Florida Senate - 2013         (PROPOSED COMMITTEE BILL) SPB 7138
       
       
       
       FOR CONSIDERATION By the Committee on Banking and Insurance
       
       
       
       
       597-02756B-13                                         20137138__
    1                        A bill to be entitled                      
    2         An act relating to health insurance; creating s.
    3         624.25, F.S.; providing that a provision of the
    4         Florida Insurance Code applies unless it conflicts
    5         with a provision of the Patient Protection and
    6         Affordable Care Act (PPACA); creating s. 624.26, F.S.;
    7         authorizing the Office of Insurance Regulation to
    8         review forms and conduct market conduct examinations
    9         for compliance with PPACA and to report potential
   10         violations to the federal Department of Health and
   11         Human Services; authorizing the Division of Consumer
   12         Services of the Department of Financial Services to
   13         respond to complaints related to PPACA and to report
   14         violations to the office and the Department of Health
   15         and Human Services; providing that certain
   16         determinations by the office or the Department of
   17         Financial Services are not subject to certain
   18         challenges under ch. 120, F.S.; amending s. 627.402,
   19         F.S.; providing definitions for “grandfathered health
   20         plan,” “nongrandfathered health plan,” and “PPACA”;
   21         amending s. 627.410, F.S.; providing an exception to
   22         the prohibition against an insurer issuing a new
   23         policy form after discontinuing the availability of a
   24         similar policy form when the form does not comply with
   25         PPACA; requiring the experience of grandfathered
   26         health plans and nongrandfathered health plans to be
   27         separated; providing that nongrandfathered health
   28         plans are not subject to rate review or approval by
   29         the office; specifying that such rates for such health
   30         plans must be filed with the office and are exempt
   31         from other specified rate requirements; requiring
   32         insurers and health maintenance organizations issuing
   33         such health plans to include a notice of the estimated
   34         impact of PPACA on monthly premiums with the first
   35         issuance or renewal of the policy; requiring the
   36         Financial Services Commission to adopt the notice
   37         format by rule; requiring the notice to be filed with
   38         the office for informational purposes; providing for
   39         the calculation of the estimated premium impact, which
   40         must be included in the notice; requiring the office,
   41         in consultation with the department, to develop a
   42         summary of the impact to be made available on their
   43         respective websites; providing for future repeal;
   44         amending s. 627.411, F.S.; providing that grounds for
   45         disapproval of rates do not apply to nongrandfathered
   46         health plans; providing for future repeal of this
   47         provision; amending s. 627.6425, F.S.; allowing an
   48         insurer to nonrenew coverage only for all
   49         nongrandfathered health plans under certain
   50         conditions; amending s. 627.6484, F.S.; providing that
   51         coverage for policyholders of the Florida
   52         Comprehensive Health Association terminates on a
   53         specified date; requiring the association to provide
   54         specified assistance to policyholders in obtaining
   55         other health insurance coverage; requiring the
   56         association to notify policyholders of termination of
   57         coverage and information on how to obtain other
   58         coverage; requiring the association to determine the
   59         amount of a final assessment or to refund any surplus
   60         funds to member insurers, and to otherwise complete
   61         program responsibilities; repealing s. 627.64872,
   62         related to the Florida Health Insurance Plan;
   63         providing for the future repeal of ss. 627.648,
   64         627.6482, 627.6484, 627.6486, 627.6488, 627.6489,
   65         627.649, 627.6492, 627.6494, 627.6496, 627.6498, and
   66         627.6499, F.S., relating to the Florida Comprehensive
   67         Health Association; amending s. 627.6571, F.S.;
   68         allowing an insurer to nonrenew coverage only for all
   69         nongrandfathered health plans under certain
   70         conditions; amending s. 627.6699, F.S.; adding and
   71         revising definitions used in the Employee Health Care
   72         Access Act; providing that a small employer carrier is
   73         not required to use gender as a rating factor for a
   74         nongrandfathered health plan; requiring carriers to
   75         separate the experience of grandfathered health plans
   76         and nongrandfathered health plans for determining
   77         rates; amending s. 641.31, F.S.; providing that
   78         nongrandfathered health plans are not subject to rate
   79         review or approval by the office; providing for future
   80         repeal of this provision; providing effective dates.
