Senate Bill sb1660c1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
By the Committee on Banking and Insurance; and Senators
Fasano, Lawson and Baker
597-2094-05
1 A bill to be entitled
2 An act relating to health insurance; amending
3 s. 408.05, F.S.; changing the due date for a
4 report from the Agency for Health Care
5 Administration regarding the State Center for
6 Health Statistics; amending s. 408.909, F.S.;
7 providing an additional criterion for the
8 Office of Insurance Regulation to disapprove or
9 withdraw approval of health flex plans;
10 amending s. 627.413, F.S.; authorizing insurers
11 and health maintenance organizations to offer
12 policies or contracts providing for a
13 high-deductible plan meeting federal
14 requirements and in conjunction with a health
15 savings account; amending s. 627.6487, F.S.;
16 revising the definition of the term "eligible
17 individual" for purposes of obtaining coverage
18 in the Florida Health Insurance Plan; amending
19 s. 627.64872, F.S.; revising definitions;
20 changing references to the Director of the
21 Office of Insurance Regulation to the
22 Commissioner of Insurance Regulation; deleting
23 obsolete language; providing additional
24 eligibility criteria; reducing premium rate
25 limitations; revising requirements for sources
26 of additional revenue; authorizing the board to
27 cancel policies under inadequate funding
28 conditions; providing a limitation; specifying
29 a maximum provider reimbursement rate;
30 requiring licensed providers to accept
31 assignment of plan benefits and consider
1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 certain payments as payments in full; amending
2 s. 627.65626, F.S.; providing insurance rebates
3 for healthy lifestyles; amending s. 627.6692,
4 F.S.; extending a time period within which
5 eligible employees may apply for continuation
6 of coverage; amending s. 627.6699, F.S.;
7 revising standards for determining
8 applicability of the Employee Health Care
9 Access Act; prescribing acts that may be
10 performed by an employer without being
11 considered contributing to premiums or
12 facilitating administration of a policy;
13 authorizing certain carriers to offer coverage
14 to certain employees without being subject to
15 the act under certain circumstances; requiring
16 a carrier who offers such coverage to provide
17 notice to the primary insured prior to
18 cancellation for nonpayment of premium;
19 revising an availability of coverage provision
20 of the Employee Health Care Access Act;
21 including high-deductible plans meeting federal
22 health savings account plan requirements;
23 revising membership of the board of the small
24 employer health reinsurance program; revising
25 certain reporting dates relating to program
26 losses and assessments; requiring the board to
27 advise executive and legislative entities on
28 health insurance issues; providing
29 requirements; amending s. 641.27, F.S.;
30 increasing the interval at which the office
31 examines health maintenance organizations;
2
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 deleting authorization for the office to accept
2 an audit report from a certified public
3 accountant in lieu of conducting its own
4 examination; increasing an expense limitation;
5 amending s. 641.31, F.S.; providing for an
6 insurance rebate for members in a health
7 wellness program; providing for the rebate to
8 cease under certain conditions; creating a
9 high-deductible health insurance plan study
10 group; specifying membership; requiring the
11 study group to investigate certain issues
12 relating to high-deductible health insurance
13 plans; requiring the group to meet and submit
14 recommendations to the Governor and
15 Legislature; repealing s. 627.6402, F.S.,
16 relating to authorized insurance rebates for
17 healthy lifestyles; providing application;
18 providing an appropriation; providing an
19 effective date.
20
21 Be It Enacted by the Legislature of the State of Florida:
22
23 Section 1. Paragraph (l) of subsection (3) of section
24 408.05, Florida Statutes, is amended to read:
25 408.05 State Center for Health Statistics.--
26 (3) COMPREHENSIVE HEALTH INFORMATION SYSTEM.--In order
27 to produce comparable and uniform health information and
28 statistics, the agency shall perform the following functions:
29 (l) Develop, in conjunction with the State
30 Comprehensive Health Information System Advisory Council, and
31 implement a long-range plan for making available performance
3
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 outcome and financial data that will allow consumers to
2 compare health care services. The performance outcomes and
3 financial data the agency must make available shall include,
4 but is not limited to, pharmaceuticals, physicians, health
5 care facilities, and health plans and managed care entities.
6 The agency shall submit the initial plan to the Governor, the
7 President of the Senate, and the Speaker of the House of
8 Representatives by January March 1, 2006 2005, and shall
9 update the plan and report on the status of its implementation
10 annually thereafter. The agency shall also make the plan and
11 status report available to the public on its Internet website.
12 As part of the plan, the agency shall identify the process and
13 timeframes for implementation, any barriers to implementation,
14 and recommendations of changes in the law that may be enacted
15 by the Legislature to eliminate the barriers. As preliminary
16 elements of the plan, the agency shall:
17 1. Make available performance outcome and patient
18 charge data collected from health care facilities pursuant to
19 s. 408.061(1)(a) and (2). The agency shall determine which
20 conditions and procedures, performance outcomes, and patient
21 charge data to disclose based upon input from the council.
22 When determining which conditions and procedures are to be
23 disclosed, the council and the agency shall consider variation
24 in costs, variation in outcomes, and magnitude of variations
25 and other relevant information. When determining which
26 performance outcomes to disclose, the agency:
27 a. Shall consider such factors as volume of cases;
28 average patient charges; average length of stay; complication
29 rates; mortality rates; and infection rates, among others,
30 which shall be adjusted for case mix and severity, if
31 applicable.
4
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 b. May consider such additional measures that are
2 adopted by the Centers for Medicare and Medicaid Studies,
3 National Quality Forum, the Joint Commission on Accreditation
4 of Healthcare Organizations, the Agency for Healthcare
5 Research and Quality, or a similar national entity that
6 establishes standards to measure the performance of health
7 care providers, or by other states.
