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. 627.638, F.S.;
19	providing certain contract and claim form requirements for
20	direct payment to certain providers of emergency services
21	and care; amending s. 627.6402, F.S.; revising provisions
22	for healthy lifestyle rebates for an individual health
23	insurance policy; providing exceptions; providing
24	application; amending s. 627.6487, F.S.; revising the
25	definition of the term "eligible individual" for purposes
26	of obtaining coverage in the Florida Health Insurance
27	Plan; amending s. 627.64872, F.S.; revising definitions;
28	changing references to the Director of the Office of
29	Insurance Regulation to the Commissioner of Insurance
30	Regulation; deleting obsolete language; providing
31	additional eligibility criteria; reducing premium rate
32	limitations; revising requirements for sources of
33	additional revenue; authorizing the board to cancel
34	policies under inadequate funding conditions; providing a
35	limitation; defining the term "health insurance" for
36	purposes of certain assessments; providing an exclusion;
37	specifying a maximum provider reimbursement rate;
38	requiring licensed providers to accept assignment of plan
39	benefits and consider certain payments as payments in
40	full; authorizing the board to update a required actuarial
41	study; providing study criteria; amending s. 627.65626,
42	F.S.; revising criteria for healthy lifestyle rebates for
43	group and similar health insurance policies provided by
44	health insurers; providing exceptions; providing
45	application; amending s. 627.6692, F.S.; extending a time
46	period within which eligible employees may apply for
47	continuation of coverage; amending s. 627.6699, F.S.;
48	revising availability of coverage provision of the
49	Employee Health Care Access Act; including high deductible
50	plans meeting federal health savings account plan
51	requirements; revising membership of the board of the
52	small employer health reinsurance program; revising
53	certain reporting dates relating to program losses and
54	assessments; requiring the board to advise executive and
55	legislative entities on health insurance issues; providing
56	requirements; amending s. 641.27, F.S.; increasing the
57	interval at which the office examines health maintenance
58	organizations; deleting authorization for the office to
59	accept an audit report from a certified public accountant
60	in lieu of conducting its own examination; increasing an
61	expense limitation; amending s. 641.31, F.S.; revising
62	criteria for healthy lifestyle rebates for health
63	maintenance organizations; providing exceptions; providing
64	application; providing an appropriation; providing
65	application; providing an effective date.
66
67	Be It Enacted by the Legislature of the State of Florida:
68
69	Section 1.  Paragraph (l) of subsection (3) of section
70	408.05, Florida Statutes, is amended to read:
71	408.05  State Center for Health Statistics.--
72	(3)  COMPREHENSIVE HEALTH INFORMATION SYSTEM.--In order to
73	produce comparable and uniform health information and
74	statistics, the agency shall perform the following functions:
75	(l)  Develop, in conjunction with the State Comprehensive
76	Health Information System Advisory Council, and implement a
77	long-range plan for making available performance outcome and
78	financial data that will allow consumers to compare health care
79	services. The performance outcomes and financial data the agency
80	must make available shall include, but is not limited to,
81	pharmaceuticals, physicians, health care facilities, and health
82	plans and managed care entities. The agency shall submit the
83	initial plan to the Governor, the President of the Senate, and
84	the Speaker of the House of Representatives by January March 1,
85	2006 2005, and shall update the plan and report on the status of
86	its implementation annually thereafter. The agency shall also
87	make the plan and status report available to the public on its
88	Internet website. As part of the plan, the agency shall identify
89	the process and timeframes for implementation, any barriers to
90	implementation, and recommendations of changes in the law that
91	may be enacted by the Legislature to eliminate the barriers. As
92	preliminary elements of the plan, the agency shall:
93	1.  Make available performance outcome and patient charge
94	data collected from health care facilities pursuant to s.
95	408.061(1)(a) and (2). The agency shall determine which
96	conditions and procedures, performance outcomes, and patient
97	charge data to disclose based upon input from the council. When
98	determining which conditions and procedures are to be disclosed,
99	the council and the agency shall consider variation in costs,
100	variation in outcomes, and magnitude of variations and other
101	relevant information. When determining which performance
102	outcomes to disclose, the agency:
103	a.  Shall consider such factors as volume of cases; average
104	patient charges; average length of stay; complication rates;
105	mortality rates; and infection rates, among others, which shall
106	be adjusted for case mix and severity, if applicable.
107	b.  May consider such additional measures that are adopted
108	by the Centers for Medicare and Medicaid Studies, National
109	Quality Forum, the Joint Commission on Accreditation of
110	Healthcare Organizations, the Agency for Healthcare Research and
111	Quality, or a similar national entity that establishes standards
112	to measure the performance of health care providers, or by other
113	states.
114
115	When determining which patient charge data to disclose, the
116	agency shall consider such measures as average charge, average
117	net revenue per adjusted patient day, average cost per adjusted
118	patient day, and average cost per admission, among others.
119	2.  Make available performance measures, benefit design,
120	and premium cost data from health plans licensed pursuant to
121	chapter 627 or chapter 641. The agency shall determine which
122	performance outcome and member and subscriber cost data to
123	disclose, based upon input from the council. When determining
124	which data to disclose, the agency shall consider information
125	that may be required by either individual or group purchasers to
126	assess the value of the product, which may include membership
127	satisfaction, quality of care, current enrollment or membership,
128	coverage areas, accreditation status, premium costs, plan costs,
129	premium increases, range of benefits, copayments and
130	deductibles, accuracy and speed of claims payment, credentials
131	of physicians, number of providers, names of network providers,
132	and hospitals in the network. Health plans shall make available
133	to the agency any such data or information that is not currently
134	reported to the agency or the office.