   81  
   82  Be It Enacted by the Legislature of the State of Florida:
   83  
   84         Section 1. Section 624.25, Florida Statutes, is created to
   85  read:
   86         624.25 Patient Protection and Affordable Care Act.—A
   87  provision of the Florida Insurance Code, or rule adopted
   88  pursuant to the code, applies unless such provision or rule
   89  prevents the application of a provision of PPACA. As used in
   90  this section, the term “PPACA” has the same meaning as provided
   91  in s. 627.402.
   92         Section 2. Section 624.26, Florida Statutes, is created to
   93  read:
   94         624.26Collaborative arrangement with the Department of
   95  Health and Human Services.—
   96         (1) As used in this section, the term “PPACA” has the same
   97  meaning as provided in s. 627.402.
   98         (2) When reviewing forms filed by health insurers or health
   99  maintenance organizations pursuant to s. 627.410 or s. 641.31(3)
  100  for compliance with state law, the office may also review such
  101  forms for compliance with PPACA. If the office determines that a
  102  form does not comply with PPACA, the office shall inform the
  103  insurer or organization of the reason for noncompliance. If the
  104  office determines that a form ultimately used by an insurer or
  105  organization does not comply with PPACA, the office may report
  106  such potential violation to the federal Department of Health and
  107  Human Services. The review of forms by the office under this
  108  subsection does not include review of the rates, rating
  109  practices, or the relationship of benefits to the rates.
  110         (3) When performing market conduct examinations or
  111  investigations of health insurers or health maintenance
  112  organizations as authorized under s. 624.307, s. 624.3161, or s.
  113  641.3905 for compliance with state law, the office may include
  114  compliance with PPACA within the scope of such examination or
  115  investigation. If the office determines that an insurer’s or
  116  organization’s operations do not comply with PPACA, the office
  117  shall inform the insurer or organization of the reason for such
  118  determination. If the insurer or organization does not take
  119  action to comply with PPACA, the office may report such
  120  potential violation to the federal Department of Health and
  121  Human Resources.
  122         (4) The department’s Division of Consumer Services may
  123  respond to complaints by consumers relating to a requirement of
  124  PPACA as authorized under s. 20.121(2)(h), and report apparent
  125  or potential violations to the office and to the federal
  126  Department of Health and Human Services.
  127         (5) A determination made by the office or department
  128  pursuant to this section regarding compliance with PPACA does
  129  not constitute a determination that affects the substantial
  130  interests of any party for purposes of chapter 120.
  131         Section 3. Section 627.402, Florida Statutes, is amended to
  132  read:
  133         627.402 Definitions; specified certificates not included.
  134  As used in this part, the term:
  135         (1) “Grandfathered health plan” has the same meaning as
  136  provided in 42 U.S.C. s. 18011, subject to the conditions for
  137  maintaining status as a grandfathered health plan specified in
  138  regulations adopted by the federal Department of Health and
  139  Human Services in 45 C.F.R. s. 147.140.
  140         (2) “Nongrandfathered health plan” is a health insurance
  141  policy or health maintenance organization contract that is not a
  142  grandfathered health plan.
  143         (3)(1) “Policy” means a written contract of insurance or
  144  written agreement for or effecting insurance, or the certificate
  145  thereof, by whatever name called, and includes all clauses,
  146  riders, endorsements, and papers that which are a part thereof.
  147         (2) The term word “certificate” as used in this subsection
  148  section does not include certificates as to group life or health
  149  insurance or as to group annuities issued to individual
  150  insureds.
  151         (4) “PPACA” means the Patient Protection and Affordable
  152  Care Act, Pub. L. No. 111-148, as amended by the Health Care and
  153  Education Reconciliation Act of 2010, Pub. L. No. 111-152, and
  154  regulations adopted pursuant to those acts.
  155         Section 4. Subsections (2), (6), and (7) of section
  156  627.410, Florida Statutes, are amended, and subsection (9) is
  157  added to that section, to read:
  158         627.410 Filing, approval of forms.—
  159         (2) Every such filing must be made at least not less than
  160  30 days in advance of any such use or delivery. At the
  161  expiration of the such 30 days, the form so filed will be deemed
  162  approved unless prior thereto it has been affirmatively approved
  163  or disapproved by order of the office. The approval of any such
  164  form by the office constitutes a waiver of any unexpired portion
  165  of such waiting period. The office may extend by not more than
  166  an additional 15 days the period within which it may so
  167  affirmatively approve or disapprove any such form by up to 15
  168  days, by giving notice of such extension before expiration of
  169  the initial 30-day period. At the expiration of any such
  170  extended period as so extended, and in the absence of such prior
  171  affirmative approval or disapproval, any such form shall be
  172  deemed approved.
