HOUSE AMENDMENT Bill No. HB 1573 CS
1	CHAMBER ACTION
2	Senate House
3	.
4	.
5	.
6
7
8
9
10
11
12	Representatives Negron, Berfield, and Farkas offered the
13	following:
14
15	Amendment (with title amendment)
16	Between line(s) 618 and 619, insert:
17	Section 15. Section 627.411, Florida Statutes, is amended
18	to read:
19	627.411 Grounds for disapproval.--
20	(1) The department shall disapprove any form filed under
21	s. 627.410, or withdraw any previous approval thereof, only if
22	the form:
23	(a) Is in any respect in violation of, or does not comply
24	with, this code.
25	(b) Contains or incorporates by reference, where such
26	incorporation is otherwise permissible, any inconsistent,
27	ambiguous, or misleading clauses, or exceptions and conditions
28	which deceptively affect the risk purported to be assumed in the
29	general coverage of the contract.
30	(c) Has any title, heading, or other indication of its
31	provisions which is misleading.
32	(d) Is printed or otherwise reproduced in such manner as
33	to render any material provision of the form substantially
34	illegible.
35	(e) Is for health insurance, and:
36	1. Provides benefits thatwhichare unreasonable in
37	relation to the premium charged;,
38	2. Contains provisions thatwhichare unfair or
39	inequitable or contrary to the public policy of this state or
40	thatwhich encourage misrepresentation;, or
41	3. Contains provisions thatwhich apply rating practices
42	thatwhich result in premium escalations that are not viable for
43	the policyholder market or result in unfair discrimination
44	pursuant to s. 626.9541(1)(g)2.; or
45	4. Results in actuarially justified rate increases on an
46	annual basis:
47	a. Attributed to the insurer reducing the portion of the
48	premium used to pay claims from the loss ratio standard
49	certified in the last actuarial certification filed by the
50	insurer, in excess of the greater of 50 percent of annual
51	medical trend or 5 percent. At its option, the insurer may file
52	for approval of an actuarially justified new business rate
53	schedule for new insureds and a rate increase for existing
54	insureds that is equal to the greater of 150 percent of annual
55	medical trend or 10 percent. Future annual rate increases for
56	existing insureds shall be limited to the greater of 150 percent
57	of the rate increase approved for new insureds or 10 percent
58	until the two rate schedules converge;
59	b. In excess of the greater of 150 percent of annual
60	medical trend or 10 percent and the company did not comply with
61	the annual filing requirements of s. 627.410(7) or commission
62	rule for health maintenance organizations pursuant to s. 641.31.
63	At its option, the insurer may file for approval of an
64	actuarially justified new business rate schedule for new
65	insureds and a rate increase for existing insureds that is equal
66	to the rate increase allowed by the preceding sentence. Future
67	annual rate increases for existing insureds shall be limited to
68	the greater of 150 percent of the rate increase approved for new
69	insureds or 10 percent until the two rate schedules converge; or
70	c. In excess of the greater of 150 percent of annual
71	medical trend or 10 percent on a form or block of pooled forms
72	in which no form is currently available for sale. This sub-
73	subparagraph does not apply to pre-standardized Medicare
74	supplement formsin sales practices.
75	(f) Excludes coverage for human immunodeficiency virus
76	infection or acquired immune deficiency syndrome or contains
77	limitations in the benefits payable, or in the terms or
78	conditions of such contract, for human immunodeficiency virus
79	infection or acquired immune deficiency syndrome which are
80	different than those which apply to any other sickness or
81	medical condition.
82	(2) In determining whether the benefits are reasonable in
83	relation to the premium charged, the department, in accordance
84	with reasonable actuarial techniques, shall consider:
85	(a) Past loss experience and prospective loss experience
86	within and without this state.
87	(b) Allocation of expenses.
88	(c) Risk and contingency margins, along with justification
89	of such margins.
90	(d) Acquisition costs.
91	(3)(a) For health insurance coverage as described in s.
92	627.6561(5)(a)2., the minimum loss ratio standard of incurred
93	claims to earned premium for the form shall be 65 percent.
94	(b) Incurred claims are claims occurring within a fixed
95	period, whether or not paid during the same period, under the
96	terms of the policy period.
97	1. Claims include scheduled benefit payments, or services
98	provided by a provider or through a provider network for dental,
99	vision, disability, and similar health benefits.
100	2. Claims do not include state assessments, taxes, company
101	expenses, or any expense incurred by the company for the cost of
102	adjusting and settling a claim, including the review,
103	qualification, oversight, management, or monitoring of a claim
104	or incentives or compensation to providers for other than the
105	provisions of health care services.
106	3. A company may, at its discretion, include costs that
107	are demonstrated to reduce claims, such as fraud intervention
108	programs or case management costs, which are identified in each
109	filing, are demonstrated to reduce claims costs, and do not
110	result in increasing the experience period loss ratio by more
111	than 5 percent.
112	4. For scheduled claim payments, such as disability income
113	or long-term care, the incurred claims shall be the present
114	value of the benefit payments discounted for continuance and
115	interest.
