| 1 | A bill to be entitled |
| 2 | An act relating to health insurance; amending s. 408.05, |
| 3 | F.S.; changing the due date for a report from the Agency |
| 4 | for Health Care Administration regarding the State Center |
| 5 | for Health Statistics; amending s. 408.909, F.S.; |
| 6 | providing an additional criterion for the Office of |
| 7 | Insurance Regulation to disapprove or withdraw approval of |
| 8 | health flex plans; amending s. 627.413, F.S.; authorizing |
| 9 | insurers and health maintenance organizations to offer |
| 10 | policies or contracts providing for a high-deductible plan |
| 11 | meeting federal requirements and in conjunction with a |
| 12 | health savings account; amending s. 627.638, F.S.; |
| 13 | revising direct payment provisions for insurers; amending |
| 14 | s. 627.6402, F.S.; revising the requirements for the |
| 15 | healthy lifestyle premium rebate; amending s. 627.65626, |
| 16 | F.S.; providing insurance rebates for healthy lifestyles; |
| 17 | amending s. 627.6692, F.S.; extending a time period within |
| 18 | which eligible employees may apply for continuation of |
| 19 | coverage; amending s. 627.6699, F.S.; revising standards |
| 20 | for determining applicability of the Employee Health Care |
| 21 | Access Act; prescribing acts that may be performed by an |
| 22 | employer without being considered contributing to premiums |
| 23 | or facilitating administration of a policy; authorizing |
| 24 | certain carriers to offer coverage to certain employees |
| 25 | without being subject to the act under certain |
| 26 | circumstances; requiring a carrier who offers such |
| 27 | coverage to provide notice to the primary insured prior to |
| 28 | cancellation for nonpayment of premium; revising an |
| 29 | availability of coverage provision of the Employee Health |
| 30 | Care Access Act; including high-deductible plans meeting |
| 31 | federal health savings account plan requirements; revising |
| 32 | membership of the board of the small employer health |
| 33 | reinsurance program; revising certain reporting dates |
| 34 | relating to program losses and assessments; requiring the |
| 35 | board to advise executive and legislative entities on |
| 36 | health insurance issues; providing requirements; amending |
| 37 | s. 641.27, F.S.; increasing the interval at which the |
| 38 | office examines health maintenance organizations; deleting |
| 39 | authorization for the office to accept an audit report |
| 40 | from a certified public accountant in lieu of conducting |
| 41 | its own examination; increasing an expense limitation; |
| 42 | amending s. 641.31, F.S.; providing for an insurance |
| 43 | rebate for members in a health wellness program; providing |
| 44 | for the rebate to cease under certain conditions; |
| 45 | providing effective dates. |
| 46 |
|
| 47 | Be It Enacted by the Legislature of the State of Florida: |
| 48 |
|
| 49 | Section 1. Paragraph (l) of subsection (3) of section |
| 50 | 408.05, Florida Statutes, is amended to read: |
| 51 | 408.05 State Center for Health Statistics.-- |
| 52 | (3) COMPREHENSIVE HEALTH INFORMATION SYSTEM.--In order to |
| 53 | produce comparable and uniform health information and |
| 54 | statistics, the agency shall perform the following functions: |
| 55 | (l) Develop, in conjunction with the State Comprehensive |
| 56 | Health Information System Advisory Council, and implement a |
| 57 | long-range plan for making available performance outcome and |
| 58 | financial data that will allow consumers to compare health care |
| 59 | services. The performance outcomes and financial data the agency |
| 60 | must make available shall include, but is not limited to, |
| 61 | pharmaceuticals, physicians, health care facilities, and health |
| 62 | plans and managed care entities. The agency shall submit the |
| 63 | initial plan to the Governor, the President of the Senate, and |
| 64 | the Speaker of the House of Representatives by January March 1, |
| 65 | 2006 2005, and shall update the plan and report on the status of |
| 66 | its implementation annually thereafter. The agency shall also |
| 67 | make the plan and status report available to the public on its |
| 68 | Internet website. As part of the plan, the agency shall identify |
| 69 | the process and timeframes for implementation, any barriers to |
| 70 | implementation, and recommendations of changes in the law that |
| 71 | may be enacted by the Legislature to eliminate the barriers. As |
| 72 | preliminary elements of the plan, the agency shall: |
| 73 | 1. Make available performance outcome and patient charge |
| 74 | data collected from health care facilities pursuant to s. |
| 75 | 408.061(1)(a) and (2). The agency shall determine which |
| 76 | conditions and procedures, performance outcomes, and patient |
| 77 | charge data to disclose based upon input from the council. When |
| 78 | determining which conditions and procedures are to be disclosed, |
| 79 | the council and the agency shall consider variation in costs, |
| 80 | variation in outcomes, and magnitude of variations and other |
| 81 | relevant information. When determining which performance |