  173         (6)(a) An insurer may shall not deliver, or issue for
  174  delivery, or renew in this state any health insurance policy
  175  form until it has filed with the office a copy of every
  176  applicable rating manual, rating schedule, change in rating
  177  manual, and change in rating schedule; if rating manuals and
  178  rating schedules are not applicable, the insurer must file with
  179  the office applicable premium rates and any change in applicable
  180  premium rates. This paragraph does not apply to group health
  181  insurance policies, effectuated and delivered in this state,
  182  insuring groups of 51 or more persons, except for Medicare
  183  supplement insurance, long-term care insurance, and any coverage
  184  under which the increase in claim costs over the lifetime of the
  185  contract due to advancing age or duration is prefunded in the
  186  premium.
  187         (b) The commission may establish by rule, for each type of
  188  health insurance form, procedures to be used in ascertaining the
  189  reasonableness of benefits in relation to premium rates and may,
  190  by rule, exempt from any requirement of paragraph (a) any health
  191  insurance policy form or type thereof, (as specified in such
  192  rule,) to which form or type such requirements may not be
  193  practically applied or to which form or type the application of
  194  such requirements is not desirable or necessary for the
  195  protection of the public. With respect to any health insurance
  196  policy form or type thereof which is exempted by rule from any
  197  requirement of paragraph (a), premium rates filed pursuant to
  198  ss. 627.640 and 627.662 are shall be for informational purposes.
  199         (c) Every filing made pursuant to this subsection shall be
  200  made within the same time period provided in, and shall be
  201  deemed to be approved under the same conditions, as those
  202  provided in, subsection (2).
  203         (d) Every filing made pursuant to this subsection, except
  204  disability income policies and accidental death policies, are
  205  shall be prohibited from applying the following rating
  206  practices:
  207         1. Select and ultimate premium schedules.
  208         2. Premium class definitions that which classify insured
  209  based on year of issue or duration since issue.
  210         3. Attained age premium structures on policy forms under
  211  which more than 50 percent of the policies are issued to persons
  212  age 65 or over.
  213         (e) Except as provided in subparagraph 1., an insurer shall
  214  continue to make available for purchase any individual policy
  215  form issued on or after October 1, 1993. A policy form is shall
  216  not be considered to be available for purchase unless the
  217  insurer has actively offered it for sale during in the previous
  218  12 months.
  219         1. An insurer may discontinue the availability of a policy
  220  form if the insurer provides its decision to the office in
  221  writing its decision at least 30 days before prior to
  222  discontinuing the availability of the form of the policy or
  223  certificate. After receipt of the notice by the office, the
  224  insurer may shall no longer offer for sale the policy form or
  225  certificate form for sale in this state.
  226         2. An insurer that discontinues the availability of a
  227  policy form pursuant to subparagraph 1. may shall not file for
  228  approval a new policy form providing similar benefits similar to
  229  as the discontinued form for a period of 5 years after the
  230  insurer provides notice to the office of the discontinuance. The
  231  period of discontinuance may be reduced if the office determines
  232  that a shorter period is appropriate. The requirements of this
  233  subparagraph do not apply to the discontinuance of a policy form
  234  because it does not comply with PPACA.
  235         3. The experience of all policy forms providing similar
  236  benefits shall be combined for all rating purposes, except that
  237  the experience of grandfathered health plans and
  238  nongrandfathered health plans shall be separated.
  239         (7)(a) Each insurer subject to the requirements of
  240  subsection (6) shall make an annual filing with the office
  241  within no later than 12 months after its previous filing,
  242  demonstrating the reasonableness of benefits in relation to
  243  premium rates. The office, After receiving a request to be
  244  exempted from the provisions of this section, the office may,
  245  for good cause due to insignificant numbers of policies in force
  246  or insignificant premium volume, exempt a company, by line of
  247  coverage, from filing rates or rate certification as required by
  248  this section.
  249         (a)(b) The filing required by this subsection shall be
  250  satisfied by one of the following methods:
  251         1. A rate filing prepared by an actuary which contains
  252  documentation demonstrating the reasonableness of benefits in
  253  relation to premiums charged in accordance with the applicable
  254  rating laws and rules adopted promulgated by the commission.
  255         2. If no rate change is proposed, a filing that which
  256  consists of a certification by an actuary that benefits are
  257  reasonable in relation to premiums currently charged in
  258  accordance with applicable laws and rules promulgated by the
  259  commission.