116	Section 16. Subsection (2) of section 627.6515, Florida
117	Statutes, is amended, and subsections (9) and (10) are added to
118	said section, to read:
119	627.6515 Out-of-state groups.--
120	(2) Except as provided in this part,this part does not
121	apply to a group health insurance policy issued or delivered
122	outside this state under which a resident of this state is
123	provided coverage if:
124	(a) The policy is issued to an employee group the
125	composition of which is substantially as described in s.
126	627.653; a labor union group or association group the
127	composition of which is substantially as described in s.
128	627.654; an additional group the composition of which is
129	substantially as described in s. 627.656; a group insured under
130	a blanket health policy when the composition of the group is
131	substantially in compliance with s. 627.659; a group insured
132	under a franchise health policy when the composition of the
133	group is substantially in compliance with s. 627.663 and the
134	policy was issued prior to January 1, 2003; an association group
135	to cover persons associated in any other common group, which
136	common group is formed primarily for purposes other than
137	providing insurance; a group that is established primarily for
138	the purpose of providing group insurance, provided the benefits
139	are reasonable in relation to the premiums charged thereunder
140	and the issuance of the group policy has resulted, or will
141	result, in economies of administration; or a group of insurance
142	agents of an insurer, which insurer is the policyholder;
143	(b) Certificates evidencing coverage under the policy are
144	issued to residents of this state and contain in contrasting
145	color and not less than 10-point type the following statement:
146	"The benefits of the policy providing your coverage are governed
147	primarily by the law of a state other than Florida"; and
148	(c) The policy provides the benefits specified in ss.
149	627.419, 627.6574, 627.6575, 627.6579, 627.6612, 627.66121,
150	627.66122, 627.6613, 627.667, 627.6675, 627.6691, and
151	627.66911;.
152	(d) For the policies or contracts issued on or after
153	October 1, 2003, regardless of the type of group described in
154	this subsection to which the policy is issued, except for
155	policies issued to provide coverage to groups of persons all of
156	whom are in the same or functionally related licensed
157	professions, and providing coverage only to such licensed
158	professionals, their employees or their dependents, or to a bona
159	fide association as defined in s. 627.6571(5), the policy
160	complies with the antidiscrimination provisions set forth in s.
161	627.65625, regarding rating and eligibility for enrollment and
162	for any benefit under the policy, and with s. 627.6571;
163	(e) For the policies or contracts issued on or after
164	October 1, 2003, the policy is not issued to a group, other than
165	an employer group for the benefit of its employees, that
166	directly or indirectly uses any health-status-related factor, as
167	described in s. 627.65625, in determining eligibility for
168	initial or continued membership in the group or initial or
169	continued eligibility of any group member to participate in any
170	aspect of the group insurance program; and
171	(f) For the purposes of paragraphs (d) and (e), "group
172	health insurance policy" means any hospital or medical policy,
173	hospital or medical service plan contract, or health maintenance
174	organization subscriber contract. The term does not include
175	accidental death, accidental death and dismemberment, accident-
176	only, vision-only, dental-only, hospital indemnity, hospital
177	accident, cancer, specified disease, Medicare supplement,
178	products that supplement Medicare, long-term care, or disability
179	income insurance, similar supplemental plans provided under a
180	separate policy, certificate, or contract of insurance, which
181	cannot duplicate coverage under an underlying health plan and
182	are specifically designed to fill gaps in the underlying health
183	plan, coinsurance, or deductibles; coverage issued as a
184	supplement to liability insurance; workers' compensation or
185	similar insurance; or automobile medical payment insurance.
186	(9) The Financial Services Commission shall adopt rules
187	necessary to administer this section.
188	(10) The Financial Services Commission may adopt rules to
189	establish standards for exempting certain groups from the
190	provisions of paragraphs (2)(d) and (e). Such rules shall
191	establish standards for determining that the members of the
192	group policy are provided protection from rate escalations from
193	the segregation of risks and that members are provided
194	protection by an individual or board that is not owned or
195	controlled by the carrier or affiliate of the carrier and acts
196	in a fiduciary capacity for the protection of its members. The
197	office must provide, upon request of an insurer, a 90-day
198	exemption from the October 1, 2003, effect date of paragraphs
199	(2)(d) and (e) to any insurer:
200	(a) Having an approved filing for individual business by
201	October 1, 2003; and
202	(b) Certifying that each individual issued a policy or
203	certificate after October 1, 2003, will be offered the
204	opportunity to switch his or her policy to the new form at the
205	end of the exemption period.
206
207	The provisions of paragraphs (2)(d) and (e) do not apply to
208	policies or certificates issued prior to October 1, 2003.
209
210	================= T I T L E A M E N D M E N T =================
211	Remove line(s) 66, and insert:
212	to subscribers; amending s. 627.411, F.S.; revising grounds for
213	disapproval of health insurance policy forms that apply certain
214	rating practices or that result in actuarially justified rate
215	increases under certain circumstances; requiring health
216	insurance policies to meet a minimum loss ratio of a specified
217	amount; amending s. 627.6515, F.S.; amending conditions that
218	must be met to exempt from part VII of ch. 627, F.S., a group
219	health insurance policy issued or delivered outside this state
220	under which a resident of this state is provided coverage;
221	providing rulemaking authority; providing severability;
222	providing an effective date.