HB 7243

1	A bill to be entitled
2	An act relating to health and human services; repealing s.
3	408.50, F.S., relating to prospective payment
4	arrangements; repealing s. 408.70, F.S., relating to
5	managed competition in health care markets; repealing s.
6	408.9091, F.S., relating to the Cover Florida Health Care
7	Access Program; amending s. 627.6699, F.S., the Employee
8	Health Care Access Act; deleting from the act provisions
9	relating to the Florida Small Employer Health Reinsurance
10	Program; amending ss. 112.363, 395.002, 395.003, 408.07,
11	458.345, 459.021, 627.642, 627.6475, 627.6487, 627.657,
12	627.6675, 641.3922, 945.603, and 1011.52, F.S.; conforming
13	provisions to changes made by the act; providing effective
14	dates.
15
16	Be It Enacted by the Legislature of the State of Florida:
17
18	Section 1.  Section 408.50, Florida Statutes, is repealed.
19	Section 2.  Section 408.70, Florida Statutes, is repealed.
20	Section 3.  Effective January 1, 2014, section 408.9091,
21	Florida Statutes, is repealed.
22	Section 4.  Paragraph (d) of subsection (2) of section
23	112.363, Florida Statutes, is amended to read:
24	112.363  Retiree health insurance subsidy.-
25	(2)  ELIGIBILITY FOR RETIREE HEALTH INSURANCE SUBSIDY.-
26	(d)  Payment of the retiree health insurance subsidy shall
27	be made only after coverage for health insurance for the retiree
28	or beneficiary has been certified in writing to the Department
29	of Management Services. Participation in a former employer's
30	group health insurance program is not a requirement for
31	eligibility under this section. Coverage issued pursuant to s.
32	408.9091 is considered health insurance for the purposes of this
33	section.
34	Section 5.  Subsection (23) of section 395.002, Florida
35	Statutes, is amended to read
36	395.002  Definitions.-As used in this chapter:
37	(23)  "Premises" means those buildings, beds, and equipment
38	located at the address of the licensed facility and all other
39	buildings, beds, and equipment for the provision of hospital,
40	ambulatory surgical, or mobile surgical care located in such
41	reasonable proximity to the address of the licensed facility as
42	to appear to the public to be under the dominion and control of
43	the licensee. For any licensee that is a teaching hospital as
44	defined in s. 408.07(44)(45), reasonable proximity includes any
45	buildings, beds, services, programs, and equipment under the
46	dominion and control of the licensee that are located at a site
47	with a main address that is within 1 mile of the main address of
48	the licensed facility; and all such buildings, beds, and
49	equipment may, at the request of a licensee or applicant, be
50	included on the facility license as a single premises.
51	Section 6.  Paragraph (b) of subsection (2) of section
52	395.003, Florida Statutes, is amended to read:
53	395.003  Licensure; denial, suspension, and revocation.-
54	(2)
55	(b)  The agency shall, at the request of a licensee that is
56	a teaching hospital as defined in s. 408.07(44)(45), issue a
57	single license to a licensee for facilities that have been
58	previously licensed as separate premises, provided such
59	separately licensed facilities, taken together, constitute the
60	same premises as defined in s. 395.002(23). Such license for the
61	single premises shall include all of the beds, services, and
62	programs that were previously included on the licenses for the
63	separate premises. The granting of a single license under this
64	paragraph shall not in any manner reduce the number of beds,
65	services, or programs operated by the licensee.
66	Section 7.  Subsections (42) through (45) of section
67	408.07, Florida Statutes, are renumbered as subsections (41)
68	through (44), respectively, and present subsection (41) of that
69	section is amended to read:
70	408.07  Definitions.-As used in this chapter, with the
71	exception of ss. 408.031-408.045, the term:
72	(41)  "Prospective payment arrangement" means a financial
73	agreement negotiated between a hospital and an insurer, health
74	maintenance organization, preferred provider organization, or
75	other third-party payor which contains, at a minimum, the
76	elements provided for in s. 408.50.
77	Section 8.  Subsection (1) of section 458.345, Florida
78	Statutes, is amended to read:
79	458.345  Registration of resident physicians, interns, and
80	fellows; list of hospital employees; prescribing of medicinal
81	drugs; penalty.-
82	(1)  Any person desiring to practice as a resident
83	physician, assistant resident physician, house physician,
84	intern, or fellow in fellowship training which leads to
85	subspecialty board certification in this state, or any person
86	desiring to practice as a resident physician, assistant resident
87	physician, house physician, intern, or fellow in fellowship
88	training in a teaching hospital in this state as defined in s.
89	408.07(44)(45) or s. 395.805(2), who does not hold a valid,
90	active license issued under this chapter shall apply to the
91	department to be registered and shall remit a fee not to exceed
92	$300 as set by the board. The department shall register any
93	applicant the board certifies has met the following
94	requirements:
95	(a)  Is at least 21 years of age.
96	(b)  Has not committed any act or offense within or without
97	the state which would constitute the basis for refusal to
98	certify an application for licensure pursuant to s. 458.331.
99	(c)  Is a graduate of a medical school or college as
100	specified in s. 458.311(1)(f).
101	Section 9.  Subsection (1) of section 459.021, Florida
102	Statutes, is amended to read:
103	459.021  Registration of resident physicians, interns, and
104	fellows; list of hospital employees; penalty.-
105	(1)  Any person who holds a degree of Doctor of Osteopathic
106	Medicine from a college of osteopathic medicine recognized and
107	approved by the American Osteopathic Association who desires to
108	practice as a resident physician, assistant resident physician,
109	house physician, intern, or fellow in fellowship training which
110	leads to subspecialty board certification in this state, or any
111	person desiring to practice as a resident physician, assistant
112	resident physician, house physician, intern, or fellow in
113	fellowship training in a teaching hospital in this state as
114	defined in s. 408.07(44)(45) or s. 395.805(2), who does not hold
115	an active license issued under this chapter shall apply to the
116	department to be registered, on an application provided by the
117	department, before commencing such a training program and shall
118	remit a fee not to exceed $300 as set by the board.
119	Section 10.  Subsection (3) of section 627.642, Florida
120	Statutes, is amended to read:
121	627.642  Outline of coverage.-
122	(3)  In addition to the outline of coverage, a policy as
123	specified in s. 627.6699(3)(j)(k) must be accompanied by an
124	identification card that contains, at a minimum:
125	(a)  The name of the organization issuing the policy or the
126	name of the organization administering the policy, whichever
127	applies.
128	(b)  The name of the contract holder.
129	(c)  The type of plan only if the plan is filed in the
130	state, an indication that the plan is self-funded, or the name
131	of the network.
132	(d)  The member identification number, contract number, and
133	policy or group number, if applicable.
134	(e)  A contact phone number or electronic address for
135	authorizations and admission certifications.
136	(f)  A phone number or electronic address whereby the
137	covered person or hospital, physician, or other person rendering
138	services covered by the policy may obtain benefits verification
139	and information in order to estimate patient financial
140	responsibility, in compliance with privacy rules under the
141	Health Insurance Portability and Accountability Act.
142	(g)  The national plan identifier, in accordance with the
143	compliance date set forth by the federal Department of Health
144	and Human Services.
145
146	The identification card must present the information in a
147	readily identifiable manner or, alternatively, the information
148	may be embedded on the card and available through magnetic
149	stripe or smart card. The information may also be provided
150	through other electronic technology.
