HB 811

1	A bill to be entitled
2	An act relating to health insurance; amending s. 627.6699,
3	F.S.; revising application of the act; providing
4	construction; authorizing carriers to offer coverage to
5	certain employees without being subject to the act under
6	certain circumstances; providing requirements; amending s.
7	408.05, F.S.; changing the due date for a report from the
8	Agency for Health Care Administration regarding the State
9	Center for Health Statistics; changing the release dates
10	for 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; authorizing group or health insurers to
45	contract with an independent third-party administrator for
46	certain purposes; providing exceptions; providing
47	application; amending s. 627.6692, F.S.; extending a time
48	period within which eligible employees may apply for
49	continuation of coverage; amending s. 627.6699, F.S.;
50	revising availability of coverage provision of the
51	Employee Health Care Access Act; including high deductible
52	plans meeting federal health savings account plan
53	requirements; revising membership of the board of the
54	small employer health reinsurance program; revising
55	certain reporting dates relating to program losses and
56	assessments; requiring the board to advise executive and
57	legislative entities on health insurance issues; providing
58	requirements; amending s. 641.27, F.S.; increasing the
59	interval at which the office examines health maintenance
60	organizations; deleting authorization for the office to
61	accept an audit report from a certified public accountant
62	in lieu of conducting its own examination; increasing an
63	expense limitation; amending s. 641.31, F.S.; revising
64	criteria for healthy lifestyle rebates for health
65	maintenance organizations; providing exceptions; providing
66	application; providing an appropriation; providing
67	application; providing an effective date.
68
69	Be It Enacted by the Legislature of the State of Florida:
70
71	Section 1.  Paragraph (a) of subsection (4) of section
72	627.6699, Florida Statutes, is amended to read:
73	627.6699  Employee Health Care Access Act.--
74	(4)  APPLICABILITY AND SCOPE.--
75	(a)1.  This section applies to a health benefit plan that
76	provides coverage to employees of a small employer in this
77	state, unless the coverage policy is marketed directly to the
78	individual employee, and the employer does not contribute
79	directly or indirectly to participate in the collection or
80	distribution of premiums or facilitate the administration of the
81	coverage policy in any manner. For the purposes of this
82	subparagraph, an employer shall not be deemed to be contributing
83	to the premiums or facilitating the administration of coverage
84	if the employer does not contribute towards the premium and
85	merely collects the premiums for such coverage from an
86	employee's wages or salary through payroll deduction and submits
87	payment for the premiums of one or more employees in a lump sum
88	to a carrier.
89	2.  A carrier authorized to issue group or individual
90	health benefit plans under chapter 627 or chapter 641 may offer
91	coverage as described in this subparagraph to individual
92	employees without being subject to this section if the employer
93	has not had a group health benefit plan in place in the prior 6
94	months. A carrier authorized to issue group or individual health
95	benefit plans under chapter 627 or chapter 641 may offer
96	coverage as described in this subparagraph to employees that are
97	not eligible employees as defined in this section, whether or
98	not the small employer has a group health benefit plan in place.
99	A carrier that offers coverage as described in this subparagraph
100	must provide a cancellation notice to the primary insured at
101	least 10 days prior to canceling the coverage for nonpayment of
102	premium.
103	Section 2.  Paragraph (l) of subsection (3) of section
104	408.05, Florida Statutes, is amended to read:
105	408.05  State Center for Health Statistics.--
106	(3)  COMPREHENSIVE HEALTH INFORMATION SYSTEM.--In order to
107	produce comparable and uniform health information and
108	statistics, the agency shall perform the following functions:
109	(l)  Develop, in conjunction with the State Comprehensive
110	Health Information System Advisory Council, and implement a
111	long-range plan for making available performance outcome and
112	financial data that will allow consumers to compare health care
113	services. The performance outcomes and financial data the agency
114	must make available shall include, but is not limited to,
115	pharmaceuticals, physicians, health care facilities, and health
116	plans and managed care entities. The agency shall submit the
117	initial plan to the Governor, the President of the Senate, and
118	the Speaker of the House of Representatives by January March 1,
119	2006 2005, and shall update the plan and report on the status of
120	its implementation annually thereafter. The agency shall also
121	make the plan and status report available to the public on its
122	Internet website. As part of the plan, the agency shall identify
123	the process and timeframes for implementation, any barriers to
124	implementation, and recommendations of changes in the law that
125	may be enacted by the Legislature to eliminate the barriers. As
126	preliminary elements of the plan, the agency shall:
127	1.  Make available performance outcome and patient charge
128	data collected from health care facilities pursuant to s.
129	408.061(1)(a) and (2). The agency shall determine which
130	conditions and procedures, performance outcomes, and patient
131	charge data to disclose based upon input from the council. When
132	determining which conditions and procedures are to be disclosed,
133	the council and the agency shall consider variation in costs,
134	variation in outcomes, and magnitude of variations and other
135	relevant information. When determining which performance
136	outcomes to disclose, the agency:
137	a.  Shall consider such factors as volume of cases; average
138	patient charges; average length of stay; complication rates;
139	mortality rates; and infection rates, among others, which shall
140	be adjusted for case mix and severity, if applicable.
141	b.  May consider such additional measures that are adopted
142	by the Centers for Medicare and Medicaid Studies, National
143	Quality Forum, the Joint Commission on Accreditation of
144	Healthcare Organizations, the Agency for Healthcare Research and
145	Quality, or a similar national entity that establishes standards
146	to measure the performance of health care providers, or by other
147	states.
