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Senate Bill 2514

Senate Bill sb2514

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    Florida Senate - 2005                                  SB 2514

    By Senator Fasano





    11-1311A-05

  1                      A bill to be entitled

  2         An act relating to health insurance; amending

  3         s. 408.909, F.S.; requiring disapproval of

  4         health flex plans that cannot be shown to meet

  5         general eligibility standards for insurer

  6         certificate of authority; amending s. 627.411,

  7         F.S.; prescribing a limit on rate increases for

  8         closed forms; amending s. 627.413, F.S.;

  9         authorizing insurers and health maintenance

10         organizations to issue high deductible

11         insurance plans that meet certain criteria;

12         creating s. 627.4141, F.S.; prohibiting

13         mandatory arbitration clauses in life insurance

14         and health insurance policies; amending s.

15         627.6487, F.S.; redefining the term "eligible

16         individual" for purposes of guaranteed

17         availability of individual health insurance

18         coverage to eligible individuals; amending s.

19         627.64872, F.S.; revising definitions relating

20         to the Florida Health Insurance Plan; providing

21         for the Commissioner of Insurance Regulation to

22         serve on the plan's board of directors;

23         deleting obsolete provisions relating to an

24         interim report; revising qualifications for

25         eligibility; revising sources of additional

26         revenue for the plan; prescribing a limit on

27         health care provider reimbursement; amending s.

28         627.6515, F.S.; providing that out-of-state

29         group health insurance policies are subject to

30         the prohibition on mandatory arbitration

31         clauses; amending s. 627.6692, F.S.; extending

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    Florida Senate - 2005                                  SB 2514
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 1         time limits for giving certain notice with

 2         respect to health insurance coverage

 3         continuation; amending s. 627.6699, F.S.;

 4         requiring health insurance small employer

 5         carriers to offer high deductible insurance

 6         plans that meet certain criteria;

 7         reconstituting the board of the Florida Small

 8         Employer Health Reinsurance Program; changing

 9         the date by which the board must take certain

10         actions; prescribing duties of the board with

11         respect to advising the Office of Insurance

12         Regulation and other entities on health

13         insurance issues; amending s. 641.27, F.S.;

14         increasing the interval at which the office

15         must examine health maintenance organizations;

16         deleting authority of the office to accept a

17         report of an independent certified public

18         accountant; deleting a limit on examination

19         expenses; amending s. 641.31, F.S.; providing

20         that health maintenance organization contracts

21         are subject to the prohibition on mandatory

22         arbitration clauses; providing applicability;

23         providing an effective date.

24  

25  Be It Enacted by the Legislature of the State of Florida:

26  

27         Section 1.  Paragraph (b) of subsection (3) of section

28  408.909, Florida Statutes, is amended to read:

29         408.909  Health flex plans.--

30         (3)  PROGRAM.--The agency and the office shall each

31  approve or disapprove health flex plans that provide health

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    Florida Senate - 2005                                  SB 2514
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 1  care coverage for eligible participants. A health flex plan

 2  may limit or exclude benefits otherwise required by law for

 3  insurers offering coverage in this state, may cap the total

 4  amount of claims paid per year per enrollee, may limit the

 5  number of enrollees, or may take any combination of those

 6  actions. A health flex plan offering may include the option of

 7  a catastrophic plan supplementing the health flex plan.

 8         (b)  The office shall develop guidelines for the review

 9  of health flex plan applications and provide regulatory

10  oversight of health flex plan advertisement and marketing

11  procedures. The office shall disapprove or shall withdraw

12  approval of plans that:

13         1.  Contain any ambiguous, inconsistent, or misleading

14  provisions or any exceptions or conditions that deceptively

15  affect or limit the benefits purported to be assumed in the

16  general coverage provided by the health flex plan;

17         2.  Provide benefits that are unreasonable in relation

18  to the premium charged or contain provisions that are unfair

19  or inequitable or contrary to the public policy of this state,

20  that encourage misrepresentation, or that result in unfair

21  discrimination in sales practices; or

22         3.  Cannot demonstrate that the health flex plan is

23  financially sound and that the applicant is able to underwrite

24  or finance the health care coverage provided; or.

25         4.  Cannot demonstrate that the applicant and its

26  management are in compliance with the standards required under

27  s. 624.404(3).

28         Section 2.  Subsection (4) is added to section 627.411,

29  Florida Statutes, to read:

30         627.411  Grounds for disapproval.--

31  

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    Florida Senate - 2005                                  SB 2514
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 1         (4)  Notwithstanding subsections (1) and (2), an annual

 2  rate increase for a closed form, or a closed block of forms

 3  with similar benefits, may not exceed medical trend. For

 4  purposes of this subsection, the term "closed" means that the

 5  form, or all forms within the block of pooled forms, has not

 6  been actively offered for sale by the insurer in the previous

 7  12 months.

 8         Section 3.  Subsection (6) is added to section 627.413,

 9  Florida Statutes, to read:

10         627.413  Contents of policies, in general;

11  identification.--

12         (6)  Notwithstanding any other provision of the Florida

13  Insurance Code which is in conflict with the federal

14  requirements for a health savings account qualified high

15  deductible health plan, an insurer or health maintenance

16  organization subject to part I of chapter 641 which is

17  authorized to issue health insurance in this state may offer

18  for sale an individual or group policy or contract that

19  provides for a high deductible plan that meets the federal

20  requirements of a health savings account plan and that is

21  offered in conjunction with a health savings account.

22         Section 4.  Section 627.4141, Florida Statutes, is

23  created to read:

24         627.4141  Mandatory arbitration clauses prohibited.--An

25  insurer or health maintenance organization may not deliver or

26  issue for delivery a life or health insurance policy,

27  including a group life or health contract or certificate of

28  coverage issued to a resident of this state, or a health

29  maintenance contract in this state which contains a provision

30  requiring the resolution of claims or disputes between the

31  

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    Florida Senate - 2005                                  SB 2514
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 1  insured and the insurer or health maintenance organization

 2  through the use of mandatory binding arbitration.

 3         Section 5.  Subsection (3) of section 627.6487, Florida

 4  Statutes, is amended to read:

 5         627.6487  Guaranteed availability of individual health

 6  insurance coverage to eligible individuals.--

 7         (3)  For the purposes of this section, the term

 8  "eligible individual" means an individual:

 9         (a)1.  For whom, as of the date on which the individual

10  seeks coverage under this section, the aggregate of the

11  periods of creditable coverage, as defined in s. 627.6561(5)

12  and (6), is 18 or more months; and

13         2.a.  Whose most recent prior creditable coverage was

14  under a group health plan, governmental plan, or church plan,

15  or health insurance coverage offered in connection with any

16  such plan; or

17         b.  Whose most recent prior creditable coverage was

18  under an individual plan issued in this state by a health

19  insurer or health maintenance organization, which coverage is

20  terminated due to the insurer or health maintenance

21  organization becoming insolvent or discontinuing the offering

22  of all individual coverage in the State of Florida, or due to

23  the insured no longer living in the service area in the State

24  of Florida of the insurer or health maintenance organization

25  that provides coverage through a network plan in the State of

26  Florida; or

27         c.  Whose most recent creditable coverage was with the

28  Florida Health Insurance Plan specified in s. 627.64872, which

29  coverage is terminated due to inadequate funding of the

30  Florida Health Insurance Plan as provided in s. 627.64872(15);

31         (b)  Who is not eligible for coverage under:

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    Florida Senate - 2005                                  SB 2514
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 1         1.  A group health plan, as defined in s. 2791 of the

 2  Public Health Service Act;

 3         2.  A conversion policy or contract issued by an

 4  authorized insurer or health maintenance organization under s.

