House Bill 4495e1
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 A bill to be entitled
2 An act relating to health insurance; creating
3 s. 222.23, F.S.; exempting moneys paid into a
4 medical savings account from attachment,
5 garnishment, or legal process; amending s.
6 627.6571, F.S.; clarifying application;
7 amending s. 627.6675, F.S.; revising standards
8 for renewal of converted insurance policies;
9 creating s. 627.6685, F.S.; requiring health
10 insurers and health maintenance organizations
11 to include in their plans that offer mental
12 health coverage annual and lifetime mental
13 health benefits coverage restrictions that are
14 not less than annual and lifetime benefits
15 coverage restrictions for medical or surgical
16 benefits covered by the plan; providing
17 exemptions; amending s. 627.6699, F.S.;
18 revising a definition; authorizing the
19 Department of Insurance to adopt rules
20 governing guaranteed issue of Medicare
21 supplement coverage for continuously covered
22 individuals; amending s. 627.674, F.S.;
23 revising the minimum standards for Medicare
24 Supplement policies; amending s. 627.6741,
25 F.S.; revising requirements for insurers to
26 issue, cancel, nonrenew, and replace Medicare
27 supplement policies; restricting preexisting
28 condition exclusions; amending s. 627.912,
29 F.S.; requiring certain self-insurers to report
30 certain information to the Department of
31 Insurance; amending s. 627.9403, F.S.;
1
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 clarifying application to certain types of
2 long-term care policies; amending s. 627.9404,
3 F.S.; exempting long-term care insurance
4 policies from certain requirements; providing
5 definitions; amending s. 627.9407, F.S.;
6 revising the definition of "preexisting
7 condition"; requiring certain insurance
8 policies to provide disclosure of certain
9 information; amending s. 627.94073, F.S.,
10 clarifying notice; amending s. 641.225, F.S.;
11 increasing solvency requirements for health
12 maintenance organizations; amending s. 641.285,
13 F.S.; revising requirements for insolvency
14 protection; authorizing the Department of
15 Insurance to increase insolvency protection for
16 certain health maintenance organizations;
17 amending s. 641.31074, F.S.; removing redundant
18 language and making technical corrections;
19 amending s. 641.3922, F.S.; revising standards
20 for renewal of converted health maintenance
21 organization policies; amending s. 641.495,
22 F.S.; exempting from certain licensure
23 requirements certain beds of a health
24 maintenance organization; repealing s.
25 641.3922(7)(b), F.S., relating to cancellation
26 or nonrenewal of health maintenance contracts
27 due to eligibility for coverage under Medicare;
28 providing an effective date.
29
30 Be It Enacted by the Legislature of the State of Florida:
31
2
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 Section 1. Section 222.23, Florida Statutes, is
2 created to read:
3 222.23 Exemption of moneys in the medical savings
4 account from legal process.--Moneys paid into or out of a
5 medical savings account by or on behalf of a person depositing
6 money into such account or qualified beneficiary are not
7 liable to attachment, garnishment, or legal process in the
8 state in favor of any creditor of such person or beneficiary
9 of such medical savings account.
10 Section 2. Paragraph (b) of subsection (3) of section
11 627.6571, Florida Statutes, is amended to read:
12 627.6571 Guaranteed renewability of coverage.--
13 (3)
14 (b)1. In any case in which an insurer elects to
15 discontinue offering all health insurance coverage in the
16 small-group market or the large-group market, or both, in this
17 state, health insurance coverage may be discontinued by the
18 insurer only if:
19 a. The insurer provides notice to the department and
20 to each policyholder, and participants and beneficiaries
21 covered under such coverage, of such discontinuation at least
22 180 days prior to the date of the discontinuation of such
23 coverage; and
24 b. All health insurance issued or delivered for
25 issuance in this state in such market markets is discontinued
26 and coverage under such health insurance coverage in such
27 market is not renewed.
28 2. In the case of a discontinuation under subparagraph
29 1. in a market, the insurer may not provide for the issuance
30 of any health insurance coverage in the market in this state
31
3
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 during the 5-year period beginning on the date of the
2 discontinuation of the last insurance coverage not renewed.