| 82 | outcomes to disclose, the agency: |
| 83 | a. Shall consider such factors as volume of cases; average |
| 84 | patient charges; average length of stay; complication rates; |
| 85 | mortality rates; and infection rates, among others, which shall |
| 86 | be adjusted for case mix and severity, if applicable. |
| 87 | b. May consider such additional measures that are adopted |
| 88 | by the Centers for Medicare and Medicaid Studies, National |
| 89 | Quality Forum, the Joint Commission on Accreditation of |
| 90 | Healthcare Organizations, the Agency for Healthcare Research and |
| 91 | Quality, or a similar national entity that establishes standards |
| 92 | to measure the performance of health care providers, or by other |
| 93 | states. |
| 94 |
|
| 95 | When determining which patient charge data to disclose, the |
| 96 | agency shall consider such measures as average charge, average |
| 97 | net revenue per adjusted patient day, average cost per adjusted |
| 98 | patient day, and average cost per admission, among others. |
| 99 | 2. Make available performance measures, benefit design, |
| 100 | and premium cost data from health plans licensed pursuant to |
| 101 | chapter 627 or chapter 641. The agency shall determine which |
| 102 | performance outcome and member and subscriber cost data to |
| 103 | disclose, based upon input from the council. When determining |
| 104 | which data to disclose, the agency shall consider information |
| 105 | that may be required by either individual or group purchasers to |
| 106 | assess the value of the product, which may include membership |
| 107 | satisfaction, quality of care, current enrollment or membership, |
| 108 | coverage areas, accreditation status, premium costs, plan costs, |
| 109 | premium increases, range of benefits, copayments and |
| 110 | deductibles, accuracy and speed of claims payment, credentials |
| 111 | of physicians, number of providers, names of network providers, |
| 112 | and hospitals in the network. Health plans shall make available |
| 113 | to the agency any such data or information that is not currently |
| 114 | reported to the agency or the office. |
| 115 | 3. Determine the method and format for public disclosure |
| 116 | of data reported pursuant to this paragraph. The agency shall |
| 117 | make its determination based upon input from the Comprehensive |
| 118 | Health Information System Advisory Council. At a minimum, the |
| 119 | data shall be made available on the agency's Internet website in |
| 120 | a manner that allows consumers to conduct an interactive search |
| 121 | that allows them to view and compare the information for |
| 122 | specific providers. The website must include such additional |
| 123 | information as is determined necessary to ensure that the |
| 124 | website enhances informed decisionmaking among consumers and |
| 125 | health care purchasers, which shall include, at a minimum, |
| 126 | appropriate guidance on how to use the data and an explanation |
| 127 | of why the data may vary from provider to provider. The data |
| 128 | specified in subparagraph 1. shall be released no later than |
| 129 | January 1, 2006, for the reporting of infection rates, and no |
| 130 | later than October 1, 2005, for mortality rates and complication |
| 131 | rates March 1, 2005. The data specified in subparagraph 2. shall |
| 132 | be released no later than October March 1, 2006. |
| 133 | Section 2. Paragraph (b) of subsection (3) of section |
| 134 | 408.909, Florida Statutes, is amended to read: |
| 135 | 408.909 Health flex plans.-- |
| 136 | (3) PROGRAM.--The agency and the office shall each approve |
| 137 | or disapprove health flex plans that provide health care |
| 138 | coverage for eligible participants. A health flex plan may limit |
| 139 | or exclude benefits otherwise required by law for insurers |
| 140 | offering coverage in this state, may cap the total amount of |
| 141 | claims paid per year per enrollee, may limit the number of |
| 142 | enrollees, or may take any combination of those actions. A |
| 143 | health flex plan offering may include the option of a |
| 144 | catastrophic plan supplementing the health flex plan. |
| 145 | (b) The office shall develop guidelines for the review of |
| 146 | health flex plan applications and provide regulatory oversight |
| 147 | of health flex plan advertisement and marketing procedures. The |
| 148 | office shall disapprove or shall withdraw approval of plans |
| 149 | that: |
| 150 | 1. Contain any ambiguous, inconsistent, or misleading |
| 151 | provisions or any exceptions or conditions that deceptively |
| 152 | affect or limit the benefits purported to be assumed in the |
| 153 | general coverage provided by the health flex plan; |
| 154 | 2. Provide benefits that are unreasonable in relation to |
| 155 | the premium charged or contain provisions that are unfair or |
| 156 | inequitable or contrary to the public policy of this state, that |
| 157 | encourage misrepresentation, or that result in unfair |
| 158 | discrimination in sales practices; or |
| 159 | 3. Cannot demonstrate that the health flex plan is |