 5  627.6675 or s. 641.3921, respectively, offered to an

 6  individual who is no longer eligible for coverage under either

 7  an insured or self-insured employer plan;

 8         3.  Part A or part B of Title XVIII of the Social

 9  Security Act; or

10         4.  A state plan under Title XIX of such act, or any

11  successor program, and does not have other health insurance

12  coverage; or

13         5.  The Florida Health Insurance Plan as specified in

14  s. 627.64872 and such plan is accepting new enrollment;

15         (c)  With respect to whom the most recent coverage

16  within the coverage period described in paragraph (a) was not

17  terminated based on a factor described in s. 627.6571(2)(a) or

18  (b), relating to nonpayment of premiums or fraud, unless such

19  nonpayment of premiums or fraud was due to acts of an employer

20  or person other than the individual;

21         (d)  Who, having been offered the option of

22  continuation coverage under a COBRA continuation provision or

23  under s. 627.6692, elected such coverage; and

24         (e)  Who, if the individual elected such continuation

25  provision, has exhausted such continuation coverage under such

26  provision or program.

27         Section 6.  Subsections (2), (3), (6), (9), and (15) of

28  section 627.64872, Florida Statutes, are amended, present

29  subsection (20) of that section is renumbered as subsection

30  (21), and a new subsection (20) is added to that section to

31  read:

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    Florida Senate - 2005                                  SB 2514
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 1         627.64872  Florida Health Insurance Plan.--

 2         (2)  DEFINITIONS.--As used in this section:

 3         (a)  "Board" means the board of directors of the plan.

 4         (b)  "Commissioner" means the Commissioner of Insurance

 5  Regulation.

 6         (c)(b)  "Dependent" means a resident spouse or resident

 7  unmarried child under the age of 19 years, a child who is a

 8  student under the age of 25 years and who is financially

 9  dependent upon the parent, or a child of any age who is

10  disabled and dependent upon the parent.

11         (c)  "Director" means the Director of the Office of

12  Insurance Regulation.

13         (d)  "Health insurance" means any hospital or medical

14  expense incurred policy or health maintenance organization

15  subscriber contract pursuant to chapter 641. The term does not

16  include short-term, accident, dental-only, vision-only,

17  fixed-indemnity, limited-benefit, or credit insurance;

18  disability income insurance; coverage for onsite medical

19  clinics; insurance coverage specified in federal regulations

20  issued pursuant to Pub. L. No. 104-191, under which benefits

21  for medical care are secondary or incidental to other

22  insurance benefits; benefits for long-term care, nursing home

23  care, home health care, community-based care, or any

24  combination thereof, or other similar, limited benefits

25  specified in federal regulations issued pursuant to Pub. L.

26  No. 104-191; benefits provided under a separate policy,

27  certificate, or contract of insurance, under which there is no

28  coordination between the provision of the benefits and any

29  exclusion of benefits under any group health plan maintained

30  by the same plan sponsor and the benefits are paid with

31  respect to an event without regard to whether benefits are

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    Florida Senate - 2005                                  SB 2514
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 1  provided with respect to such an event under any group health

 2  plan maintained by the same plan sponsor, such as for coverage

 3  only for a specified disease or illness; hospital indemnity or

 4  other fixed indemnity insurance; coverage offered as a

 5  separate policy, certificate, or contract of insurance, such

 6  as Medicare supplemental health insurance as defined under s.

 7  1882(g)(1) of the Social Security Act; coverage supplemental

 8  to the coverage provided under chapter 55 of Title 10, U.S.C.,

 9  the Civilian Health and Medical Program of the Uniformed

10  Services (CHAMPUS); similar supplemental coverage provided to

11  coverage under a group health plan; coverage issued as a

12  supplement to liability insurance; insurance arising out of a

13  workers' compensation or similar law; automobile medical

14  payment insurance; or insurance under which benefits are

15  payable with or without regard to fault and which is

16  statutorily required to be contained in any liability

17  insurance policy or equivalent self-insurance.

18         (e)  "Implementation" means the effective date after

19  the first meeting of the board when legal authority and

20  administrative ability exists for the board to subsume the

21  transfer of all statutory powers, duties, functions, assets,

22  records, personnel, and property of the Florida Comprehensive

23  Health Association as specified in s. 627.6488.

24         (f)  "Insurer" means any entity that provides health

25  insurance in this state. For purposes of this section, insurer

26  includes an insurance company with a valid certificate in

27  accordance with chapter 624, a health maintenance organization

28  with a valid certificate of authority in accordance with part

29  I or part III of chapter 641, a prepaid health clinic

30  authorized to transact business in this state pursuant to part

31  II of chapter 641, multiple employer welfare arrangements

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    Florida Senate - 2005                                  SB 2514
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 1  authorized to transact business in this state pursuant to ss.

 2  624.436-624.45, or a fraternal benefit society providing

 3  health benefits to its members as authorized pursuant to

 4  chapter 632.

 5         (g)  "Medicare" means coverage under both Parts A and B

 6  of Title XVIII of the Social Security Act, 42 U.S.C. ss. 1395

 7  et seq., as amended.

 8         (h)  "Medicaid" means coverage under Title XIX of the

 9  Social Security Act.

10         (i)  "Office" means the Office of Insurance Regulation

11  of the Financial Services Commission.

12         (j)  "Participating insurer" means any insurer

13  providing health insurance to citizens of this state.

14         (k)  "Provider" means any physician, hospital, or other

15  institution, organization, or person that furnishes health

16  care services and is licensed or otherwise authorized to

17  practice in the state.

18         (l)  "Plan" means the Florida Health Insurance Plan

19  created in subsection (1).

20         (m)  "Plan of operation" means the articles, bylaws,

21  and operating rules and procedures adopted by the board

22  pursuant to this section.

23         (n)  "Resident" means an individual who has been

24  legally domiciled in this state for a period of at least 6

25  months and who physically resides in this state not less than

26  185 days a year.

27         (3)  BOARD OF DIRECTORS.--

28         (a)  The plan shall operate subject to the supervision

29  and control of the board. The board shall consist of the

30  commissioner director or his or her designated representative,

31  who shall serve as a member of the board and shall be its

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    Florida Senate - 2005                                  SB 2514
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 1  chair, and an additional eight members, five of whom shall be

 2  appointed by the Governor, at least two of whom shall be

 3  individuals not representative of insurers or health care

 4  providers, one of whom shall be appointed by the President of

 5  the Senate, one of whom shall be appointed by the Speaker of

 6  the House of Representatives, and one of whom shall be

 7  appointed by the Chief Financial Officer.