148
149	When determining which patient charge data to disclose, the
150	agency shall consider such measures as average charge, average
151	net revenue per adjusted patient day, average cost per adjusted
152	patient day, and average cost per admission, among others.
153	2.  Make available performance measures, benefit design,
154	and premium cost data from health plans licensed pursuant to
155	chapter 627 or chapter 641. The agency shall determine which
156	performance outcome and member and subscriber cost data to
157	disclose, based upon input from the council. When determining
158	which data to disclose, the agency shall consider information
159	that may be required by either individual or group purchasers to
160	assess the value of the product, which may include membership
161	satisfaction, quality of care, current enrollment or membership,
162	coverage areas, accreditation status, premium costs, plan costs,
163	premium increases, range of benefits, copayments and
164	deductibles, accuracy and speed of claims payment, credentials
165	of physicians, number of providers, names of network providers,
166	and hospitals in the network. Health plans shall make available
167	to the agency any such data or information that is not currently
168	reported to the agency or the office.
169	3.  Determine the method and format for public disclosure
170	of data reported pursuant to this paragraph. The agency shall
171	make its determination based upon input from the Comprehensive
172	Health Information System Advisory Council. At a minimum, the
173	data shall be made available on the agency's Internet website in
174	a manner that allows consumers to conduct an interactive search
175	that allows them to view and compare the information for
176	specific providers. The website must include such additional
177	information as is determined necessary to ensure that the
178	website enhances informed decisionmaking among consumers and
179	health care purchasers, which shall include, at a minimum,
180	appropriate guidance on how to use the data and an explanation
181	of why the data may vary from provider to provider. The data
182	specified in subparagraph 1. shall be released no later than
183	January 1, 2006, for the reporting of infection rates, and no
184	later than October March 1, 2005, for mortality rates and
185	complication rates. The data specified in subparagraph 2. shall
186	be released no later than October March 1, 2006.
187	Section 3.  Paragraph (b) of subsection (3) of section
188	408.909, Florida Statutes, is amended to read:
189	408.909  Health flex plans.--
190	(3)  PROGRAM.--The agency and the office shall each approve
191	or disapprove health flex plans that provide health care
192	coverage for eligible participants. A health flex plan may limit
193	or exclude benefits otherwise required by law for insurers
194	offering coverage in this state, may cap the total amount of
195	claims paid per year per enrollee, may limit the number of
196	enrollees, or may take any combination of those actions. A
197	health flex plan offering may include the option of a
198	catastrophic plan supplementing the health flex plan.
199	(b)  The office shall develop guidelines for the review of
200	health flex plan applications and provide regulatory oversight
201	of health flex plan advertisement and marketing procedures. The
202	office shall disapprove or shall withdraw approval of plans
203	that:
204	1.  Contain any ambiguous, inconsistent, or misleading
205	provisions or any exceptions or conditions that deceptively
206	affect or limit the benefits purported to be assumed in the
207	general coverage provided by the health flex plan;
208	2.  Provide benefits that are unreasonable in relation to
209	the premium charged or contain provisions that are unfair or
210	inequitable or contrary to the public policy of this state, that
211	encourage misrepresentation, or that result in unfair
212	discrimination in sales practices; or
213	3.  Cannot demonstrate that the health flex plan is
214	financially sound and that the applicant is able to underwrite
215	or finance the health care coverage provided; or
216	4.  Cannot demonstrate that the applicant and its
217	management are in compliance with the standards required
218	pursuant to s. 624.404(3).
219	Section 4.  Subsection (6) is added to section 627.413,
220	Florida Statutes, to read:
221	627.413  Contents of policies, in general;
222	identification.--
223	(6)  Notwithstanding any other provision of the Florida
224	Insurance Code that is in conflict with federal requirements for
225	a health savings account qualified high deductible health plan,
226	an insurer, or a health maintenance organization subject to part
227	I of chapter 641, which is authorized to issue health insurance
228	in this state may offer for sale an individual or group policy
229	or contract that provides for a high deductible plan that meets
230	the federal requirements of a health savings account plan and
231	which is offered in conjunction with a health savings account.
232	Section 5.  Subsection (2) of section 627.638, Florida
233	Statutes, is amended to read:
234	627.638  Direct payment for hospital, medical services.--
235	(2)  Whenever, in any health insurance claim form, an
236	insured specifically authorizes payment of benefits directly to
237	any recognized hospital, or physician, or dentist, the insurer
238	shall make such payment to the designated provider of such
239	services, unless otherwise provided in the insurance contract.
240	The insurance contract may not prohibit, and claims forms must
241	provide option for, the payment of benefits directly to a
242	licensed hospital, physician, or dentist for care provided
243	pursuant to s. 395.1041. The insurer may require written
244	attestation of assignment of benefits. Payment to the provider
245	from the insurer shall be no more than the amount that the
246	insurer would otherwise have paid without the assignment.
247	Section 6.  Section 627.6402, Florida Statutes, is amended
248	to read:
249	627.6402  Insurance rebates for healthy lifestyles.--
250	(1)  Any rate, rating schedule, or rating manual for an
251	individual health insurance policy filed with the office may
252	shall provide for an appropriate rebate of premiums paid in the
253	last calendar year when the individual covered by such plan is
254	enrolled in and maintains participation in any health wellness,
255	maintenance, or improvement program approved by the health plan.