| 160 | financially sound and that the applicant is able to underwrite |
| 161 | or finance the health care coverage provided; or |
| 162 | 4. Cannot demonstrate that the applicant and its |
| 163 | management are in compliance with the standards required under |
| 164 | s. 624.404(3). |
| 165 | Section 3. Subsection (6) is added to section 627.413, |
| 166 | Florida Statutes, to read: |
| 167 | 627.413 Contents of policies, in general; identification.- |
| 168 | - |
| 169 | (6) Notwithstanding any other provision of the Florida |
| 170 | Insurance Code that is in conflict with federal requirements for |
| 171 | a health savings account qualified high-deductible health plan, |
| 172 | an insurer, or a health maintenance organization subject to part |
| 173 | I of chapter 641, which is authorized to issue health insurance |
| 174 | in this state may offer for sale an individual or group policy |
| 175 | or contract that provides for a high-deductible plan that meets |
| 176 | the federal requirements of a health savings account plan and |
| 177 | which is offered in conjunction with a health savings account. |
| 178 | Section 4. Subsection (2) of section 627.638, Florida |
| 179 | Statutes, is amended to read: |
| 180 | 627.638 Direct payment for hospital, medical services.-- |
| 181 | (2) Whenever, in any health insurance claim form, an |
| 182 | insured specifically authorizes payment of benefits directly to |
| 183 | any recognized hospital, or physician, or dentist, the insurer |
| 184 | shall make such payment to the designated provider of such |
| 185 | services, unless otherwise provided in the insurance contract. |
| 186 | The insurance contract may not prohibit, and claims forms must |
| 187 | provide an option for, the payment of benefits directly to a |
| 188 | licensed hospital, physician, or dentist for care provided |
| 189 | pursuant to s. 395.1041. The insurer may require written |
| 190 | attestation of assignment of benefits. Payment to the provider |
| 191 | from the insurer may not be more than the amount that the |
| 192 | insurer would otherwise have paid without the assignment. |
| 193 | Section 5. Section 627.6402, Florida Statutes, is amended |
| 194 | to read: |
| 195 | 627.6402 Insurance rebates for healthy lifestyles.-- |
| 196 | (1) Any rate, rating schedule, or rating manual for an |
| 197 | individual health insurance policy filed with the office may |
| 198 | shall provide for an appropriate rebate of premiums paid in the |
| 199 | last calendar year when the individual covered by such plan is |
| 200 | enrolled in and maintains participation in any health wellness, |
| 201 | maintenance, or improvement program approved by the health plan. |
| 202 | The rebate may be based on premiums paid in the last calendar |
| 203 | year or the last policy year. The individual must provide |
| 204 | evidence of demonstrative maintenance or improvement of the |
| 205 | individual's health status as determined by assessments of |
| 206 | agreed-upon health status indicators between the individual and |
| 207 | the health insurer, including, but not limited to, reduction in |
| 208 | weight, body mass index, and smoking cessation. Any rebate |
| 209 | provided by the health insurer is presumed to be appropriate |
| 210 | unless credible data demonstrates otherwise, or unless such |
| 211 | rebate program requires the insured to incur costs to qualify |
| 212 | for the rebate which equal or exceed the value of the rebate, |
| 213 | but in no event shall the rebate not exceed 10 percent of paid |
| 214 | premiums. |
| 215 | (2) The premium rebate authorized by this section shall be |
| 216 | effective for an insured on an annual basis, unless the |
| 217 | individual fails to maintain or improve his or her health status |
| 218 | while participating in an approved wellness program, or credible |
| 219 | evidence demonstrates that the individual is not participating |
| 220 | in the approved wellness program. |
| 221 | Section 6. Section 627.65626, Florida Statutes, is amended |
| 222 | to read: |
| 223 | 627.65626 Insurance rebates for healthy lifestyles.-- |
| 224 | (1) Any rate, rating schedule, or rating manual for a |
| 225 | health insurance policy that provides creditable coverage as |
| 226 | defined in s. 627.6561(5) filed with the office shall provide |
| 227 | for an appropriate rebate of premiums paid in the last policy |
| 228 | year, contract year, or calendar year when the majority of |
| 229 | members of a health plan have enrolled and maintained |
| 230 | participation in any health wellness, maintenance, or |
| 231 | improvement program offered by the group policyholder and health |
| 232 | plan employer. The rebate may be based upon premiums paid in the |
| 233 | last calendar year or policy year. The group employer must |
| 234 | provide evidence of demonstrative maintenance or improvement of |
| 235 | the enrollees' health status as determined by assessments of |
| 236 | agreed-upon health status indicators between the policyholder |
| 237 | employer and the health insurer, including, but not limited to, |