8
9 When determining which patient charge data to disclose, the
10 agency shall consider such measures as average charge, average
11 net revenue per adjusted patient day, average cost per
12 adjusted patient day, and average cost per admission, among
13 others.
14 2. Make available performance measures, benefit
15 design, and premium cost data from health plans licensed
16 pursuant to chapter 627 or chapter 641. The agency shall
17 determine which performance outcome and member and subscriber
18 cost data to disclose, based upon input from the council. When
19 determining which data to disclose, the agency shall consider
20 information that may be required by either individual or group
21 purchasers to assess the value of the product, which may
22 include membership satisfaction, quality of care, current
23 enrollment or membership, coverage areas, accreditation
24 status, premium costs, plan costs, premium increases, range of
25 benefits, copayments and deductibles, accuracy and speed of
26 claims payment, credentials of physicians, number of
27 providers, names of network providers, and hospitals in the
28 network. Health plans shall make available to the agency any
29 such data or information that is not currently reported to the
30 agency or the office.
31
5
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 3. Determine the method and format for public
2 disclosure of data reported pursuant to this paragraph. The
3 agency shall make its determination based upon input from the
4 Comprehensive Health Information System Advisory Council. At a
5 minimum, the data shall be made available on the agency's
6 Internet website in a manner that allows consumers to conduct
7 an interactive search that allows them to view and compare the
8 information for specific providers. The website must include
9 such additional information as is determined necessary to
10 ensure that the website enhances informed decisionmaking among
11 consumers and health care purchasers, which shall include, at
12 a minimum, appropriate guidance on how to use the data and an
13 explanation of why the data may vary from provider to
14 provider. The data specified in subparagraph 1. shall be
15 released no later than March 1, 2005. The data specified in
16 subparagraph 2. shall be released no later than March 1, 2006.
17 Section 2. Paragraph (b) of subsection (3) of section
18 408.909, Florida Statutes, is amended to read:
19 408.909 Health flex plans.--
20 (3) PROGRAM.--The agency and the office shall each
21 approve or disapprove health flex plans that provide health
22 care coverage for eligible participants. A health flex plan
23 may limit or exclude benefits otherwise required by law for
24 insurers offering coverage in this state, may cap the total
25 amount of claims paid per year per enrollee, may limit the
26 number of enrollees, or may take any combination of those
27 actions. A health flex plan offering may include the option of
28 a catastrophic plan supplementing the health flex plan.
29 (b) The office shall develop guidelines for the review
30 of health flex plan applications and provide regulatory
31 oversight of health flex plan advertisement and marketing
6
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 procedures. The office shall disapprove or shall withdraw
2 approval of plans that:
3 1. Contain any ambiguous, inconsistent, or misleading
4 provisions or any exceptions or conditions that deceptively
5 affect or limit the benefits purported to be assumed in the
6 general coverage provided by the health flex plan;
7 2. Provide benefits that are unreasonable in relation
8 to the premium charged or contain provisions that are unfair
9 or inequitable or contrary to the public policy of this state,
10 that encourage misrepresentation, or that result in unfair
11 discrimination in sales practices; or
12 3. Cannot demonstrate that the health flex plan is
13 financially sound and that the applicant is able to underwrite
14 or finance the health care coverage provided; or
15 4. Cannot demonstrate that the applicant and its
16 management are in compliance with the standards required under
17 s. 624.404(3).
18 Section 3. Subsection (6) is added to section 627.413,
19 Florida Statutes, to read:
20 627.413 Contents of policies, in general;
21 identification.--
22 (6) Notwithstanding any other provision of the Florida
23 Insurance Code that is in conflict with federal requirements
24 for a health savings account qualified high-deductible health
25 plan, an insurer, or a health maintenance organization subject
26 to part I of chapter 641, which is authorized to issue health
27 insurance in this state may offer for sale an individual or
28 group policy or contract that provides for a high-deductible
29 plan that meets the federal requirements of a health savings
30 account plan and which is offered in conjunction with a health
31 savings account.
7
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 Section 4. Paragraph (b) of subsection (3) of section
2 627.6487, Florida Statutes, is amended to read:
3 627.6487 Guaranteed availability of individual health
4 insurance coverage to eligible individuals.--
5 (3) For the purposes of this section, the term
6 "eligible individual" means an individual:
7 (b) Who is not eligible for coverage under:
8 1. A group health plan, as defined in s. 2791 of the
9 Public Health Service Act;
10 2. A conversion policy or contract issued by an
11 authorized insurer or health maintenance organization under s.
12 627.6675 or s. 641.3921, respectively, offered to an
13 individual who is no longer eligible for coverage under either
14 an insured or self-insured employer plan;
15 3. Part A or part B of Title XVIII of the Social
16 Security Act; or
17 4. A state plan under Title XIX of such act, or any
18 successor program, and does not have other health insurance
19 coverage; or
20 5. The Florida Health Insurance Plan as specified in
21 s. 627.64872 and such plan is accepting new enrollments.
22 However, a person whose previous coverage was under the
23 Florida Health Insurance Plan as specified in s. 627.64872 is
24 not an eligible individual as defined in s. 627.6487(3)(a).
25 Section 5. Paragraphs (b), (c), and (n) of subsection
26 (2) and subsections (3), (6), (9), and (15) of section
27 627.64872, Florida Statutes, are amended, subsection (20) of
28 that section is renumbered as subsection (21), and a new
29 subsection (20) is added to that section, to read:
30 627.64872 Florida Health Insurance Plan.--
31 (2) DEFINITIONS.--As used in this section:
8
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 (b) "Commissioner" means the Commissioner of Insurance
2 Regulation.
3 (c) "Dependent" means a resident spouse or resident
4 unmarried child under the age of 19 years, a child who is a
5 student under the age of 25 years and who is financially
6 dependent upon the parent, or a child of any age who is
7 disabled and dependent upon the parent.