151	Section 11.  Section 627.6475, Florida Statutes, is amended
152	to read:
153	627.6475  Individual reinsurance pool.-
154	(1)  PURPOSE.-The purpose of this section is to provide for
155	the establishment of a reinsurance program for coverage of
156	individuals who are eligible for issuance of individual health
157	insurance from a health insurance issuer pursuant to s.
158	627.6487.
159	(2)  DEFINITIONS.-As used in this section:
160	(a)  "Board," "carrier," and "Health benefit plan" has have
161	the same meaning ascribed in s. 627.6699(3)(j).
162	(b)  "Health insurance issuer," "issuer," and "individual
163	health insurance" have the same meaning ascribed in s.
164	627.6487(2).
165	(c)  "Reinsuring carrier" means a health insurance issuer
166	that elects to comply with the requirements set forth in
167	subsection (7).
168	(c)(d)  "Risk-assuming carrier" means a health insurance
169	issuer that elects to comply with the requirements set forth in
170	subsection (6).
171	(d)(e)  "Eligible individual" has the same meaning ascribed
172	in s. 627.6487(3).
173	(3)  APPLICABILITY AND SCOPE.-This section applies to
174	individual health insurance offered by a health insurance issuer
175	to an eligible individual.
176	(4)  MAINTENANCE OF RECORDS.-Each health insurance issuer
177	that offers individual health insurance must maintain at its
178	principal place of business a complete and detailed description
179	of its rating practices and renewal practices, as required for
180	small employer carriers pursuant to s. 627.6699(8).
181	(5)  ISSUER'S ELECTION TO BECOME A RISK-ASSUMING CARRIER.-
182	(a)  Each health insurance issuer that offers individual
183	health insurance must elect to become a risk-assuming carrier or
184	a reinsuring carrier for purposes of this section. Each such
185	issuer must make an initial election, binding through December
186	31, 1999. The issuer's initial election must be made no later
187	than October 31, 1997. By October 31, 1997, all issuers must
188	file a final election, which is binding for 2 years, from
189	January 1, 1998, through December 31, 1999, after which an
190	election shall be binding for a period of 5 years. The office
191	may permit an issuer to modify its election at any time for good
192	cause shown, after a hearing.
193	(b)  The office shall establish an application process for
194	issuers seeking to change their status under this subsection.
195	(b)(c)  An election to become a risk-assuming carrier is
196	subject to approval under this subsection.
197	(d)  An issuer that elects to cease participating as a
198	reinsuring carrier and to become a risk-assuming carrier may not
199	reinsure or continue to reinsure any individual health benefits
200	plan under subsection (7) once the issuer becomes a risk-
201	assuming carrier, and the issuer must pay a prorated assessment
202	based upon business issued as a reinsuring carrier for any
203	portion of the year that the business was reinsured. An issuer
204	that elects to cease participating as a risk-assuming carrier
205	and to become a reinsuring carrier may reinsure individual
206	health insurance under the terms set forth in subsection (7) and
207	must pay a prorated assessment based upon business issued as a
208	reinsuring carrier for any portion of the year that the business
209	was reinsured.
210	(6)  ELECTION PROCESS TO BECOME A RISK-ASSUMING CARRIER.-
211	(a)1.  A health insurance issuer that offers individual
212	health insurance may become a risk-assuming carrier by filing
213	with the office a designation of election under this subsection
214	in a format and manner prescribed by the commission. The office
215	shall approve the election of a health insurance issuer to
216	become a risk-assuming carrier if the office finds that the
217	issuer is capable of assuming that status pursuant to the
218	criteria set forth in paragraph (b).
219	2.  The office must approve or disapprove any designation
220	as a risk-assuming carrier within 60 days after a filing.
221	(b)  In determining whether to approve an application by an
222	issuer to become a risk-assuming carrier, the office shall
223	consider:
224	1.  The issuer's financial ability to support the
225	assumption of the risk of individuals.
226	2.  The issuer's history of rating and underwriting
227	individuals.
228	3.  The issuer's commitment to market fairly to all
229	individuals in the state or its service area, as applicable.
230	4.  The issuer's ability to assume and manage the risk of
231	enrolling individuals without the protection of the reinsurance
232	program provided in subsection (7).
233	(c)  The office shall provide public notice of an issuer's
234	designation of election under this subsection to become a risk-
235	assuming carrier and shall provide at least a 21-day period for
236	public comment prior to making a decision on the election. The
237	office shall hold a hearing on the election at the request of
238	the issuer.
239	(d)  The office may rescind the approval granted to a risk-
240	assuming carrier under this subsection if the office finds that
241	the carrier no longer meets the criteria of paragraph (b).
242	(7)  INDIVIDUAL HEALTH REINSURANCE PROGRAM.-
243	(a)  The individual health reinsurance program shall
244	operate subject to the supervision and control of the board of
245	the small employer health reinsurance program established
246	pursuant to s. 627.6699(11). The board shall establish a
247	separate, segregated account for eligible individuals reinsured
248	pursuant to this section, which account may not be commingled
249	with the small employer health reinsurance account.
250	(b)  A reinsuring carrier may reinsure with the program
251	coverage of an eligible individual, subject to each of the
252	following provisions:
253	1.  A reinsuring carrier may reinsure an eligible
254	individual within 60 days after commencement of the coverage of
255	the eligible individual.
256	2.  The program may not reimburse a participating carrier
257	with respect to the claims of a reinsured eligible individual
258	until the carrier has paid incurred claims of at least $5,000 in
259	a calendar year for benefits covered by the program. In
260	addition, the reinsuring carrier is responsible for 10 percent
261	of the next $50,000 and 5 percent of the next $100,000 of
262	incurred claims during a calendar year, and the program shall
263	reinsure the remainder.
264	3.  The board shall annually adjust the initial level of
265	claims and the maximum limit to be retained by the carrier to
266	reflect increases in costs and utilization within the standard
267	market for health benefit plans within the state. The adjustment
268	may not be less than the annual change in the medical component
269	of the "Commerce Price Index for All Urban Consumers" of the
270	Bureau of Labor Statistics of the United States Department of
271	Labor, unless the board proposes and the office approves a lower
272	adjustment factor.
273	4.  A reinsuring carrier may terminate reinsurance for all
274	reinsured eligible individuals on any plan anniversary.
275	5.  The premium rate charged for reinsurance by the program
276	to a health maintenance organization that is approved by the
277	Secretary of Health and Human Services as a federally qualified
278	health maintenance organization pursuant to 42 U.S.C. s.
279	300e(c)(2)(A) and that, as such, is subject to requirements that
280	limit the amount of risk that may be ceded to the program, which
281	requirements are more restrictive than subparagraph 2., shall be
282	reduced by an amount equal to that portion of the risk, if any,
283	which exceeds the amount set forth in subparagraph 2., which may
284	not be ceded to the program.
285	6.  The board may consider adjustments to the premium rates
286	charged for reinsurance by the program or carriers that use
287	effective cost-containment measures, including high-cost case
288	management, as defined by the board.
289	7.  A reinsuring carrier shall apply its case-management
290	and claims-handling techniques, including, but not limited to,
291	utilization review, individual case management, preferred
292	provider provisions, other managed-care provisions, or methods
293	of operation consistently with both reinsured business and
294	nonreinsured business.