| 238 | reduction in weight, body mass index, and smoking cessation. The |
| 239 | group or health insurer may contract with a third-party |
| 240 | administrator to assemble and report the health status required |
| 241 | in this subsection between the policyholder and the health |
| 242 | insurer. Any rebate provided by the health insurer is presumed |
| 243 | to be appropriate unless credible data demonstrates otherwise, |
| 244 | or unless the rebate program requires the insured to incur costs |
| 245 | to qualify for the rebate which equal or exceeds the value of |
| 246 | the rebate, but the rebate may shall not exceed 10 percent of |
| 247 | paid premiums. |
| 248 | (2) The premium rebate authorized by this section shall be |
| 249 | effective for an insured on an annual basis unless the number of |
| 250 | participating members on the policy renewal anniversary |
| 251 | employees becomes less than the majority of the members |
| 252 | employees eligible for participation in the wellness program. |
| 253 | Section 7. Paragraphs (d) and (j) of subsection (5) of |
| 254 | section 627.6692, Florida Statutes, are amended to read: |
| 255 | 627.6692 Florida Health Insurance Coverage Continuation |
| 256 | Act.-- |
| 257 | (5) CONTINUATION OF COVERAGE UNDER GROUP HEALTH PLANS.-- |
| 258 | (d)1. A qualified beneficiary must give written notice to |
| 259 | the insurance carrier within 63 30 days after the occurrence of |
| 260 | a qualifying event. Unless otherwise specified in the notice, a |
| 261 | notice by any qualified beneficiary constitutes notice on behalf |
| 262 | of all qualified beneficiaries. The written notice must inform |
| 263 | the insurance carrier of the occurrence and type of the |
| 264 | qualifying event giving rise to the potential election by a |
| 265 | qualified beneficiary of continuation of coverage under the |
| 266 | group health plan issued by that insurance carrier, except that |
| 267 | in cases where the covered employee has been involuntarily |
| 268 | discharged, the nature of such discharge need not be disclosed. |
| 269 | The written notice must, at a minimum, identify the employer, |
| 270 | the group health plan number, the name and address of all |
| 271 | qualified beneficiaries, and such other information required by |
| 272 | the insurance carrier under the terms of the group health plan |
| 273 | or the commission by rule, to the extent that such information |
| 274 | is known by the qualified beneficiary. |
| 275 | 2. Within 14 days after the receipt of written notice |
| 276 | under subparagraph 1., the insurance carrier shall send each |
| 277 | qualified beneficiary by certified mail an election and premium |
| 278 | notice form, approved by the office, which form must provide for |
| 279 | the qualified beneficiary's election or nonelection of |
| 280 | continuation of coverage under the group health plan and the |
| 281 | applicable premium amount due after the election to continue |
| 282 | coverage. This subparagraph does not require separate mailing of |
| 283 | notices to qualified beneficiaries residing in the same |
| 284 | household, but requires a separate mailing for each separate |
| 285 | household. |
| 286 | (j) Notwithstanding paragraph (b), if a qualified |
| 287 | beneficiary in the military reserve or National Guard has |
| 288 | elected to continue coverage and is thereafter called to active |
| 289 | duty and the coverage under the group plan is terminated by the |
| 290 | beneficiary or the carrier due to the qualified beneficiary |
| 291 | becoming eligible for TRICARE (the health care program provided |
| 292 | by the United States Defense Department), the 18-month period or |
| 293 | such other applicable maximum time period for which the |
| 294 | qualified beneficiary would otherwise be entitled to continue |
| 295 | coverage is tolled during the time that he or she is covered |
| 296 | under the TRICARE program. Within 63 30 days after the federal |
| 297 | TRICARE coverage terminates, the qualified beneficiary may elect |
| 298 | to continue coverage under the group health plan, retroactively |
| 299 | to the date coverage terminated under TRICARE, for the remainder |
| 300 | of the 18-month period or such other applicable time period, |
| 301 | subject to termination of coverage at the earliest of the |
| 302 | conditions specified in paragraph (b). |
| 303 | Section 8. Paragraph (a) of subsection (4), paragraph (c) |
| 304 | of subsection (5), and paragraphs (b) and (j) of subsection (11) |
| 305 | of section 627.6699, Florida Statutes, are amended, and |
| 306 | paragraph (o) is added to subsection (11) of that section, to |
| 307 | read: |
| 308 | 627.6699 Employee Health Care Access Act.-- |
| 309 | (4) APPLICABILITY AND SCOPE.-- |
| 310 | (a)1. This section applies to a health benefit plan that |
| 311 | provides coverage to employees of a small employer in this |
| 312 | state, unless the coverage policy is marketed directly to the |
| 313 | individual employee, and the employer does not contribute |
| 314 | directly or indirectly to participate in the collection or |
| 315 | distribution of premiums or facilitate the administration of the |