8 (c) "Director" means the Director of the Office of
9 Insurance Regulation.
10 (n) "Resident" means an individual who has been
11 legally domiciled in this state for a period of at least 6
12 months and who physically resides in this state not less than
13 185 days per year.
14 (3) BOARD OF DIRECTORS.--
15 (a) The plan shall operate subject to the supervision
16 and control of the board. The board shall consist of the
17 commissioner director or his or her designated representative,
18 who shall serve as a member of the board and shall be its
19 chair, and an additional eight members, five of whom shall be
20 appointed by the Governor, at least two of whom shall be
21 individuals not representative of insurers or health care
22 providers, one of whom shall be appointed by the President of
23 the Senate, one of whom shall be appointed by the Speaker of
24 the House of Representatives, and one of whom shall be
25 appointed by the Chief Financial Officer.
26 (b) The term to be served on the board by the
27 commissioner Director of the Office of Insurance Regulation
28 shall be determined by continued employment in such position.
29 The remaining initial board members shall serve for a period
30 of time as follows: two members appointed by the Governor and
31 the members appointed by the President of the Senate and the
9
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 Speaker of the House of Representatives shall serve a term of
2 2 years; and three members appointed by the Governor and the
3 Chief Financial Officer shall serve a term of 4 years.
4 Subsequent board members shall serve for a term of 3 years. A
5 board member's term shall continue until his or her successor
6 is appointed.
7 (c) Vacancies on the board shall be filled by the
8 appointing authority, such authority being the Governor, the
9 President of the Senate, the Speaker of the House of
10 Representatives, or the Chief Financial Officer. The
11 appointing authority may remove board members for cause.
12 (d) The commissioner director, or his or her
13 recognized representative, shall be responsible for any
14 organizational requirements necessary for the initial meeting
15 of the board which shall take place no later than September 1,
16 2004.
17 (e) Members shall not be compensated in their capacity
18 as board members but shall be reimbursed for reasonable
19 expenses incurred in the necessary performance of their duties
20 in accordance with s. 112.061.
21 (f) The board shall submit to the Financial Services
22 Commission a plan of operation for the plan and any amendments
23 thereto necessary or suitable to ensure the fair, reasonable,
24 and equitable administration of the plan. The plan of
25 operation shall ensure that the plan qualifies to apply for
26 any available funding from the Federal Government that adds to
27 the financial viability of the plan. The plan of operation
28 shall become effective upon approval in writing by the
29 Financial Services Commission consistent with the date on
30 which the coverage under this section must be made available.
31 If the board fails to submit a suitable plan of operation
10
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 within 1 year after implementation the appointment of the
2 board of directors, or at any time thereafter fails to submit
3 suitable amendments to the plan of operation, the Financial
4 Services Commission shall adopt such rules as are necessary or
5 advisable to effectuate the provisions of this section. Such
6 rules shall continue in force until modified by the office or
7 superseded by a plan of operation submitted by the board and
8 approved by the Financial Services Commission.
9 (6) INTERIM REPORT; ANNUAL REPORT.--
10 (a) By no later than December 1, 2004, the board shall
11 report to the Governor, the President of the Senate, and the
12 Speaker of the House of Representatives the results of an
13 actuarial study conducted by the board to determine,
14 including, but not limited to:
15 1. The impact the creation of the plan will have on
16 the small group insurance market and the individual market on
17 premiums paid by insureds. This shall include an estimate of
18 the total anticipated aggregate savings for all small
19 employers in the state.
20 2. The number of individuals the pool could reasonably
21 cover at various funding levels, specifically, the number of
22 people the pool may cover at each of those funding levels.
23 3. A recommendation as to the best source of funding
24 for the anticipated deficits of the pool.
25 4. The effect on the individual and small group market
26 by including in the Florida Health Insurance Plan persons
27 eligible for coverage under s. 627.6487, as well as the cost
28 of including these individuals.
29
30 The board shall take no action to implement the Florida Health
31 Insurance Plan, other than the completion of the actuarial
11
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 study authorized in this paragraph, until funds are
2 appropriated for startup cost and any projected deficits.
3 (b) No later than December 1, 2005, and annually
4 thereafter, the board shall submit to the Governor, the
5 President of the Senate, the Speaker of the House of
6 Representatives, and the substantive legislative committees of
7 the Legislature a report which includes an independent
8 actuarial study to determine, including, but not be limited
9 to:
10 (a)1. The impact the creation of the plan has on the
11 small group and individual insurance market, specifically on
12 the premiums paid by insureds. This shall include an estimate
13 of the total anticipated aggregate savings for all small
14 employers in the state.
15 (b)2. The actual number of individuals covered at the
16 current funding and benefit level, the projected number of
17 individuals that may seek coverage in the forthcoming fiscal
18 year, and the projected funding needed to cover anticipated
19 increase or decrease in plan participation.
20 3. A recommendation as to the best source of funding
21 for the anticipated deficits of the pool.
22 (c)4. A summarization of the activities of the plan in
23 the preceding calendar year, including the net written and
24 earned premiums, plan enrollment, the expense of
25 administration, and the paid and incurred losses.
26 (d)5. A review of the operation of the plan as to
27 whether the plan has met the intent of this section.
28 (9) ELIGIBILITY.--
29 (a) Any individual person who is and continues to be a
30 resident of this state shall be eligible for coverage under
31 the plan if:
12
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 1. Evidence is provided that the person received
2 notices of rejection or refusal to issue substantially similar
3 coverage for health reasons from at least two health insurers
4 or health maintenance organizations. A rejection or refusal by
5 an insurer offering only stop-loss, excess of loss, or
6 reinsurance coverage with respect to the applicant shall not
7 be sufficient evidence under this paragraph;.