 8         (b)  The term to be served on the board by the

 9  commissioner Director of the Office of Insurance Regulation

10  shall be determined by continued employment in such position.

11  The remaining initial board members shall serve for a period

12  of time as follows: two members appointed by the Governor and

13  the members appointed by the President of the Senate and the

14  Speaker of the House of Representatives shall serve a term of

15  2 years; and three members appointed by the Governor and the

16  Chief Financial Officer shall serve a term of 4 years.

17  Subsequent board members shall serve for a term of 3 years. A

18  board member's term shall continue until his or her successor

19  is appointed.

20         (c)  Vacancies on the board shall be filled by the

21  appointing authority, such authority being the Governor, the

22  President of the Senate, the Speaker of the House of

23  Representatives, or the Chief Financial Officer. The

24  appointing authority may remove board members for cause.

25         (d)  The commissioner director, or his or her

26  recognized representative, shall be responsible for any

27  organizational requirements necessary for the initial meeting

28  of the board which shall take place no later than September 1,

29  2004.

30         (e)  Members shall not be compensated in their capacity

31  as board members but shall be reimbursed for reasonable

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 1  expenses incurred in the necessary performance of their duties

 2  in accordance with s. 112.061.

 3         (f)  The board shall submit to the Financial Services

 4  Commission a plan of operation for the plan and any amendments

 5  thereto necessary or suitable to ensure the fair, reasonable,

 6  and equitable administration of the plan. The plan of

 7  operation shall ensure that the plan qualifies to apply for

 8  any available funding from the Federal Government that adds to

 9  the financial viability of the plan. The plan of operation

10  shall become effective upon approval in writing by the

11  Financial Services Commission consistent with the date on

12  which the coverage under this section must be made available.

13  If the board fails to submit a suitable plan of operation

14  within 1 year after implementation the appointment of the

15  board of directors, or at any time thereafter fails to submit

16  suitable amendments to the plan of operation, the Financial

17  Services Commission shall adopt such rules as are necessary or

18  advisable to effectuate the provisions of this section. Such

19  rules shall continue in force until modified by the office or

20  superseded by a plan of operation submitted by the board and

21  approved by the Financial Services Commission.

22         (6)  INTERIM REPORT; ANNUAL REPORT.--

23         (a)  By no later than December 1, 2004, the board shall

24  report to the Governor, the President of the Senate, and the

25  Speaker of the House of Representatives the results of an

26  actuarial study conducted by the board to determine,

27  including, but not limited to:

28         1.  The impact the creation of the plan will have on

29  the small group insurance market and the individual market on

30  premiums paid by insureds. This shall include an estimate of

31  

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    Florida Senate - 2005                                  SB 2514
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 1  the total anticipated aggregate savings for all small

 2  employers in the state.

 3         2.  The number of individuals the pool could reasonably

 4  cover at various funding levels, specifically, the number of

 5  people the pool may cover at each of those funding levels.

 6         3.  A recommendation as to the best source of funding

 7  for the anticipated deficits of the pool.

 8         4.  The effect on the individual and small group market

 9  by including in the Florida Health Insurance Plan persons

10  eligible for coverage under s. 627.6487, as well as the cost

11  of including these individuals.

12  

13  The board shall take no action to implement the Florida Health

14  Insurance Plan, other than the completion of the actuarial

15  study authorized in this paragraph, until funds are

16  appropriated for startup cost and any projected deficits.

17         (b)  No later than December 1, 2005, and annually

18  thereafter, the board shall submit to the Governor, the

19  President of the Senate, the Speaker of the House of

20  Representatives, and the substantive legislative committees of

21  the Legislature a report which includes an independent

22  actuarial study to determine, including, but not be limited

23  to:

24         (a)1.  The impact the creation of the plan has on the

25  small group and individual insurance market, specifically on

26  the premiums paid by insureds. This shall include an estimate

27  of the total anticipated aggregate savings for all small

28  employers in the state.

29         (b)2.  The actual number of individuals covered at the

30  current funding and benefit level, the projected number of

31  individuals that may seek coverage in the forthcoming fiscal

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 1  year, and the projected funding needed to cover anticipated

 2  increase or decrease in plan participation.

 3         3.  A recommendation as to the best source of funding

 4  for the anticipated deficits of the pool.

 5         (c)4.  A summarization of the activities of the plan in

 6  the preceding calendar year, including the net written and

 7  earned premiums, plan enrollment, the expense of

 8  administration, and the paid and incurred losses.

 9         (d)5.  A review of the operation of the plan as to

10  whether the plan has met the intent of this section.

11         (9)  ELIGIBILITY.--

12         (a)  Any individual person who is and continues to be a

13  resident of this state shall be eligible for coverage under

14  the plan if:

15         1.  Evidence is provided that the person received

16  notices of rejection or refusal to issue substantially similar

17  coverage for health reasons from at least two health insurers

18  or health maintenance organizations. A rejection or refusal by

19  an insurer offering only stop-loss, excess of loss, or

20  reinsurance coverage with respect to the applicant shall not

21  be sufficient evidence under this paragraph.

22         2.  The person is enrolled in the Florida Comprehensive

23  Health Association as of the date the plan is implemented.

24         3.  The person is an eligible individual as defined in

25  s. 627.6487(3), excluding s. 627.6487(3)(b)5.

26         (b)  Each resident dependent of a person who is

27  eligible for coverage under the plan shall also be eligible

28  for such coverage.

29         (c)  A person shall not be eligible for coverage under

30  the plan if:

31  

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 1         1.  The person has or obtains health insurance coverage

 2  substantially similar to or more comprehensive than a plan

 3  policy, or would be eligible to obtain such coverage, unless a

 4  person may maintain other coverage for the period of time the

 5  person is satisfying any preexisting condition waiting period

 6  under a plan policy or may maintain plan coverage for the

 7  period of time the person is satisfying a preexisting

 8  condition waiting period under another health insurance policy

 9  intended to replace the plan policy.

10         2.  The person is determined to be eligible for health

11  care benefits under Medicaid, Medicare, the state's children's

12  health insurance program, or any other federal, state, or

13  local government program that provides health benefits;

14         3.  The person voluntarily terminated plan coverage

15  unless 12 months have elapsed since such termination;

16         4.  The person is an inmate or resident of a public

17  institution; or

18         5.  The person's premiums are paid for or reimbursed

19  under any government-sponsored program or by any government

20  agency, or health care provider, or

21  health-care-provider-sponsored or affiliated organization.