3 Section 3. Paragraph (b) of subsection (7) of section
4 627.6675, Florida Statutes, is amended to read:
5 627.6675 Conversion on termination of
6 eligibility.--Subject to all of the provisions of this
7 section, a group policy delivered or issued for delivery in
8 this state by an insurer or nonprofit health care services
9 plan that provides, on an expense-incurred basis, hospital,
10 surgical, or major medical expense insurance, or any
11 combination of these coverages, shall provide that an employee
12 or member whose insurance under the group policy has been
13 terminated for any reason, including discontinuance of the
14 group policy in its entirety or with respect to an insured
15 class, and who has been continuously insured under the group
16 policy, and under any group policy providing similar benefits
17 that the terminated group policy replaced, for at least 3
18 months immediately prior to termination, shall be entitled to
19 have issued to him or her by the insurer a policy or
20 certificate of health insurance, referred to in this section
21 as a "converted policy." An employee or member shall not be
22 entitled to a converted policy if termination of his or her
23 insurance under the group policy occurred because he or she
24 failed to pay any required contribution, or because any
25 discontinued group coverage was replaced by similar group
26 coverage within 31 days after discontinuance.
27 (7) INFORMATION REQUESTED BY INSURER.--
28 (b) The converted policy may provide that the insurer
29 may refuse to renew the policy or the coverage of any person
30 only for one or more of the following reasons:
31
4
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 1. Either the benefits provided under the sources
2 referred to in subparagraphs (a)1. and 2. for the person or
3 the benefits provided or available under the sources referred
4 to in subparagraph (a)3. for the person, together with the
5 benefits provided by the converted policy, would result in
6 overinsurance according to the insurer's standards on file
7 with the department.
8 2. The converted policyholder fails to provide the
9 information requested pursuant to paragraph (a).
10 3. Fraud or intentional material misrepresentation in
11 applying for any benefits under the converted policy.
12 4. Eligibility of the insured person for coverage
13 under Medicare or under any other state or federal law
14 providing for benefits similar to those provided by the
15 converted policy.
16 4.5. Other reasons approved by the department.
17 Section 4. Section 627.6685, Florida Statutes, is
18 created to read:
19 627.6685 Mental health coverage.--
20 (1) DEFINITIONS.--As used in this section:
21 (a) "Aggregate lifetime limit" means, with respect to
22 benefits under a group health plan or health insurance
23 coverage, a dollar limitation on the total amount that may be
24 paid with respect to such benefits under the plan or health
25 insurance coverage with respect to an individual or other
26 coverage unit.
27 (b) "Annual limit" means, with respect to benefits
28 under a group health plan or health insurance coverage, a
29 dollar limitation on the total amount of benefits that may be
30 paid with respect to such benefits in a 12-month period under
31
5
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 the plan or health insurance coverage with respect to an
2 individual or other coverage unit.
3 (c) "Medical or surgical benefits" means benefits with
4 respect to medical or surgical services, as defined under the
5 terms of the plan or coverage, but does not include mental
6 health benefits.
7 (d) "Mental health benefits" means benefits with
8 respect to mental health services, as defined under the terms
9 of the plan or coverage, but does not include benefits with
10 respect to treatment of substance abuse or chemical
11 dependency.
12 (e) "Health insurance coverage" means coverage
13 provided by an authorized insurer or by a health maintenance
14 organization.
15 (2) BENEFITS.--
16 (a)1. In the case of a group health plan, or health
17 insurance coverage offered in connection with such a plan,
18 which provides both medical and surgical benefits and mental
19 health benefits:
20 a. If the plan or coverage does not include an
21 aggregate lifetime limit on substantially all medical and
22 surgical benefits, the plan or coverage may not impose any
23 aggregate lifetime limit on mental health benefits.
24 b. If the plan or coverage includes an aggregate
25 lifetime limit on substantially all medical and surgical
26 benefits, the plan or coverage must:
27 (I) Apply that applicable lifetime limit both to the
28 medical and surgical benefits to which it otherwise would
29 apply and to mental health benefits and not distinguish in the
30 application of such limit between such medical and surgical
31 benefits and mental health benefits; or
6
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 (II) Not include any aggregate lifetime limit on
2 mental health benefits which is less than that applicable
3 lifetime limit.
4 c. For any plan or coverage that is not described in
5 sub-subparagraph a. or sub-subparagraph b. and that includes
6 no or different aggregate lifetime limits on different
7 categories of medical and surgical benefits, the department
8 shall establish rules under which sub-subparagraph b. is
9 applied to such plan or coverage with respect to mental health
10 benefits by substituting for the applicable lifetime limit an
11 average aggregate lifetime limit that is computed taking into
12 account the weighted average of the aggregate lifetime limits
13 applicable to such categories.
14 2. In the case of a group health plan, or health
15 insurance coverage offered in connection with such a plan,
16 which provides both medical and surgical benefits and mental
17 health benefits:
18 a. If the plan or coverage does not include an annual
19 limit on substantially all medical and surgical benefits, the
20 plan or coverage may not impose any annual limit on mental
21 health benefits.