135	3.  Determine the method and format for public disclosure
136	of data reported pursuant to this paragraph. The agency shall
137	make its determination based upon input from the Comprehensive
138	Health Information System Advisory Council. At a minimum, the
139	data shall be made available on the agency's Internet website in
140	a manner that allows consumers to conduct an interactive search
141	that allows them to view and compare the information for
142	specific providers. The website must include such additional
143	information as is determined necessary to ensure that the
144	website enhances informed decisionmaking among consumers and
145	health care purchasers, which shall include, at a minimum,
146	appropriate guidance on how to use the data and an explanation
147	of why the data may vary from provider to provider. The data
148	specified in subparagraph 1. shall be released no later than
149	January 1, 2006, for the reporting of infection rates, and no
150	later than October March 1, 2005, for mortality rates and
151	complication rates. The data specified in subparagraph 2. shall
152	be released no later than October March 1, 2006.
153	Section 2.  Paragraph (b) of subsection (3) of section
154	408.909, Florida Statutes, is amended to read:
155	408.909  Health flex plans.--
156	(3)  PROGRAM.--The agency and the office shall each approve
157	or disapprove health flex plans that provide health care
158	coverage for eligible participants. A health flex plan may limit
159	or exclude benefits otherwise required by law for insurers
160	offering coverage in this state, may cap the total amount of
161	claims paid per year per enrollee, may limit the number of
162	enrollees, or may take any combination of those actions. A
163	health flex plan offering may include the option of a
164	catastrophic plan supplementing the health flex plan.
165	(b)  The office shall develop guidelines for the review of
166	health flex plan applications and provide regulatory oversight
167	of health flex plan advertisement and marketing procedures. The
168	office shall disapprove or shall withdraw approval of plans
169	that:
170	1.  Contain any ambiguous, inconsistent, or misleading
171	provisions or any exceptions or conditions that deceptively
172	affect or limit the benefits purported to be assumed in the
173	general coverage provided by the health flex plan;
174	2.  Provide benefits that are unreasonable in relation to
175	the premium charged or contain provisions that are unfair or
176	inequitable or contrary to the public policy of this state, that
177	encourage misrepresentation, or that result in unfair
178	discrimination in sales practices; or
179	3.  Cannot demonstrate that the health flex plan is
180	financially sound and that the applicant is able to underwrite
181	or finance the health care coverage provided; or
182	4.  Cannot demonstrate that the applicant and its
183	management are in compliance with the standards required
184	pursuant to s. 624.404(3).
185	Section 3.  Subsection (6) is added to section 627.413,
186	Florida Statutes, to read:
187	627.413  Contents of policies, in general;
188	identification.--
189	(6)  Notwithstanding any other provision of the Florida
190	Insurance Code that is in conflict with federal requirements for
191	a health savings account qualified high deductible health plan,
192	an insurer, or a health maintenance organization subject to part
193	I of chapter 641, which is authorized to issue health insurance
194	in this state may offer for sale an individual or group policy
195	or contract that provides for a high deductible plan that meets
196	the federal requirements of a health savings account plan and
197	which is offered in conjunction with a health savings account.
198	Section 4.  Subsection (2) of section 627.638, Florida
199	Statutes, is amended to read:
200	627.638  Direct payment for hospital, medical services.--
201	(2)  Whenever, in any health insurance claim form, an
202	insured specifically authorizes payment of benefits directly to
203	any recognized hospital or physician, the insurer shall make
204	such payment to the designated provider of such services, unless
205	otherwise provided in the insurance contract. The insurance
206	contract cannot prohibit, and claims forms must provide option
207	for, the payment of benefits directly to a recognized hospital
208	or physician for care provided pursuant to s. 395.1041.
209	Section 5.  Section 627.6402, Florida Statutes, is amended
210	to read:
211	627.6402  Insurance rebates for healthy lifestyles.--
212	(1)  Any rate, rating schedule, or rating manual for an
213	individual health insurance policy filed with the office may
214	shall provide for an appropriate rebate of premiums paid in the
215	last calendar year when the individual covered by such plan is
216	enrolled in and maintains participation in any health wellness,
217	maintenance, or improvement program approved by the health plan.
218	The rebate may be based on premiums paid in the last calendar
219	year or the last policy year. The individual must provide
220	evidence of demonstrative maintenance or improvement of the
221	individual's health status as determined by assessments of
222	agreed-upon health status indicators between the individual and
223	the health insurer, including, but not limited to, reduction in
224	weight, body mass index, and smoking cessation. Any rebate
225	provided by the health insurer is presumed to be appropriate
226	unless credible data demonstrates otherwise, or unless such
227	rebate program requires the insured to incur costs to qualify
228	for the rebate which equal or exceed the value of the rebate,
229	but in no event shall the rebate not exceed 10 percent of paid
230	premiums.
231	(2)  The premium rebate authorized by this section shall be
232	effective for an insured on an annual basis, unless the
233	individual fails to maintain or improve his or her health status
234	while participating in an approved wellness program, or credible
235	evidence demonstrates that the individual is not participating
236	in the approved wellness program.