295	(c)1.  The board, as part of the plan of operation, shall
296	establish a methodology for determining premium rates to be
297	charged by the program for reinsuring eligible individuals
298	pursuant to this section. The methodology must include a system
299	for classifying individuals which reflects the types of case
300	characteristics commonly used by carriers in this state. The
301	methodology must provide for the development of basic
302	reinsurance premium rates, which shall be multiplied by the
303	factors set for them in this paragraph to determine the premium
304	rates for the program. The basic reinsurance premium rates shall
305	be established by the board, subject to the approval of the
306	office, and shall be set at levels that reasonably approximate
307	gross premiums charged to eligible individuals for individual
308	health insurance by health insurance issuers. The premium rates
309	set by the board may vary by geographical area, as determined
310	under this section, to reflect differences in cost. An eligible
311	individual may be reinsured for a rate that is five times the
312	rate established by the board.
313	2.  The board shall periodically review the methodology
314	established, including the system of classification and any
315	rating factors, to ensure that it reasonably reflects the claims
316	experience of the program. The board may propose changes to the
317	rates that are subject to the approval of the office.
318	(d)  If individual health insurance for an eligible
319	individual is entirely or partially reinsured with the program
320	pursuant to this section, the premium charged to the eligible
321	individual for any rating period for the coverage issued must be
322	the same premium that would have been charged to that individual
323	if the health insurance issuer elected not to reinsure coverage
324	for that individual.
325	(e)1.  Before March 1 of each calendar year, the board
326	shall determine and report to the office the program net loss in
327	the individual account for the previous year, including
328	administrative expenses for that year and the incurred losses
329	for that year, taking into account investment income and other
330	appropriate gains and losses.
331	2.  Any net loss in the individual account for the year
332	shall be recouped by assessing the carriers as follows:
333	a.  The operating losses of the program shall be assessed
334	in the following order subject to the specified limitations. The
335	first tier of assessments shall be made against reinsuring
336	carriers in an amount that may not exceed 5 percent of each
337	reinsuring carrier's premiums for individual health insurance.
338	If such assessments have been collected and additional moneys
339	are needed, the board shall make a second tier of assessments in
340	an amount that may not exceed 0.5 percent of each carrier's
341	health benefit plan premiums.
342	b.  Except as provided in paragraph (f), risk-assuming
343	carriers are exempt from all assessments authorized pursuant to
344	this section. The amount paid by a reinsuring carrier for the
345	first tier of assessments shall be credited against any
346	additional assessments made.
347	c.  The board shall equitably assess reinsuring carriers
348	for operating losses of the individual account based on market
349	share. The board shall annually assess each carrier a portion of
350	the operating losses of the individual account. The first tier
351	of assessments shall be determined by multiplying the operating
352	losses by a fraction, the numerator of which equals the
353	reinsuring carrier's earned premium pertaining to direct
354	writings of individual health insurance in the state during the
355	calendar year for which the assessment is levied, and the
356	denominator of which equals the total of all such premiums
357	earned by reinsuring carriers in the state during that calendar
358	year. The second tier of assessments shall be based on the
359	premiums that all carriers, except risk-assuming carriers,
360	earned on all health benefit plans written in this state. The
361	board may levy interim assessments against reinsuring carriers
362	to ensure the financial ability of the plan to cover claims
363	expenses and administrative expenses paid or estimated to be
364	paid in the operation of the plan for the calendar year prior to
365	the association's anticipated receipt of annual assessments for
366	that calendar year. Any interim assessment is due and payable
367	within 30 days after receipt by a carrier of the interim
368	assessment notice. Interim assessment payments shall be credited
369	against the carrier's annual assessment. Health benefit plan
370	premiums and benefits paid by a carrier that are less than an
371	amount determined by the board to justify the cost of collection
372	may not be considered for purposes of determining assessments.
373	d.  Subject to the approval of the office, the board shall
374	adjust the assessment formula for reinsuring carriers that are
375	approved as federally qualified health maintenance organizations
376	by the Secretary of Health and Human Services pursuant to 42
377	U.S.C. s. 300e(c)(2)(A) to the extent, if any, that restrictions
378	are placed on them which are not imposed on other carriers.
379	3.  Before March 1 of each year, the board shall determine
380	and file with the office an estimate of the assessments needed
381	to fund the losses incurred by the program in the individual
382	account for the previous calendar year.
383	4.  If the board determines that the assessments needed to
384	fund the losses incurred by the program in the individual
385	account for the previous calendar year will exceed the amount
386	specified in subparagraph 2., the board shall evaluate the
387	operation of the program and report its findings and
388	recommendations to the office in the format established in s.
389	627.6699(11) for the comparable report for the small employer
390	reinsurance program.
391	(f)  Notwithstanding paragraph (e), the administrative
392	expenses of the program shall be recouped by assessing risk-
393	assuming carriers and reinsuring carriers, and such amounts may
394	not be considered part of the operating losses of the plan for
395	the purposes of this paragraph. Each carrier's portion of such
396	administrative expenses shall be determined by multiplying the
397	total of such administrative expenses by a fraction, the
398	numerator of which equals the carrier's earned premium
399	pertaining to direct writing of individual health benefit plans
400	in the state during the calendar year for which the assessment
401	is levied, and the denominator of which equals the total of such
402	premiums earned by all carriers in the state during such
403	calendar year.
404	(g)  Except as otherwise provided in this section, the
405	board and the office shall have all powers, duties, and
406	responsibilities with respect to carriers that issue and
407	reinsure individual health insurance, as specified for the board
408	and the office in s. 627.6699(11) with respect to small employer
409	carriers, including, but not limited to, the provisions of s.
410	627.6699(11) relating to:
411	1.  Use of assessments that exceed the amount of actual
412	losses and expenses.
413	2.  The annual determination of each carrier's proportion
414	of the assessment.
415	3.  Interest for late payment of assessments.
416	4.  Authority for the office to approve deferment of an
417	assessment against a carrier.
418	5.  Limited immunity from legal actions or carriers.
419	6.  Development of standards for compensation to be paid to
420	agents. Such standards shall be limited to those specifically
421	enumerated in s. 627.6699(13)(d).
422	7.  Monitoring compliance by carriers with this section.
423	(7)(8)  STANDARDS TO ASSURE FAIR MARKETING.-
424	(a)  Each health insurance issuer that offers individual
425	health insurance shall actively market coverage to eligible
426	individuals in the state. The provisions of s. 627.6699(11)(13)
427	that apply to small employer carriers that market policies to
428	small employers shall also apply to health insurance issuers
429	that offer individual health insurance with respect to marketing
430	policies to individuals.
431	(b)  A violation of this section by a health insurance
432	issuer or an agent is an unfair trade practice under s. 626.9541
433	or ss. 641.3903 and 641.3907.
434	(8)(9)  RULEMAKING AUTHORITY.-The commission may adopt
435	rules to administer this section, including rules governing
436	compliance by carriers.
437	Section 12.  Subsection (9) of section 627.6487, Florida
438	Statutes, is amended to read:
439	627.6487  Guaranteed availability of individual health
440	insurance coverage to eligible individuals.-
441	(9)  Each health insurance issuer that offers individual
442	health insurance coverage to an eligible individual shall elect
443	to become a risk-assuming carrier or a reinsuring carrier, as
444	provided by s. 627.6475.
445	Section 13.  Subsection (2) of section 627.657, Florida
446	Statutes, is amended to read:
447	627.657  Provisions of group health insurance policies.-
448	(2)  The medical policy as specified in s.
449	627.6699(3)(j)(k) must be accompanied by an identification card
450	that contains, at a minimum:
451	(a)  The name of the organization issuing the policy or
452	name of the organization administering the policy, whichever
453	applies.
454	(b)  The name of the certificateholder.