256	The rebate may be based on premiums paid in the last calendar
257	year or the last policy year. The individual must provide
258	evidence of demonstrative maintenance or improvement of the
259	individual's health status as determined by assessments of
260	agreed-upon health status indicators between the individual and
261	the health insurer, including, but not limited to, reduction in
262	weight, body mass index, and smoking cessation. Any rebate
263	provided by the health insurer is presumed to be appropriate
264	unless credible data demonstrates otherwise, or unless such
265	rebate program requires the insured to incur costs to qualify
266	for the rebate which equal or exceed the value of the rebate,
267	but in no event shall the rebate not exceed 10 percent of paid
268	premiums.
269	(2)  The premium rebate authorized by this section shall be
270	effective for an insured on an annual basis, unless the
271	individual fails to maintain or improve his or her health status
272	while participating in an approved wellness program, or credible
273	evidence demonstrates that the individual is not participating
274	in the approved wellness program.
275	(3)  The program shall be available for all policies issued
276	on or after July 1, 2005.
277	Section 7.  Paragraph (b) of subsection (3) of section
278	627.6487, Florida Statutes, is amended to read:
279	627.6487  Guaranteed availability of individual health
280	insurance coverage to eligible individuals.--
281	(3)  For the purposes of this section, the term "eligible
282	individual" means an individual:
283	(b)  Who is not eligible for coverage under:
284	1.  A group health plan, as defined in s. 2791 of the
285	Public Health Service Act;
286	2.  A conversion policy or contract issued by an authorized
287	insurer or health maintenance organization under s. 627.6675 or
288	s. 641.3921, respectively, offered to an individual who is no
289	longer eligible for coverage under either an insured or self-
290	insured employer plan;
291	3.  Part A or part B of Title XVIII of the Social Security
292	Act; or
293	4.  A state plan under Title XIX of such act, or any
294	successor program, and does not have other health insurance
295	coverage; or
296	5.  The Florida Health Insurance Plan as specified in s.
297	627.64872 and such plan is accepting new enrollments. However, a
298	person whose previous coverage was under the Florida Health
299	Insurance Plan as specified in s. 627.64872 is not an eligible
300	individual as defined in s. 627.6487(3)(a);
301	Section 8.  Paragraphs (b), (c), and (n) of subsection (2)
302	and subsections (3), (6), (9), and (15) of section 627.64872,
303	Florida Statutes, are amended, subsection (20) of said section
304	is renumbered as subsection (21), and a new subsection (20) is
305	added to said section, to read:
306	627.64872  Florida Health Insurance Plan.--
307	(2)  DEFINITIONS.--As used in this section:
308	(b)  "Commissioner" means the Commissioner of Insurance
309	Regulation.
310	(c)  "Dependent" means a resident spouse or resident
311	unmarried child under the age of 19 years, a child who is a
312	student under the age of 25 years and who is financially
313	dependent upon the parent, or a child of any age who is disabled
314	and dependent upon the parent.
315	(c)  "Director" means the Director of the Office of
316	Insurance Regulation.
317	(n)  "Resident" means an individual who has been legally
318	domiciled in this state for a period of at least 6 months and
319	who physically resides in this state not less than 185 days per
320	year.
321	(3)  BOARD OF DIRECTORS.--
322	(a)  The plan shall operate subject to the supervision and
323	control of the board. The board shall consist of the
324	commissioner director or his or her designated representative,
325	who shall serve as a member of the board and shall be its chair,
326	and an additional eight members, five of whom shall be appointed
327	by the Governor, at least two of whom shall be individuals not
328	representative of insurers or health care providers, one of whom
329	shall be appointed by the President of the Senate, one of whom
330	shall be appointed by the Speaker of the House of
331	Representatives, and one of whom shall be appointed by the Chief
332	Financial Officer.
333	(b)  The term to be served on the board by the commissioner
334	Director of the Office of Insurance Regulation shall be
335	determined by continued employment in such position. The
336	remaining initial board members shall serve for a period of time
337	as follows: two members appointed by the Governor and the
338	members appointed by the President of the Senate and the Speaker
339	of the House of Representatives shall serve a term of 2 years;
340	and three members appointed by the Governor and the Chief
341	Financial Officer shall serve a term of 4 years. Subsequent
342	board members shall serve for a term of 3 years. A board
343	member's term shall continue until his or her successor is
344	appointed.
345	(c)  Vacancies on the board shall be filled by the
346	appointing authority, such authority being the Governor, the
347	President of the Senate, the Speaker of the House of
348	Representatives, or the Chief Financial Officer. The appointing
349	authority may remove board members for cause.
350	(d)  The commissioner director, or his or her recognized
351	representative, shall be responsible for any organizational
352	requirements necessary for the initial meeting of the board
353	which shall take place no later than September 1, 2004.
354	(e)  Members shall not be compensated in their capacity as
355	board members but shall be reimbursed for reasonable expenses
356	incurred in the necessary performance of their duties in
357	accordance with s. 112.061.