237	(3)  The program shall be available for all policies issued
238	on or after July 1, 2005.
239	Section 6.  Paragraph (b) of subsection (3) of section
240	627.6487, Florida Statutes, is amended to read:
241	627.6487  Guaranteed availability of individual health
242	insurance coverage to eligible individuals.--
243	(3)  For the purposes of this section, the term "eligible
244	individual" means an individual:
245	(b)  Who is not eligible for coverage under:
246	1.  A group health plan, as defined in s. 2791 of the
247	Public Health Service Act;
248	2.  A conversion policy or contract issued by an authorized
249	insurer or health maintenance organization under s. 627.6675 or
250	s. 641.3921, respectively, offered to an individual who is no
251	longer eligible for coverage under either an insured or self-
252	insured employer plan;
253	3.  Part A or part B of Title XVIII of the Social Security
254	Act; or
255	4.  A state plan under Title XIX of such act, or any
256	successor program, and does not have other health insurance
257	coverage; or
258	5.  The Florida Health Insurance Plan as specified in s.
259	627.64872 and such plan is accepting new enrollments. However, a
260	person whose previous coverage was under the Florida Health
261	Insurance Plan as specified in s. 627.64872 is not an eligible
262	individual as defined in s. 627.6487(3)(a);
263	Section 7.  Paragraphs (b), (c), and (n) of subsection (2)
264	and subsections (3), (6), (9), and (15) of section 627.64872,
265	Florida Statutes, are amended, subsection (20) of said section
266	is renumbered as subsection (21), and a new subsection (20) is
267	added to said section, to read:
268	627.64872  Florida Health Insurance Plan.--
269	(2)  DEFINITIONS.--As used in this section:
270	(b)  "Commissioner" means the Commissioner of Insurance
271	Regulation.
272	(c)  "Dependent" means a resident spouse or resident
273	unmarried child under the age of 19 years, a child who is a
274	student under the age of 25 years and who is financially
275	dependent upon the parent, or a child of any age who is disabled
276	and dependent upon the parent.
277	(c)  "Director" means the Director of the Office of
278	Insurance Regulation.
279	(n)  "Resident" means an individual who has been legally
280	domiciled in this state for a period of at least 6 months and
281	who physically resides in this state not less than 185 days per
282	year.
283	(3)  BOARD OF DIRECTORS.--
284	(a)  The plan shall operate subject to the supervision and
285	control of the board. The board shall consist of the
286	commissioner director or his or her designated representative,
287	who shall serve as a member of the board and shall be its chair,
288	and an additional eight members, five of whom shall be appointed
289	by the Governor, at least two of whom shall be individuals not
290	representative of insurers or health care providers, one of whom
291	shall be appointed by the President of the Senate, one of whom
292	shall be appointed by the Speaker of the House of
293	Representatives, and one of whom shall be appointed by the Chief
294	Financial Officer.
295	(b)  The term to be served on the board by the commissioner
296	Director of the Office of Insurance Regulation shall be
297	determined by continued employment in such position. The
298	remaining initial board members shall serve for a period of time
299	as follows: two members appointed by the Governor and the
300	members appointed by the President of the Senate and the Speaker
301	of the House of Representatives shall serve a term of 2 years;
302	and three members appointed by the Governor and the Chief
303	Financial Officer shall serve a term of 4 years. Subsequent
304	board members shall serve for a term of 3 years. A board
305	member's term shall continue until his or her successor is
306	appointed.
307	(c)  Vacancies on the board shall be filled by the
308	appointing authority, such authority being the Governor, the
309	President of the Senate, the Speaker of the House of
310	Representatives, or the Chief Financial Officer. The appointing
311	authority may remove board members for cause.
312	(d)  The commissioner director, or his or her recognized
313	representative, shall be responsible for any organizational
314	requirements necessary for the initial meeting of the board
315	which shall take place no later than September 1, 2004.
316	(e)  Members shall not be compensated in their capacity as
317	board members but shall be reimbursed for reasonable expenses
318	incurred in the necessary performance of their duties in
319	accordance with s. 112.061.
320	(f)  The board shall submit to the Financial Services
321	Commission a plan of operation for the plan and any amendments
322	thereto necessary or suitable to ensure the fair, reasonable,
323	and equitable administration of the plan. The plan of operation
324	shall ensure that the plan qualifies to apply for any available
325	funding from the Federal Government that adds to the financial
326	viability of the plan. The plan of operation shall become
327	effective upon approval in writing by the Financial Services
328	Commission consistent with the date on which the coverage under
329	this section must be made available. If the board fails to
330	submit a suitable plan of operation within 1 year after
331	implementation the appointment of the board of directors, or at
332	any time thereafter fails to submit suitable amendments to the
333	plan of operation, the Financial Services Commission shall adopt
334	such rules as are necessary or advisable to effectuate the
335	provisions of this section. Such rules shall continue in force
336	until modified by the office or superseded by a plan of
337	operation submitted by the board and approved by the Financial
338	Services Commission.
339	(6)  INTERIM REPORT; ANNUAL REPORT.--
340	(a)  By no later than December 1, 2004, the board shall
341	report to the Governor, the President of the Senate, and the
342	Speaker of the House of Representatives the results of an
343	actuarial study conducted by the board to determine, including,
344	but not limited to:
345	1.  The impact the creation of the plan will have on the
346	small group insurance market and the individual market on
347	premiums paid by insureds. This shall include an estimate of the
348	total anticipated aggregate savings for all small employers in
349	the state.
