amended to read:
834	641.31  Health maintenance contracts.--
835	(40)(a)  Any group rate, rating schedule, or rating manual
836	for a health maintenance organization policy, which provides
837	creditable coverage as defined in s. 627.6561(5), filed with the
838	office shall provide for an appropriate rebate of premiums paid
839	in the last contract calendar year when the majority of the
840	members of a health individual covered by such plan are is
841	enrolled in and maintain maintains participation in any health
842	wellness, maintenance, or improvement program offered by the
843	group contract holder approved by the health plan. The group
844	individual must provide evidence of demonstrative maintenance or
845	improvement of his or her health status as determined by
846	assessments of agreed-upon health status indicators between the
847	group individual and the health insurer, including, but not
848	limited to, reduction in weight, body mass index, and smoking
849	cessation. Any rebate provided by the health maintenance
850	organization insurer is presumed to be appropriate unless
851	credible data demonstrates otherwise or unless such rebate
852	program requires the insured to incur costs to qualify for the
853	rebate which equal or exceed the value of the rebate, but in no
854	event shall the rebate not exceed 10 percent of paid premiums.
855	(b)  The premium rebate authorized by this section shall be
856	effective for a subscriber an insured on an annual basis, unless
857	the number of participating members on the contract renewal
858	anniversary becomes less than the majority of the members
859	eligible for participation in the wellness program individual
860	fails to maintain or improve his or her health status while
861	participating in an approved wellness program, or credible
862	evidence demonstrates that the individual is not participating
863	in the approved wellness program.
864	(c)  The program shall be available for all contracts
865	issued on or after July 1, 2005.
866	Section 12.  The sum of $5 million is appropriated from the
867	General Revenue Fund to the Florida Health Insurance Plan for
868	the purposes of implementing the plan.
869	Section 13.  This act shall take effect July 1, 2005, and
870	shall apply to all policies or contracts issued or renewed on or
871	after July 1, 2005.

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