455	(c)  The type of plan only if the plan is filed in the
456	state, an indication that the plan is self-funded, or the name
457	of the network.
458	(d)  The member identification number, contract number, and
459	policy or group number, if applicable.
460	(e)  A contact phone number or electronic address for
461	authorizations and admission certifications.
462	(f)  A phone number or electronic address whereby the
463	covered person or hospital, physician, or other person rendering
464	services covered by the policy may obtain benefits verification
465	and information in order to estimate patient financial
466	responsibility, in compliance with privacy rules under the
467	Health Insurance Portability and Accountability Act.
468	(g)  The national plan identifier, in accordance with the
469	compliance date set forth by the federal Department of Health
470	and Human Services.
471
472	The identification card must present the information in a
473	readily identifiable manner or, alternatively, the information
474	may be embedded on the card and available through magnetic
475	stripe or smart card. The information may also be provided
476	through other electronic technology.
477	Section 14.  Subsection (11) of section 627.6675, Florida
478	Statutes, is amended to read:
479	627.6675  Conversion on termination of eligibility.-Subject
480	to all of the provisions of this section, a group policy
481	delivered or issued for delivery in this state by an insurer or
482	nonprofit health care services plan that provides, on an
483	expense-incurred basis, hospital, surgical, or major medical
484	expense insurance, or any combination of these coverages, shall
485	provide that an employee or member whose insurance under the
486	group policy has been terminated for any reason, including
487	discontinuance of the group policy in its entirety or with
488	respect to an insured class, and who has been continuously
489	insured under the group policy, and under any group policy
490	providing similar benefits that the terminated group policy
491	replaced, for at least 3 months immediately prior to
492	termination, shall be entitled to have issued to him or her by
493	the insurer a policy or certificate of health insurance,
494	referred to in this section as a "converted policy." A group
495	insurer may meet the requirements of this section by contracting
496	with another insurer, authorized in this state, to issue an
497	individual converted policy, which policy has been approved by
498	the office under s. 627.410. An employee or member shall not be
499	entitled to a converted policy if termination of his or her
500	insurance under the group policy occurred because he or she
501	failed to pay any required contribution, or because any
502	discontinued group coverage was replaced by similar group
503	coverage within 31 days after discontinuance.
504	(11)  ALTERNATIVE PLANS.-The insurer shall, in addition to
505	the option required by subsection (10), offer the standard
506	health benefit plan, as established pursuant to s.
507	627.6699(10)(12). The insurer may, at its option, also offer
508	alternative plans for group health conversion in addition to the
509	plans required by this section.
510	Section 15.  Subsections (10) and (12) through (17) of
511	section 627.6699, Florida Statutes, are renumbered as
512	subsections (9) and (10) through (15), respectively, and present
513	subsections (2), (3), (9), (10), and (11), paragraph (a) of
514	present subsection (12), paragraph (e) of present subsection
515	(13), paragraph (k) of present subsection (15), and paragraphs
516	(a), (c), and (d) of present subsection (16) of that section are
517	amended, to read:
518	627.6699  Employee Health Care Access Act.-
519	(2)  PURPOSE AND INTENT.-The purpose and intent of this
520	section is to promote the availability of health insurance
521	coverage to small employers regardless of their claims
522	experience or their employees' health status, to establish rules
523	regarding renewability of that coverage, to establish
524	limitations on the use of exclusions for preexisting conditions,
525	to provide for development of a standard health benefit plan and
526	a basic health benefit plan to be offered to all small
527	employers, to provide for establishment of a reinsurance program
528	for coverage of small employers, and to improve the overall
529	fairness and efficiency of the small group health insurance
530	market.
531	(3)  DEFINITIONS.-As used in this section, the term:
532	(a)  "Actuarial certification" means a written statement,
533	by a member of the American Academy of Actuaries or another
534	person acceptable to the office, that a small employer carrier
535	is in compliance with subsection (6), based upon the person's
536	examination, including a review of the appropriate records and
537	of the actuarial assumptions and methods used by the carrier in
538	establishing premium rates for applicable health benefit plans.
539	(b)  "Basic health benefit plan" and "standard health
540	benefit plan" mean low-cost health care plans developed pursuant
541	to subsection (10) (12).
542	(c)  "Board" means the board of directors of the program.
543	(c)(d)  "Carrier" means a person who provides health
544	benefit plans in this state, including an authorized insurer, a
545	health maintenance organization, a multiple-employer welfare
546	arrangement, or any other person providing a health benefit plan
547	that is subject to insurance regulation in this state. However,
548	the term does not include a multiple-employer welfare
549	arrangement, which multiple-employer welfare arrangement
550	operates solely for the benefit of the members or the members
551	and the employees of such members, and was in existence on
552	January 1, 1992.
553	(d)(e)  "Case management program" means the specific
554	supervision and management of the medical care provided or
555	prescribed for a specific individual, which may include the use
556	of health care providers designated by the carrier.
557	(e)(f)  "Creditable coverage" has the same meaning ascribed
558	in s. 627.6561.
559	(f)(g)  "Dependent" means the spouse or child of an
560	eligible employee, subject to the applicable terms of the health
561	benefit plan covering that employee.
562	(g)(h)  "Eligible employee" means an employee who works
563	full time, having a normal workweek of 25 or more hours, and who
564	has met any applicable waiting-period requirements or other
565	requirements of this act. The term includes a self-employed
566	individual, a sole proprietor, a partner of a partnership, or an
567	independent contractor, if the sole proprietor, partner, or
568	independent contractor is included as an employee under a health
569	benefit plan of a small employer, but does not include a part-
570	time, temporary, or substitute employee.
571	(h)(i)  "Established geographic area" means the county or
572	counties, or any portion of a county or counties, within which
573	the carrier provides or arranges for health care services to be
574	available to its insureds, members, or subscribers.
575	(i)(j)  "Guaranteed-issue basis" means an insurance policy
576	that must be offered to an employer, employee, or dependent of
577	the employee, regardless of health status, preexisting
578	conditions, or claims history.
579	(j)(k)  "Health benefit plan" means any hospital or medical
580	policy or certificate, hospital or medical service plan
581	contract, or health maintenance organization subscriber
582	contract. The term does not include accident-only, specified
583	disease, individual hospital indemnity, credit, dental-only,
584	vision-only, Medicare supplement, long-term care, or disability
585	income insurance; similar supplemental plans provided under a
586	separate policy, certificate, or contract of insurance, which
587	cannot duplicate coverage under an underlying health plan and
588	are specifically designed to fill gaps in the underlying health
589	plan, coinsurance, or deductibles; coverage issued as a
590	supplement to liability insurance; workers' compensation or
591	similar insurance; or automobile medical-payment insurance.
592	(k)(l)  "Late enrollee" means an eligible employee or
593	dependent as defined under s. 627.6561(1)(b).
594	(l)(m)  "Limited benefit policy or contract" means a policy
595	or contract that provides coverage for each person insured under
596	the policy for a specifically named disease or diseases, a
597	specifically named accident, or a specifically named limited
598	market that fulfills an experimental or reasonable need, such as
599	the small group market.
600	(m)(n)  "Modified community rating" means a method used to
601	develop carrier premiums which spreads financial risk across a
602	large population; allows the use of separate rating factors for
603	age, gender, family composition, tobacco usage, and geographic
604	area as determined under paragraph (5)(j); and allows
605	adjustments for: claims experience, health status, or duration
606	of coverage as permitted under subparagraph (6)(b)5.; and
607	administrative and acquisition expenses as permitted under
608	subparagraph (6)(b)5.