350	2.  The number of individuals the pool could reasonably
351	cover at various funding levels, specifically, the number of
352	people the pool may cover at each of those funding levels.
353	3.  A recommendation as to the best source of funding for
354	the anticipated deficits of the pool.
355	4.  The effect on the individual and small group market by
356	including in the Florida Health Insurance Plan persons eligible
357	for coverage under s. 627.6487, as well as the cost of including
358	these individuals.
359
360	The board shall take no action to implement the Florida Health
361	Insurance Plan, other than the completion of the actuarial study
362	authorized in this paragraph, until funds are appropriated for
363	startup cost and any projected deficits.
364	(b)  No later than December 1, 2005, and annually
365	thereafter, the board shall submit to the Governor, the
366	President of the Senate, the Speaker of the House of
367	Representatives, and the substantive legislative committees of
368	the Legislature a report which includes an independent actuarial
369	study to determine, including, but not be limited to:
370	(a)1.  The impact the creation of the plan has on the small
371	group and individual insurance market, specifically on the
372	premiums paid by insureds. This shall include an estimate of the
373	total anticipated aggregate savings for all small employers in
374	the state.
375	(b)2.  The actual number of individuals covered at the
376	current funding and benefit level, the projected number of
377	individuals that may seek coverage in the forthcoming fiscal
378	year, and the projected funding needed to cover anticipated
379	increase or decrease in plan participation.
380	3.  A recommendation as to the best source of funding for
381	the anticipated deficits of the pool.
382	(c)4.  A summarization of the activities of the plan in the
383	preceding calendar year, including the net written and earned
384	premiums, plan enrollment, the expense of administration, and
385	the paid and incurred losses.
386	(d)5.  A review of the operation of the plan as to whether
387	the plan has met the intent of this section.
388	(9)  ELIGIBILITY.--
389	(a)  Any individual person who is and continues to be a
390	resident of this state shall be eligible for coverage under the
391	plan if:
392	1.  Evidence is provided that the person received notices
393	of rejection or refusal to issue substantially similar coverage
394	for health reasons from at least two health insurers or health
395	maintenance organizations. A rejection or refusal by an insurer
396	offering only stop-loss, excess of loss, or reinsurance coverage
397	with respect to the applicant shall not be sufficient evidence
398	under this paragraph.
399	2.  The person is enrolled in the Florida Comprehensive
400	Health Association as of the date the plan is implemented.
401	3.  Is an eligible individual as defined in s. 627.6487(3),
402	excluding s. 627.6487(3)(b)5.
403	(b)  Each resident dependent of a person who is eligible
404	for coverage under the plan shall also be eligible for such
405	coverage.
406	(c)  A person shall not be eligible for coverage under the
407	plan if:
408	1.  The person has or obtains health insurance coverage
409	substantially similar to or more comprehensive than a plan
410	policy, or would be eligible to obtain such coverage, unless a
411	person may maintain other coverage for the period of time the
412	person is satisfying any preexisting condition waiting period
413	under a plan policy or may maintain plan coverage for the period
414	of time the person is satisfying a preexisting condition waiting
415	period under another health insurance policy intended to replace
416	the plan policy;.
417	2.  The person is determined to be eligible for health care
418	benefits under Medicaid, Medicare, the state's children's health
419	insurance program, or any other federal, state, or local
420	government program that provides health benefits;
421	3.  The person voluntarily terminated plan coverage unless
422	12 months have elapsed since such termination;
423	4.  The person is an inmate or resident of a public
424	institution; or
425	5.  The person's premiums are paid for or reimbursed under
426	any government-sponsored program or by any government agency or
427	health care provider or by any health care provider sponsored or
428	affiliated organization.
429	(d)  Coverage shall cease:
430	1.  On the date a person is no longer a resident of this
431	state;
432	2.  On the date a person requests coverage to end;
433	3.  Upon the death of the covered person;
434	4.  On the date state law requires cancellation or
435	nonrenewal of the policy; or
436	5.  At the option of the plan, 30 days after the plan makes
437	any inquiry concerning the person's eligibility or place of
438	residence to which the person does not reply; or.
439	6.  Upon failure of the insured to pay for continued
440	coverage.
441	(e)  Except under the circumstances described in this
442	subsection, coverage of a person who ceases to meet the
443	eligibility requirements of this subsection shall be terminated
444	at the end of the policy period for which the necessary premiums
445	have been paid.
446	(15)  FUNDING OF THE PLAN.--
447	(a)  Premiums.--
448	1.  The plan shall establish premium rates for plan
449	coverage as provided in this section. Separate schedules of
450	premium rates based on age, sex, and geographical location may
451	apply for individual risks. Premium rates and schedules shall be
452	submitted to the office for approval prior to use.
453	2.  Initial rates for plan coverage shall be limited to no
454	more than 200 percent 300 percent of rates established for
455	individual standard risks as specified in s. 627.6675(3)(c).