| 316 | coverage policy in any manner. For the purposes of this |
| 317 | subparagraph, an employer is not deemed to be contributing to |
| 318 | the premiums or facilitating the administration of coverage if |
| 319 | the employer does not contribute to the premium and merely |
| 320 | collects the premiums for coverage from an employee's wages or |
| 321 | salary through payroll deduction and submits payment for the |
| 322 | premiums of one or more employees in a lump sum to a carrier. |
| 323 | 2. A carrier authorized to issue group or individual |
| 324 | health benefit plans under this chapter or chapter 641 may offer |
| 325 | coverage as described in this paragraph to individual employees |
| 326 | without being subject to this section if the employer has not |
| 327 | had a group health benefit plan in place in the prior 6 months. |
| 328 | A carrier authorized to issue group or individual health benefit |
| 329 | plans under this chapter or chapter 641 may offer coverage as |
| 330 | described in this subparagraph to employees that are not |
| 331 | eligible employees as defined in this section, whether or not |
| 332 | the small employer has a group health benefit plan in place. A |
| 333 | carrier that offers coverage as described in this subparagraph |
| 334 | must provide a cancellation notice to the primary insured at |
| 335 | least 10 days prior to canceling the coverage for nonpayment of |
| 336 | premium. |
| 337 | (5) AVAILABILITY OF COVERAGE.-- |
| 338 | (c) Every small employer carrier must, as a condition of |
| 339 | transacting business in this state: |
| 340 | 1. Offer and issue all small employer health benefit plans |
| 341 | on a guaranteed-issue basis to every eligible small employer, |
| 342 | with 2 to 50 eligible employees, that elects to be covered under |
| 343 | such plan, agrees to make the required premium payments, and |
| 344 | satisfies the other provisions of the plan. A rider for |
| 345 | additional or increased benefits may be medically underwritten |
| 346 | and may only be added to the standard health benefit plan. The |
| 347 | increased rate charged for the additional or increased benefit |
| 348 | must be rated in accordance with this section. |
| 349 | 2. In the absence of enrollment availability in the |
| 350 | Florida Health Insurance Plan, offer and issue basic and |
| 351 | standard small employer health benefit plans and a high- |
| 352 | deductible plan that meets the requirements of a health savings |
| 353 | account plan or health reimbursement account as defined by |
| 354 | federal law, on a guaranteed-issue basis, during a 31-day open |
| 355 | enrollment period of August 1 through August 31 of each year, to |
| 356 | every eligible small employer, with fewer than two eligible |
| 357 | employees, which small employer is not formed primarily for the |
| 358 | purpose of buying health insurance and which elects to be |
| 359 | covered under such plan, agrees to make the required premium |
| 360 | payments, and satisfies the other provisions of the plan. |
| 361 | Coverage provided under this subparagraph shall begin on October |
| 362 | 1 of the same year as the date of enrollment, unless the small |
| 363 | employer carrier and the small employer agree to a different |
| 364 | date. A rider for additional or increased benefits may be |
| 365 | medically underwritten and may only be added to the standard |
| 366 | health benefit plan. The increased rate charged for the |
| 367 | additional or increased benefit must be rated in accordance with |
| 368 | this section. For purposes of this subparagraph, a person, his |
| 369 | or her spouse, and his or her dependent children constitute a |
| 370 | single eligible employee if that person and spouse are employed |
| 371 | by the same small employer and either that person or his or her |
| 372 | spouse has a normal work week of less than 25 hours. Any right |
| 373 | to an open enrollment of health benefit coverage for groups of |
| 374 | fewer than two employees, pursuant to this section, shall remain |
| 375 | in full force and effect in the absence of the availability of |
| 376 | new enrollment into the Florida Health Insurance Plan. |
| 377 | 3. This paragraph does not limit a carrier's ability to |
| 378 | offer other health benefit plans to small employers if the |
| 379 | standard and basic health benefit plans are offered and |
| 380 | rejected. |
| 381 | (11) SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.-- |
| 382 | (b)1. The program shall operate subject to the supervision |
| 383 | and control of the board. |
| 384 | 2. Effective upon this act becoming a law, the board shall |
| 385 | consist of the director of the office or his or her designee, |
| 386 | who shall serve as the chairperson, and 13 additional members |
| 387 | who are representatives of carriers and insurance agents and are |
| 388 | appointed by the director of the office and serve as follows: |
| 389 | a. Five members shall be representatives of health |
| 390 | insurers licensed under chapter 624 or chapter 641. Two members |