  260         (b)(c) As used in this section, the term “actuary” means an
  261  individual who is a member of the Society of Actuaries or the
  262  American Academy of Actuaries. If an insurer does not employ or
  263  otherwise retain the services of an actuary, the insurer’s
  264  certification shall be prepared by insurer personnel or
  265  consultants who have with a minimum of 5 years’ experience in
  266  insurance ratemaking. The chief executive officer of the insurer
  267  shall review and sign the certification indicating his or her
  268  agreement with its conclusions.
  269         (c)(d) If at the time a filing is required under this
  270  section an insurer is in the process of completing a rate
  271  review, the insurer may apply to the office for an extension of
  272  up to an additional 30 days in which to make the filing. The
  273  request for extension must be received by the office by no later
  274  than the date the filing is due.
  275         (d)(e) If an insurer fails to meet the filing requirements
  276  of this subsection and does not submit the filing within 60 days
  277  after following the date the filing is due, the office may, in
  278  addition to any other penalty authorized by law, order the
  279  insurer to discontinue the issuance of policies for which the
  280  required filing was not made, until such time as the office
  281  determines that the required filing is properly submitted.
  282         (9) For plan years 2014 and 2015, nongrandfathered health
  283  plans for the individual or small group market are not subject
  284  to rate review or approval by the office. An insurer or health
  285  maintenance organization issuing or renewing such health plans
  286  shall file rates and any change in rates with the office as
  287  required by paragraph (6)(a), but the filing and rates are not
  288  subject to subsection (2), paragraphs (b), (c), or (d) of
  289  subsection (6), or subsection (7). The filing shall also include
  290  the notice to policyholders required under this subsection.
  291         (a) For each nongrandfathered health plan, an insurer or
  292  health maintenance organization shall include a notice
  293  describing or illustrating the estimated impact of PPACA on
  294  monthly premiums with the delivery of the policy or contract or,
  295  upon renewal, the premium renewal notice. The notice must be in
  296  a format established by rule of the commission. All notices
  297  shall be submitted to the office for informational purposes by
  298  September 1, 2013. The notice is required only for the first
  299  issuance or renewal of the policy or contract on or after
  300  January 1, 2014.
  301         (b) The information provided in the notice shall be based
  302  on the statewide average premium for the policy or contract for
  303  the bronze, silver, gold, or platinum level plan, whichever is
  304  applicable to the policy or contract, and provide an estimate of
  305  the following effects of PPACA requirements:
  306         1. The dollar amount of the premium which is attributable
  307  to the impact of guaranteed issuance of coverage. This estimate
  308  must include, but is not required to itemize, the impact of the
  309  requirement that rates be based on factors unrelated to health
  310  status, how the individual coverage mandate and subsidies
  311  provided in the exchange affect the impact of guaranteed
  312  issuance of coverage, and estimated reinsurance credits.
  313         2. The dollar amount of the premium which is attributable
  314  to fees, taxes, and assessments.
  315         3. For individual policies or contracts, the dollar amount
  316  of the premium increase or decrease from the premium that would
  317  have otherwise been due which is attributable to the combined
  318  impact of the requirement that rates for age be limited to a 3
  319  to-1 ratio and the prohibition against using gender as a rating
  320  factor. This estimate must be displayed for the average rates
  321  for male and female insureds, respectively, for the following
  322  three age categories: age 21 years to 29 years, age 30 years to
  323  54 years, and age 55 years to 64 years.
  324         4. The dollar amount which is attributable to the
  325  requirement that essential health benefits be provided and to
  326  meet the required actuarial value for the product, as compared
  327  to the statewide average premium for the policy or contract for
  328  the plan that has the highest enrollment in the individual or
  329  small group market on July 1, 2013, whichever is applicable. The
  330  statewide average premiums for the plan that has the highest
  331  enrollment must include all policyholders, including those that
  332  have health conditions that increase the standard premium.
  333         (c) The office, in consultation with the department, shall
  334  develop a summary of the estimated impact of PPACA on monthly
  335  premiums as contained in the notices submitted by insurers and
  336  health maintenance organizations, which must be available on the
  337  respective websites of the office and department by October 1,
  338  2013.
  339         (d) This subsection is repealed on March 1, 2015.
  340         Section 5. Subsection (4) is added to section 627.411,
  341  Florida Statutes, to read:
  342         627.411 Grounds for disapproval.—
  343         (4) The provisions of this section which apply to rates,
  344  rating practices, or the relationship of benefits to the premium
  345  charged do not apply to nongrandfathered health plans described
  346  in s. 627.410(9). This subsection is repealed on July 1, 2015.