358	(f)  The board shall submit to the Financial Services
359	Commission a plan of operation for the plan and any amendments
360	thereto necessary or suitable to ensure the fair, reasonable,
361	and equitable administration of the plan. The plan of operation
362	shall ensure that the plan qualifies to apply for any available
363	funding from the Federal Government that adds to the financial
364	viability of the plan. The plan of operation shall become
365	effective upon approval in writing by the Financial Services
366	Commission consistent with the date on which the coverage under
367	this section must be made available. If the board fails to
368	submit a suitable plan of operation within 1 year after
369	implementation the appointment of the board of directors, or at
370	any time thereafter fails to submit suitable amendments to the
371	plan of operation, the Financial Services Commission shall adopt
372	such rules as are necessary or advisable to effectuate the
373	provisions of this section. Such rules shall continue in force
374	until modified by the office or superseded by a plan of
375	operation submitted by the board and approved by the Financial
376	Services Commission.
377	(6)  INTERIM REPORT; ANNUAL REPORT.--
378	(a)  By no later than December 1, 2004, the board shall
379	report to the Governor, the President of the Senate, and the
380	Speaker of the House of Representatives the results of an
381	actuarial study conducted by the board to determine, including,
382	but not limited to:
383	1.  The impact the creation of the plan will have on the
384	small group insurance market and the individual market on
385	premiums paid by insureds. This shall include an estimate of the
386	total anticipated aggregate savings for all small employers in
387	the state.
388	2.  The number of individuals the pool could reasonably
389	cover at various funding levels, specifically, the number of
390	people the pool may cover at each of those funding levels.
391	3.  A recommendation as to the best source of funding for
392	the anticipated deficits of the pool.
393	4.  The effect on the individual and small group market by
394	including in the Florida Health Insurance Plan persons eligible
395	for coverage under s. 627.6487, as well as the cost of including
396	these individuals.
397
398	The board shall take no action to implement the Florida Health
399	Insurance Plan, other than the completion of the actuarial study
400	authorized in this paragraph, until funds are appropriated for
401	startup cost and any projected deficits.
402	(b)  No later than December 1, 2005, and annually
403	thereafter, the board shall submit to the Governor, the
404	President of the Senate, the Speaker of the House of
405	Representatives, and the substantive legislative committees of
406	the Legislature a report which includes an independent actuarial
407	study to determine, including, but not be limited to:
408	(a)1.  The impact the creation of the plan has on the small
409	group and individual insurance market, specifically on the
410	premiums paid by insureds. This shall include an estimate of the
411	total anticipated aggregate savings for all small employers in
412	the state.
413	(b)2.  The actual number of individuals covered at the
414	current funding and benefit level, the projected number of
415	individuals that may seek coverage in the forthcoming fiscal
416	year, and the projected funding needed to cover anticipated
417	increase or decrease in plan participation.
418	3.  A recommendation as to the best source of funding for
419	the anticipated deficits of the pool.
420	(c)4.  A summarization of the activities of the plan in the
421	preceding calendar year, including the net written and earned
422	premiums, plan enrollment, the expense of administration, and
423	the paid and incurred losses.
424	(d)5.  A review of the operation of the plan as to whether
425	the plan has met the intent of this section.
426	(9)  ELIGIBILITY.--
427	(a)  Any individual person who is and continues to be a
428	resident of this state shall be eligible for coverage under the
429	plan if:
430	1.  Evidence is provided that the person received notices
431	of rejection or refusal to issue substantially similar coverage
432	for health reasons from at least two health insurers or health
433	maintenance organizations. A rejection or refusal by an insurer
434	offering only stop-loss, excess of loss, or reinsurance coverage
435	with respect to the applicant shall not be sufficient evidence
436	under this paragraph;.
437	2.  The person is enrolled in the Florida Comprehensive
438	Health Association as of the date the plan is implemented; or.
439	3.  Is an eligible individual as defined in s. 627.6487(3),
440	excluding s. 627.6487(3)(b)5.
441	(b)  Each resident dependent of a person who is eligible
442	for coverage under the plan shall also be eligible for such
443	coverage.
444	(c)  Except for individuals made eligible under
445	subparagraph (a)3., a person shall not be eligible for coverage
446	under the plan if:
447	1.  The person has or obtains health insurance coverage
448	substantially similar to or more comprehensive than a plan
449	policy, or would be eligible to obtain such coverage, unless a
450	person may maintain other coverage for the period of time the
451	person is satisfying any preexisting condition waiting period
452	under a plan policy or may maintain plan coverage for the period
453	of time the person is satisfying a preexisting condition waiting
454	period under another health insurance policy intended to replace
455	the plan policy;.
456	2.  The person is determined to be eligible for health care
457	benefits under Medicaid, Medicare, the state's children's health
458	insurance program, or any other federal, state, or local
459	government program that provides health benefits;
460	3.  The person voluntarily terminated plan coverage unless
461	12 months have elapsed since such termination;
462	4.  The person is an inmate or resident of a public
463	institution; or
464	5.  The person's premiums are paid for or reimbursed under
465	any government-sponsored program or by any government agency or
466	health care provider or by any health care provider sponsored or
467	affiliated organization.
468	(d)  Coverage shall cease:
469	1.  On the date a person is no longer a resident of this
470	state;
471	2.  On the date a person requests coverage to end;
472	3.  Upon the death of the covered person;
473	4.  On the date state law requires cancellation or
474	nonrenewal of the policy; or
475	5.  At the option of the plan, 30 days after the plan makes
476	any inquiry concerning the person's eligibility or place of
477	residence to which the person does not reply; or.
478	6.  Upon failure of the insured to pay for continued
479	coverage.
480	(e)  Except under the circumstances described in this
481	subsection, coverage of a person who ceases to meet the
482	eligibility requirements of this subsection shall be terminated
483	at the end of the policy period for which the necessary premiums
484	have been paid.
485	(15)  FUNDING OF THE PLAN.--
486	(a)  Premiums.--
487	1.  The plan shall establish premium rates for plan
488	coverage as provided in this section. Separate schedules of
489	premium rates based on age, sex, and geographical location may
490	apply for individual risks. Premium rates and schedules shall be
491	submitted to the office for approval prior to use.