| 391 | shall be agents who are actively engaged in the sale of health |
| 392 | insurance. Four members shall be employers or representatives of |
| 393 | employers. One member shall be a person covered under an |
| 394 | individual health insurance policy issued by a licensed insurer |
| 395 | in this state. One member shall represent the Agency for Health |
| 396 | Care Administration and shall be recommended by the Secretary of |
| 397 | Health Care Administration. The director of the office shall |
| 398 | include representatives of small employer carriers subject to |
| 399 | assessment under this subsection. If two or more carriers elect |
| 400 | to be risk-assuming carriers, the membership must include at |
| 401 | least two representatives of risk-assuming carriers; if one |
| 402 | carrier is risk-assuming, one member must be a representative of |
| 403 | such carrier. At least one member must be a carrier who is |
| 404 | subject to the assessments, but is not a small employer carrier. |
| 405 | Subject to such restrictions, at least five members shall be |
| 406 | selected from individuals recommended by small employer carriers |
| 407 | pursuant to procedures provided by rule of the commission. Three |
| 408 | members shall be selected from a list of health insurance |
| 409 | carriers that issue individual health insurance policies. At |
| 410 | least two of the three members selected must be reinsuring |
| 411 | carriers. Two members shall be selected from a list of insurance |
| 412 | agents who are actively engaged in the sale of health insurance. |
| 413 | b. A member appointed under this subparagraph shall serve |
| 414 | a term of 4 years and shall continue in office until the |
| 415 | member's successor takes office, except that, in order to |
| 416 | provide for staggered terms, the director of the office shall |
| 417 | designate two of the initial appointees under this subparagraph |
| 418 | to serve terms of 2 years and shall designate three of the |
| 419 | initial appointees under this subparagraph to serve terms of 3 |
| 420 | years. |
| 421 | 3. The director of the office may remove a member for |
| 422 | cause. |
| 423 | 4. Vacancies on the board shall be filled in the same |
| 424 | manner as the original appointment for the unexpired portion of |
| 425 | the term. |
| 426 | 5. The director of the office may require an entity that |
| 427 | recommends persons for appointment to submit additional lists of |
| 428 | recommended appointees. |
| 429 | (j)1. Before July March 1 of each calendar year, the board |
| 430 | shall determine and report to the office the program net loss |
| 431 | for the previous year, including administrative expenses for |
| 432 | that year, and the incurred losses for the year, taking into |
| 433 | account investment income and other appropriate gains and |
| 434 | losses. |
| 435 | 2. Any net loss for the year shall be recouped by |
| 436 | assessment of the carriers, as follows: |
| 437 | a. The operating losses of the program shall be assessed |
| 438 | in the following order subject to the specified limitations. The |
| 439 | first tier of assessments shall be made against reinsuring |
| 440 | carriers in an amount which shall not exceed 5 percent of each |
| 441 | reinsuring carrier's premiums from health benefit plans covering |
| 442 | small employers. If such assessments have been collected and |
| 443 | additional moneys are needed, the board shall make a second tier |
| 444 | of assessments in an amount which shall not exceed 0.5 percent |
| 445 | of each carrier's health benefit plan premiums. Except as |
| 446 | provided in paragraph (n), risk-assuming carriers are exempt |
| 447 | from all assessments authorized pursuant to this section. The |
| 448 | amount paid by a reinsuring carrier for the first tier of |
| 449 | assessments shall be credited against any additional assessments |
| 450 | made. |
| 451 | b. The board shall equitably assess carriers for operating |
| 452 | losses of the plan based on market share. The board shall |
| 453 | annually assess each carrier a portion of the operating losses |
| 454 | of the plan. The first tier of assessments shall be determined |
| 455 | by multiplying the operating losses by a fraction, the numerator |
| 456 | of which equals the reinsuring carrier's earned premium |
| 457 | pertaining to direct writings of small employer health benefit |
| 458 | plans in the state during the calendar year for which the |
| 459 | assessment is levied, and the denominator of which equals the |
| 460 | total of all such premiums earned by reinsuring carriers in the |
| 461 | state during that calendar year. The second tier of assessments |
| 462 | shall be based on the premiums that all carriers, except risk- |
| 463 | assuming carriers, earned on all health benefit plans written in |
| 464 | this state. The board may levy interim assessments against |
| 465 | carriers to ensure the financial ability of the plan to cover |
| 466 | claims expenses and administrative expenses paid or estimated to |
| 467 | be paid in the operation of the plan for the calendar year prior |