22         (d)  Coverage shall cease:

23         1.  On the date a person is no longer a resident of

24  this state;

25         2.  On the date a person requests coverage to end;

26         3.  Upon the death of the covered person;

27         4.  On the date state law requires cancellation or

28  nonrenewal of the policy; or

29         5.  At the option of the plan, 30 days after the plan

30  makes any inquiry concerning the person's eligibility or place

31  of residence to which the person does not reply; or.

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 1         6.  Upon failure of the insured to pay for continued

 2  coverage.

 3         (e)  Except under the circumstances described in this

 4  subsection, coverage of a person who ceases to meet the

 5  eligibility requirements of this subsection shall be

 6  terminated at the end of the policy period for which the

 7  necessary premiums have been paid.

 8         (15)  FUNDING OF THE PLAN.--

 9         (a)  Premiums.--

10         1.  The plan shall establish premium rates for plan

11  coverage as provided in this section. Separate schedules of

12  premium rates based on age, sex, and geographical location may

13  apply for individual risks. Premium rates and schedules shall

14  be submitted to the office for approval prior to use.

15         2.  Initial rates for plan coverage shall be limited to

16  no more than 200 300 percent of rates established for

17  individual standard risks as specified in s. 627.6675(3)(c).

18  Subject to the limits provided in this paragraph, subsequent

19  rates shall be established to provide fully for the expected

20  costs of claims, including recovery of prior losses, expenses

21  of operation, investment income of claim reserves, and any

22  other cost factors subject to the limitations described

23  herein, but in no event shall premiums exceed the 200-percent

24  300-percent rate limitation provided in this section.

25  Notwithstanding the 200-percent 300-percent rate limitation,

26  sliding scale premium surcharges based upon the insured's

27  income may apply to all enrollees.

28         (b)  Sources of additional revenue.--Any deficit

29  incurred by the plan shall be primarily funded through amounts

30  appropriated by the Legislature from general revenue sources,

31  including, but not limited to, a portion of the amount of

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 1  annual growth in existing net insurance premium taxes in an

 2  amount not less than the anticipated losses and reserve

 3  requirements for existing policyholders. The board shall

 4  operate the plan in such a manner that the estimated cost of

 5  providing health insurance during any fiscal year will not

 6  exceed total income the plan expects to receive from policy

 7  premiums and funds appropriated by the Legislature, including

 8  any interest on investments. After determining the amount of

 9  funds appropriated to the board for a fiscal year, the board

10  shall estimate the number of new policies it believes the plan

11  has the financial capacity to insure during that year so that

12  costs do not exceed income. The board shall take steps

13  necessary to ensure that plan enrollment does not exceed the

14  number of residents it has estimated it has the financial

15  capacity to insure.

16         (c)  In the event of inadequate funding, the board may

17  cancel policies on a nondiscriminatory basis as necessary to

18  remedy the situation. A policy may not be canceled if a

19  covered individual under that policy is currently on claim.

20         (20)  PROVIDER REIMBURSEMENT.--Notwithstanding any

21  statute to the contrary, the maximum reimbursement rate to

22  health care providers for all covered, medically necessary

23  services shall be 100 percent of Medicare's allowed payment

24  amount for that particular provider and service. All providers

25  licensed in this state shall accept assignment of plan

26  benefits and consider the Medicare allowed payment amount as

27  payment in full.

28         Section 7.  Subsection (2) of section 627.6515, Florida

29  Statutes, is amended to read:

30         627.6515  Out-of-state groups.--

31  

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 1         (2)  Except as otherwise provided in this part, this

 2  part does not apply to a group health insurance policy issued

 3  or delivered outside this state under which a resident of this

 4  state is provided coverage if:

 5         (a)  The policy is issued to an employee group the

 6  composition of which is substantially as described in s.

 7  627.653; a labor union group or association group the

 8  composition of which is substantially as described in s.

 9  627.654; an additional group the composition of which is

10  substantially as described in s. 627.656; a group insured

11  under a blanket health policy when the composition of the

12  group is substantially in compliance with s. 627.659; a group

13  insured under a franchise health policy when the composition

14  of the group is substantially in compliance with s. 627.663;

15  an association group to cover persons associated in any other

16  common group, which common group is formed primarily for

17  purposes other than providing insurance; a group that is

18  established primarily for the purpose of providing group

19  insurance, provided the benefits are reasonable in relation to

20  the premiums charged thereunder and the issuance of the group

21  policy has resulted, or will result, in economies of

22  administration; or a group of insurance agents of an insurer,

23  which insurer is the policyholder;

24         (b)  Certificates evidencing coverage under the policy

25  are issued to residents of this state and contain in

26  contrasting color and not less than 10-point type the

27  following statement:  "The benefits of the policy providing

28  your coverage are governed primarily by the law of a state

29  other than Florida"; and

30         (c)  The policy provides the benefits specified in ss.

31  627.419, 627.6574, 627.6575, 627.6579, 627.6612, 627.66121,

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 1  627.66122, 627.6613, 627.667, 627.6675, 627.6691, and

 2  627.66911 and is in compliance with s. 627.4141; and.

 3         (d)  Applications for certificates of coverage offered

 4  to residents of this state must contain, in contrasting color

 5  and not less than 12-point type, the following statement on

 6  the same page as the applicant's signature:

 7  

 8         "This policy is primarily governed by the laws

 9         of ...insert state where the master policy if

10         filed.... As a result, all of the rating laws

11         applicable to policies filed in this state do

12         not apply to this coverage, which may result in

13         increases in your premium at renewal that would

14         not be permissible under a Florida-approved

15         policy. Any purchase of individual health

16         insurance should be considered carefully, as

17         future medical conditions may make it

18         impossible to qualify for another individual

19         health policy. For information concerning

20         individual health coverage under a

21         Florida-approved policy, consult your agent or

22         the Florida Department of Financial Services."

23  

24  This paragraph applies only to group certificates providing

25  health insurance coverage which require individualized

26  underwriting to determine coverage eligibility for an

27  individual or premium rates to be charged to an individual

28  except for the following:

29         1.  Policies issued to provide coverage to groups of

30  persons all of whom are in the same or functionally related

31  

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 1  licensed professions, and providing coverage only to such

 2  licensed professionals, their employees, or their dependents;

 3         2.  Policies providing coverage to small employers as

 4  defined by s. 627.6699. Such policies shall be subject to, and

 5  governed by, the provisions of s. 627.6699;

 6         3.  Policies issued to a bona fide association, as

 7  defined by s. 627.6571(5), provided that there is a person or

 8  board acting as a fiduciary for the benefit of the members,

 9  and such association is not owned, controlled by, or otherwise

10  associated with the insurance company; or

11         4.  Any accidental death, accidental death and

12  dismemberment, accident-only, vision-only, dental-only,

13  hospital indemnity-only, hospital accident-only, cancer,

14  specified disease, Medicare supplement, products that

15  supplement Medicare, long-term care, or disability income

16  insurance, or similar supplemental plans provided under a

17  separate policy, certificate, or contract of insurance, which

18  cannot duplicate coverage under an underlying health plan,

19  coinsurance, or deductibles or coverage issued as a supplement

20  to workers' compensation or similar insurance, or automobile

21  medical-payment insurance.