609	(n)(o)  "Participating carrier" means any carrier that
610	issues health benefit plans in this state except a small
611	employer carrier that elects to be a risk-assuming carrier.
612	(p)  "Plan of operation" means the plan of operation of the
613	program, including articles, bylaws, and operating rules,
614	adopted by the board under subsection (11).
615	(q)  "Program" means the Florida Small Employer Carrier
616	Reinsurance Program created under subsection (11).
617	(o)(r)  "Rating period" means the calendar period for which
618	premium rates established by a small employer carrier are
619	assumed to be in effect.
620	(s)  "Reinsuring carrier" means a small employer carrier
621	that elects to comply with the requirements set forth in
622	subsection (11).
623	(p)(t)  "Risk-assuming carrier" means a small employer
624	carrier that elects to comply with the requirements set forth in
625	subsection (9) (10).
626	(q)(u)  "Self-employed individual" means an individual or
627	sole proprietor who derives his or her income from a trade or
628	business carried on by the individual or sole proprietor which
629	results in taxable income as indicated on IRS Form 1040,
630	schedule C or F, and which generated taxable income in one of
631	the 2 previous years.
632	(r)(v)  "Small employer" means, in connection with a health
633	benefit plan with respect to a calendar year and a plan year,
634	any person, sole proprietor, self-employed individual,
635	independent contractor, firm, corporation, partnership, or
636	association that is actively engaged in business, has its
637	principal place of business in this state, employed an average
638	of at least 1 but not more than 50 eligible employees on
639	business days during the preceding calendar year the majority of
640	whom were employed in this state, employs at least 1 employee on
641	the first day of the plan year, and is not formed primarily for
642	purposes of purchasing insurance. In determining the number of
643	eligible employees, companies that are an affiliated group as
644	defined in s. 1504(a) of the Internal Revenue Code of 1986, as
645	amended, are considered a single employer. For purposes of this
646	section, a sole proprietor, an independent contractor, or a
647	self-employed individual is considered a small employer only if
648	all of the conditions and criteria established in this section
649	are met.
650	(s)(w)  "Small employer carrier" means a carrier that
651	offers health benefit plans covering eligible employees of one
652	or more small employers.
653	(9)  SMALL EMPLOYER CARRIER'S ELECTION TO BECOME A RISK-
654	ASSUMING CARRIER OR A REINSURING CARRIER.-
655	(a)  A small employer carrier must elect to become either a
656	risk-assuming carrier or a reinsuring carrier. By October 31,
657	1993, all small employer carriers must file a final election,
658	which is binding for 2 years, from January 1, 1994, through
659	December 31, 1995, after which an election shall be binding for
660	a period of 5 years. Any carrier that is not a small employer
661	carrier and intends to become a small employer carrier must file
662	its designation when it files the forms and rates it intends to
663	use for small employer group health insurance; such designation
664	shall be binding for 2 years after the date of approval of the
665	forms and rates, and any subsequent designation is binding for 5
666	years. The office may permit a carrier to modify its election at
667	any time for good cause shown, after a hearing.
668	(b)  The commission shall establish an application process
669	for small employer carriers seeking to change their status under
670	this subsection.
671	(c)  An election to become a risk-assuming carrier is
672	subject to approval under subsection (10).
673	(d)  A small employer carrier that elects to cease
674	participating as a reinsuring carrier and to become a risk-
675	assuming carrier is prohibited from reinsuring or continuing to
676	reinsure any small employer health benefits plan under
677	subsection (11) as soon as the carrier becomes a risk-assuming
678	carrier and must pay a prorated assessment based upon business
679	issued as a reinsuring carrier for any portion of the year that
680	the business was reinsured. A small employer carrier that elects
681	to cease participating as a risk-assuming carrier and to become
682	a reinsuring carrier is permitted to reinsure small employer
683	health benefit plans under the terms set forth in subsection
684	(11) and must pay a prorated assessment based upon business
685	issued as a reinsuring carrier for any portion of the year that
686	the business was reinsured.
687	(9)(10)  ELECTION PROCESS TO BECOME A RISK-ASSUMING
688	CARRIER.-
689	(a)1.  A small employer carrier may become a risk-assuming
690	carrier by filing with the office a designation of election
691	under subsection (9) in a format and manner prescribed by the
692	commission. The office shall approve the election of a small
693	employer carrier to become a risk-assuming carrier if the office
694	finds that the carrier is capable of assuming that status
695	pursuant to the criteria set forth in paragraph (b).
696	2.  The office must approve or disapprove any designation
697	as a risk-assuming carrier within 60 days after filing.
698	(b)  In determining whether to approve an application by a
699	small employer carrier to become a risk-assuming carrier, the
700	office shall consider:
701	1.  The carrier's financial ability to support the
702	assumption of the risk of small employer groups.
703	2.  The carrier's history of rating and underwriting small
704	employer groups.
705	3.  The carrier's commitment to market fairly to all small
706	employers in the state or its service area, as applicable.
707	4.  The carrier's ability to assume and manage the risk of
708	enrolling small employer groups without the protection of the
709	reinsurance program provided in subsection (11).
710	(c)  A small employer carrier that becomes a risk-assuming
711	carrier pursuant to this subsection is not subject to the
712	assessment provisions of subsection (11).
713	(d)  The office shall provide public notice of a small
714	employer carrier's designation of election under subsection (9)
715	to become a risk-assuming carrier and shall provide at least a
716	21-day period for public comment prior to making a decision on
717	the election. The office shall hold a hearing on the election at
718	the request of the carrier.
719	(c)(e)  The office may rescind the approval granted to a
720	risk-assuming carrier under this subsection if the office finds
721	that the carrier no longer meets the criteria of paragraph (b).
722	(11)  SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.-
723	(a)  There is created a nonprofit entity to be known as the
724	"Florida Small Employer Health Reinsurance Program."
725	(b)1.  The program shall operate subject to the supervision
726	and control of the board.
727	2.  Effective upon this act becoming a law, the board shall
728	consist of the director of the office or his or her designee,
729	who shall serve as the chairperson, and 13 additional members
730	who are representatives of carriers and insurance agents and are
731	appointed by the director of the office and serve as follows:
732	a.  Five members shall be representatives of health
733	insurers licensed under chapter 624 or chapter 641. Two members
734	shall be agents who are actively engaged in the sale of health
735	insurance. Four members shall be employers or representatives of
736	employers. One member shall be a person covered under an
737	individual health insurance policy issued by a licensed insurer
738	in this state. One member shall represent the Agency for Health
739	Care Administration and shall be recommended by the Secretary of
740	Health Care Administration.
741	b.  A member appointed under this subparagraph shall serve
742	a term of 4 years and shall continue in office until the
743	member's successor takes office, except that, in order to
744	provide for staggered terms, the director of the office shall
745	designate two of the initial appointees under this subparagraph
746	to serve terms of 2 years and shall designate three of the
747	initial appointees under this subparagraph to serve terms of 3
748	years.
749	3.  The director of the office may remove a member for
750	cause.
751	4.  Vacancies on the board shall be filled in the same
752	manner as the original appointment for the unexpired portion of
753	the term.
754	(c)1.  The board shall submit to the office a plan of
755	operation to assure the fair, reasonable, and equitable
756	administration of the program. The board may at any time submit
757	to the office any amendments to the plan that the board finds to
758	be necessary or suitable.
759	2.  The office shall, after notice and hearing, approve the
760	plan of operation if it determines that the plan submitted by
761	the board is suitable to assure the fair, reasonable, and
762	equitable administration of the program and provides for the
763	sharing of program gains and losses equitably and
764	proportionately in accordance with paragraph (j).