| 468 | to the association's anticipated receipt of annual assessments |
| 469 | for that calendar year. Any interim assessment is due and |
| 470 | payable within 30 days after receipt by a carrier of the interim |
| 471 | assessment notice. Interim assessment payments shall be credited |
| 472 | against the carrier's annual assessment. Health benefit plan |
| 473 | premiums and benefits paid by a carrier that are less than an |
| 474 | amount determined by the board to justify the cost of collection |
| 475 | may not be considered for purposes of determining assessments. |
| 476 | c. Subject to the approval of the office, the board shall |
| 477 | make an adjustment to the assessment formula for reinsuring |
| 478 | carriers that are approved as federally qualified health |
| 479 | maintenance organizations by the Secretary of Health and Human |
| 480 | Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent, |
| 481 | if any, that restrictions are placed on them that are not |
| 482 | imposed on other small employer carriers. |
| 483 | 3. Before July March 1 of each year, the board shall |
| 484 | determine and file with the office an estimate of the |
| 485 | assessments needed to fund the losses incurred by the program in |
| 486 | the previous calendar year. |
| 487 | 4. If the board determines that the assessments needed to |
| 488 | fund the losses incurred by the program in the previous calendar |
| 489 | year will exceed the amount specified in subparagraph 2., the |
| 490 | board shall evaluate the operation of the program and report its |
| 491 | findings, including any recommendations for changes to the plan |
| 492 | of operation, to the office within 180 90 days following the end |
| 493 | of the calendar year in which the losses were incurred. The |
| 494 | evaluation shall include an estimate of future assessments, the |
| 495 | administrative costs of the program, the appropriateness of the |
| 496 | premiums charged and the level of carrier retention under the |
| 497 | program, and the costs of coverage for small employers. If the |
| 498 | board fails to file a report with the office within 180 90 days |
| 499 | following the end of the applicable calendar year, the office |
| 500 | may evaluate the operations of the program and implement such |
| 501 | amendments to the plan of operation the office deems necessary |
| 502 | to reduce future losses and assessments. |
| 503 | 5. If assessments exceed the amount of the actual losses |
| 504 | and administrative expenses of the program, the excess shall be |
| 505 | held as interest and used by the board to offset future losses |
| 506 | or to reduce program premiums. As used in this paragraph, the |
| 507 | term "future losses" includes reserves for incurred but not |
| 508 | reported claims. |
| 509 | 6. Each carrier's proportion of the assessment shall be |
| 510 | determined annually by the board, based on annual statements and |
| 511 | other reports considered necessary by the board and filed by the |
| 512 | carriers with the board. |
| 513 | 7. Provision shall be made in the plan of operation for |
| 514 | the imposition of an interest penalty for late payment of an |
| 515 | assessment. |
| 516 | 8. A carrier may seek, from the office, a deferment, in |
| 517 | whole or in part, from any assessment made by the board. The |
| 518 | office may defer, in whole or in part, the assessment of a |
| 519 | carrier if, in the opinion of the office, the payment of the |
| 520 | assessment would place the carrier in a financially impaired |
| 521 | condition. If an assessment against a carrier is deferred, in |
| 522 | whole or in part, the amount by which the assessment is deferred |
| 523 | may be assessed against the other carriers in a manner |
| 524 | consistent with the basis for assessment set forth in this |
| 525 | section. The carrier receiving such deferment remains liable to |
| 526 | the program for the amount deferred and is prohibited from |
| 527 | reinsuring any individuals or groups in the program if it fails |
| 528 | to pay assessments. |
| 529 | (o) The board shall advise the office, the Agency for |
| 530 | Health Care Administration, the department, other executive |
| 531 | departments, and the Legislature on health insurance issues. |
| 532 | Specifically, the board shall: |
| 533 | 1. Provide a forum for stakeholders, consisting of |
| 534 | insurers, employers, agents, consumers, and regulators, in the |
| 535 | private health insurance market in this state. |
| 536 | 2. Review and recommend strategies to improve the |
| 537 | functioning of the health insurance markets in this state with a |
| 538 | specific focus on market stability, access, and pricing. |
| 539 | 3. Make recommendations to the office for legislation |
| 540 | addressing health insurance market issues and provide comments |
| 541 | on health insurance legislation proposed by the office. |
| 542 | 4. Meet at least three times each year. One meeting shall |
| 543 | be held to hear reports and to secure public comment on the |
| 544 | health insurance market, to develop any legislation needed to |
| 545 | address health insurance market issues, and to provide comments |