492	2.  Initial rates for plan coverage shall be limited to no
493	more than 200 percent 300 percent of rates established for
494	individual standard risks as specified in s. 627.6675(3)(c).
495	Subject to the limits provided in this paragraph, subsequent
496	rates shall be established to provide fully for the expected
497	costs of claims, including recovery of prior losses, expenses of
498	operation, investment income of claim reserves, and any other
499	cost factors subject to the limitations described herein, but in
500	no event shall premiums exceed the 200-percent 300-percent rate
501	limitation provided in this section. Notwithstanding the 200-
502	percent 300-percent rate limitation, sliding scale premium
503	surcharges based upon the insured's income may apply to all
504	enrollees, except those made eligible for coverage by
505	subparagraph (9)(a)3.
506	3.  For the purposes of determining assessments under this
507	section, the term "health insurance" means any hospital and
508	medical expense incurred policy, minimum premium plan, stop-loss
509	coverage, health maintenance organization contract, prepaid
510	health clinic contract, multiple-employer welfare arrangement
511	contract, or fraternal benefit society health benefits contract,
512	whether sold as an individual or group policy or contract. The
513	term does not include a policy covering medical payment coverage
514	or personal injury protection coverage in a motor vehicle
515	policy, coverage issued as a supplement to liability insurance,
516	or workers' compensation.
517	(b)  Sources of additional revenue.--Any deficit incurred
518	by the plan may shall be primarily funded through amounts
519	appropriated by the Legislature from general revenue and other
520	appropriate sources, including, but not limited to, a portion of
521	the annual growth in existing net insurance premium taxes in an
522	amount not less than the anticipated losses and reserve
523	requirements for existing policyholders. General revenue sources
524	for the plan shall not exceed $5 million per year and are
525	subject to annual appropriation by the Legislature. The board
526	shall operate the plan in such a manner that the estimated cost
527	of providing health insurance during any fiscal year will not
528	exceed total income the plan expects to receive from policy
529	premiums and funds appropriated by the Legislature, including
530	any interest on investments. After determining the amount of
531	funds appropriated to the board for a fiscal year, the board
532	shall estimate the number of new policies it believes the plan
533	has the financial capacity to insure during that year so that
534	costs do not exceed income. The board shall take steps necessary
535	to ensure that plan enrollment does not exceed the number of
536	residents it has estimated it has the financial capacity to
537	insure.
538	(c)  In the event of inadequate funding, the board may
539	cancel existing policies on a nondiscriminatory basis as
540	necessary to remedy the situation. No policy may be canceled if
541	a covered individual is currently making a claim.
542	(20)  PROVIDER REIMBURSEMENT.--Notwithstanding any other
543	provision of law, the maximum reimbursement rate to health care
544	providers for all covered, medically necessary services shall be
545	100 percent of Medicare's allowed payment amount for that
546	particular provider and service. All licensed providers in this
547	state shall accept assignment of plan benefits and consider the
548	Medicare allowed payment amount as payment in full. By no later
549	than December 1, 2005, the board shall update the actuarial
550	study required by s. 627.64872(6), to include the impact of
551	alternative methods of actuarially sound risk adjusted provider
552	reimbursement methodologies, including capitated prepaid
553	arrangements, that take into account such factors as age, sex,
554	geographic variations, case mix, and access to specialty medical
555	care. The board shall submit the updated actuarial study to the
556	Governor, the President of the Senate, and the Speaker of the
557	House no later than December 1, 2005.
558	Section 9.  Section 627.65626, Florida Statutes, is amended
559	to read:
560	627.65626  Insurance rebates for healthy lifestyles.--
561	(1)  Any rate, rating schedule, or rating manual for a
562	health insurance policy, which provides creditable coverage as
563	defined in s. 627.6561(5), filed with the office shall provide
564	for an appropriate rebate of premiums paid in the last policy
565	year, contract year, or calendar year when the majority of
566	members of a health plan have enrolled and maintained
567	participation in any health wellness, maintenance, or
568	improvement program offered by the group policyholder and the
569	health plan employer. The rebate may be based upon premiums paid
570	in the last calendar year or policy year. The group employer
571	must provide evidence of demonstrative maintenance or
572	improvement of the enrollees' health status as determined by
573	assessments of agreed-upon health status indicators between the
574	policyholder employer and the health insurer, including, but not
575	limited to, reduction in weight, body mass index, and smoking
576	cessation. The group or health insurer may contract with an
577	independent third-party administrator to assemble and report the
578	health status required in this subsection between the
579	policyholder and the health insurer. Any rebate provided by the
580	health insurer is presumed to be appropriate unless credible
581	data demonstrates otherwise or unless such rebate program
582	requires the insured to incur costs to qualify for the rebate
583	which equal or exceed the value of the rebate, but in no event
584	shall the rebate not exceed 10 percent of paid premiums.
585	(2)  The premium rebate authorized by this section shall be
586	effective for an insured on an annual basis unless the number of
587	participating employees or members on the policy renewal
588	anniversary becomes less than the majority of the employees or
589	members eligible for participation in the wellness program.
590	(3)  The program shall be available for all policies issued
591	on or after July 1, 2005.