8 2. The person is enrolled in the Florida Comprehensive
9 Health Association as of the date the plan is implemented; or.
10 3. Is an eligible individual as defined in s.
11 627.6487(3), excluding s. 627.6487(3)(b)5.
12 (b) Each resident dependent of a person who is
13 eligible for coverage under the plan shall also be eligible
14 for such coverage.
15 (c) Except for persons made eligible by paragraph (a),
16 a person shall not be eligible for coverage under the plan if:
17 1. The person has or obtains health insurance coverage
18 substantially similar to or more comprehensive than a plan
19 policy, or would be eligible to obtain such coverage, unless a
20 person may maintain other coverage for the period of time the
21 person is satisfying any preexisting condition waiting period
22 under a plan policy or may maintain plan coverage for the
23 period of time the person is satisfying a preexisting
24 condition waiting period under another health insurance policy
25 intended to replace the plan policy;.
26 2. The person is determined to be eligible for health
27 care benefits under Medicaid, Medicare, the state's children's
28 health insurance program, or any other federal, state, or
29 local government program that provides health benefits;
30 3. The person voluntarily terminated plan coverage
31 unless 12 months have elapsed since such termination;
13
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 4. The person is an inmate or resident of a public
2 institution; or
3 5. The person's premiums are paid for or reimbursed
4 under any government-sponsored program, or by any government
5 agency or health care provider, or by any organization
6 sponsored by or affiliated with a health care provider.
7 (d) Coverage shall cease:
8 1. On the date a person is no longer a resident of
9 this state;
10 2. On the date a person requests coverage to end;
11 3. Upon the death of the covered person;
12 4. On the date state law requires cancellation or
13 nonrenewal of the policy; or
14 5. At the option of the plan, 30 days after the plan
15 makes any inquiry concerning the person's eligibility or place
16 of residence to which the person does not reply; or.
17 6. Upon failure of the insured to pay for continued
18 coverage.
19 (e) Except under the circumstances described in this
20 subsection, coverage of a person who ceases to meet the
21 eligibility requirements of this subsection shall be
22 terminated at the end of the policy period for which the
23 necessary premiums have been paid.
24 (15) FUNDING OF THE PLAN.--
25 (a) Premiums.--
26 1. The plan shall establish premium rates for plan
27 coverage as provided in this section. Separate schedules of
28 premium rates based on age, sex, and geographical location may
29 apply for individual risks. Premium rates and schedules shall
30 be submitted to the office for approval prior to use.
31
14
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 2. Initial rates for plan coverage shall be limited to
2 no more than 200 percent 300 percent of rates established for
3 individual standard risks as specified in s. 627.6675(3)(c).
4 Subject to the limits provided in this paragraph, subsequent
5 rates shall be established to provide fully for the expected
6 costs of claims, including recovery of prior losses, expenses
7 of operation, investment income of claim reserves, and any
8 other cost factors subject to the limitations described
9 herein, but in no event shall premiums exceed the 200-percent
10 300-percent rate limitation provided in this section.
11 Notwithstanding the 200-percent 300-percent rate limitation,
12 sliding scale premium surcharges based upon the insured's
13 income may apply to all enrollees, except those made eligible
14 for coverage by paragraph (9)(a).
15 (b) Sources of additional revenue.--Any deficit
16 incurred by the plan shall be primarily funded through amounts
17 appropriated by the Legislature from general revenue sources,
18 including, but not limited to, a portion of the annual growth
19 in existing net insurance premium taxes in an amount not less
20 than the anticipated losses and reserve requirements for
21 existing policyholders. The board shall operate the plan in
22 such a manner that the estimated cost of providing health
23 insurance during any fiscal year will not exceed total income
24 the plan expects to receive from policy premiums and funds
25 appropriated by the Legislature, including any interest on
26 investments. After determining the amount of funds
27 appropriated to the board for a fiscal year, the board shall
28 estimate the number of new policies it believes the plan has
29 the financial capacity to insure during that year so that
30 costs do not exceed income. The board shall take steps
31 necessary to ensure that plan enrollment does not exceed the
15
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 number of residents it has estimated it has the financial
2 capacity to insure.
3 (c) In the event of inadequate funding, the board may
4 cancel existing policies on a nondiscriminatory basis as
5 necessary to remedy the situation. No policy may be canceled
6 if a covered individual is currently making a claim.
7 (20) PROVIDER REIMBURSEMENT.--Notwithstanding any
8 other provision of law, the maximum reimbursement rate to
9 health care providers for all covered, medically necessary
10 services shall be 100 percent of Medicare's allowed payment
11 amount for that particular provider and service. All licensed
12 providers in this state shall accept assignment of plan
13 benefits and consider the Medicare allowed payment amount as
14 payment in full.
15 Section 6. Section 627.65626, Florida Statutes, is
16 amended to read:
17 627.65626 Insurance rebates for healthy lifestyles.--
18 (1) Any rate, rating schedule, or rating manual for a
19 health insurance policy that provides creditable coverage as
20 defined in s. 627.6561(5) filed with the office shall provide
21 for an appropriate rebate of premiums paid in the last policy
22 calendar year when the majority of members of a health plan
23 have enrolled and maintained participation in any health
24 wellness, maintenance, or improvement program offered by the
25 group policyholder employer. The group employer must provide
26 evidence of demonstrative maintenance or improvement of the
27 enrollees' health status as determined by assessments of
28 agreed-upon health status indicators between the policyholder
29 employer and the health insurer, including, but not limited
30 to, reduction in weight, body mass index, and smoking
31 cessation. Any rebate provided by the health insurer is
16
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 presumed to be appropriate unless credible data demonstrates
2 otherwise, or unless the rebate program requires the insured
3 to incur costs to qualify for the rebate which equal or
4 exceeds the value of the rebate, but the rebate may shall not
5 exceed 10 percent of paid premiums.