765	3.  The plan of operation, or any amendment thereto,
766	becomes effective upon written approval of the office.
767	(d)  The plan of operation must, among other things:
768	1.  Establish procedures for handling and accounting for
769	program assets and moneys and for an annual fiscal reporting to
770	the office.
771	2.  Establish procedures for selecting an administering
772	carrier and set forth the powers and duties of the administering
773	carrier.
774	3.  Establish procedures for reinsuring risks.
775	4.  Establish procedures for collecting assessments from
776	participating carriers to provide for claims reinsured by the
777	program and for administrative expenses, other than amounts
778	payable to the administrative carrier, incurred or estimated to
779	be incurred during the period for which the assessment is made.
780	5.  Provide for any additional matters at the discretion of
781	the board.
782	(e)  The board shall recommend to the office market conduct
783	requirements and other requirements for carriers and agents,
784	including requirements relating to:
785	1.  Registration by each carrier with the office of its
786	intention to be a small employer carrier under this section;
787	2.  Publication by the office of a list of all small
788	employer carriers, including a requirement applicable to agents
789	and carriers that a health benefit plan may not be sold by a
790	carrier that is not identified as a small employer carrier;
791	3.  The availability of a broadly publicized, toll-free
792	telephone number for access by small employers to information
793	concerning this section;
794	4.  Periodic reports by carriers and agents concerning
795	health benefit plans issued; and
796	5.  Methods concerning periodic demonstration by small
797	employer carriers and agents that they are marketing or issuing
798	health benefit plans to small employers.
799	(f)  The program has the general powers and authority
800	granted under the laws of this state to insurance companies and
801	health maintenance organizations licensed to transact business,
802	except the power to issue health benefit plans directly to
803	groups or individuals. In addition thereto, the program has
804	specific authority to:
805	1.  Enter into contracts as necessary or proper to carry
806	out the provisions and purposes of this act, including the
807	authority to enter into contracts with similar programs of other
808	states for the joint performance of common functions or with
809	persons or other organizations for the performance of
810	administrative functions.
811	2.  Sue or be sued, including taking any legal action
812	necessary or proper for recovering any assessments and penalties
813	for, on behalf of, or against the program or any carrier.
814	3.  Take any legal action necessary to avoid the payment of
815	improper claims against the program.
816	4.  Issue reinsurance policies, in accordance with the
817	requirements of this act.
818	5.  Establish rules, conditions, and procedures for
819	reinsurance risks under the program participation.
820	6.  Establish actuarial functions as appropriate for the
821	operation of the program.
822	7.  Assess participating carriers in accordance with
823	paragraph (j), and make advance interim assessments as may be
824	reasonable and necessary for organizational and interim
825	operating expenses. Interim assessments shall be credited as
826	offsets against any regular assessments due following the close
827	of the calendar year.
828	8.  Appoint appropriate legal, actuarial, and other
829	committees as necessary to provide technical assistance in the
830	operation of the program, and in any other function within the
831	authority of the program.
832	9.  Borrow money to effect the purposes of the program. Any
833	notes or other evidences of indebtedness of the program which
834	are not in default constitute legal investments for carriers and
835	may be carried as admitted assets.
836	10.  To the extent necessary, increase the $5,000
837	deductible reinsurance requirement to adjust for the effects of
838	inflation.
839	(g)  A reinsuring carrier may reinsure with the program
840	coverage of an eligible employee of a small employer, or any
841	dependent of such an employee, subject to each of the following
842	provisions:
843	1.  With respect to a standard and basic health care plan,
844	the program must reinsure the level of coverage provided; and,
845	with respect to any other plan, the program must reinsure the
846	coverage up to, but not exceeding, the level of coverage
847	provided under the standard and basic health care plan.
848	2.  Except in the case of a late enrollee, a reinsuring
849	carrier may reinsure an eligible employee or dependent within 60
850	days after the commencement of the coverage of the small
851	employer. A newly employed eligible employee or dependent of a
852	small employer may be reinsured within 60 days after the
853	commencement of his or her coverage.
854	3.  A small employer carrier may reinsure an entire
855	employer group within 60 days after the commencement of the
856	group's coverage under the plan. The carrier may choose to
857	reinsure newly eligible employees and dependents of the
858	reinsured group pursuant to subparagraph 1.
859	4.  The program may not reimburse a participating carrier
860	with respect to the claims of a reinsured employee or dependent
861	until the carrier has paid incurred claims of at least $5,000 in
862	a calendar year for benefits covered by the program. In
863	addition, the reinsuring carrier shall be responsible for 10
864	percent of the next $50,000 and 5 percent of the next $100,000
865	of incurred claims during a calendar year and the program shall
866	reinsure the remainder.
867	5.  The board annually shall adjust the initial level of
868	claims and the maximum limit to be retained by the carrier to
869	reflect increases in costs and utilization within the standard
870	market for health benefit plans within the state. The adjustment
871	shall not be less than the annual change in the medical
872	component of the "Consumer Price Index for All Urban Consumers"
873	of the Bureau of Labor Statistics of the Department of Labor,
874	unless the board proposes and the office approves a lower
875	adjustment factor.
876	6.  A small employer carrier may terminate reinsurance for
877	all reinsured employees or dependents on any plan anniversary.
878	7.  The premium rate charged for reinsurance by the program
879	to a health maintenance organization that is approved by the
880	Secretary of Health and Human Services as a federally qualified
881	health maintenance organization pursuant to 42 U.S.C. s.
882	300e(c)(2)(A) and that, as such, is subject to requirements that
883	limit the amount of risk that may be ceded to the program, which
884	requirements are more restrictive than subparagraph 4., shall be
885	reduced by an amount equal to that portion of the risk, if any,
886	which exceeds the amount set forth in subparagraph 4. which may
887	not be ceded to the program.
888	8.  The board may consider adjustments to the premium rates
889	charged for reinsurance by the program for carriers that use
890	effective cost containment measures, including high-cost case
891	management, as defined by the board.
892	9.  A reinsuring carrier shall apply its case-management
893	and claims-handling techniques, including, but not limited to,
894	utilization review, individual case management, preferred
895	provider provisions, other managed care provisions or methods of
896	operation, consistently with both reinsured business and
897	nonreinsured business.
898	(h)1.  The board, as part of the plan of operation, shall
899	establish a methodology for determining premium rates to be
900	charged by the program for reinsuring small employers and
901	individuals pursuant to this section. The methodology shall
902	include a system for classification of small employers that
903	reflects the types of case characteristics commonly used by
904	small employer carriers in the state. The methodology shall
905	provide for the development of basic reinsurance premium rates,
906	which shall be multiplied by the factors set for them in this
907	paragraph to determine the premium rates for the program. The
908	basic reinsurance premium rates shall be established by the
909	board, subject to the approval of the office, and shall be set
910	at levels which reasonably approximate gross premiums charged to
911	small employers by small employer carriers for health benefit
912	plans with benefits similar to the standard and basic health
913	benefit plan. The premium rates set by the board may vary by
914	geographical area, as determined under this section, to reflect
915	differences in cost. The multiplying factors must be established
916	as follows:
917	a.  The entire group may be reinsured for a rate that is
918	1.5 times the rate established by the board.
919	b.  An eligible employee or dependent may be reinsured for
920	a rate that is 5 times the rate established by the board.