592	Section 10.  Paragraphs (d) and (j) of subsection (5) of
593	section 627.6692, Florida Statutes, are amended to read:
594	627.6692  Florida Health Insurance Coverage Continuation
595	Act.--
596	(5)  CONTINUATION OF COVERAGE UNDER GROUP HEALTH PLANS.--
597	(d)1.  A qualified beneficiary must give written notice to
598	the insurance carrier within 63 30 days after the occurrence of
599	a qualifying event. Unless otherwise specified in the notice, a
600	notice by any qualified beneficiary constitutes notice on behalf
601	of all qualified beneficiaries. The written notice must inform
602	the insurance carrier of the occurrence and type of the
603	qualifying event giving rise to the potential election by a
604	qualified beneficiary of continuation of coverage under the
605	group health plan issued by that insurance carrier, except that
606	in cases where the covered employee has been involuntarily
607	discharged, the nature of such discharge need not be disclosed.
608	The written notice must, at a minimum, identify the employer,
609	the group health plan number, the name and address of all
610	qualified beneficiaries, and such other information required by
611	the insurance carrier under the terms of the group health plan
612	or the commission by rule, to the extent that such information
613	is known by the qualified beneficiary.
614	2.  Within 14 days after the receipt of written notice
615	under subparagraph 1., the insurance carrier shall send each
616	qualified beneficiary by certified mail an election and premium
617	notice form, approved by the office, which form must provide for
618	the qualified beneficiary's election or nonelection of
619	continuation of coverage under the group health plan and the
620	applicable premium amount due after the election to continue
621	coverage. This subparagraph does not require separate mailing of
622	notices to qualified beneficiaries residing in the same
623	household, but requires a separate mailing for each separate
624	household.
625	(j)  Notwithstanding paragraph (b), if a qualified
626	beneficiary in the military reserve or National Guard has
627	elected to continue coverage and is thereafter called to active
628	duty and the coverage under the group plan is terminated by the
629	beneficiary or the carrier due to the qualified beneficiary
630	becoming eligible for TRICARE (the health care program provided
631	by the United States Defense Department), the 18-month period or
632	such other applicable maximum time period for which the
633	qualified beneficiary would otherwise be entitled to continue
634	coverage is tolled during the time that he or she is covered
635	under the TRICARE program. Within 63 30 days after the federal
636	TRICARE coverage terminates, the qualified beneficiary may elect
637	to continue coverage under the group health plan, retroactively
638	to the date coverage terminated under TRICARE, for the remainder
639	of the 18-month period or such other applicable time period,
640	subject to termination of coverage at the earliest of the
641	conditions specified in paragraph (b).
642	Section 11.  Paragraph (c) of subsection (5) and paragraphs
643	(b) and (j) of subsection (11) of section 627.6699, Florida
644	Statutes, are amended, and paragraph (o) is added to subsection
645	(11) of said section, to read:
646	627.6699  Employee Health Care Access Act.--
647	(5)  AVAILABILITY OF COVERAGE.--
648	(c)  Every small employer carrier must, as a condition of
649	transacting business in this state:
650	1.  Offer and issue all small employer health benefit plans
651	on a guaranteed-issue basis to every eligible small employer,
652	with 2 to 50 eligible employees, that elects to be covered under
653	such plan, agrees to make the required premium payments, and
654	satisfies the other provisions of the plan. A rider for
655	additional or increased benefits may be medically underwritten
656	and may only be added to the standard health benefit plan. The
657	increased rate charged for the additional or increased benefit
658	must be rated in accordance with this section.
659	2.  In the absence of enrollment availability in the
660	Florida Health Insurance Plan, offer and issue basic and
661	standard small employer health benefit plans and a high
662	deductible plan that meets the requirements of a health savings
663	account plan or health reimbursement account as defined by
664	federal law, on a guaranteed-issue basis, during a 31-day open
665	enrollment period of August 1 through August 31 of each year, to
666	every eligible small employer, with fewer than two eligible
667	employees, which small employer is not formed primarily for the
668	purpose of buying health insurance and which elects to be
669	covered under such plan, agrees to make the required premium
670	payments, and satisfies the other provisions of the plan.
671	Coverage provided under this subparagraph shall begin on October
672	1 of the same year as the date of enrollment, unless the small
673	employer carrier and the small employer agree to a different
674	date. A rider for additional or increased benefits may be
675	medically underwritten and may only be added to the standard
676	health benefit plan. The increased rate charged for the
677	additional or increased benefit must be rated in accordance with
678	this section. For purposes of this subparagraph, a person, his
679	or her spouse, and his or her dependent children constitute a
680	single eligible employee if that person and spouse are employed
681	by the same small employer and either that person or his or her
682	spouse has a normal work week of less than 25 hours. Any right
683	to an open enrollment of health benefit coverage for groups of
684	fewer than two employees, pursuant to this section, shall remain
685	in full force and effect in the absence of the availability of
686	new enrollment into the Florida Health Insurance Plan.
687	3.  This paragraph does not limit a carrier's ability to
688	offer other health benefit plans to small employers if the
689	standard and basic health benefit plans are offered and
690	rejected.
691	(11)  SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--
692	(b)1.  The program shall operate subject to the supervision
693	and control of the board.