22 b. If the plan or coverage includes an annual limit on
23 substantially all medical and surgical benefits, the plan or
24 coverage must:
25 (I) Apply that applicable annual limit both to medical
26 and surgical benefits to which it otherwise would apply and to
27 mental health benefits and not distinguish in the application
28 of such limit between such medical and surgical benefits and
29 mental health benefits; or
30 (II) Not include any annual limit on mental health
31 benefits which is less than the applicable annual limit.
7
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 c. For any plan or coverage that is not described in
2 sub-subparagraph a. or sub-subparagraph b. and that includes
3 no or different annual limits on different categories of
4 medical and surgical benefits, the department shall establish
5 rules under which sub-subparagraph b. is applied to such plan
6 or coverage with respect to mental health benefits by
7 substituting for the applicable annual limit an average annual
8 limit that is computed taking into account the weighted
9 average of the annual limits applicable to such categories.
10 (b) Nothing in this section shall be construed:
11 1. To require a group health plan, or health insurance
12 coverage offered in connection with such a plan, to provide
13 any mental health benefits; or
14 2. In the case of a group health plan, or health
15 insurance coverage offered in connection with such a plan,
16 which provides mental health benefits, to affect the terms and
17 conditions, including cost-sharing, limits on numbers of
18 visits or days of coverage, and requirements relating to
19 medical necessity, relating to the amount, duration, or scope
20 of mental health benefits under the plan or coverage, except
21 as specifically provided in paragraph (a) with respect to
22 parity in the imposition of aggregate lifetime limits and
23 annual limits for mental health benefits.
24 (3) EXEMPTIONS.--
25 (a) This section does not apply to any group health
26 plan, or group health insurance coverage offered in connection
27 with a group health plan, for any plan year of a small
28 employer as defined in s. 627.6699.
29 (b) This section does not apply with respect to a
30 group health plan, or health insurance coverage offered in
31 connection with a group health plan, if the application of
8
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 this section to such plan or coverage results in an increase
2 in the cost under the plan or for such coverage of at least 1
3 percent.
4 (4) SEPARATE APPLICATION.--For any group health plan
5 that offers a participant or beneficiary two or more
6 benefit-package options under the plan, the requirements of
7 this section apply separately with respect to each such
8 option.
9 (5) DURATION.--This section does not apply to benefits
10 for services furnished on or after September 30, 2001.
11 (6) APPLICATION.--The provisions of this section shall
12 control in the event to the extent of any conflict between
13 this section and s. 627.668.
14 Section 5. Paragraph (k) of subsection (3) of section
15 627.6699, Florida Statutes, is amended to read:
16 627.6699 Employee Health Care Access Act.--
17 (3) DEFINITIONS.--As used in this section, the term:
18 (k) "Health benefit plan" means any hospital or
19 medical policy or certificate, hospital or medical service
20 plan contract, or health maintenance organization subscriber
21 contract. The term does not include accident-only, specified
22 disease, individual hospital indemnity, credit, dental-only,
23 vision-only, Medicare supplement, and similar supplemental
24 plans provided under a separate policy, certificate, or
25 contract of insurance, which cannot duplicate coverage under
26 an underlying health plan and are specifically designed to
27 fill gaps in the underlying health plan, coinsurance, or
28 deductibles, long-term care, or disability income insurance;
29 coverage issued as a supplement to liability insurance;
30 workers' compensation or similar insurance; or automobile
31 medical-payment insurance.
9
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 Section 6. Paragraphs (a) and (d) of subsection (2)
2 and subsection (3) of section 627.674, Florida Statutes, are
3 amended to read:
4 627.674 Minimum standards; filing requirements.--
5 (2)(a) The department must adopt rules establishing
6 minimum standards for Medicare supplement policies that, taken
7 together with the requirements of this part, are no less
8 comprehensive or beneficial to persons insured or covered
9 under Medicare supplement policies issued, delivered, or
10 issued for delivery in this state, including certificates
11 under group or blanket policies issued, delivered, or issued
12 for delivery in this state, than the standards provided in 42
13 U.S.C., s. 1395ss, or the most recent version of the NAIC
14 Model Regulation To Implement the NAIC Medicare Supplement
15 Insurance Minimum Standards Model Act adopted by the National
16 Association of Insurance Commissioners on July 31, 1991, or
17 the Omnibus Budget Reconciliation Act of 1990 (Pub. L. No.