22         Section 8.  Paragraphs (d) and (j) of subsection (5) of

23  section 627.6692, Florida Statutes, are amended to read:

24         627.6692  Florida Health Insurance Coverage

25  Continuation Act.--

26         (5)  CONTINUATION OF COVERAGE UNDER GROUP HEALTH

27  PLANS.--

28         (d)1.  A qualified beneficiary must give written notice

29  to the insurance carrier within 63 30 days after the

30  occurrence of a qualifying event.  Unless otherwise specified

31  in the notice, a notice by any qualified beneficiary

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 1  constitutes notice on behalf of all qualified beneficiaries.

 2  The written notice must inform the insurance carrier of the

 3  occurrence and type of the qualifying event giving rise to the

 4  potential election by a qualified beneficiary of continuation

 5  of coverage under the group health plan issued by that

 6  insurance carrier, except that in cases where the covered

 7  employee has been involuntarily discharged, the nature of such

 8  discharge need not be disclosed. The written notice must, at a

 9  minimum, identify the employer, the group health plan number,

10  the name and address of all qualified beneficiaries, and such

11  other information required by the insurance carrier under the

12  terms of the group health plan or the commission by rule, to

13  the extent that such information is known by the qualified

14  beneficiary.

15         2.  Within 14 days after the receipt of written notice

16  under subparagraph 1., the insurance carrier shall send each

17  qualified beneficiary by certified mail an election and

18  premium notice form, approved by the office, which form must

19  provide for the qualified beneficiary's election or

20  nonelection of continuation of coverage under the group health

21  plan and the applicable premium amount due after the election

22  to continue coverage.  This subparagraph does not require

23  separate mailing of notices to qualified beneficiaries

24  residing in the same household, but requires a separate

25  mailing for each separate household.

26         (j)  Notwithstanding paragraph (b), if a qualified

27  beneficiary in the military reserve or National Guard has

28  elected to continue coverage and is thereafter called to

29  active duty and the coverage under the group plan is

30  terminated by the beneficiary or the carrier due to the

31  qualified beneficiary becoming eligible for TRICARE (the

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 1  health care program provided by the United States Defense

 2  Department), the 18-month period or such other applicable

 3  maximum time period for which the qualified beneficiary would

 4  otherwise be entitled to continue coverage is tolled during

 5  the time that he or she is covered under the TRICARE program.

 6  Within 63 30 days after the federal TRICARE coverage

 7  terminates, the qualified beneficiary may elect to continue

 8  coverage under the group health plan, retroactively to the

 9  date coverage terminated under TRICARE, for the remainder of

10  the 18-month period or such other applicable time period,

11  subject to termination of coverage at the earliest of the

12  conditions specified in paragraph (b).

13         Section 9.  Paragraph (c) of subsection (5) and

14  subsection (11) of section 627.6699, Florida Statutes, are

15  amended to read:

16         627.6699  Employee Health Care Access Act.--

17         (5)  AVAILABILITY OF COVERAGE.--

18         (c)  Every small employer carrier must, as a condition

19  of transacting business in this state:

20         1.  Offer and issue all small employer health benefit

21  plans on a guaranteed-issue basis to every eligible small

22  employer, with 2 to 50 eligible employees, that elects to be

23  covered under such plan, agrees to make the required premium

24  payments, and satisfies the other provisions of the plan. A

25  rider for additional or increased benefits may be medically

26  underwritten and may only be added to the standard health

27  benefit plan. The increased rate charged for the additional or

28  increased benefit must be rated in accordance with this

29  section.

30         2.  In the absence of enrollment availability in the

31  Florida Health Insurance Plan, offer and issue basic and

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 1  standard small employer health benefit plans, and a

 2  high-deductible plan that meets the requirements of a health

 3  savings account plan as defined by federal law, on a

 4  guaranteed-issue basis, during a 31-day open enrollment period

 5  of August 1 through August 31 of each year, to every eligible

 6  small employer, with fewer than two eligible employees, which

 7  small employer is not formed primarily for the purpose of

 8  buying health insurance and which elects to be covered under

 9  such plan, agrees to make the required premium payments, and

10  satisfies the other provisions of the plan. Coverage provided

11  under this subparagraph shall begin on October 1 of the same

12  year as the date of enrollment, unless the small employer

13  carrier and the small employer agree to a different date. A

14  rider for additional or increased benefits may be medically

15  underwritten and may only be added to the standard health

16  benefit plan. The increased rate charged for the additional or

17  increased benefit must be rated in accordance with this

18  section. For purposes of this subparagraph, a person, his or

19  her spouse, and his or her dependent children constitute a

20  single eligible employee if that person and spouse are

21  employed by the same small employer and either that person or

22  his or her spouse has a normal work week of less than 25

23  hours. Any right to an open enrollment of health benefit

24  coverage for groups of fewer than two employees, pursuant to

25  this section, shall remain in full force and effect in the

26  absence of the availability of new enrollment into the Florida

27  Health Insurance Plan.

28         3.  This paragraph does not limit a carrier's ability

29  to offer other health benefit plans to small employers if the

30  standard and basic health benefit plans are offered and

31  rejected.

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 1         (11)  SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--

 2         (a)  There is created a nonprofit entity to be known as

 3  the "Florida Small Employer Health Reinsurance Program."

 4         (b)1.  The program shall operate subject to the

 5  supervision and control of the board.

 6         2.  Effective upon this act becoming a law, the board

 7  shall consist of the director of the office or his or her

 8  designee, who shall serve as the chairperson, and 13

 9  additional members who are representatives of carriers and

10  insurance agents and are appointed by the director of the

11  office and serve as follows:

12         a.  Five members must be representatives of health

13  insurers licensed under chapters 624 and 641. Two members must

14  be agents who are actively engaged in the sale of health

15  insurance. Four members must be employers or representatives.

16  One member must be a person covered under an individual health

17  insurance policy issued by an insurer licensed in this state.

18  One member must represent the Agency for Health Care

19  Administration and be recommended by the secretary. The

20  director of the office shall include representatives of small

21  employer carriers subject to assessment under this subsection.

22  If two or more carriers elect to be risk-assuming carriers,

23  the membership must include at least two representatives of

24  risk-assuming carriers; if one carrier is risk-assuming, one

25  member must be a representative of such carrier.  At least one

26  member must be a carrier who is subject to the assessments,

27  but is not a small employer carrier.  Subject to such

28  restrictions, at least five members shall be selected from

29  individuals recommended by small employer carriers pursuant to

30  procedures provided by rule of the commission. Three members

31  shall be selected from a list of health insurance carriers

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 1  that issue individual health insurance policies. At least two

 2  of the three members selected must be reinsuring carriers. Two

 3  members shall be selected from a list of insurance agents who

 4  are actively engaged in the sale of health insurance.