694	2.  Effective upon this act becoming a law, the board shall
695	consist of the director of the office or his or her designee,
696	who shall serve as the chairperson, and 13 additional members
697	who are representatives of carriers and insurance agents and are
698	appointed by the director of the office and serve as follows:
699	a.  Five members shall be representatives of health
700	insurers licensed under chapter 624 or chapter 641. Two members
701	shall be agents who are actively engaged in the sale of health
702	insurance. Four members shall be employers or representatives of
703	employers. One member shall be a person covered under an
704	individual health insurance policy issued by a licensed insurer
705	in this state. One member shall represent the Agency for Health
706	Care Administration and shall be recommended by the Secretary of
707	Health Care Administration. The director of the office shall
708	include representatives of small employer carriers subject to
709	assessment under this subsection. If two or more carriers elect
710	to be risk-assuming carriers, the membership must include at
711	least two representatives of risk-assuming carriers; if one
712	carrier is risk-assuming, one member must be a representative of
713	such carrier. At least one member must be a carrier who is
714	subject to the assessments, but is not a small employer carrier.
715	Subject to such restrictions, at least five members shall be
716	selected from individuals recommended by small employer carriers
717	pursuant to procedures provided by rule of the commission. Three
718	members shall be selected from a list of health insurance
719	carriers that issue individual health insurance policies. At
720	least two of the three members selected must be reinsuring
721	carriers. Two members shall be selected from a list of insurance
722	agents who are actively engaged in the sale of health insurance.
723	b.  A member appointed under this subparagraph shall serve
724	a term of 4 years and shall continue in office until the
725	member's successor takes office, except that, in order to
726	provide for staggered terms, the director of the office shall
727	designate two of the initial appointees under this subparagraph
728	to serve terms of 2 years and shall designate three of the
729	initial appointees under this subparagraph to serve terms of 3
730	years.
731	3.  The director of the office may remove a member for
732	cause.
733	4.  Vacancies on the board shall be filled in the same
734	manner as the original appointment for the unexpired portion of
735	the term.
736	5.  The director of the office may require an entity that
737	recommends persons for appointment to submit additional lists of
738	recommended appointees.
739	(j)1.  Before July March 1 of each calendar year, the board
740	shall determine and report to the office the program net loss
741	for the previous year, including administrative expenses for
742	that year, and the incurred losses for the year, taking into
743	account investment income and other appropriate gains and
744	losses.
745	2.  Any net loss for the year shall be recouped by
746	assessment of the carriers, as follows:
747	a.  The operating losses of the program shall be assessed
748	in the following order subject to the specified limitations. The
749	first tier of assessments shall be made against reinsuring
750	carriers in an amount which shall not exceed 5 percent of each
751	reinsuring carrier's premiums from health benefit plans covering
752	small employers. If such assessments have been collected and
753	additional moneys are needed, the board shall make a second tier
754	of assessments in an amount which shall not exceed 0.5 percent
755	of each carrier's health benefit plan premiums. Except as
756	provided in paragraph (n), risk-assuming carriers are exempt
757	from all assessments authorized pursuant to this section. The
758	amount paid by a reinsuring carrier for the first tier of
759	assessments shall be credited against any additional assessments
760	made.
761	b.  The board shall equitably assess carriers for operating
762	losses of the plan based on market share. The board shall
763	annually assess each carrier a portion of the operating losses
764	of the plan. The first tier of assessments shall be determined
765	by multiplying the operating losses by a fraction, the numerator
766	of which equals the reinsuring carrier's earned premium
767	pertaining to direct writings of small employer health benefit
768	plans in the state during the calendar year for which the
769	assessment is levied, and the denominator of which equals the
770	total of all such premiums earned by reinsuring carriers in the
771	state during that calendar year. The second tier of assessments
772	shall be based on the premiums that all carriers, except risk-
773	assuming carriers, earned on all health benefit plans written in
774	this state. The board may levy interim assessments against
775	carriers to ensure the financial ability of the plan to cover
776	claims expenses and administrative expenses paid or estimated to
777	be paid in the operation of the plan for the calendar year prior
778	to the association's anticipated receipt of annual assessments
779	for that calendar year. Any interim assessment is due and
780	payable within 30 days after receipt by a carrier of the interim
781	assessment notice. Interim assessment payments shall be credited
782	against the carrier's annual assessment. Health benefit plan
783	premiums and benefits paid by a carrier that are less than an
784	amount determined by the board to justify the cost of collection
785	may not be considered for purposes of determining assessments.
786	c.  Subject to the approval of the office, the board shall
787	make an adjustment to the assessment formula for reinsuring
788	carriers that are approved as federally qualified health
789	maintenance organizations by the Secretary of Health and Human
790	Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,
791	if any, that restrictions are placed on them that are not
792	imposed on other small employer carriers.
793	3.  Before July March 1 of each year, the board shall
794	determine and file with the office an estimate of the
795	assessments needed to fund the losses incurred by the program in
796	the previous calendar year.
797	4.  If the board determines that the assessments needed to
798	fund the losses incurred by the program in the previous calendar
799	year will exceed the amount specified in subparagraph 2., the
800	board shall evaluate the operation of the program and report its
801	findings, including any recommendations for changes to the plan
802	of operation, to the office within 180 90 days following the end
803	of the calendar year in which the losses were incurred. The
804	evaluation shall include an estimate of future assessments, the
805	administrative costs of the program, the appropriateness of the
806	premiums charged and the level of carrier retention under the
807	program, and the costs of coverage for small employers. If the
808	board fails to file a report with the office within 180 90 days
809	following the end of the applicable calendar year, the office
810	may evaluate the operations of the program and implement such
811	amendments to the plan of operation the office deems necessary
812	to reduce future losses and assessments.
813	5.  If assessments exceed the amount of the actual losses
814	and administrative expenses of the program, the excess shall be
815	held as interest and used by the board to offset future losses
816	or to reduce program premiums. As used in this paragraph, the
817	term "future losses" includes reserves for incurred but not
818	reported claims.