18 101-508).
19 (d) For policies issued on or after January 1, 1991,
20 the department may adopt rules to establish minimum policy
21 standards to authorize the types of policies specified by 42
22 U.S.C. s. 1395ss(p)(2)(c) and any optional benefits to
23 facilitate policy comparisons.
24 (3) A policy may not be filed with the department as a
25 Medicare supplement policy unless the policy meets or exceeds,
26 either in a single policy or, in the case of nonprofit health
27 care services plans, in one or more policies issued in
28 conjunction with one another, the requirements of 42 U.S.C.,
29 s. 1395ss, or the most recent version of the NAIC Medicare
30 Supplement Insurance Minimum Standards Model Act, adopted by
31 the National Association of Insurance Commissioners on July
10
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 31, 1991, and the Omnibus Budget Reconciliation Act of 1990
2 (Pub. L. No. 101-508).
3 Section 7. Subsection (1) and paragraph (c) of
4 subsection (2) of section 627.6741, Florida Statutes, are
5 amended, and subsection (5) is added to said section, to read:
6 627.6741 Issuance, cancellation, nonrenewal, and
7 replacement.--
8 (1) An insurer issuing Medicare supplement policies in
9 this state shall offer the opportunity of enrolling in a
10 Medicare supplement policy, without conditioning the issuance
11 or effectiveness of the policy on, and without discriminating
12 in the price of the policy based on, the medical or health
13 status or receipt of health care by the individual:
14 (a) To any individual who is 65 years of age or older
15 and who resides in this state, upon the request of the
16 individual during the 6-month period beginning with the first
17 month in which the individual has attained 65 years of age and
18 is enrolled in Medicare part B; or
19 (b) To any individual who is 65 years of age or older
20 and is enrolled in Medicare part B, who resides in this state,
21 upon the request of the individual during the 2-month period
22 following termination of coverage under a group health
23 insurance policy.;
24
25 A Medicare supplement policy issued to an individual under
26 paragraph (a) or paragraph (b) may not exclude benefits based
27 on a preexisting condition if the individual has a continuous
28 period of creditable coverage, as defined in s. 627.6561(5),
29 of at least 6 months as of the date of application for
30 coverage the opportunity of enrolling in a Medicare supplement
31 policy, without conditioning the issuance or effectiveness of
11
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 the policy on, and without discriminating in the price of the
2 policy based on, the medical or health status or receipt of
3 health care by the individual.
4 (2) For both individual and group Medicare supplement
5 policies:
6 (c) If a Medicare supplement policy or certificate
7 replaces another Medicare supplement policy or certificate or
8 creditable coverage as defined in s. 627.6561(5) group health
9 insurance policy or certificate, the replacing insurer shall
10 waive any time periods applicable to preexisting conditions,
11 waiting periods, elimination periods, and probationary periods
12 in the new Medicare supplement policy for similar benefits to
13 the extent such time was spent under the original policy,
14 subject to the requirements of s. 627.6561(6)-(11).
15 (5) The department, by rule, shall prescribe standards
16 relating to the guaranteed issue of coverage, without
17 exclusions for preexisting conditions, for continuously
18 covered individuals consistent with the provisions of 42
19 U.S.C., s. 1395ss(s)(3).
20 Section 8. Subsection (5) is added to section 627.912,
21 Florida Statutes, to read:
22 627.912 Professional liability claims and actions;
23 reports by insurers.--
24 (5) Any self-insurance program established under s.
25 240.213 shall report in duplicate to the Department of
26 Insurance any claim or action for damages for personal
27 injuries claimed to have been caused by error, omission, or
28 negligence in the performance of professional services
29 provided by the Board of Regents through an employee or agent
30 of the Board of Regents, including practitioners of medicine
31 licensed under chapter 458, practitioners of osteopathic
12
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 medicine licensed under chapter 459, podiatrists licensed
2 under chapter 461, and dentists licensed under chapter 466, or
3 based on a claimed performance of professional services
4 without consent if the claim resulted in a final judgment in
5 any amount, a settlement in any amount, or a final disposition
6 not resulting in payment on behalf of the insured. The reports
7 required by this subsection shall contain the information
8 required by subsection (3) and the name, address, and
9 specialty of the employee or agent of the Board of Regents
10 whose performance or professional services is alleged in the
11 claim or action to have caused personal injury.