456	Subject to the limits provided in this paragraph, subsequent
457	rates shall be established to provide fully for the expected
458	costs of claims, including recovery of prior losses, expenses of
459	operation, investment income of claim reserves, and any other
460	cost factors subject to the limitations described herein, but in
461	no event shall premiums exceed the 200-percent 300-percent rate
462	limitation provided in this section. Notwithstanding the 200-
463	percent 300-percent rate limitation, sliding scale premium
464	surcharges based upon the insured's income may apply to all
465	enrollees, except those made eligible for coverage by
466	subparagraph (9)(a)3.
467	3.  For the purposes of determining assessments under this
468	section, the term "health insurance" means any hospital and
469	medical expense incurred policy, minimum premium plan, stop-loss
470	coverage, health maintenance organization contract, prepaid
471	health clinic contract, multiple-employer welfare arrangement
472	contract, or fraternal benefit society health benefits contract,
473	whether sold as an individual or group policy or contract. The
474	term does not include a policy covering medical payment coverage
475	or personal injury protection coverage in a motor vehicle
476	policy, coverage issued as a supplement to liability insurance,
477	or workers' compensation.
478	(b)  Sources of additional revenue.--Any deficit incurred
479	by the plan shall be primarily funded through amounts
480	appropriated by the Legislature from general revenue sources,
481	including, but not limited to, a portion of the annual growth in
482	existing net insurance premium taxes in an amount not less than
483	the anticipated losses and reserve requirements for existing
484	policyholders. The board shall operate the plan in such a manner
485	that the estimated cost of providing health insurance during any
486	fiscal year will not exceed total income the plan expects to
487	receive from policy premiums and funds appropriated by the
488	Legislature, including any interest on investments. After
489	determining the amount of funds appropriated to the board for a
490	fiscal year, the board shall estimate the number of new policies
491	it believes the plan has the financial capacity to insure during
492	that year so that costs do not exceed income. The board shall
493	take steps necessary to ensure that plan enrollment does not
494	exceed the number of residents it has estimated it has the
495	financial capacity to insure.
496	(c)  In the event of inadequate funding, the board may
497	cancel existing policies on a nondiscriminatory basis as
498	necessary to remedy the situation. No policy may be canceled if
499	a covered individual is currently making a claim.
500	(20)  PROVIDER REIMBURSEMENT.--Notwithstanding any other
501	provision of law, the maximum reimbursement rate to health care
502	providers for all covered, medically necessary services shall be
503	100 percent of Medicare's allowed payment amount for that
504	particular provider and service. All licensed providers in this
505	state shall accept assignment of plan benefits and consider the
506	Medicare allowed payment amount as payment in full. By no later
507	than December 1, 2005, the board shall update the actuarial
508	study required by s. 627.64872(6), to include the impact of
509	alternative methods of actuarially sound risk adjusted provider
510	reimbursement methodologies, including capitated prepaid
511	arrangements, that take into account such factors as age, sex,
512	geographic variations, case mix, and access to specialty medical
513	care. The board shall submit the updated actuarial study to the
514	Governor, the President of the Senate, and the Speaker of the
515	House no later than December 1, 2005.
516	Section 8.  Section 627.65626, Florida Statutes, is amended
517	to read:
518	627.65626  Insurance rebates for healthy lifestyles.--
519	(1)  Any rate, rating schedule, or rating manual for a
520	health insurance policy, which provides creditable coverage as
521	defined in s. 627.6561(5), filed with the office shall provide
522	for an appropriate rebate of premiums paid in the last policy
523	year, contract year, or calendar year when the majority of
524	members of a health plan have enrolled and maintained
525	participation in any health wellness, maintenance, or
526	improvement program offered by the group policyholder and the
527	health plan employer. The rebate may be based upon premiums paid
528	in the last calendar year or policy year. The group employer
529	must provide evidence of demonstrative maintenance or
530	improvement of the enrollees' health status as determined by
531	assessments of agreed-upon health status indicators between the
532	policyholder employer and the health insurer, including, but not
533	limited to, reduction in weight, body mass index, and smoking
534	cessation. Any rebate provided by the health insurer is presumed
535	to be appropriate unless credible data demonstrates otherwise or
536	unless such rebate program requires the insured to incur costs
537	to qualify for the rebate which equal or exceed the value of the
538	rebate, but in no event shall the rebate not exceed 10 percent
539	of paid premiums.
540	(2)  The premium rebate authorized by this section shall be
541	effective for an insured on an annual basis unless the number of
542	participating employees or members on the policy renewal
543	anniversary becomes less than the majority of the employees or
544	members eligible for participation in the wellness program.
545	(3)  The program shall be available for all policies issued
546	on or after July 1, 2005.
547	Section 9.  Paragraphs (d) and (j) of subsection (5) of
548	section 627.6692, Florida Statutes, are amended to read:
549	627.6692  Florida Health Insurance Coverage Continuation
550	Act.--
551	(5)  CONTINUATION OF COVERAGE UNDER GROUP HEALTH PLANS.--
552	(d)1.  A qualified beneficiary must give written notice to
553	the insurance carrier within 63 30 days after the occurrence of
554	a qualifying event. Unless otherwise specified in the notice, a
555	notice by any qualified beneficiary constitutes notice on behalf
556	of all qualified beneficiaries. The written notice must inform
557	the insurance carrier of the occurrence and type of the
558	qualifying event giving rise to the potential election by a
559	qualified beneficiary of continuation of coverage under the
560	group health plan issued by that insurance carrier, except that
561	in cases where the covered employee has been involuntarily
562	discharged, the nature of such discharge need not be disclosed.