  347         Section 6. Paragraph (a) of subsection (3) of section
  348  627.6425, Florida Statutes, is amended to read:
  349         627.6425 Renewability of individual coverage.—
  350         (3)(a) If In any case in which an insurer decides to
  351  discontinue offering a particular policy form for health
  352  insurance coverage offered in the individual market, coverage
  353  under such form may be discontinued by the insurer only if:
  354         1. The insurer provides notice to each covered individual
  355  provided coverage under this policy form in the individual
  356  market of such discontinuation at least 90 days before prior to
  357  the date of the nonrenewal of such coverage;
  358         2. The insurer offers to each individual in the individual
  359  market provided coverage under this policy form the option to
  360  purchase any other individual health insurance coverage
  361  currently being offered by the insurer for individuals in such
  362  market in the state; and
  363         3. In exercising the option to discontinue coverage of a
  364  this policy form and in offering the option of coverage under
  365  subparagraph 2., the insurer acts uniformly without regard to
  366  any health-status-related factor of enrolled individuals or
  367  individuals who may become eligible for such coverage. If a
  368  policy form covers both grandfathered and nongrandfathered
  369  health plans, an insurer may nonrenew coverage only for the
  370  nongrandfathered health plans, in which case the requirements of
  371  subparagraphs 1. and 2. apply only to the nongrandfathered
  372  health plans. As used in this subparagraph, the terms
  373  “grandfathered health plan” and “nongrandfathered health plan”
  374  have the same meaning as provided in s. 627.402.
  375         Section 7. Section 627.6484, Florida Statutes, is amended
  376  to read:
  377         627.6484 Dissolution of association; termination of
  378  enrollment; availability of other coverage.—
  379         (1) The association shall accept applications for insurance
  380  only until June 30, 1991, after which date no further
  381  applications may be accepted.
  382         (2) Coverage for each policyholder of the association
  383  terminates at midnight, June 30, 2014, or on the date that
  384  health insurance coverage is effective with another insurer,
  385  whichever occurs first, and such terminated coverage may not be
  386  renewed.
  387         (3) The association must provide assistance to each
  388  policyholder concerning how to obtain health insurance coverage.
  389  Such assistance must include the identification of insurers and
  390  health maintenance organizations offering coverage in the
  391  individual market, including inside and outside of the Health
  392  Insurance Exchange, a basic explanation of the levels of
  393  coverage available, and specific information relating to local
  394  and online sources from which a policyholder may obtain detailed
  395  policy and premium comparisons and directly obtain coverage.
  396         (4) The association shall provide written notice to all
  397  policyholders by September 1, 2013, which informs each
  398  policyholder with respect to:
  399         (a) The date that coverage with the association is
  400  terminated and that such coverage may not be renewed.
  401         (b) The opportunity for the policyholder to obtain
  402  individual health insurance coverage on a guaranteed-issue
  403  basis, regardless of the policyholder’s health status, from any
  404  health insurer or health maintenance organization that offers
  405  coverage in the individual market, including the dates of open
  406  enrollment periods for obtaining such coverage.
  407         (c) How to access coverage through the Health Insurance
  408  Exchange established for this state pursuant to the Patient
  409  Protection and Affordable Care Act and the potential for
  410  obtaining reduced premiums and cost-sharing provisions depending
  411  on the policyholder’s family income level.
  412         (d) Contact information for a representative of the
  413  association who is able to provide additional information about
  414  obtaining individual health insurance coverage both inside and
  415  outside of the Health Insurance Exchange.
  416         (5) After termination of coverage, the association must
  417  continue to receive and process timely submitted claims in
  418  accordance with the laws of this state.
  419         (6) By March 15, 2015, the association must determine the
  420  final assessment to be collected from insurers for funding
  421  claims and administrative expenses of the association or, if
  422  surplus funds remain, determine the refund amount to be provided
  423  to each insurer based on the same pro rata formula used in
  424  determining each insurer’s assessment.
  425         (7) By September 1, 2015, the board must:
  426         (a) Complete performance of all program responsibilities.
  427         (b) Sell or otherwise dispose of all physical assets of the
  428  association.
  429         (c) Make a final accounting of the finances of the
  430  association.