12 Section 9. Section 627.9403, Florida Statutes, is
13 amended to read:
14 627.9403 Scope.--The provisions of this part shall
15 apply to long-term care insurance policies delivered or issued
16 for delivery in this state, and to policies delivered or
17 issued for delivery outside this state to the extent provided
18 in s. 627.9406, by an insurer, a fraternal benefit society as
19 defined in s. 632.601, a health care services plan as defined
20 in s. 641.01, a health maintenance organization as defined in
21 s. 641.19, a prepaid health clinic as defined in s. 641.402,
22 or a multiple-employer welfare arrangement as defined in s.
23 624.437. A policy which is advertised, marketed, or offered as
24 a long-term care policy and as a Medicare supplement policy
25 shall meet the requirements of this part and the requirements
26 of ss. 627.671-627.675 and, to the extent of a conflict, be
27 subject to the requirement that is more favorable to the
28 policyholder or certificateholder. The provisions of this
29 part shall not apply to a continuing care contract issued
30 pursuant to chapter 651 and shall not apply to guaranteed
31 renewable policies issued prior to October 1, 1988. Any
13
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 limited benefit policy that limits coverage to care in a
2 nursing home or to one or more lower levels of care required
3 or authorized to be provided by this part or by department
4 rule must meet all requirements of this part that apply to
5 long-term care insurance policies, except s. 627.9407(3)(c),
6 and (9), (10)(f), and (12) and s. 627.94073(2). If the
7 limited benefit policy does not provide coverage for care in a
8 nursing home, but does provide coverage for one or more lower
9 levels of care, the policy shall also be exempt from the
10 requirements of s. 627.9407(3)(d).
11 Section 10. Subsection (1) of section 627.9404,
12 Florida Statutes, is amended, subsections (7), (8), (9), and
13 (10) of said section are renumbered as subsections (8), (9),
14 (10), and (11), respectively, and new subsection (7) is added
15 to said section, to read:
16 627.9404 Definitions.--For the purposes of this part:
17 (1) "Long-term care insurance policy" means any
18 insurance policy or rider advertised, marketed, offered, or
19 designed to provide coverage on an expense-incurred,
20 indemnity, prepaid, or other basis for one or more necessary
21 or medically necessary diagnostic, preventive, therapeutic,
22 curing, treating, mitigating, rehabilitative, maintenance, or
23 personal care services provided in a setting other than an
24 acute care unit of a hospital. Long-term care insurance shall
25 not include any insurance policy which is offered primarily to
26 provide basic Medicare supplement coverage, basic hospital
27 expense coverage, basic medical-surgical expense coverage,
28 hospital confinement indemnity coverage, major medical expense
29 coverage, disability income protection coverage, accident only
30 coverage, specified disease or specified accident coverage, or
31 limited benefit health coverage. A long-term care insurance
14
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 policy must meet all the requirements of this part except s.
2 627.9407(12).
3 (7) "Limited benefit policy" means any policy that
4 limits coverage to care in a nursing home or to one or more
5 lower levels of care required or authorized to be provided by
6 this part or by department rule.
7 Section 11. Paragraph (a) of subsection (4) and
8 subsection (12) of section 627.9407, Florida Statutes, are
9 amended to read:
10 627.9407 Disclosure, advertising, and performance
11 standards for long-term care insurance.--
12 (4) PREEXISTING CONDITION.--
13 (a) A long-term care insurance policy or certificate,
14 other than a policy or certificate issued to a group referred
15 to in s. 627.9405(1)(a), may not use a definition of
16 "preexisting condition" which is more restrictive than the
17 following: "Preexisting condition" means the existence of
18 symptoms which would cause an ordinarily prudent person to
19 seek diagnosis, care, or treatment, or a condition for which
20 medical advice or treatment was recommended by or received
21 from a provider of health care services within 6 months
22 preceding the effective date of coverage of an insured person.
23 (12) DISCLOSURE.--
24 (a) A qualified long-term care insurance policy must
25 include a disclosure statement within the policy and within
26 the outline of coverage that the policy is intended to be a
27 qualified long-term contract. A long-term care insurance
28 policy that is not intended to be a qualified long-term care
29 insurance contract must include a disclosure statement within
30 the policy and within the outline of coverage that the policy
31 is not intended to be a qualified long-term care insurance
15
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 contract. The disclosure shall be prominently displayed and
2 shall read as follows: "This long-term care insurance policy
3 is not intended to be a qualified long-term care insurance
4 contract. You need to be aware that benefits received under
5 this policy may create unintended, adverse income tax
6 consequences to you. You may want to consult with a
7 knowledgeable individual about such potential income tax
8 consequences."