563	The written notice must, at a minimum, identify the employer,
564	the group health plan number, the name and address of all
565	qualified beneficiaries, and such other information required by
566	the insurance carrier under the terms of the group health plan
567	or the commission by rule, to the extent that such information
568	is known by the qualified beneficiary.
569	2.  Within 14 days after the receipt of written notice
570	under subparagraph 1., the insurance carrier shall send each
571	qualified beneficiary by certified mail an election and premium
572	notice form, approved by the office, which form must provide for
573	the qualified beneficiary's election or nonelection of
574	continuation of coverage under the group health plan and the
575	applicable premium amount due after the election to continue
576	coverage. This subparagraph does not require separate mailing of
577	notices to qualified beneficiaries residing in the same
578	household, but requires a separate mailing for each separate
579	household.
580	(j)  Notwithstanding paragraph (b), if a qualified
581	beneficiary in the military reserve or National Guard has
582	elected to continue coverage and is thereafter called to active
583	duty and the coverage under the group plan is terminated by the
584	beneficiary or the carrier due to the qualified beneficiary
585	becoming eligible for TRICARE (the health care program provided
586	by the United States Defense Department), the 18-month period or
587	such other applicable maximum time period for which the
588	qualified beneficiary would otherwise be entitled to continue
589	coverage is tolled during the time that he or she is covered
590	under the TRICARE program. Within 63 30 days after the federal
591	TRICARE coverage terminates, the qualified beneficiary may elect
592	to continue coverage under the group health plan, retroactively
593	to the date coverage terminated under TRICARE, for the remainder
594	of the 18-month period or such other applicable time period,
595	subject to termination of coverage at the earliest of the
596	conditions specified in paragraph (b).
597	Section 10.  Paragraph (c) of subsection (5) and paragraphs
598	(b) and (j) of subsection (11) of section 627.6699, Florida
599	Statutes, are amended, and paragraph (o) is added to subsection
600	(11) of said section, to read:
601	627.6699  Employee Health Care Access Act.--
602	(5)  AVAILABILITY OF COVERAGE.--
603	(c)  Every small employer carrier must, as a condition of
604	transacting business in this state:
605	1.  Offer and issue all small employer health benefit plans
606	on a guaranteed-issue basis to every eligible small employer,
607	with 2 to 50 eligible employees, that elects to be covered under
608	such plan, agrees to make the required premium payments, and
609	satisfies the other provisions of the plan. A rider for
610	additional or increased benefits may be medically underwritten
611	and may only be added to the standard health benefit plan. The
612	increased rate charged for the additional or increased benefit
613	must be rated in accordance with this section.
614	2.  In the absence of enrollment availability in the
615	Florida Health Insurance Plan, offer and issue basic and
616	standard small employer health benefit plans and a high
617	deductible plan that meets the requirements of a health savings
618	account plan or health reimbursement account as defined by
619	federal law, on a guaranteed-issue basis, during a 31-day open
620	enrollment period of August 1 through August 31 of each year, to
621	every eligible small employer, with fewer than two eligible
622	employees, which small employer is not formed primarily for the
623	purpose of buying health insurance and which elects to be
624	covered under such plan, agrees to make the required premium
625	payments, and satisfies the other provisions of the plan.
626	Coverage provided under this subparagraph shall begin on October
627	1 of the same year as the date of enrollment, unless the small
628	employer carrier and the small employer agree to a different
629	date. A rider for additional or increased benefits may be
630	medically underwritten and may only be added to the standard
631	health benefit plan. The increased rate charged for the
632	additional or increased benefit must be rated in accordance with
633	this section. For purposes of this subparagraph, a person, his
634	or her spouse, and his or her dependent children constitute a
635	single eligible employee if that person and spouse are employed
636	by the same small employer and either that person or his or her
637	spouse has a normal work week of less than 25 hours. Any right
638	to an open enrollment of health benefit coverage for groups of
639	fewer than two employees, pursuant to this section, shall remain
640	in full force and effect in the absence of the availability of
641	new enrollment into the Florida Health Insurance Plan.
642	3.  This paragraph does not limit a carrier's ability to
643	offer other health benefit plans to small employers if the
644	standard and basic health benefit plans are offered and
645	rejected.
646	(11)  SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
647	(b)1.  The program shall operate subject to the supervision
648	and control of the board.
649	2.  Effective upon this act becoming a law, the board shall
650	consist of the director of the office or his or her designee,
651	who shall serve as the chairperson, and 13 additional members
652	who are representatives of carriers and insurance agents and are
653	appointed by the director of the office and serve as follows:
654	a.  Five members shall be representatives of health
655	insurers licensed under chapter 624 or chapter 641. Two members
656	shall be agents who are actively engaged in the sale of health
657	insurance. Four members shall be employers or representatives of
658	employers. One member shall be a person covered under an
659	individual health insurance policy issued by a licensed insurer
660	in this state. One member shall represent the Agency for Health
661	Care Administration and shall be recommended by the Secretary of
662	Health Care Administration. The director of the office shall
663	include representatives of small employer carriers subject to
664	assessment under this subsection. If two or more carriers elect
665	to be risk-assuming carriers, the membership must include at
666	least two representatives of risk-assuming carriers; if one
667	carrier is risk-assuming, one member must be a representative of
668	such carrier. At least one member must be a carrier who is
669	subject to the assessments, but is not a small employer carrier.