| 546 | on health insurance legislation proposed by the office. |
| 547 | 5. Issue a report to the office on the state of the health |
| 548 | insurance market by September 1 each year. The report shall |
| 549 | include recommendations for changes in the health insurance |
| 550 | market, results from implementation of previous recommendations, |
| 551 | and information on health insurance markets. |
| 552 | Section 9. Subsection (1) of section 641.27, Florida |
| 553 | Statutes, is amended to read: |
| 554 | 641.27 Examination by the department.-- |
| 555 | (1) The office shall examine the affairs, transactions, |
| 556 | accounts, business records, and assets of any health maintenance |
| 557 | organization as often as it deems it expedient for the |
| 558 | protection of the people of this state, but not less frequently |
| 559 | than once every 5 3 years. In lieu of making its own financial |
| 560 | examination, the office may accept an independent certified |
| 561 | public accountant's audit report prepared on a statutory |
| 562 | accounting basis consistent with this part. However, except when |
| 563 | the medical records are requested and copies furnished pursuant |
| 564 | to s. 456.057, medical records of individuals and records of |
| 565 | physicians providing service under contract to the health |
| 566 | maintenance organization shall not be subject to audit, although |
| 567 | they may be subject to subpoena by court order upon a showing of |
| 568 | good cause. For the purpose of examinations, the office may |
| 569 | administer oaths to and examine the officers and agents of a |
| 570 | health maintenance organization concerning its business and |
| 571 | affairs. The examination of each health maintenance organization |
| 572 | by the office shall be subject to the same terms and conditions |
| 573 | as apply to insurers under chapter 624. In no event shall |
| 574 | expenses of all examinations exceed a maximum of $50,000 $20,000 |
| 575 | for any 1-year period. Any rehabilitation, liquidation, |
| 576 | conservation, or dissolution of a health maintenance |
| 577 | organization shall be conducted under the supervision of the |
| 578 | department, which shall have all power with respect thereto |
| 579 | granted to it under the laws governing the rehabilitation, |
| 580 | liquidation, reorganization, conservation, or dissolution of |
| 581 | life insurance companies. |
| 582 | Section 10. Subsection (40) of section 641.31, Florida |
| 583 | Statutes, is amended to read: |
| 584 | 641.31 Health maintenance contracts.-- |
| 585 | (40)(a) Any group rate, rating schedule, or rating manual |
| 586 | for a health maintenance organization policy, which provides |
| 587 | creditable coverage as defined in s. 627.6561(5), filed with the |
| 588 | office shall provide for an appropriate rebate of premiums paid |
| 589 | in the last policy year, contract year, or calendar year when |
| 590 | the majority of members of a health individual covered by such |
| 591 | plan are is enrolled in and maintained maintains participation |
| 592 | in any health wellness, maintenance, or improvement program |
| 593 | offered by the group contract holder approved by the health |
| 594 | plan. The group individual must provide evidence of |
| 595 | demonstrative maintenance or improvement of his or her health |
| 596 | status as determined by assessments of agreed-upon health status |
| 597 | indicators between the group individual and the health insurer, |
| 598 | including, but not limited to, reduction in weight, body mass |
| 599 | index, and smoking cessation. Any rebate provided by the health |
| 600 | maintenance organization insurer is presumed to be appropriate |
| 601 | unless credible data demonstrates otherwise, or unless the |
| 602 | rebate program requires the insured to incur costs to qualify |
| 603 | for the rebate which equals or exceeds the value of the rebate |
| 604 | but the rebate may shall not exceed 10 percent of paid premiums. |
| 605 | (b) The premium rebate authorized by this section shall be |
| 606 | effective for a subscriber an insured on an annual basis, unless |
| 607 | the number of participating members on the contract renewal |
| 608 | anniversary becomes fewer than the majority of the members |
| 609 | eligible for participation in the wellness program individual |
| 610 | fails to maintain or improve his or her health status while |
| 611 | participating in an approved wellness program, or credible |
| 612 | evidence demonstrates that the individual is not participating |
| 613 | in the approved wellness program. |
| 614 | (c) A health maintenance organization that issues |
| 615 | individual contracts may offer a premium rebate, as provided |
| 616 | under this section, for a healthy lifestyle program. |
| 617 | Section 11. Except as otherwise expressly provided in this |
| 618 | act and except for this section, which shall take effect upon |
| 619 | becoming a law, this act shall take effect July 1, 2005, and |
| 620 | shall apply to all policies or contracts issued or renewed on or |
| 621 | after July 1, 2005. |