9 (b) A limited benefit policy qualified under s. 7702B
10 of the Internal Revenue Code must include a disclosure
11 statement within the policy and within the outline of coverage
12 that the policy is intended to be a qualified limited benefit
13 insurance contract. A limited benefit policy that is not
14 intended to be a qualified limited benefit insurance contract
15 must include a disclosure statement within the policy and
16 within the outline of coverage that the policy is not intended
17 to be a qualified limited benefit insurance contract. The
18 disclosure shall be prominently displayed and shall read as
19 follows: "This limited benefit insurance policy is not
20 intended to be a qualified limited benefit insurance contract.
21 You need to be aware that benefits received under this policy
22 may create unintended, adverse income tax consequences to you.
23 You may want to consult with a knowledgeable individual about
24 such potential income tax consequences."
25 Section 12. Subsection (2) of section 627.94073,
26 Florida Statutes, is amended to read:
27 627.94073 Notice of cancellation; grace period.--
28 (2) A long-term care policy may not be canceled for
29 nonpayment of premium unless, after expiration of the grace
30 period in subsection (1), and at least 30 days prior to the
31 effective date of such cancellation, the insurer has mailed a
16
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 notification of possible lapse in coverage to the policyholder
2 and to a specified secondary addressee if such addressee has
3 been designated in writing by name and address by the
4 policyholder. For policies issued or renewed on or after
5 October 1, 1996, the insurer shall notify the policyholder, at
6 least once every 2 years, of the right to designate a
7 secondary addressee. The applicant has the right to designate
8 at least one person who is to receive the notice of
9 termination, in addition to the insured. Designation shall not
10 constitute acceptance of any liability on the third party for
11 services provided to the insured. The form used for the
12 written designation must provide space clearly designated for
13 listing at least one person. The designation shall include
14 each person's full name and home address. In the case of an
15 applicant who elects not to designate an additional person,
16 the waiver shall state: "Protection against unintended
17 lapse.--I understand that I have the right to designate at
18 least one person other than myself to receive notice of lapse
19 or termination of this [long-term care/limited benefit]
20 insurance policy for nonpayment of premium. I understand that
21 notice will not be given until 30 days after a premium is due
22 and unpaid. I elect NOT to designate any person to receive
23 such notice." Notice shall be given by first class United
24 States mail, postage prepaid, and notice may not be given
25 until 30 days after a premium is due and unpaid. Notice shall
26 be deemed to have been given as of 5 days after the date of
27 mailing.
28 Section 13. Subsections (1) and (2) of section
29 641.225, Florida Statutes, are amended to read:
30 641.225 Surplus requirements.--
31
17
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 (1) Each health maintenance organization shall at all
2 times maintain a minimum surplus in an amount which is the
3 greater of $1,500,000, $500,000 or 10 percent of total
4 liabilities, or 2 percent of total annualized premium. All
5 health maintenance organizations which have a valid
6 certificate of authority before October 1, 1998 1988, or an
7 entity described in subsection (3), and which do not meet the
8 minimum surplus requirement, shall increase their surplus as
9 follows:
10
11 Date Amount
12
13 September 30, 1998 1989 $800,000, $200,000 or 10 6 percent
14 of total liabilities, or 1 percent
15 of annualized premium, whichever is
16 greater
17
18 September 30, 1999 1990 $1,150,000, $350,000 or 8 percent
19 of total liabilities, or 1.25
20 percent of annualized premium,
21 whichever is greater
22
23 September 30, 2000 1991 $1,500,000, $500,000 or 10 percent
24 of total liabilities, or 2 percent
25 of annualized premium, whichever is
26 greater
27
28 (2) The department shall not issue a certificate of
29 authority, except as provided in subsection (3), unless the
30 health maintenance organization has a minimum surplus in an
31 amount which is the greater of:
18
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 (a) $1,500,000;
2 (a)(b) Ten percent of their total liabilities based on
3 their startup actuarial projection as set forth in this part;
4 or
5 (b) Two percent of their total projected premiums
6 based on their startup projection as set forth in this part;
7 or
8 (c) $1,150,000 $500,000 plus all startup losses,
9 excluding profits, projected to be incurred on their startup
10 actuarial projection until the projection reflects statutory
11 net profits for 12 consecutive months.
12 Section 14. Section 641.285, Florida Statutes, is
13 amended to read:
14 641.285 Insolvency protection.--
15 (1) Unless otherwise provided in this section, Each
16 health maintenance organization shall deposit with the
17 department cash or securities of the type eligible under s.