6 (2) The premium rebate authorized by this section
7 shall be effective for an insured on an annual basis unless
8 the number of participating members on the policy renewal
9 anniversary employees becomes less than the majority of the
10 members employees eligible for participation in the wellness
11 program.
12 Section 7. Paragraphs (d) and (j) of subsection (5) of
13 section 627.6692, Florida Statutes, are amended to read:
14 627.6692 Florida Health Insurance Coverage
15 Continuation Act.--
16 (5) CONTINUATION OF COVERAGE UNDER GROUP HEALTH
17 PLANS.--
18 (d)1. A qualified beneficiary must give written notice
19 to the insurance carrier within 63 30 days after the
20 occurrence of a qualifying event. Unless otherwise specified
21 in the notice, a notice by any qualified beneficiary
22 constitutes notice on behalf of all qualified beneficiaries.
23 The written notice must inform the insurance carrier of the
24 occurrence and type of the qualifying event giving rise to the
25 potential election by a qualified beneficiary of continuation
26 of coverage under the group health plan issued by that
27 insurance carrier, except that in cases where the covered
28 employee has been involuntarily discharged, the nature of such
29 discharge need not be disclosed. The written notice must, at a
30 minimum, identify the employer, the group health plan number,
31 the name and address of all qualified beneficiaries, and such
17
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 other information required by the insurance carrier under the
2 terms of the group health plan or the commission by rule, to
3 the extent that such information is known by the qualified
4 beneficiary.
5 2. Within 14 days after the receipt of written notice
6 under subparagraph 1., the insurance carrier shall send each
7 qualified beneficiary by certified mail an election and
8 premium notice form, approved by the office, which form must
9 provide for the qualified beneficiary's election or
10 nonelection of continuation of coverage under the group health
11 plan and the applicable premium amount due after the election
12 to continue coverage. This subparagraph does not require
13 separate mailing of notices to qualified beneficiaries
14 residing in the same household, but requires a separate
15 mailing for each separate household.
16 (j) Notwithstanding paragraph (b), if a qualified
17 beneficiary in the military reserve or National Guard has
18 elected to continue coverage and is thereafter called to
19 active duty and the coverage under the group plan is
20 terminated by the beneficiary or the carrier due to the
21 qualified beneficiary becoming eligible for TRICARE (the
22 health care program provided by the United States Defense
23 Department), the 18-month period or such other applicable
24 maximum time period for which the qualified beneficiary would
25 otherwise be entitled to continue coverage is tolled during
26 the time that he or she is covered under the TRICARE program.
27 Within 63 30 days after the federal TRICARE coverage
28 terminates, the qualified beneficiary may elect to continue
29 coverage under the group health plan, retroactively to the
30 date coverage terminated under TRICARE, for the remainder of
31 the 18-month period or such other applicable time period,
18
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 subject to termination of coverage at the earliest of the
2 conditions specified in paragraph (b).
3 Section 8. Paragraph (a) of subsection (4), paragraph
4 (c) of subsection (5), and paragraphs (b) and (j) of
5 subsection (11) of section 627.6699, Florida Statutes, are
6 amended, and paragraph (o) is added to subsection (11) of that
7 section, to read:
8 627.6699 Employee Health Care Access Act.--
9 (4) APPLICABILITY AND SCOPE.--
10 (a)1. This section applies to a health benefit plan
11 that provides coverage to employees of a small employer in
12 this state, unless the coverage policy is marketed directly to
13 the individual employee, and the employer does not contribute
14 directly or indirectly to participate in the collection or
15 distribution of premiums or facilitate the administration of
16 the coverage policy in any manner. For the purposes of this
17 paragraph, an employer is not deemed to be contributing to the
18 premiums or facilitating the administration of coverage if the
19 employer does not contribute to the premium and merely
20 collects the premiums for coverage from an employee's wages or
21 salary through payroll deduction and submits payment for the
22 premiums of one or more employees in a lump sum to a carrier.
23 2. A carrier authorized to issue group or individual
24 health benefit plans under this chapter or chapter 641 may
25 offer coverage as described in this paragraph to individual
26 employees without being subject to this section if the
27 employer has not had a group health benefit plan in place in
28 the prior 12 months. A carrier authorized to issue group or
29 individual health benefit plans under this chapter or chapter
30 641 may offer coverage as described in this paragraph to
31 employees that are not eligible employees as defined in this
19
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 section, whether or not the small employer has a group health
2 benefit plan in place. A carrier that offers coverage as
3 described in this paragraph must provide a cancellation notice
4 to the primary insured at least 10 days prior to canceling the
5 coverage for nonpayment of premium.
6 (5) AVAILABILITY OF COVERAGE.--
7 (c) Every small employer carrier must, as a condition
8 of transacting business in this state:
9 1. Offer and issue all small employer health benefit
10 plans on a guaranteed-issue basis to every eligible small
11 employer, with 2 to 50 eligible employees, that elects to be
12 covered under such plan, agrees to make the required premium
13 payments, and satisfies the other provisions of the plan. A
14 rider for additional or increased benefits may be medically
15 underwritten and may only be added to the standard health
16 benefit plan. The increased rate charged for the additional or
17 increased benefit must be rated in accordance with this
18 section.