 5         b.  A member appointed under this subparagraph shall

 6  serve a term of 4 years and shall continue in office until the

 7  member's successor takes office, except that, in order to

 8  provide for staggered terms, the director of the office shall

 9  designate two of the initial appointees under this

10  subparagraph to serve terms of 2 years and shall designate

11  three of the initial appointees under this subparagraph to

12  serve terms of 3 years.

13         3.  The director of the office may remove a member for

14  cause.

15         4.  Vacancies on the board shall be filled in the same

16  manner as the original appointment for the unexpired portion

17  of the term.

18         5.  The director of the office may require an entity

19  that recommends persons for appointment to submit additional

20  lists of recommended appointees.

21         (c)1.  The board shall submit to the office a plan of

22  operation to assure the fair, reasonable, and equitable

23  administration of the program.  The board may at any time

24  submit to the office any amendments to the plan that the board

25  finds to be necessary or suitable.

26         2.  The office shall, after notice and hearing, approve

27  the plan of operation if it determines that the plan submitted

28  by the board is suitable to assure the fair, reasonable, and

29  equitable administration of the program and provides for the

30  sharing of program gains and losses equitably and

31  proportionately in accordance with paragraph (j).

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 1         3.  The plan of operation, or any amendment thereto,

 2  becomes effective upon written approval of the office.

 3         (d)  The plan of operation must, among other things:

 4         1.  Establish procedures for handling and accounting

 5  for program assets and moneys and for an annual fiscal

 6  reporting to the office.

 7         2.  Establish procedures for selecting an administering

 8  carrier and set forth the powers and duties of the

 9  administering carrier.

10         3.  Establish procedures for reinsuring risks.

11         4.  Establish procedures for collecting assessments

12  from participating carriers to provide for claims reinsured by

13  the program and for administrative expenses, other than

14  amounts payable to the administrative carrier, incurred or

15  estimated to be incurred during the period for which the

16  assessment is made.

17         5.  Provide for any additional matters at the

18  discretion of the board.

19         (e)  The board shall recommend to the office market

20  conduct requirements and other requirements for carriers and

21  agents, including requirements relating to:

22         1.  Registration by each carrier with the office of its

23  intention to be a small employer carrier under this section;

24         2.  Publication by the office of a list of all small

25  employer carriers, including a requirement applicable to

26  agents and carriers that a health benefit plan may not be sold

27  by a carrier that is not identified as a small employer

28  carrier;

29         3.  The availability of a broadly publicized, toll-free

30  telephone number for access by small employers to information

31  concerning this section;

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 1         4.  Periodic reports by carriers and agents concerning

 2  health benefit plans issued; and

 3         5.  Methods concerning periodic demonstration by small

 4  employer carriers and agents that they are marketing or

 5  issuing health benefit plans to small employers.

 6         (f)  The program has the general powers and authority

 7  granted under the laws of this state to insurance companies

 8  and health maintenance organizations licensed to transact

 9  business, except the power to issue health benefit plans

10  directly to groups or individuals.  In addition thereto, the

11  program has specific authority to:

12         1.  Enter into contracts as necessary or proper to

13  carry out the provisions and purposes of this act, including

14  the authority to enter into contracts with similar programs of

15  other states for the joint performance of common functions or

16  with persons or other organizations for the performance of

17  administrative functions.

18         2.  Sue or be sued, including taking any legal action

19  necessary or proper for recovering any assessments and

20  penalties for, on behalf of, or against the program or any

21  carrier.

22         3.  Take any legal action necessary to avoid the

23  payment of improper claims against the program.

24         4.  Issue reinsurance policies, in accordance with the

25  requirements of this act.

26         5.  Establish rules, conditions, and procedures for

27  reinsurance risks under the program participation.

28         6.  Establish actuarial functions as appropriate for

29  the operation of the program.

30         7.  Assess participating carriers in accordance with

31  paragraph (j), and make advance interim assessments as may be

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 1  reasonable and necessary for organizational and interim

 2  operating expenses.  Interim assessments shall be credited as

 3  offsets against any regular assessments due following the

 4  close of the calendar year.

 5         8.  Appoint appropriate legal, actuarial, and other

 6  committees as necessary to provide technical assistance in the

 7  operation of the program, and in any other function within the

 8  authority of the program.

 9         9.  Borrow money to effect the purposes of the program.

10  Any notes or other evidences of indebtedness of the program

11  which are not in default constitute legal investments for

12  carriers and may be carried as admitted assets.

13         10.  To the extent necessary, increase the $5,000

14  deductible reinsurance requirement to adjust for the effects

15  of inflation.

16         (g)  A reinsuring carrier may reinsure with the program

17  coverage of an eligible employee of a small employer, or any

18  dependent of such an employee, subject to each of the

19  following provisions:

20         1.  With respect to a standard and basic health care

21  plan, the program must reinsure the level of coverage

22  provided; and, with respect to any other plan, the program

23  must reinsure the coverage up to, but not exceeding, the level

24  of coverage provided under the standard and basic health care

25  plan.

26         2.  Except in the case of a late enrollee, a reinsuring

27  carrier may reinsure an eligible employee or dependent within

28  60 days after the commencement of the coverage of the small

29  employer. A newly employed eligible employee or dependent of a

30  small employer may be reinsured within 60 days after the

31  commencement of his or her coverage.

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 1         3.  A small employer carrier may reinsure an entire

 2  employer group within 60 days after the commencement of the

 3  group's coverage under the plan. The carrier may choose to

 4  reinsure newly eligible employees and dependents of the

 5  reinsured group pursuant to subparagraph 1.

 6         4.  The program may not reimburse a participating

 7  carrier with respect to the claims of a reinsured employee or

 8  dependent until the carrier has paid incurred claims of at

 9  least $5,000 in a calendar year for benefits covered by the

10  program.  In addition, the reinsuring carrier shall be

11  responsible for 10 percent of the next $50,000 and 5 percent

12  of the next $100,000 of incurred claims during a calendar year

13  and the program shall reinsure the remainder.

14         5.  The board annually shall adjust the initial level

15  of claims and the maximum limit to be retained by the carrier

16  to reflect increases in costs and utilization within the

17  standard market for health benefit plans within the state. The

18  adjustment shall not be less than the annual change in the

19  medical component of the "Consumer Price Index for All Urban

20  Consumers" of the Bureau of Labor Statistics of the Department

21  of Labor, unless the board proposes and the office approves a

22  lower adjustment factor.

23         6.  A small employer carrier may terminate reinsurance

24  for all reinsured employees or dependents on any plan

25  anniversary.

26         7.  The premium rate charged for reinsurance by the

27  program to a health maintenance organization that is approved

28  by the Secretary of Health and Human Services as a federally

29  qualified health maintenance organization pursuant to 42

30  U.S.C. s. 300e(c)(2)(A) and that, as such, is subject to

31  requirements that limit the amount of risk that may be ceded

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 1  to the program, which requirements are more restrictive than

 2  subparagraph 4., shall be reduced by an amount equal to that

 3  portion of the risk, if any, which exceeds the amount set

 4  forth in subparagraph 4. which may not be ceded to the

 5  program.