  431         (d) Transfer all records to the Office of Insurance
  432  Regulation, which shall serve as custodian of such records.
  433         (e) Execute a legal dissolution of the association and
  434  report such action to the Chief Financial Officer, the Insurance
  435  Commissioner, the President of the Senate, and the Speaker of
  436  the House of Representatives. Upon receipt of an application for
  437  insurance, the association shall issue coverage for an eligible
  438  applicant. When appropriate, the administrator shall forward a
  439  copy of the application to a market assistance plan created by
  440  the office, which shall conduct a diligent search of the private
  441  marketplace for a carrier willing to accept the application.
  442         (2) The office shall, after consultation with the health
  443  insurers licensed in this state, adopt a market assistance plan
  444  to assist in the placement of risks of Florida Comprehensive
  445  Health Association applicants. All health insurers and health
  446  maintenance organizations licensed in this state shall
  447  participate in the plan.
  448         (3) Guidelines for the use of such program shall be a part
  449  of the association’s plan of operation. The guidelines shall
  450  describe which types of applications are to be exempt from
  451  submission to the market assistance plan. An exemption shall be
  452  based upon a determination that due to a specific health
  453  condition an applicant is ineligible for coverage in the
  454  standard market. The guidelines shall also describe how the
  455  market assistance plan is to be conducted, and how the periodic
  456  reviews to depopulate the association are to be conducted.
  457         (4) If a carrier is found through the market assistance
  458  plan, the individual shall apply to that company. If the
  459  individual’s application is accepted, association coverage shall
  460  terminate upon the effective date of the coverage with the
  461  private carrier. For the purpose of applying a preexisting
  462  condition limitation or exclusion, any carrier accepting a risk
  463  pursuant to this section shall provide coverage as if it began
  464  on the date coverage was effectuated on behalf of the
  465  association, and shall be indemnified by the association for
  466  claims costs incurred as a result of utilizing such effective
  467  date.
  468         (5) The association shall establish a policyholder
  469  assistance program by July 1, 1991, to assist in placing
  470  eligible policyholders in other coverage programs, including
  471  Medicare and Medicaid.
  472         Section 8. Section 627.64872, Florida Statutes, is
  473  repealed.
  474         Section 9. Effective October 1, 2015, sections 627.648,
  475  627.6482, 627.6484, 627.6486, 627.6488, 627.6489, 627.649,
  476  627.6492, 627.6494, 627.6496, 627.6498, and 627.6499, Florida
  477  Statutes, are repealed.
  478         Section 10. Paragraph (a) of subsection (3) of section
  479  627.6571, Florida Statutes, is amended to read:
  480         627.6571 Guaranteed renewability of coverage.—
  481         (3)(a) An insurer may discontinue offering a particular
  482  policy form of group health insurance coverage offered in the
  483  small-group market or large-group market only if:
  484         1. The insurer provides notice to each policyholder
  485  provided coverage under of this policy form in such market, and
  486  to participants and beneficiaries covered under such coverage,
  487  of such discontinuation at least 90 days before prior to the
  488  date of the nonrenewal of such coverage;
  489         2. The insurer offers to each policyholder provided
  490  coverage under of this policy form in such market the option to
  491  purchase all, or in the case of the large-group market, any
  492  other health insurance coverage currently being offered by the
  493  insurer in such market; and
  494         3. In exercising the option to discontinue coverage of this
  495  form and in offering the option of coverage under subparagraph
  496  2., the insurer acts uniformly without regard to the claims
  497  experience of those policyholders or any health-status-related
  498  factor that relates to any participants or beneficiaries covered
  499  or new participants or beneficiaries who may become eligible for
  500  such coverage. If a policy form covers both grandfathered and
  501  nongrandfathered health plans, an insurer may nonrenew coverage
  502  only for nongrandfathered health plans, in which case the
  503  requirements of subparagraphs 1. and 2. apply only to the
  504  nongrandfathered health plans. As used in this subparagraph, the
  505  terms “grandfathered health planand “nongrandfathered health
  506  plan” have the same meanings as provided in s. 627.402.
  507         Section 11. Paragraphs (j) through (w) of subsection (3) of
  508  section 627.6699, Florida Statutes, are redesignated as
  509  paragraphs (k) through (x), respectively, a new paragraph (j) is
  510  added to that subsection, present paragraphs (v) and (w) of that
  511  subsection are amended, and paragraph (b) of subsection (6) is
  512  amended, to read:
  513         627.6699 Employee Health Care Access Act.—
  514         (3) DEFINITIONS.—As used in this section, the term:
  515         (j) “Grandfathered health plan” and “nongrandfathered
  516  health plan” have the same meaning as provided in s. 627.402.