19 2. In the absence of enrollment availability in the
20 Florida Health Insurance Plan, offer and issue basic and
21 standard small employer health benefit plans and a
22 high-deductible plan that meets the requirements of a health
23 savings account plan or health reimbursement account as
24 defined by federal law, on a guaranteed-issue basis, during a
25 31-day open enrollment period of August 1 through August 31 of
26 each year, to every eligible small employer, with fewer than
27 two eligible employees, which small employer is not formed
28 primarily for the purpose of buying health insurance and which
29 elects to be covered under such plan, agrees to make the
30 required premium payments, and satisfies the other provisions
31 of the plan. Coverage provided under this subparagraph shall
20
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 begin on October 1 of the same year as the date of enrollment,
2 unless the small employer carrier and the small employer agree
3 to a different date. A rider for additional or increased
4 benefits may be medically underwritten and may only be added
5 to the standard health benefit plan. The increased rate
6 charged for the additional or increased benefit must be rated
7 in accordance with this section. For purposes of this
8 subparagraph, a person, his or her spouse, and his or her
9 dependent children constitute a single eligible employee if
10 that person and spouse are employed by the same small employer
11 and either that person or his or her spouse has a normal work
12 week of less than 25 hours. Any right to an open enrollment of
13 health benefit coverage for groups of fewer than two
14 employees, pursuant to this section, shall remain in full
15 force and effect in the absence of the availability of new
16 enrollment into the Florida Health Insurance Plan.
17 3. This paragraph does not limit a carrier's ability
18 to offer other health benefit plans to small employers if the
19 standard and basic health benefit plans are offered and
20 rejected.
21 (11) SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
22 (b)1. The program shall operate subject to the
23 supervision and control of the board.
24 2. Effective upon this act becoming a law, the board
25 shall consist of the director of the office or his or her
26 designee, who shall serve as the chairperson, and 13
27 additional members who are representatives of carriers and
28 insurance agents and are appointed by the director of the
29 office and serve as follows:
30 a. Five members shall be representatives of health
31 insurers licensed under chapter 624 or chapter 641. Two
21
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 members shall be agents who are actively engaged in the sale
2 of health insurance. Four members shall be employers or
3 representatives of employers. One member shall be a person
4 covered under an individual health insurance policy issued by
5 a licensed insurer in this state. One member shall represent
6 the Agency for Health Care Administration and shall be
7 recommended by the Secretary of Health Care Administration.
8 The director of the office shall include representatives of
9 small employer carriers subject to assessment under this
10 subsection. If two or more carriers elect to be risk-assuming
11 carriers, the membership must include at least two
12 representatives of risk-assuming carriers; if one carrier is
13 risk-assuming, one member must be a representative of such
14 carrier. At least one member must be a carrier who is subject
15 to the assessments, but is not a small employer carrier.
16 Subject to such restrictions, at least five members shall be
17 selected from individuals recommended by small employer
18 carriers pursuant to procedures provided by rule of the
19 commission. Three members shall be selected from a list of
20 health insurance carriers that issue individual health
21 insurance policies. At least two of the three members selected
22 must be reinsuring carriers. Two members shall be selected
23 from a list of insurance agents who are actively engaged in
24 the sale of health insurance.
25 b. A member appointed under this subparagraph shall
26 serve a term of 4 years and shall continue in office until the
27 member's successor takes office, except that, in order to
28 provide for staggered terms, the director of the office shall
29 designate two of the initial appointees under this
30 subparagraph to serve terms of 2 years and shall designate
31
22
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 three of the initial appointees under this subparagraph to
2 serve terms of 3 years.
3 3. The director of the office may remove a member for
4 cause.
5 4. Vacancies on the board shall be filled in the same
6 manner as the original appointment for the unexpired portion
7 of the term.
8 5. The director of the office may require an entity
9 that recommends persons for appointment to submit additional
10 lists of recommended appointees.
11 (j)1. Before July March 1 of each calendar year, the
12 board shall determine and report to the office the program net
13 loss for the previous year, including administrative expenses
14 for that year, and the incurred losses for the year, taking
15 into account investment income and other appropriate gains and
16 losses.
17 2. Any net loss for the year shall be recouped by
18 assessment of the carriers, as follows:
19 a. The operating losses of the program shall be
20 assessed in the following order subject to the specified
21 limitations. The first tier of assessments shall be made
22 against reinsuring carriers in an amount which shall not
23 exceed 5 percent of each reinsuring carrier's premiums from
24 health benefit plans covering small employers. If such
25 assessments have been collected and additional moneys are
26 needed, the board shall make a second tier of assessments in
27 an amount which shall not exceed 0.5 percent of each carrier's
28 health benefit plan premiums. Except as provided in paragraph
29 (n), risk-assuming carriers are exempt from all assessments
30 authorized pursuant to this section. The amount paid by a
31
23
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 reinsuring carrier for the first tier of assessments shall be
2 credited against any additional assessments made.
3 b. The board shall equitably assess carriers for
4 operating losses of the plan based on market share. The board
5 shall annually assess each carrier a portion of the operating
6 losses of the plan. The first tier of assessments shall be
7 determined by multiplying the operating losses by a fraction,
8 the numerator of which equals the reinsuring carrier's earned
9 premium pertaining to direct writings of small employer health
10 benefit plans in the state during the calendar year for which
11 the assessment is levied, and the denominator of which equals
12 the total of all such premiums earned by reinsuring carriers
13 in the state during that calendar year. The second tier of
14 assessments shall be based on the premiums that all carriers,
15 except risk-assuming carriers, earned on all health benefit
16 plans written in this state. The board may levy interim
17 assessments against carriers to ensure the financial ability
18 of the plan to cover claims expenses and administrative
19 expenses paid or estimated to be paid in the operation of the
20 plan for the calendar year prior to the association's
21 anticipated receipt of annual assessments for that calendar
22 year. Any interim assessment is due and payable within 30 days
23 after receipt by a carrier of the interim assessment notice.