921	2.  The board periodically shall review the methodology
922	established, including the system of classification and any
923	rating factors, to assure that it reasonably reflects the claims
924	experience of the program. The board may propose changes to the
925	rates which shall be subject to the approval of the office.
926	(i)  If a health benefit plan for a small employer issued
927	in accordance with this subsection is entirely or partially
928	reinsured with the program, the premium charged to the small
929	employer for any rating period for the coverage issued must be
930	consistent with the requirements relating to premium rates set
931	forth in this section.
932	(j)1.  Before July 1 of each calendar year, the board shall
933	determine and report to the office the program net loss for the
934	previous year, including administrative expenses for that year,
935	and the incurred losses for the year, taking into account
936	investment income and other appropriate gains and losses.
937	2.  Any net loss for the year shall be recouped by
938	assessment of the carriers, as follows:
939	a.  The operating losses of the program shall be assessed
940	in the following order subject to the specified limitations. The
941	first tier of assessments shall be made against reinsuring
942	carriers in an amount which shall not exceed 5 percent of each
943	reinsuring carrier's premiums from health benefit plans covering
944	small employers. If such assessments have been collected and
945	additional moneys are needed, the board shall make a second tier
946	of assessments in an amount which shall not exceed 0.5 percent
947	of each carrier's health benefit plan premiums. Except as
948	provided in paragraph (n), risk-assuming carriers are exempt
949	from all assessments authorized pursuant to this section. The
950	amount paid by a reinsuring carrier for the first tier of
951	assessments shall be credited against any additional assessments
952	made.
953	b.  The board shall equitably assess carriers for operating
954	losses of the plan based on market share. The board shall
955	annually assess each carrier a portion of the operating losses
956	of the plan. The first tier of assessments shall be determined
957	by multiplying the operating losses by a fraction, the numerator
958	of which equals the reinsuring carrier's earned premium
959	pertaining to direct writings of small employer health benefit
960	plans in the state during the calendar year for which the
961	assessment is levied, and the denominator of which equals the
962	total of all such premiums earned by reinsuring carriers in the
963	state during that calendar year. The second tier of assessments
964	shall be based on the premiums that all carriers, except risk-
965	assuming carriers, earned on all health benefit plans written in
966	this state. The board may levy interim assessments against
967	carriers to ensure the financial ability of the plan to cover
968	claims expenses and administrative expenses paid or estimated to
969	be paid in the operation of the plan for the calendar year prior
970	to the association's anticipated receipt of annual assessments
971	for that calendar year. Any interim assessment is due and
972	payable within 30 days after receipt by a carrier of the interim
973	assessment notice. Interim assessment payments shall be credited
974	against the carrier's annual assessment. Health benefit plan
975	premiums and benefits paid by a carrier that are less than an
976	amount determined by the board to justify the cost of collection
977	may not be considered for purposes of determining assessments.
978	c.  Subject to the approval of the office, the board shall
979	make an adjustment to the assessment formula for reinsuring
980	carriers that are approved as federally qualified health
981	maintenance organizations by the Secretary of Health and Human
982	Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,
983	if any, that restrictions are placed on them that are not
984	imposed on other small employer carriers.
985	3.  Before July 1 of each year, the board shall determine
986	and file with the office an estimate of the assessments needed
987	to fund the losses incurred by the program in the previous
988	calendar year.
989	4.  If the board determines that the assessments needed to
990	fund the losses incurred by the program in the previous calendar
991	year will exceed the amount specified in subparagraph 2., the
992	board shall evaluate the operation of the program and report its
993	findings, including any recommendations for changes to the plan
994	of operation, to the office within 180 days following the end of
995	the calendar year in which the losses were incurred. The
996	evaluation shall include an estimate of future assessments, the
997	administrative costs of the program, the appropriateness of the
998	premiums charged and the level of carrier retention under the
999	program, and the costs of coverage for small employers. If the
1000	board fails to file a report with the office within 180 days
1001	following the end of the applicable calendar year, the office
1002	may evaluate the operations of the program and implement such
1003	amendments to the plan of operation the office deems necessary
1004	to reduce future losses and assessments.
1005	5.  If assessments exceed the amount of the actual losses
1006	and administrative expenses of the program, the excess shall be
1007	held as interest and used by the board to offset future losses
1008	or to reduce program premiums. As used in this paragraph, the
1009	term "future losses" includes reserves for incurred but not
1010	reported claims.
1011	6.  Each carrier's proportion of the assessment shall be
1012	determined annually by the board, based on annual statements and
1013	other reports considered necessary by the board and filed by the
1014	carriers with the board.
1015	7.  Provision shall be made in the plan of operation for
1016	the imposition of an interest penalty for late payment of an
1017	assessment.
1018	8.  A carrier may seek, from the office, a deferment, in
1019	whole or in part, from any assessment made by the board. The
1020	office may defer, in whole or in part, the assessment of a
1021	carrier if, in the opinion of the office, the payment of the
1022	assessment would place the carrier in a financially impaired
1023	condition. If an assessment against a carrier is deferred, in
1024	whole or in part, the amount by which the assessment is deferred
1025	may be assessed against the other carriers in a manner
1026	consistent with the basis for assessment set forth in this
1027	section. The carrier receiving such deferment remains liable to
1028	the program for the amount deferred and is prohibited from
1029	reinsuring any individuals or groups in the program if it fails
1030	to pay assessments.
1031	(k)  Neither the participation in the program as reinsuring
1032	carriers, the establishment of rates, forms, or procedures, nor
1033	any other joint or collective action required by this act, may
1034	be the basis of any legal action, criminal or civil liability,
1035	or penalty against the program or any of its carriers either
1036	jointly or separately.
1037	(l)  The board, as part of the plan of operation, shall
1038	develop standards setting forth the manner and levels of
1039	compensation to be paid to agents for the sale of basic and
1040	standard health benefit plans. In establishing such standards,
1041	the board shall take into consideration the need to assure the
1042	broad availability of coverages, the objectives of the program,
1043	the time and effort expended in placing the coverage, the need
1044	to provide ongoing service to the small employer, the levels of
1045	compensation currently used in the industry, and the overall
1046	costs of coverage to small employers selecting these plans.
1047	(m)  The board shall monitor compliance with this section,
1048	including the market conduct of small employer carriers, and
1049	shall report to the office any unfair trade practices and
1050	misleading or unfair conduct by a small employer carrier that
1051	has been reported to the board by agents, consumers, or any
1052	other person. The office shall investigate all reports and, upon
1053	a finding of noncompliance with this section or of unfair or
1054	misleading practices, shall take action against the small
1055	employer carrier as permitted under the insurance code or
1056	chapter 641. The board is not given investigatory or regulatory
1057	powers, but must forward all reports of cases or abuse or
1058	misrepresentation to the office.
1059	(n)  Notwithstanding paragraph (j), the administrative
1060	expenses of the program shall be recouped by assessment of risk-
1061	assuming carriers and reinsuring carriers and such amounts shall
1062	not be considered part of the operating losses of the plan for
1063	the purposes of this paragraph. Each carrier's portion of such
1064	administrative expenses shall be determined by multiplying the
1065	total of such administrative expenses by a fraction, the
1066	numerator of which equals the carrier's earned premium
1067	pertaining to direct writing of small employer health benefit
1068	plans in the state during the calendar year for which the
1069	assessment is levied, and the denominator of which equals the
1070	total of such premiums earned by all carriers in the state
1071	during such calendar year.
1072	(o)  The board shall advise the office, the Agency for
1073	Health Care Administration, the department, other executive
1074	departments, and the Legislature on health insurance issues.