670	Subject to such restrictions, at least five members shall be
671	selected from individuals recommended by small employer carriers
672	pursuant to procedures provided by rule of the commission. Three
673	members shall be selected from a list of health insurance
674	carriers that issue individual health insurance policies. At
675	least two of the three members selected must be reinsuring
676	carriers. Two members shall be selected from a list of insurance
677	agents who are actively engaged in the sale of health insurance.
678	b.  A member appointed under this subparagraph shall serve
679	a term of 4 years and shall continue in office until the
680	member's successor takes office, except that, in order to
681	provide for staggered terms, the director of the office shall
682	designate two of the initial appointees under this subparagraph
683	to serve terms of 2 years and shall designate three of the
684	initial appointees under this subparagraph to serve terms of 3
685	years.
686	3.  The director of the office may remove a member for
687	cause.
688	4.  Vacancies on the board shall be filled in the same
689	manner as the original appointment for the unexpired portion of
690	the term.
691	5.  The director of the office may require an entity that
692	recommends persons for appointment to submit additional lists of
693	recommended appointees.
694	(j)1.  Before July March 1 of each calendar year, the board
695	shall determine and report to the office the program net loss
696	for the previous year, including administrative expenses for
697	that year, and the incurred losses for the year, taking into
698	account investment income and other appropriate gains and
699	losses.
700	2.  Any net loss for the year shall be recouped by
701	assessment of the carriers, as follows:
702	a.  The operating losses of the program shall be assessed
703	in the following order subject to the specified limitations. The
704	first tier of assessments shall be made against reinsuring
705	carriers in an amount which shall not exceed 5 percent of each
706	reinsuring carrier's premiums from health benefit plans covering
707	small employers. If such assessments have been collected and
708	additional moneys are needed, the board shall make a second tier
709	of assessments in an amount which shall not exceed 0.5 percent
710	of each carrier's health benefit plan premiums. Except as
711	provided in paragraph (n), risk-assuming carriers are exempt
712	from all assessments authorized pursuant to this section. The
713	amount paid by a reinsuring carrier for the first tier of
714	assessments shall be credited against any additional assessments
715	made.
716	b.  The board shall equitably assess carriers for operating
717	losses of the plan based on market share. The board shall
718	annually assess each carrier a portion of the operating losses
719	of the plan. The first tier of assessments shall be determined
720	by multiplying the operating losses by a fraction, the numerator
721	of which equals the reinsuring carrier's earned premium
722	pertaining to direct writings of small employer health benefit
723	plans in the state during the calendar year for which the
724	assessment is levied, and the denominator of which equals the
725	total of all such premiums earned by reinsuring carriers in the
726	state during that calendar year. The second tier of assessments
727	shall be based on the premiums that all carriers, except risk-
728	assuming carriers, earned on all health benefit plans written in
729	this state. The board may levy interim assessments against
730	carriers to ensure the financial ability of the plan to cover
731	claims expenses and administrative expenses paid or estimated to
732	be paid in the operation of the plan for the calendar year prior
733	to the association's anticipated receipt of annual assessments
734	for that calendar year. Any interim assessment is due and
735	payable within 30 days after receipt by a carrier of the interim
736	assessment notice. Interim assessment payments shall be credited
737	against the carrier's annual assessment. Health benefit plan
738	premiums and benefits paid by a carrier that are less than an
739	amount determined by the board to justify the cost of collection
740	may not be considered for purposes of determining assessments.
741	c.  Subject to the approval of the office, the board shall
742	make an adjustment to the assessment formula for reinsuring
743	carriers that are approved as federally qualified health
744	maintenance organizations by the Secretary of Health and Human
745	Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,
746	if any, that restrictions are placed on them that are not
747	imposed on other small employer carriers.
748	3.  Before July March 1 of each year, the board shall
749	determine and file with the office an estimate of the
750	assessments needed to fund the losses incurred by the program in
751	the previous calendar year.
752	4.  If the board determines that the assessments needed to
753	fund the losses incurred by the program in the previous calendar
754	year will exceed the amount specified in subparagraph 2., the
755	board shall evaluate the operation of the program and report its
756	findings, including any recommendations for changes to the plan
757	of operation, to the office within 180 90 days following the end
758	of the calendar year in which the losses were incurred. The
759	evaluation shall include an estimate of future assessments, the
760	administrative costs of the program, the appropriateness of the
761	premiums charged and the level of carrier retention under the
762	program, and the costs of coverage for small employers. If the
763	board fails to file a report with the office within 180 90 days
764	following the end of the applicable calendar year, the office
765	may evaluate the operations of the program and implement such
766	amendments to the plan of operation the office deems necessary
767	to reduce future losses and assessments.
768	5.  If assessments exceed the amount of the actual losses
769	and administrative expenses of the program, the excess shall be
770	held as interest and used by the board to offset future losses
771	or to reduce program premiums. As used in this paragraph, the
772	term "future losses" includes reserves for incurred but not
773	reported claims.
774	6.  Each carrier's proportion of the assessment shall be
775	determined annually by the board, based on annual statements and
776	other reports considered necessary by the board and filed by the
777	carriers with the board.