  517         (w)(v) “Small employer” means, in connection with a health
  518  benefit plan with respect to a calendar year and a plan year:,
  519         1. For a grandfathered health plan, any person, sole
  520  proprietor, self-employed individual, independent contractor,
  521  firm, corporation, partnership, or association that is actively
  522  engaged in business, has its principal place of business in this
  523  state, employed an average of at least 1 but not more than 50
  524  eligible employees on business days during the preceding
  525  calendar year, the majority of whom were employed in this state,
  526  employs at least 1 employee on the first day of the plan year,
  527  and is not formed primarily for purposes of purchasing
  528  insurance. In determining the number of eligible employees,
  529  companies that are an affiliated group as defined in s. 1504(a)
  530  of the Internal Revenue Code of 1986, as amended, are considered
  531  a single employer. For purposes of this section, a sole
  532  proprietor, an independent contractor, or a self-employed
  533  individual is considered a small employer only if all of the
  534  conditions and criteria established in this section are met.
  535         2. For a nongrandfathered health plan, any employer that
  536  has its principal place of business in this state, employed an
  537  average of at least 1 but not more than 50 employees on business
  538  days during the preceding calendar year, and employs at least 1
  539  employee on the first day of the plan year. As used in this
  540  subparagraph, the terms “employee” and “employer” have the same
  541  meaning as provided in s. 3 of the Employee Retirement Income
  542  Security Act of 1974, as amended, 29 U.S.C. 1002.
  543         (x)(w) “Small employer carrier” means a carrier that offers
  544  health benefit plans covering eligible employees of one or more
  545  small employers.
  546         (6) RESTRICTIONS RELATING TO PREMIUM RATES.—
  547         (b) For all small employer health benefit plans that are
  548  subject to this section and are issued by small employer
  549  carriers on or after January 1, 1994, premium rates for health
  550  benefit plans subject to this section are subject to the
  551  following:
  552         1. Small employer carriers must use a modified community
  553  rating methodology in which the premium for each small employer
  554  is must be determined solely on the basis of the eligible
  555  employee’s and eligible dependent’s gender, age, family
  556  composition, tobacco use, or geographic area as determined under
  557  paragraph (5)(j) and in which the premium may be adjusted as
  558  permitted by this paragraph. A small employer carrier is not
  559  required to use gender as a rating factor for a nongrandfathered
  560  health plan.
  561         2. Rating factors related to age, gender, family
  562  composition, tobacco use, or geographic location may be
  563  developed by each carrier to reflect the carrier’s experience.
  564  The factors used by carriers are subject to office review and
  565  approval.
  566         3. Small employer carriers may not modify the rate for a
  567  small employer for 12 months from the initial issue date or
  568  renewal date, unless the composition of the group changes or
  569  benefits are changed. However, a small employer carrier may
  570  modify the rate one time within the prior to 12 months after the
  571  initial issue date for a small employer who enrolls under a
  572  previously issued group policy that has a common anniversary
  573  date for all employers covered under the policy if:
  574         a. The carrier discloses to the employer in a clear and
  575  conspicuous manner the date of the first renewal and the fact
  576  that the premium may increase on or after that date.
  577         b. The insurer demonstrates to the office that efficiencies
  578  in administration are achieved and reflected in the rates
  579  charged to small employers covered under the policy.
  580         4. A carrier may issue a group health insurance policy to a
  581  small employer health alliance or other group association with
  582  rates that reflect a premium credit for expense savings
  583  attributable to administrative activities being performed by the
  584  alliance or group association if such expense savings are
  585  specifically documented in the insurer’s rate filing and are
  586  approved by the office. Any such credit may not be based on
  587  different morbidity assumptions or on any other factor related
  588  to the health status or claims experience of any person covered
  589  under the policy. Nothing in This subparagraph does not exempt
  590  exempts an alliance or group association from licensure for any
  591  activities that require licensure under the insurance code. A
  592  carrier issuing a group health insurance policy to a small
  593  employer health alliance or other group association shall allow
  594  any properly licensed and appointed agent of that carrier to
  595  market and sell the small employer health alliance or other
  596  group association policy. Such agent shall be paid the usual and
  597  customary commission paid to any agent selling the policy.