24 Interim assessment payments shall be credited against the
25 carrier's annual assessment. Health benefit plan premiums and
26 benefits paid by a carrier that are less than an amount
27 determined by the board to justify the cost of collection may
28 not be considered for purposes of determining assessments.
29 c. Subject to the approval of the office, the board
30 shall make an adjustment to the assessment formula for
31 reinsuring carriers that are approved as federally qualified
24
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 health maintenance organizations by the Secretary of Health
2 and Human Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to
3 the extent, if any, that restrictions are placed on them that
4 are not imposed on other small employer carriers.
5 3. Before July March 1 of each year, the board shall
6 determine and file with the office an estimate of the
7 assessments needed to fund the losses incurred by the program
8 in the previous calendar year.
9 4. If the board determines that the assessments needed
10 to fund the losses incurred by the program in the previous
11 calendar year will exceed the amount specified in subparagraph
12 2., the board shall evaluate the operation of the program and
13 report its findings, including any recommendations for changes
14 to the plan of operation, to the office within 180 90 days
15 following the end of the calendar year in which the losses
16 were incurred. The evaluation shall include an estimate of
17 future assessments, the administrative costs of the program,
18 the appropriateness of the premiums charged and the level of
19 carrier retention under the program, and the costs of coverage
20 for small employers. If the board fails to file a report with
21 the office within 180 90 days following the end of the
22 applicable calendar year, the office may evaluate the
23 operations of the program and implement such amendments to the
24 plan of operation the office deems necessary to reduce future
25 losses and assessments.
26 5. If assessments exceed the amount of the actual
27 losses and administrative expenses of the program, the excess
28 shall be held as interest and used by the board to offset
29 future losses or to reduce program premiums. As used in this
30 paragraph, the term "future losses" includes reserves for
31 incurred but not reported claims.
25
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 6. Each carrier's proportion of the assessment shall
2 be determined annually by the board, based on annual
3 statements and other reports considered necessary by the board
4 and filed by the carriers with the board.
5 7. Provision shall be made in the plan of operation
6 for the imposition of an interest penalty for late payment of
7 an assessment.
8 8. A carrier may seek, from the office, a deferment,
9 in whole or in part, from any assessment made by the board.
10 The office may defer, in whole or in part, the assessment of a
11 carrier if, in the opinion of the office, the payment of the
12 assessment would place the carrier in a financially impaired
13 condition. If an assessment against a carrier is deferred, in
14 whole or in part, the amount by which the assessment is
15 deferred may be assessed against the other carriers in a
16 manner consistent with the basis for assessment set forth in
17 this section. The carrier receiving such deferment remains
18 liable to the program for the amount deferred and is
19 prohibited from reinsuring any individuals or groups in the
20 program if it fails to pay assessments.
21 (o) The board shall advise the office, the agency, the
22 department, and other executive and legislative entities on
23 health insurance issues. Specifically, the board shall:
24 1. Provide a forum for stakeholders, consisting of
25 insurers, employers, agents, consumers, and regulators, in the
26 private health insurance market in this state.
27 2. Review and recommend strategies to improve the
28 functioning of the health insurance markets in this state with
29 a specific focus on market stability, access, and pricing.
30
31
26
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 3. Make recommendations to the office for legislation
2 addressing health insurance market issues and provide comments
3 on health insurance legislation proposed by the office.
4 4. Meet at least three times each year. One meeting
5 shall be held to hear reports and to secure public comment on
6 the health insurance market, to develop any legislation needed
7 to address health insurance market issues, and to provide
8 comments on health insurance legislation proposed by the
9 office.
10 5. By September 1 each year, issue a report to the
11 office on the state of the health insurance market. The report
12 shall include recommendations for changes in the health
13 insurance market, results from implementation of previous
14 recommendations, and information on health insurance markets.
15 Section 9. Subsection (1) of section 641.27, Florida
16 Statutes, is amended to read:
17 641.27 Examination by the department.--
18 (1) The office shall examine the affairs,
19 transactions, accounts, business records, and assets of any
20 health maintenance organization as often as it deems it
21 expedient for the protection of the people of this state, but
22 not less frequently than once every 5 3 years. In lieu of
23 making its own financial examination, the office may accept an
24 independent certified public accountant's audit report
25 prepared on a statutory accounting basis consistent with this
26 part. However, except when the medical records are requested
27 and copies furnished pursuant to s. 456.057, medical records
28 of individuals and records of physicians providing service
29 under contract to the health maintenance organization shall
30 not be subject to audit, although they may be subject to
31 subpoena by court order upon a showing of good cause. For the
27
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 purpose of examinations, the office may administer oaths to
2 and examine the officers and agents of a health maintenance
3 organization concerning its business and affairs. The
4 examination of each health maintenance organization by the
5 office shall be subject to the same terms and conditions as
6 apply to insurers under chapter 624. In no event shall
7 expenses of all examinations exceed a maximum of $50,000
8 $20,000 for any 1-year period. Any rehabilitation,
9 liquidation, conservation, or dissolution of a health
10 maintenance organization shall be conducted under the
11 supervision of the department, which shall have all power with
12 respect thereto granted to it under the laws governing the
13 rehabilitation, liquidation, reorganization, conservation, or
14 dissolution of life insurance companies.