1075	Specifically, the board shall:
1076	1.  Provide a forum for stakeholders, consisting of
1077	insurers, employers, agents, consumers, and regulators, in the
1078	private health insurance market in this state.
1079	2.  Review and recommend strategies to improve the
1080	functioning of the health insurance markets in this state with a
1081	specific focus on market stability, access, and pricing.
1082	3.  Make recommendations to the office for legislation
1083	addressing health insurance market issues and provide comments
1084	on health insurance legislation proposed by the office.
1085	4.  Meet at least three times each year. One meeting shall
1086	be held to hear reports and to secure public comment on the
1087	health insurance market, to develop any legislation needed to
1088	address health insurance market issues, and to provide comments
1089	on health insurance legislation proposed by the office.
1090	5.  Issue a report to the office on the state of the health
1091	insurance market by September 1 each year. The report shall
1092	include recommendations for changes in the health insurance
1093	market, results from implementation of previous recommendations,
1094	and information on health insurance markets.
1095	(10)(12)  STANDARD, BASIC, HIGH DEDUCTIBLE, AND LIMITED
1096	HEALTH BENEFIT PLANS.-
1097	(a)1.  The Chief Financial Officer shall appoint a health
1098	benefit plan committee composed of four representatives of
1099	carriers which shall include at least two representatives of
1100	HMOs, at least one of which is a staff model HMO, two
1101	representatives of agents, four representatives of small
1102	employers, and one employee of a small employer. The carrier
1103	members shall be selected from a list of individuals recommended
1104	by the insurance commissioner board. The Chief Financial Officer
1105	may require the insurance commissioner board to submit
1106	additional recommendations of individuals for appointment.
1107	2.  The plans shall comply with all of the requirements of
1108	this subsection.
1109	3.  The plans must be filed with and approved by the office
1110	prior to issuance or delivery by any small employer carrier.
1111	4.  After approval of the revised health benefit plans, if
1112	the office determines that modifications to a plan might be
1113	appropriate, the Chief Financial Officer shall appoint a new
1114	health benefit plan committee in the manner provided in
1115	subparagraph 1. to submit recommended modifications to the
1116	office for approval.
1117	(11)(13)  STANDARDS TO ASSURE FAIR MARKETING.-
1118	(e)  A small employer carrier shall provide reasonable
1119	compensation, as provided under the plan of operation of the
1120	program, to an agent, if any, for the sale of a basic or
1121	standard health benefit plan.
1122	(13)(15)  SMALL EMPLOYERS ACCESS PROGRAM.-
1123	(k)  Benefits.-The benefits provided by the plan shall be
1124	the same as the coverage required for small employers under
1125	subsection (10) (12). Upon the approval of the office, the
1126	insurer may also establish an optional mutually supported
1127	benefit plan which is an alternative plan developed within a
1128	defined geographic region of this state or any other such
1129	alternative plan which will carry out the intent of this
1130	subsection. Any small employer carrier issuing new health
1131	benefit plans may offer a benefit plan with coverages similar
1132	to, but not less than, any alternative coverage plan developed
1133	pursuant to this subsection.
1134	(14)(16)  APPLICABILITY OF OTHER STATE LAWS.-
1135	(a)  Except as expressly provided in this section, a law
1136	requiring coverage for a specific health care service or
1137	benefit, or a law requiring reimbursement, utilization, or
1138	consideration of a specific category of licensed health care
1139	practitioner, does not apply to a standard or basic health
1140	benefit plan policy or contract or a limited benefit policy or
1141	contract offered or delivered to a small employer unless that
1142	law is made expressly applicable to such policies or contracts.
1143	A law restricting or limiting deductibles, coinsurance,
1144	copayments, or annual or lifetime maximum payments does not
1145	apply to any health plan policy, including a standard or basic
1146	health benefit plan policy or contract, offered or delivered to
1147	a small employer unless such law is made expressly applicable to
1148	such policy or contract. However, every small employer carrier
1149	must offer to eligible small employers the standard benefit plan
1150	and the basic benefit plan, as required by subsection (5), as
1151	such plans have been approved by the office pursuant to
1152	subsection (10) (12).
1153	(c)  Any second tier assessment paid by a carrier pursuant
1154	to paragraph (11)(j) may be credited against assessments levied
1155	against the carrier pursuant to s. 627.6494.
1156	(c)(d)  Notwithstanding chapter 641, a health maintenance
1157	organization is authorized to issue contracts providing benefits
1158	equal to the standard health benefit plan, the basic health
1159	benefit plan, and the limited benefit policy authorized by this
1160	section.
1161	Section 16.  Subsection (10) of section 641.3922, Florida
1162	Statutes, is amended to read:
1163	641.3922  Conversion contracts; conditions.-Issuance of a
1164	converted contract shall be subject to the following conditions:
1165	(10)  ALTERNATE PLANS.-The health maintenance organization
1166	shall offer a standard health benefit plan as established
1167	pursuant to s. 627.6699(10)(12). The health maintenance
1168	organization may, at its option, also offer alternative plans
1169	for group health conversion in addition to those required by
1170	this section, provided any alternative plan is approved by the
1171	office or is a converted policy, approved under s. 627.6675 and
1172	issued by an insurance company authorized to transact insurance
1173	in this state. Approval by the office of an alternative plan
1174	shall be based on compliance by the alternative plan with the
1175	provisions of this part and the rules promulgated thereunder,
1176	applicable provisions of the Florida Insurance Code and rules
1177	promulgated thereunder, and any other applicable law.
1178	Section 17.  Subsections (10) through (15) of section
1179	945.603, Florida Statutes, are renumbered as subsections (9)
1180	through (14), respectively, and present subsection (10) of that
1181	section is amended to read:
1182	945.603  Powers and duties of authority.-The purpose of the
1183	authority is to assist in the delivery of health care services
1184	for inmates in the Department of Corrections by advising the
1185	Secretary of Corrections on the professional conduct of primary,
1186	convalescent, dental, and mental health care and the management
1187	of costs consistent with quality care, by advising the Governor
1188	and the Legislature on the status of the Department of
1189	Corrections' health care delivery system, and by assuring that
1190	adequate standards of physical and mental health care for
1191	inmates are maintained at all Department of Corrections
1192	institutions. For this purpose, the authority has the authority
1193	to:
1194	(10)  Coordinate the development of prospective payment
1195	arrangements as described in s. 408.50 when appropriate for the
1196	acquisition of inmate health care services.
1197	Section 18.  Paragraph (e) of subsection (2) of section
1198	1011.52, Florida Statutes, is amended to read:
1199	1011.52  Appropriation to first accredited medical school.-
1200	(2)  In order for a medical school to qualify under the
1201	provisions of this section and to be entitled to the benefits
1202	herein, such medical school:
1203	(e)  Must have in place an operating agreement with a
1204	government-owned hospital that is located in the same county as
1205	the medical school and that is a statutory teaching hospital as
1206	defined in s. 408.07(44)(45). The operating agreement shall
1207	provide for the medical school to maintain the same level of
1208	affiliation with the hospital, including the level of services
1209	to indigent and charity care patients served by the hospital,
1210	which was in place in the prior fiscal year. Each year,
1211	documentation demonstrating that an operating agreement is in
1212	effect shall be submitted jointly to the Department of Education
1213	by the hospital and the medical school prior to the payment of
1214	moneys from the annual appropriation.
1215	Section 19.  Except as otherwise expressly provided in this
1216	act, this act shall take effect July 1, 2011.

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