819	6.  Each carrier's proportion of the assessment shall be
820	determined annually by the board, based on annual statements and
821	other reports considered necessary by the board and filed by the
822	carriers with the board.
823	7.  Provision shall be made in the plan of operation for
824	the imposition of an interest penalty for late payment of an
825	assessment.
826	8.  A carrier may seek, from the office, a deferment, in
827	whole or in part, from any assessment made by the board. The
828	office may defer, in whole or in part, the assessment of a
829	carrier if, in the opinion of the office, the payment of the
830	assessment would place the carrier in a financially impaired
831	condition. If an assessment against a carrier is deferred, in
832	whole or in part, the amount by which the assessment is deferred
833	may be assessed against the other carriers in a manner
834	consistent with the basis for assessment set forth in this
835	section. The carrier receiving such deferment remains liable to
836	the program for the amount deferred and is prohibited from
837	reinsuring any individuals or groups in the program if it fails
838	to pay assessments.
839	(o)  The board shall advise the office, the agency, the
840	department, and other executive and legislative entities on
841	health insurance issues. Specifically, the board shall:
842	1.  Provide a forum for stakeholders, consisting of
843	insurers, employers, agents, consumers, and regulators, in the
844	private health insurance market in this state.
845	2.  Review and recommend strategies to improve the
846	functioning of the health insurance markets in this state with a
847	specific focus on market stability, access, and pricing.
848	3.  Make recommendations to the office for legislation
849	addressing health insurance market issues and provide comments
850	on health insurance legislation proposed by the office.
851	4.  Meet at least three times each year. One meeting shall
852	be held to hear reports and to secure public comment on the
853	health insurance market, to develop any legislation needed to
854	address health insurance market issues, and to provide comments
855	on health insurance legislation proposed by the office.
856	5.  By September 1 each year, issue a report to the office
857	on the state of the health insurance market. The report shall
858	include recommendations for changes in the health insurance
859	market, results from implementation of previous recommendations
860	and information on health insurance markets.
861	Section 12.  Subsection (1) of section 641.27, Florida
862	Statutes, is amended to read:
863	641.27  Examination by the department.--
864	(1)  The office shall examine the affairs, transactions,
865	accounts, business records, and assets of any health maintenance
866	organization as often as it deems it expedient for the
867	protection of the people of this state, but not less frequently
868	than once every 5 3 years. In lieu of making its own financial
869	examination, the office may accept an independent certified
870	public accountant's audit report prepared on a statutory
871	accounting basis consistent with this part. However, except when
872	the medical records are requested and copies furnished pursuant
873	to s. 456.057, medical records of individuals and records of
874	physicians providing service under contract to the health
875	maintenance organization shall not be subject to audit, although
876	they may be subject to subpoena by court order upon a showing of
877	good cause. For the purpose of examinations, the office may
878	administer oaths to and examine the officers and agents of a
879	health maintenance organization concerning its business and
880	affairs. The examination of each health maintenance organization
881	by the office shall be subject to the same terms and conditions
882	as apply to insurers under chapter 624. In no event shall
883	expenses of all examinations exceed a maximum of $50,000 $20,000
884	for any 1-year period. Any rehabilitation, liquidation,
885	conservation, or dissolution of a health maintenance
886	organization shall be conducted under the supervision of the
887	department, which shall have all power with respect thereto
888	granted to it under the laws governing the rehabilitation,
889	liquidation, reorganization, conservation, or dissolution of
890	life insurance companies.
891	Section 13.  Subsection (40) of section 641.31, Florida
892	Statutes, is amended to read:
893	641.31  Health maintenance contracts.--
894	(40)(a)  Any group rate, rating schedule, or rating manual
895	for a health maintenance organization policy, which provides
896	creditable coverage as defined in s. 627.6561(5), filed with the
897	office shall provide for an appropriate rebate of premiums paid
898	in the last contract or calendar year when the majority of the
899	members of a health individual covered by such plan are is
900	enrolled in and maintain maintains participation in any health
901	wellness, maintenance, or improvement program offered by the
902	group contract holder and approved by the health plan. The group
903	individual must provide evidence of demonstrative maintenance or
904	improvement of his or her health status as determined by
905	assessments of agreed-upon health status indicators between the
906	group individual and the health insurer, including, but not
907	limited to, reduction in weight, body mass index, and smoking
908	cessation. Any rebate provided by the health maintenance
909	organization insurer is presumed to be appropriate unless
910	credible data demonstrates otherwise or unless such rebate
911	program requires the insured to incur costs to qualify for the
912	rebate that equal or exceed the value of the rebate, but in no
913	event shall the rebate not exceed 10 percent of paid premiums.
914	(b)  The premium rebate authorized by this section shall be
915	effective for a subscriber an insured on an annual basis, unless
916	the number of participating members on the anniversary becomes
917	less than the majority of the members eligible for participation
918	in the wellness program individual fails to maintain or improve
919	his or her health status while participating in an approved
920	wellness program, or credible evidence demonstrates that the
921	individual is not participating in the approved wellness
922	program.
923	(c)  The program shall be available for all contracts
924	issued on or after July 1, 2005.
925	Section 14.  There is hereby appropriated $5 million from
926	the General Revenue Fund for fiscal year 2005-2006 to the
927	Florida Health Insurance Plan for the purposes of implementing
928	the plan.
929	Section 15. This act shall take effect July 1, 2005, and
930	shall apply to all policies or contracts issued or renewed on or
931	after July 1, 2005.

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