House Bill 0463

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







    Florida House of Representatives - 2000                 HB 463

        By Representative Albright






  1                      A bill to be entitled

  2         An act relating to the Employee Health Care

  3         Access Act; amending s. 627.6699, F.S.;

  4         revising a definition; requiring small employer

  5         carriers to begin to offer and issue all small

  6         employer benefit plans on a specified date;

  7         deleting a requirement that basic and standard

  8         small employer health benefit plans be issued;

  9         providing additional requirements for

10         determining premium rates for benefit plans;

11         providing for application to plans provided by

12         certain small employer carriers under certain

13         circumstances; providing an effective date.

14

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

16

17         Section 1.  Paragraph (n) of subsection (3), paragraph

18  (c) of subsection (5), and paragraphs (b) and (d) of

19  subsection (6) of section 627.6699, Florida Statutes, are

20  amended to read:

21         627.6699  Employee Health Care Access Act.--

22         (3)  DEFINITIONS.--As used in this section, the term:

23         (n)  "Modified community rating" means a method used to

24  develop carrier premiums which spreads financial risk across a

25  large population and allows adjustments for age, gender,

26  family composition, tobacco usage, and geographic area as

27  determined under paragraph (5)(j); claims experience, health

28  status, or duration of coverage as permitted under

29  subparagraph (6)(b)5.; and administrative and acquisition

30  expenses as permitted under subparagraph (6)(b)6.

31         (5)  AVAILABILITY OF COVERAGE.--

                                  1

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






    Florida House of Representatives - 2000                 HB 463

    66-230A-00






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

  2  of transacting business in this state:

  3         1.  Beginning July 1, 2000 January 1, 1994, offer and

  4  issue all small employer health benefit plans on a

  5  guaranteed-issue basis to every eligible small employer, with

  6  two 3 to 50 eligible employees, that elects to be covered

  7  under such plan, agrees to make the required premium payments,

  8  and satisfies the other provisions of the plan. A rider for

  9  additional or increased benefits may be medically underwritten

10  and may only be added to the standard health benefit plan.

11  The increased rate charged for the additional or increased

12  benefit must be rated in accordance with this section.

13         2.  Beginning August 1, 2000 April 15, 1994, offer and

14  issue basic and standard small employer health benefit plans

15  on a guaranteed-issue basis, during an open enrollment period

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

17  small employer, with less than one or two eligible employees,

18  which is not formed primarily for purposes of buying health

19  insurance and which elects to be covered under such plan,

20  agrees to make the required premium payments, and satisfies

21  the other provisions of the plan.  Coverage provided pursuant

22  to this subparagraph shall begin on October 1 of the same year

23  as the date of enrollment, unless the small employer carrier

24  and the small employer agree to a different date.  A rider for

25  additional or increased benefits may be medically underwritten

26  and may only be added to the standard health benefit plan.

27  The increased rate charged for the additional or increased

28  benefit must be rated in accordance with this section. For

29  purposes of this subparagraph, a person, his or her spouse,

30  and his or her dependent children shall constitute a single

31

                                  2

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






    Florida House of Representatives - 2000                 HB 463

    66-230A-00






  1  eligible employee if such person and spouse are employed by

  2  the same small employer.

  3

  4  3.  Offer to eligible small employers the standard and basic

  5  health benefit plans.  This paragraph subparagraph does not

  6  limit a carrier's ability to offer other health benefit plans

  7  to small employers if the standard and basic health benefit

  8  plans are offered and rejected.

  9         (6)  RESTRICTIONS RELATING TO PREMIUM RATES.--

10         (b)  For all small employer health benefit plans that

11  are subject to this section and are issued by small employer

12  carriers on or after January 1, 1994, premium rates for health

13  benefit plans subject to this section are subject to the

14  following:

15         1.  Small employer carriers must use a modified

16  community rating methodology in which the premium for each

17  small employer must be determined solely on the basis of the

18  eligible employee's and eligible dependent's gender, age,

19  family composition, tobacco use, or geographic area as

20  determined under paragraph (5)(j) and may be adjusted as

21  permitted by subparagraphs 6. and 7.