15 Section 10. Subsection (40) of section 641.31, Florida
16 Statutes, is amended to read:
17 641.31 Health maintenance contracts.--
18 (40)(a) Any group rate, rating schedule, or rating
19 manual for a health maintenance organization policy filed with
20 the office shall provide for an appropriate rebate of premiums
21 paid in the last contract calendar year when the majority of
22 members of a health individual covered by such plan have is
23 enrolled in and maintained maintains participation in any
24 health wellness, maintenance, or improvement program offered
25 by the group contract holder approved by the health plan. The
26 group individual must provide evidence of demonstrative
27 maintenance or improvement of the group's his or her health
28 status as determined by assessments of agreed-upon health
29 status indicators between the group individual and the health
30 insurer, including, but not limited to, reduction in weight,
31 body mass index, and smoking cessation. Any rebate provided by
28
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 the health maintenance organization insurer is presumed to be
2 appropriate unless credible data demonstrates otherwise, or
3 unless the rebate program requires the insured to incur costs
4 to qualify for the rebate which equals or exceeds the value of
5 the rebate but the rebate may shall not exceed 10 percent of
6 paid premiums.
7 (b) The premium rebate authorized by this section
8 shall be effective for a subscriber an insured on an annual
9 basis, unless the number of participating members on the
10 contract renewal anniversary becomes fewer than the majority
11 of the members eligible for participation in the wellness
12 program individual fails to maintain or improve his or her
13 health status while participating in an approved wellness
14 program, or credible evidence demonstrates that the individual
15 is not participating in the approved wellness program.
16 Section 11. (1) An 11-member high-deductible health
17 insurance plan study group is created, to be composed of:
18 (a) Three representatives of employers offering
19 high-deductible health plans to their employees, one of whom
20 shall be a small employer as defined in s. 627.6699, Florida
21 Statutes, who shall be appointed by the Florida Chamber of
22 Commerce.
23 (b) Three representatives of commercial health plans,
24 to be appointed by the Florida Insurance Council.
25 (c) Three representatives of hospitals, to be
26 appointed by the Florida Hospital Association.
27 (d) The Secretary of the Agency for Health Care
28 Administration, or the secretary's designee, who shall serve
29 as co-chair.
30
31
29
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 (e) The Director of the Office of Insurance
2 Regulation, or the director's designee, who shall serve as
3 co-chair.
4 (2) The study group shall study the following issues
5 related to high-deductible health insurance plans, including,
6 but not limited to, health savings accounts and health
7 reimbursement arrangements:
8 (a) The impact of high deductibles on access to health
9 care services and pharmaceutical benefits.
10 (b) The impact of high deductibles on utilization of
11 health care services and overutilization of health care
12 services.
13 (c) The impact on hospitals' inability to collect
14 deductibles and copayments.
15 (d) The ability of hospitals and insureds to
16 determine, prior to service delivery, the level of deductible
17 and copayment required of the insured.
18 (e) Methods to assist hospitals and insureds in
19 determining prior to service delivery the status of the
20 insured in meeting annual deductible requirements and any
21 subsequent copayments.
22 (f) Methods to assist hospitals in the collection of
23 deductibles and copayments, including electronic payments.
24 (g) Alternative approaches to the collection of
25 deductibles and copayments when either the extent of patient
26 financial responsibility is unknown in advance or there are no
27 funds electronically available from the patient to pay for the
28 deductible and any associated copayment.
29 (3) The study group shall also study the following
30 issues in addition to those specified in subsection (2):
31
30
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 (a) The assignment of benefits attestations and
2 contract provisions that nullify the attestations of insureds.
3 (b) The standardization of insured or subscriber
4 identifications cards.
5 (c) The standardization of claim edits or insuring
6 that claim edits comply with nationally recognized editing
7 guidelines.
8 (4) The study group shall meet by August 1, 2005, and
9 shall submit recommendations to the Governor, the President of
10 the Senate, and the Speaker of the House of Representatives by
11 January 1, 2006.
12 Section 12. Section 627.6402, Florida Statutes, is
13 repealed.
14 Section 13. The sum of $5 million is appropriated from
15 the General Revenue Fund to the Florida Health Insurance Plan
16 for the purposes of implementing the plan.
17 Section 14. This act shall take effect July 1, 2005,
18 and shall apply to all policies or contracts issued or renewed
19 on or after July 1, 2005.
20
21
22
23
24
25
26
27
28
29
30
31
31
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2005 CS for SB 1660
597-2094-05
1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 Senate Bill 1660
3
4 The committee substitute provides the following changes:
5 o Appropriates $5 million from General Revenue to implement
the Florida Health Insurance Plan (FHIP).
6
o Provides that persons who are eligible for individual
7 coverage after losing group coverage would be guaranteed
individual coverage from the FHIP, rather than from an
8 insurer or HMO issuing individual coverage, if the FHIP
is accepting new enrollment.
9
o Decreases the maximum premium for FHIP coverage.
10
o Limits provider reimbursement from the FHIP to 100
11 percent of the Medicare rate.
12 o Limits eligibility for FHIP coverage.
13 o Allows the board of the FHIP to cancel existing policies
if inadequate funding is provided.
14
o Provides that the small group law requirements would not
15 apply to individual coverage marketed to an employee of a
small employer that provides for payroll deduction of the
16 premium, if the employer has not had group coverage
within the prior 12 months.
17
o Increases from 30 days to 63 days after group coverage is
18 terminated within which an individual must notify the
insurance carrier of coverage termination and preserve
19 their right to continue group coverage.
20 o Provides that insurers and HMOs may offer high-deductible
plans that meet the federal requirements for a health
21 savings account, notwithstanding conflicting Florida
laws.
22
o Authorizes the Office of Insurance Regulation (OIR) to
23 disapprove a health flex plan under certain conditions.
24 o Exempts certain policies from the requirement to provide
premium rebates to policyholders who participate in a
25 wellness program.
26 o Changes the requirements for financial examinations of
HMOs by the Office of Insurance Regulation.
27
28
29
30
31
32
CODING: Words stricken are deletions; words underlined are additions.