778	7.  Provision shall be made in the plan of operation for
779	the imposition of an interest penalty for late payment of an
780	assessment.
781	8.  A carrier may seek, from the office, a deferment, in
782	whole or in part, from any assessment made by the board. The
783	office may defer, in whole or in part, the assessment of a
784	carrier if, in the opinion of the office, the payment of the
785	assessment would place the carrier in a financially impaired
786	condition. If an assessment against a carrier is deferred, in
787	whole or in part, the amount by which the assessment is deferred
788	may be assessed against the other carriers in a manner
789	consistent with the basis for assessment set forth in this
790	section. The carrier receiving such deferment remains liable to
791	the program for the amount deferred and is prohibited from
792	reinsuring any individuals or groups in the program if it fails
793	to pay assessments.
794	(o)  The board shall advise the office, the agency, the
795	department, and other executive and legislative entities on
796	health insurance issues. Specifically, the board shall:
797	1.  Provide a forum for stakeholders, consisting of
798	insurers, employers, agents, consumers, and regulators, in the
799	private health insurance market in this state.
800	2.  Review and recommend strategies to improve the
801	functioning of the health insurance markets in this state with a
802	specific focus on market stability, access, and pricing.
803	3.  Make recommendations to the office for legislation
804	addressing health insurance market issues and provide comments
805	on health insurance legislation proposed by the office.
806	4.  Meet at least three times each year. One meeting shall
807	be held to hear reports and to secure public comment on the
808	health insurance market, to develop any legislation needed to
809	address health insurance market issues, and to provide comments
810	on health insurance legislation proposed by the office.
811	5.  By September 1 each year, issue a report to the office
812	on the state of the health insurance market. The report shall
813	include recommendations for changes in the health insurance
814	market, results from implementation of previous recommendations
815	and information on health insurance markets.
816	Section 11.  Subsection (1) of section 641.27, Florida
817	Statutes, is amended to read:
818	641.27  Examination by the department.--
819	(1)  The office shall examine the affairs, transactions,
820	accounts, business records, and assets of any health maintenance
821	organization as often as it deems it expedient for the
822	protection of the people of this state, but not less frequently
823	than once every 5 3 years. In lieu of making its own financial
824	examination, the office may accept an independent certified
825	public accountant's audit report prepared on a statutory
826	accounting basis consistent with this part. However, except when
827	the medical records are requested and copies furnished pursuant
828	to s. 456.057, medical records of individuals and records of
829	physicians providing service under contract to the health
830	maintenance organization shall not be subject to audit, although
831	they may be subject to subpoena by court order upon a showing of
832	good cause. For the purpose of examinations, the office may
833	administer oaths to and examine the officers and agents of a
834	health maintenance organization concerning its business and
835	affairs. The examination of each health maintenance organization
836	by the office shall be subject to the same terms and conditions
837	as apply to insurers under chapter 624. In no event shall
838	expenses of all examinations exceed a maximum of $50,000 $20,000
839	for any 1-year period. Any rehabilitation, liquidation,
840	conservation, or dissolution of a health maintenance
841	organization shall be conducted under the supervision of the
842	department, which shall have all power with respect thereto
843	granted to it under the laws governing the rehabilitation,
844	liquidation, reorganization, conservation, or dissolution of
845	life insurance companies.
846	Section 12.  Subsection (40) of section 641.31, Florida
847	Statutes, is amended to read:
848	641.31  Health maintenance contracts.--
849	(40)(a)  Any group rate, rating schedule, or rating manual
850	for a health maintenance organization policy, which provides
851	creditable coverage as defined in s. 627.6561(5), filed with the
852	office shall provide for an appropriate rebate of premiums paid
853	in the last contract calendar year when the majority of the
854	members of a health individual covered by such plan are is
855	enrolled in and maintain maintains participation in any health
856	wellness, maintenance, or improvement program offered by the
857	group contract holder approved by the health plan. The group
858	individual must provide evidence of demonstrative maintenance or
859	improvement of his or her health status as determined by
860	assessments of agreed-upon health status indicators between the
861	group individual and the health insurer, including, but not
862	limited to, reduction in weight, body mass index, and smoking
863	cessation. Any rebate provided by the health maintenance
864	organization insurer is presumed to be appropriate unless
865	credible data demonstrates otherwise or unless such rebate
866	program requires the insured to incur costs to qualify for the
867	rebate which equal or exceed the value of the rebate, but in no
868	event shall the rebate not exceed 10 percent of paid premiums.
869	(b)  The premium rebate authorized by this section shall be
870	effective for a subscriber an insured on an annual basis, unless
871	the number of participating members on the contract renewal
872	anniversary becomes less than the majority of the members
873	eligible for participation in the wellness program individual
874	fails to maintain or improve his or her health status while
875	participating in an approved wellness program, or credible
876	evidence demonstrates that the individual is not participating
877	in the approved wellness program.
878	(c)  The program shall be available for all contracts
879	issued on or after July 1, 2005.
880	Section 13.  The sum of $5 million is appropriated from the
881	General Revenue Fund to the Florida Health Insurance Plan for
882	the purposes of implementing the plan.
883	Section 14.  This act shall take effect July 1, 2005, and
884	shall apply to all policies or contracts issued or renewed on or
885	after July 1, 2005.

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