 6         8.  The board may consider adjustments to the premium

 7  rates charged for reinsurance by the program for carriers that

 8  use effective cost containment measures, including high-cost

 9  case management, as defined by the board.

10         9.  A reinsuring carrier shall apply its

11  case-management and claims-handling techniques, including, but

12  not limited to, utilization review, individual case

13  management, preferred provider provisions, other managed care

14  provisions or methods of operation, consistently with both

15  reinsured business and nonreinsured business.

16         (h)1.  The board, as part of the plan of operation,

17  shall establish a methodology for determining premium rates to

18  be charged by the program for reinsuring small employers and

19  individuals pursuant to this section.  The methodology shall

20  include a system for classification of small employers that

21  reflects the types of case characteristics commonly used by

22  small employer carriers in the state.  The methodology shall

23  provide for the development of basic reinsurance premium

24  rates, which shall be multiplied by the factors set for them

25  in this paragraph to determine the premium rates for the

26  program. The basic reinsurance premium rates shall be

27  established by the board, subject to the approval of the

28  office, and shall be set at levels which reasonably

29  approximate gross premiums charged to small employers by small

30  employer carriers for health benefit plans with benefits

31  similar to the standard and basic health benefit plan.  The

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 1  premium rates set by the board may vary by geographical area,

 2  as determined under this section, to reflect differences in

 3  cost.  The multiplying factors must be established as follows:

 4         a.  The entire group may be reinsured for a rate that

 5  is 1.5 times the rate established by the board.

 6         b.  An eligible employee or dependent may be reinsured

 7  for a rate that is 5 times the rate established by the board.

 8         2.  The board periodically shall review the methodology

 9  established, including the system of classification and any

10  rating factors, to assure that it reasonably reflects the

11  claims experience of the program.  The board may propose

12  changes to the rates which shall be subject to the approval of

13  the office.

14         (i)  If a health benefit plan for a small employer

15  issued in accordance with this subsection is entirely or

16  partially reinsured with the program, the premium charged to

17  the small employer for any rating period for the coverage

18  issued must be consistent with the requirements relating to

19  premium rates set forth in this section.

20         (j)1.  Before July March 1 of each calendar year, the

21  board shall determine and report to the office the program net

22  loss for the previous year, including administrative expenses

23  for that year, and the incurred losses for the year, taking

24  into account investment income and other appropriate gains and

25  losses.

26         2.  Any net loss for the year shall be recouped by

27  assessment of the carriers, as follows:

28         a.  The operating losses of the program shall be

29  assessed in the following order subject to the specified

30  limitations.  The first tier of assessments shall be made

31  against reinsuring carriers in an amount which shall not

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 1  exceed 5 percent of each reinsuring carrier's premiums from

 2  health benefit plans covering small employers.  If such

 3  assessments have been collected and additional moneys are

 4  needed, the board shall make a second tier of assessments in

 5  an amount which shall not exceed 0.5 percent of each carrier's

 6  health benefit plan premiums.  Except as provided in paragraph

 7  (n), risk-assuming carriers are exempt from all assessments

 8  authorized pursuant to this section.  The amount paid by a

 9  reinsuring carrier for the first tier of assessments shall be

10  credited against any additional assessments made.

11         b.  The board shall equitably assess carriers for

12  operating losses of the plan based on market share.  The board

13  shall annually assess each carrier a portion of the operating

14  losses of the plan.  The first tier of assessments shall be

15  determined by multiplying the operating losses by a fraction,

16  the numerator of which equals the reinsuring carrier's earned

17  premium pertaining to direct writings of small employer health

18  benefit plans in the state during the calendar year for which

19  the assessment is levied, and the denominator of which equals

20  the total of all such premiums earned by reinsuring carriers

21  in the state during that calendar year. The second tier of

22  assessments shall be based on the premiums that all carriers,

23  except risk-assuming carriers, earned on all health benefit

24  plans written in this state. The board may levy interim

25  assessments against carriers to ensure the financial ability

26  of the plan to cover claims expenses and administrative

27  expenses paid or estimated to be paid in the operation of the

28  plan for the calendar year prior to the association's

29  anticipated receipt of annual assessments for that calendar

30  year.  Any interim assessment is due and payable within 30

31  days after receipt by a carrier of the interim assessment

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 1  notice. Interim assessment payments shall be credited against

 2  the carrier's annual assessment.  Health benefit plan premiums

 3  and benefits paid by a carrier that are less than an amount

 4  determined by the board to justify the cost of collection may

 5  not be considered for purposes of determining assessments.

 6         c.  Subject to the approval of the office, the board

 7  shall make an adjustment to the assessment formula for

 8  reinsuring carriers that are approved as federally qualified

 9  health maintenance organizations by the Secretary of Health

10  and Human Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to

11  the extent, if any, that restrictions are placed on them that

12  are not imposed on other small employer carriers.

13         3.  Before July March 1 of each year, the board shall

14  determine and file with the office an estimate of the

15  assessments needed to fund the losses incurred by the program

16  in the previous calendar year.

17         4.  If the board determines that the assessments needed

18  to fund the losses incurred by the program in the previous

19  calendar year will exceed the amount specified in subparagraph

20  2., the board shall evaluate the operation of the program and

21  report its findings, including any recommendations for changes

22  to the plan of operation, to the office within 180 90 days

23  following the end of the calendar year in which the losses

24  were incurred.  The evaluation shall include an estimate of

25  future assessments, the administrative costs of the program,

26  the appropriateness of the premiums charged and the level of

27  carrier retention under the program, and the costs of coverage

28  for small employers. If the board fails to file a report with

29  the office within 180 90 days following the end of the

30  applicable calendar year, the office may evaluate the

31  operations of the program and implement such amendments to the

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 1  plan of operation the office deems necessary to reduce future

 2  losses and assessments.

 3         5.  If assessments exceed the amount of the actual

 4  losses and administrative expenses of the program, the excess

 5  shall be held as interest and used by the board to offset

 6  future losses or to reduce program premiums. As used in this

 7  paragraph, the term "future losses" includes reserves for

 8  incurred but not reported claims.

 9         6.  Each carrier's proportion of the assessment shall

10  be determined annually by the board, based on annual

11  statements and other reports considered necessary by the board

12  and filed by the carriers with the board.

13         7.  Provision shall be made in the plan of operation

14  for the imposition of an interest penalty for late payment of

15  an assessment.

16         8.  A carrier may seek, from the office, a deferment,

17  in whole or in part, from any assessment made by the board.

18  The office may defer, in whole or in part, the assessment of a

19  carrier if, in the opinion of the office, the payment of the

20  assessment would place the carrier in a financially impaired

21  condition.  If an assessment against a carrier is deferred, in

22  whole or in part, the amount by which the assessment is

23  deferred may be assessed against the other carriers in a

24  manner consistent with the basis for assessment set forth in

25  this section. The carrier receiving such deferment remains

26  liable to the program for the amount deferred and is

27  prohibited from reinsuring any individuals or groups in the

28  program if it fails to pay assessments.