18 625.52, which shall have at all times a market value in the
19 amount set forth in this subsection. The amount of the
20 deposit shall be reviewed annually, or more often, as the
21 department deems necessary. The market value of the deposit
22 shall be a minimum of $300,000 the greater of:
23 (a) Twice its reasonably estimated average monthly
24 uncovered expenditures; or
25 (b) $100,000.
26 (2) If securities or assets deposited by a health
27 maintenance organization under this part are subject to
28 material fluctuations in market value, the department may, in
29 its discretion, require the organization to deposit and
30 maintain on deposit additional securities or assets in an
31 amount as may be reasonably necessary to assure that the
19
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 deposit will at all times have a market value of not less than
2 the amount specified under this section.
3 (a) If for any reason the market value of assets and
4 securities of a health maintenance organization held on
5 deposit in this state under this code falls below the amount
6 required, the organization shall promptly deposit other or
7 additional assets or securities eligible for deposit
8 sufficient to cure the deficiency. If the health maintenance
9 organization has failed to cure the deficiency within 30 days
10 after receipt of notice thereof by registered or certified
11 mail from the department, the department may revoke the
12 certificate of authority of the health maintenance
13 organization.
14 (b) A health maintenance organization may, at its
15 option, deposit assets or securities in an amount exceeding
16 its deposit required or otherwise permitted under this code by
17 not more than 20 percent of the required or permitted deposit,
18 or $20,000, whichever is the larger amount, for the purpose of
19 absorbing fluctuations in the value of securities and assets
20 deposited and to facilitate the exchange and substitution of
21 securities and assets. During the solvency of the health
22 maintenance organization, any excess shall be released to the
23 organization upon its request. During the insolvency of the
24 health maintenance organization, any excess deposit shall be
25 released only as provided in s. 625.62.
26 (3) Whenever the department determines that the
27 financial condition of a health maintenance organization has
28 deteriorated to the point that the policyholders' or
29 subscribers' best interests are not being preserved by the
30 activities of a health maintenance organization, the
31 department may require such health maintenance organization to
20
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 deposit and maintain deposited in trust with the department
2 for the protection of the health maintenance organization's
3 policyholders, subscribers and/or creditors, for such time as
4 the department deems necessary, securities eligible for such
5 deposit under s. 625.52, having a market value of not less
6 than the amount which the department determines is necessary,
7 which amount shall be not less than $100,000 or greater than
8 $2,000,000. The deposit required under this subsection is in
9 addition to any other deposits required of a health
10 maintenance organization pursuant to subsections (1) and (2).
11 The department shall waive the deposit requirements set forth
12 in subsection (1) whenever it is satisfied that:
13 (a) The health maintenance organization has sufficient
14 surplus and an adequate history of generating net income to
15 assure its financial viability for the next year;
16 (b) The performance and obligations of the health
17 maintenance organization are guaranteed by a guaranteeing
18 organization of the type and subject to the same provisions as
19 outlined in s. 641.225; or
20 (c) The assets of the health maintenance organization
21 or its contracts with any insurer, health care provider,
22 governmental entity, or other person are reasonably sufficient
23 to assure the performance of the obligations of the
24 organization.
25 (4) All income from deposits shall belong to the
26 depositing health maintenance organization and shall be paid
27 to it as it becomes available. A health maintenance
28 organization that has made a securities deposit may withdraw
29 that deposit, or any part thereof, after making a substitute
30 deposit of cash or eligible securities or any combination of
31 these or other acceptable measures of equal amount and value.
21
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 (5)(a) The requirements of this section do not apply
2 to an applying or licensed health maintenance organization
3 which has a plan, approved by the department, for handling
4 insolvency which provides for continuation of benefits and
5 payments to unaffiliated providers for services rendered both
6 prior to and after insolvency for the duration of the contract
7 period for which payment has been made, except that benefits
8 to members who are confined on the date of insolvency in an
9 inpatient facility shall be continued until their discharge.
10 This plan shall include at least one of the following:
11 1. Contracts of insurance or reinsurance on file with
12 the department that will protect subscribers in the event the
13 health maintenance organization is unable to meet its
14 obligations. Each agreement between the organization and an
15 insurer shall be subject to the laws of this state regarding
16 reinsurance. Each agreement and any modification thereto
17 shall be filed with and approved by the department. Each
18 agreement shall remain in full force and in effect until
19 replaced or for at least 90 days following written
20 notification to the department by registered mail of
21 cancellation or termination by either party. The department
22 shall be endorsed on the agreement as an additional insured
23 party;
24 2. Contractual arrangements with health care providers
25 that include a guarantee by the provider to continue providing
26 health care services to any subscriber of the health
27 maintenance organization, upon insolvency of the organization,
28 until the end of the contract period for which payment by or
29 on behalf of the subscriber has been made or the discharge of
30 the subscriber from an inpatient facility, whichever occurs
31 later; or
22
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 3. Other measures acceptable to the department.