22         2.  Rating factors related to age, gender, family

23  composition, tobacco use, or geographic location may be

24  developed by each carrier to reflect the carrier's experience.

25  The factors used by carriers are subject to department review

26  and approval.

27         3.  Small employer carriers may not modify the rate for

28  a small employer for 12 months from the initial issue date or

29  renewal date, unless the composition of the group changes or

30  benefits are changed.

31

                                  3

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






    Florida House of Representatives - 2000                 HB 463

    66-230A-00






  1         4.  Carriers participating in the alliance program, in

  2  accordance with ss. 408.70-408.706, may apply a different

  3  community rate to business written in that program.

  4         5.  Any adjustments in rates for claims experience,

  5  health status, or duration of coverage may not be charged to

  6  individual employees or dependents. For a small employer's

  7  policy, such adjustments may not result in a rate for the

  8  small employer which deviates more than 15 percent from the

  9  carrier's approved rate. Any such adjustment must be applied

10  uniformly to the rates charged for all employees and

11  dependents of the small employer. A small employer carrier may

12  make an adjustment to a small employer's renewal premium, not

13  to exceed 10 percent annually, due to the claims experience,

14  health status, or duration of coverage of the employees or

15  dependents of the small employer. Semiannually, small group

16  carriers shall report information on forms adopted by rule by

17  the department, to enable the department to monitor the

18  relationship of aggregate adjusted premiums actually charged

19  policyholders by each carrier to the premiums that would have

20  been charged by application of the carrier's approved modified

21  community rates. If the aggregate resulting from the

22  application of such adjustment exceeds the premium that would

23  have been charged by application of the approved modified

24  community rate by 5 percent for the current reporting period,

25  the carrier shall limit the application of such adjustments to

26  only minus adjustments beginning not more than 60 days after

27  the report is sent to the department. For any subsequent

28  reporting period, if the total aggregate adjusted premium

29  actually charged does not exceed the premium that would have

30  been charged by application of the approved modified community

31

                                  4

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






    Florida House of Representatives - 2000                 HB 463

    66-230A-00






  1  rate by 5 percent, the carrier may apply both plus and minus

  2  adjustments.

  3         6.  A small employer carrier may provide a credit to a

  4  small employer's premium based on administrative and

  5  acquisition expense differences resulting from the size of the

  6  group. Group size administrative and acquisition expense

  7  factors may be developed by each carrier to reflect the

  8  carrier's experience and are subject to department review and

  9  approval.

10         7.  A small employer carrier rating methodology may

11  include separate rating categories for one dependent child,

12  for two dependent children, and for three or more dependent

13  children for family coverage of employees having a spouse and

14  dependent children or employees having dependent children

15  only. A small employer carrier may have fewer, but not

16  greater, numbers of categories for dependent children than

17  those specified in this subparagraph.

18         8.  Small employer carriers may not use a composite

19  rating methodology to rate a small employer with fewer than 10

20  employees. For the purposes of this subparagraph a "composite

21  rating methodology" means a rating methodology that averages

22  the impact of the rating factors for age and gender in the

23  premiums charged to all of the employees of a small employer.

24         (d)  Notwithstanding s. 627.401(2), this section and

25  ss. 627.410 and 627.411 apply to any health benefit plan

26  provided by a small employer carrier that is an insurer, and

27  this section and s. 641.31 apply to any health benefit

28  provided by a small employer carrier that is a health

29  maintenance organization, that provides coverage to one or

30  more employees of a small employer regardless of where the

31  policy, certificate, or contract is issued or delivered, if

                                  5

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






    Florida House of Representatives - 2000                 HB 463

    66-230A-00






  1  the health benefit plan covers employees or their covered

  2  dependents who are residents of this state.

  3         Section 2.  This act shall take effect July 1, 2000.

  4

  5            *****************************************

  6                          HOUSE SUMMARY

  7
      Requires small employer carriers to begin to offer and
  8    issue small employer benefit plans on a specified date
      and deletes a requirement that basic and standard small
  9    employer health benefit plans be issued. Provides
      additional requirements for determining premium rates for
10    benefit plans. Provides application to plans provided by
      small employer carriers that are insurers or health
11    maintenance organizations. See bill for details.

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

                                  6