29         (k)  Neither the participation in the program as

30  reinsuring carriers, the establishment of rates, forms, or

31  procedures, nor any other joint or collective action required

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    Florida Senate - 2005                                  SB 2514
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 1  by this act, may be the basis of any legal action, criminal or

 2  civil liability, or penalty against the program or any of its

 3  carriers either jointly or separately.

 4         (l)  The board, as part of the plan of operation, shall

 5  develop standards setting forth the manner and levels of

 6  compensation to be paid to agents for the sale of basic and

 7  standard health benefit plans.  In establishing such

 8  standards, the board shall take into consideration the need to

 9  assure the broad availability of coverages, the objectives of

10  the program, the time and effort expended in placing the

11  coverage, the need to provide ongoing service to the small

12  employer, the levels of compensation currently used in the

13  industry, and the overall costs of coverage to small employers

14  selecting these plans.

15         (m)  The board shall monitor compliance with this

16  section, including the market conduct of small employer

17  carriers, and shall report to the office any unfair trade

18  practices and misleading or unfair conduct by a small employer

19  carrier that has been reported to the board by agents,

20  consumers, or any other person. The office shall investigate

21  all reports and, upon a finding of noncompliance with this

22  section or of unfair or misleading practices, shall take

23  action against the small employer carrier as permitted under

24  the insurance code or chapter 641.  The board is not given

25  investigatory or regulatory powers, but must forward all

26  reports of cases or abuse or misrepresentation to the office.

27         (n)  Notwithstanding paragraph (j), the administrative

28  expenses of the program shall be recouped by assessment of

29  risk-assuming carriers and reinsuring carriers and such

30  amounts shall not be considered part of the operating losses

31  of the plan for the purposes of this paragraph.  Each

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    Florida Senate - 2005                                  SB 2514
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 1  carrier's portion of such administrative expenses shall be

 2  determined by multiplying the total of such administrative

 3  expenses by a fraction, the numerator of which equals the

 4  carrier's earned premium pertaining to direct writing of small

 5  employer health benefit plans in the state during the calendar

 6  year for which the assessment is levied, and the denominator

 7  of which equals the total of such premiums earned by all

 8  carriers in the state during such calendar year.

 9         (o)  The board shall advise the office, the agency, the

10  department, and other executive and legislative entities on

11  health insurance issues. Specifically, the board shall:

12         1.  Provide a forum for stakeholders, including

13  insurers, agents, consumers, and regulators, in the private

14  health insurance market in this state.

15         2.  Review and recommend strategies to improve the

16  functioning of the health insurance markets in this state,

17  with a specific focus on market stability, access, and

18  pricing.

19         3.  Make recommendations of the office for legislation

20  addressing health insurance market issues and provide comment

21  on health insurance legislation proposed by the office.

22         4.  Meet at least three times each year. One meeting

23  shall be held to hear reports and to secure public comment on

24  the health insurance market, to develop any legislation needed

25  to address health insurance market issues, and to provide

26  comment on health insurance legislation proposed by the

27  office.

28         5.  By September 1 of each year, issue a report to the

29  office on the state of the health insurance market. The report

30  must include recommendations for changes in the health

31  

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    Florida Senate - 2005                                  SB 2514
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 1  insurance market, results from implementation of previous

 2  recommendations, and information on health insurance markets.

 3         Section 10.  Subsection (1) of section 641.27, Florida

 4  Statutes, is amended to read:

 5         641.27  Examination by the department.--

 6         (1)  The office shall examine the affairs,

 7  transactions, accounts, business records, and assets of any

 8  health maintenance organization as often as it deems it

 9  expedient for the protection of the people of this state, but

10  not less frequently than once every 5 3 years. In lieu of

11  making its own financial examination, the office may accept an

12  independent certified public accountant's audit report

13  prepared on a statutory accounting basis consistent with this

14  part. However, except when the medical records are requested

15  and copies furnished pursuant to s. 456.057, medical records

16  of individuals and records of physicians providing service

17  under contract to the health maintenance organization shall

18  not be subject to audit, although they may be subject to

19  subpoena by court order upon a showing of good cause.  For the

20  purpose of examinations, the office may administer oaths to

21  and examine the officers and agents of a health maintenance

22  organization concerning its business and affairs.  The

23  examination of each health maintenance organization by the

24  office shall be subject to the same terms and conditions as

25  apply to insurers under chapter 624.  In no event shall

26  expenses of all examinations exceed a maximum of $20,000 for

27  any 1-year period. Any rehabilitation, liquidation,

28  conservation, or dissolution of a health maintenance

29  organization shall be conducted under the supervision of the

30  department, which shall have all power with respect thereto

31  granted to it under the laws governing the rehabilitation,

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 1  liquidation, reorganization, conservation, or dissolution of

 2  life insurance companies.

 3         Section 11.  Paragraph (c) of subsection (3) of section

 4  641.31, Florida Statutes, is amended to read:

 5         641.31  Health maintenance contracts.--

 6         (3)

 7         (c)  The office shall disapprove any form filed under

 8  this subsection, or withdraw any previous approval thereof, if

 9  the form:

10         1.  Is in any respect in violation of, or does not

11  comply with, any provision of this part or rule adopted

12  thereunder.

13         2.  Contains or incorporates by reference, where such

14  incorporation is otherwise permissible, any inconsistent,

15  ambiguous, or misleading clauses or exceptions and conditions

16  which deceptively affect the risk purported to be assumed in

17  the general coverage of the contract.

18         3.  Has any title, heading, or other indication of its

19  provisions which is misleading.

20         4.  Is printed or otherwise reproduced in such a manner

21  as to render any material provision of the form substantially

22  illegible.

23         5.  Contains provisions which are unfair, inequitable,

24  or contrary to the public policy of this state or which

25  encourage misrepresentation.

26         6.  Excludes coverage for human immunodeficiency virus

27  infection or acquired immune deficiency syndrome or contains

28  limitations in the benefits payable, or in the terms or

29  conditions of such contract, for human immunodeficiency virus

30  infection or acquired immune deficiency syndrome which are

31  

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    Florida Senate - 2005                                  SB 2514
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 1  different than those which apply to any other sickness or

 2  medical condition.

 3         7.  Is not in compliance with s. 627.4141.

 4         Section 12.  This act shall take effect July 1, 2005,

 5  and applies to all policies and contracts issued on or after

 6  that date.

 7  

 8            *****************************************

 9                          SENATE SUMMARY

10    Prohibits mandatory arbitration clauses in life insurance
      and health insurance policies. Authorizes high deductible
11    health insurance plans that meet certain requirements of
      a health savings account. Revises duties of the Office of
12    Insurance Regulation in examinations of health
      maintenance organizations. Extends the time within which
13    eligible employees may apply for health insurance
      coverage continuation.
14  

15  

16  

17  

18  

19  

20  

21  

22  

23  

24  

25  

26  

27  

28  

29  

30  

31  

                                  38

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