  598         5. Any adjustments in rates for claims experience, health
  599  status, or duration of coverage may not be charged to individual
  600  employees or dependents. For a small employer’s policy, such
  601  adjustments may not result in a rate for the small employer
  602  which deviates more than 15 percent from the carrier’s approved
  603  rate. Any such adjustment must be applied uniformly to the rates
  604  charged for all employees and dependents of the small employer.
  605  A small employer carrier may make an adjustment to a small
  606  employer’s renewal premium, up to not to exceed 10 percent
  607  annually, due to the claims experience, health status, or
  608  duration of coverage of the employees or dependents of the small
  609  employer. Semiannually, small group carriers shall report
  610  information on forms adopted by rule by the commission, to
  611  enable the office to monitor the relationship of aggregate
  612  adjusted premiums actually charged policyholders by each carrier
  613  to the premiums that would have been charged by application of
  614  the carrier’s approved modified community rates. If the
  615  aggregate resulting from the application of such adjustment
  616  exceeds the premium that would have been charged by application
  617  of the approved modified community rate by 4 percent for the
  618  current reporting period, the carrier shall limit the
  619  application of such adjustments only to minus adjustments
  620  beginning within not more than 60 days after the report is sent
  621  to the office. For any subsequent reporting period, if the total
  622  aggregate adjusted premium actually charged does not exceed the
  623  premium that would have been charged by application of the
  624  approved modified community rate by 4 percent, the carrier may
  625  apply both plus and minus adjustments. A small employer carrier
  626  may provide a credit to a small employer’s premium based on
  627  administrative and acquisition expense differences resulting
  628  from the size of the group. Group size administrative and
  629  acquisition expense factors may be developed by each carrier to
  630  reflect the carrier’s experience and are subject to office
  631  review and approval.
  632         6. A small employer carrier rating methodology may include
  633  separate rating categories for one dependent child, for two
  634  dependent children, and for three or more dependent children for
  635  family coverage of employees having a spouse and dependent
  636  children or employees having dependent children only. A small
  637  employer carrier may have fewer, but not greater, numbers of
  638  categories for dependent children than those specified in this
  639  subparagraph.
  640         7. Small employer carriers may not use a composite rating
  641  methodology to rate a small employer with fewer than 10
  642  employees. For the purposes of this subparagraph, the term a
  643  “composite rating methodology” means a rating methodology that
  644  averages the impact of the rating factors for age and gender in
  645  the premiums charged to all of the employees of a small
  646  employer.
  647         8.a. A carrier may separate the experience of small
  648  employer groups with fewer less than 2 eligible employees from
  649  the experience of small employer groups with 2-50 eligible
  650  employees for purposes of determining an alternative modified
  651  community rating.
  652         a.b. If a carrier separates the experience of small
  653  employer groups as provided in sub-subparagraph a., the rate to
  654  be charged to small employer groups of fewer less than 2
  655  eligible employees may not exceed 150 percent of the rate
  656  determined for small employer groups of 2-50 eligible employees.
  657  However, the carrier may charge excess losses of the experience
  658  pool consisting of small employer groups with less than 2
  659  eligible employees to the experience pool consisting of small
  660  employer groups with 2-50 eligible employees so that all losses
  661  are allocated and the 150-percent rate limit on the experience
  662  pool consisting of small employer groups with less than 2
  663  eligible employees is maintained.
  664         b. Notwithstanding s. 627.411(1), the rate to be charged to
  665  a small employer group of fewer than 2 eligible employees,
  666  insured as of July 1, 2002, may be up to 125 percent of the rate
  667  determined for small employer groups of 2-50 eligible employees
  668  for the first annual renewal and 150 percent for subsequent
  669  annual renewals.
  670         9. A carrier shall separate the experience of grandfathered
  671  health plans from nongrandfathered health plans for determining
  672  rates.
  673         Section 12. Paragraph (f) is added to subsection (3) of
  674  section 641.31, Florida Statutes, to read:
  675         641.31 Health maintenance contracts.—
  676         (3)
  677         (f)1. For plan years 2014 and 2015, nongrandfathered health
  678  plans for the individual or small group market are not subject
  679  to rate review or approval by the office. A health maintenance
  680  organization that issues or renews a nongrandfathered health
  681  plan is subject to s. 627.410(9). As used in this paragraph, the
  682  terms “PPACA” and “nongrandfathered health plan” have the same
  683  meanings as those terms are defined in s. 627.402.
  684         2. This paragraph is repealed effective March 1, 2015.
  685         Section 13. This act shall take effect upon becoming a law.