2 (b) The department shall reduce the deposit
3 requirements specified in subsection (1) whenever the
4 department has determined that the health maintenance
5 organization has a plan for handling insolvency which
6 partially meets the requirements of this section. The amount
7 of the deposit reduction shall be based on the extent to which
8 the organization meets the requirements of this section.
9 Section 15. Paragraph (d) of subsection (2) and
10 paragraphs (a) and (b) of subsection (3) of section 641.31074,
11 Florida Statutes, are amended to read:
12 641.31074 Guaranteed renewability of coverage.--
13 (2) A health maintenance organization may nonrenew or
14 discontinue a contract based only on one or more of the
15 following conditions:
16 (d) The health maintenance organization is ceasing to
17 offer coverage in such a market in accordance with subsection
18 (3) and applicable state law.
19 (3)(a) A health maintenance organization may
20 discontinue offering a particular contract form for group
21 coverage offered in the small group market or large group
22 market only if:
23 1. The health maintenance organization provides notice
24 to each contract holder provided coverage of this form in such
25 market, and participants and beneficiaries covered under such
26 coverage, of such discontinuation at least 90 days prior to
27 the date of the discontinuation of such coverage;
28 2. The health maintenance organization offers to each
29 contract holder provided coverage of this form in such market
30 the option to purchase all, or in the case of the large group
31 market, any other health insurance coverage currently being
23
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 offered by the health maintenance organization in such market;
2 and
3 3. In exercising the option to discontinue coverage of
4 this form and in offering the option of coverage under
5 subparagraph 2., the health maintenance organization acts
6 uniformly without regard to the claims experience of those
7 contract holders or any health-status-related factor that
8 relates to any participants or beneficiaries covered or new
9 participants or beneficiaries who may become eligible for such
10 coverage.
11 (b)1. In any case in which a health maintenance
12 organization elects to discontinue offering all coverage in
13 the small group market or the large group market, or both, in
14 this state, coverage may be discontinued by the insurer only
15 if:
16 a. The health maintenance organization provides notice
17 to the department and to each contract holder, and
18 participants and beneficiaries covered under such coverage, of
19 such discontinuation at least 180 days prior to the date of
20 the discontinuation of such coverage; and
21 b. All health insurance issued or delivered for
22 issuance in this state in such market is markets are
23 discontinued and coverage under such health insurance coverage
24 in such market is not renewed.
25 2. In the case of a discontinuation under subparagraph
26 1. in a market, the health maintenance organization may not
27 provide for the issuance of any health maintenance
28 organization contract coverage in the market in this state
29 during the 5-year period beginning on the date of the
30 discontinuation of the last insurance contract not renewed.
31
24
CODING: Words stricken are deletions; words underlined are additions.
HB 4495, First Engrossed
1 Section 16. Paragraph (a) of subsection (7) of section
2 641.3922, Florida Statutes, is amended to read:
3 641.3922 Conversion contracts; conditions.--Issuance
4 of a converted contract shall be subject to the following
5 conditions:
6 (7) REASONS FOR CANCELLATION; TERMINATION.--The
7 converted health maintenance contract must contain a
8 cancellation or nonrenewability clause providing that the
9 health maintenance organization may refuse to renew the
10 contract of any person covered thereunder, but cancellation or
11 nonrenewal must be limited to one or more of the following
12 reasons:
13 (a) Fraud or intentional material misrepresentation,
14 subject to the limitations of s. 641.31(23), in applying for
15 any benefits under the converted health maintenance contract;
16 Section 17. Subsection (12) is added to section
17 641.495, Florida Statutes, to read:
18 641.495 Requirements for issuance and maintenance of
19 certificate.--
20 (12) The provisions of part I of chapter 395 do not
21 apply to a health maintenance organization if, on or before
22 January 1, 1991, the organization provided not more than 10
23 outpatient holding beds for short-term and hospice-type
24 patients in an ambulatory care facility for its members,
25 provided such health maintenance organization maintains
26 current accreditation by the Joint Commission on Accreditation
27 of Health Care Organizations, the Accreditation Association
28 for Ambulatory Health Care, or the National Committee for
29 Quality Assurance.
30 Section 18. This act shall take effect on July 1,
31 1998.
25