HB 0999 2003
1	CHAMBER ACTION
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6	The Committee on Insurance recommends the following:
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8	Committee Substitute
9	Remove the entire bill and insert:
10	A bill to be entitled
11	An act relating to health insurance; amending s. 627.410,
12	F.S.; amending form filing requirements; providing
13	exemptions; amending s. 627.6515, F.S.; revising
14	conditions that must be met for exemption from provisions
15	regulating group, blanket, and franchise health insurance
16	policies for a group health insurance policy issued or
17	delivered outside this state under which a resident of
18	this state is provided coverage; providing limitations on
19	premium increases, reduction of benefits, and contractual
20	modifications; authorizing rulemaking; providing
21	definitions; restricting eligibility for insurance;
22	modifying applicability of exemptions and requiring
23	compliance with Insurance Code under certain
24	circumstances; providing an effective date.
25
26	Be It Enacted by the Legislature of the State of Florida:
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28	Section 1. Subsection (6) of section 627.410, Florida
29	Statutes, is amended to read:
30	627.410 Filing, approval of forms.--
31	(6)(a) An insurer shall not deliver or issue for delivery
32	or renew in this state any health insurance policy form until it
33	has filed with the department a copy of every applicable rating
34	manual, rating schedule, change in rating manual, and change in
35	rating schedule; if rating manuals and rating schedules are not
36	applicable, the insurer must file with the department applicable
37	premium rates and any change in applicable premium rates.
38	(b) This subsectionparagraphdoes not apply to group
39	health insurance policies:,
40	1.Effectuated and delivered in this state, insuring
41	groups of 51 or more persons, except for Medicare supplement
42	insurance, long-term care insurance, and any coverage under
43	which the increase in claim costs over the lifetime of the
44	contract due to advancing age or duration is prefunded in the
45	premium.
46	2. Effectuated and delivered outside this state, but
47	covering residents of this state, except for policies issued to
48	provide coverage to groups of persons all of whom are in the
49	same or functionally related licensed professions and provide
50	coverage only to such licensed professionals, their employees,
51	or their dependents, if the insurer meets the requirements of s.
52	627.6515, files its rates with the Office of Insurance
53	Regulation for information purposes only, and the filing of
54	rates is accompanied by an actuarial certification that the loss
55	ratios for the certificates delivered or issued for delivery in
56	this state meet or exceed the loss-ratio standards provided by
57	this subsection. For purposes of this subsection, group health
58	insurance policy means any hospital or medical policy, hospital
59	or medical service plan contract, or health maintenance
60	organization subscriber contract. The term does not include
61	accidental death, accidental death and dismemberment, accident-
62	only, vision-only, dental-only, hospital indemnity, hospital
63	accident, cancer, specified disease, limited-benefit, disability
64	income insurance, or similar supplemental plans provided under a
65	separate policy, certificate, or contract of insurance, which
66	cannot duplicate coverage under an underlying health plan, and
67	are specifically designed to fill gaps in the underlying health
68	plan, coinsurance, or deductibles; coverage issued as a
69	supplement to liability insurance; workers’ compensation, or
70	similar insurance; or automobile medical-payment insurance.
71	3. Effectuated and delivered to a bona fide association,
72	which means with respect to health insurance coverage offered in
73	a state, an association which:
74	a. Has been actively in existence for at least 5 years;
75	b. Has been formed and maintained in good faith for
76	purposes other than obtaining insurance;
77	c. Does not condition membership in the association on any
78	health status-related factor relating to an individual,
79	including an employee of an employer or a dependent of an
80	employee;
81	d. Makes health insurance coverage offered through the
82	association available to all members regardless of any health
83	status-related factor relating to such members, or individuals
84	eligible for coverage through a member; and
85	e. Does not make health coverage offered through the
86	association available other than in connection with a member of
87	the association.
88	(c)(b)The department may establish by rule, for each type
89	of health insurance form, procedures to be used in ascertaining
90	the reasonableness of benefits in relation to premium rates and
91	may, by rule, exempt from any requirement of paragraph (a) any
92	health insurance policy form or type thereof (as specified in
93	such rule) to which form or type such requirements may not be
94	practically applied or to which form or type the application of
95	such requirements is not desirable or necessary for the
96	protection of the public. With respect to any health insurance
97	policy form or type thereof which is exempted by rule from any
98	requirement of paragraph (a), premium rates filed pursuant to
99	ss. 627.640 and 627.662 shall be for informational purposes.
100	(d)(c)Every filing made pursuant to this subsection shall
101	be made within the same time period provided in, and shall be
102	deemed to be approved under the same conditions as those
103	provided in, subsection (2).
104	(e)(d)Every filing made pursuant to this subsection,
105	except disability income policies and accidental death policies,
106	shall be prohibited from applying the following rating
107	practices:
108	1. Select and ultimate premium schedules.
109	2. Premium class definitions which classify insured based
110	on year of issue or duration since issue.
111	3. Attained age premium structures on policy forms under
112	which more than 50 percent of the policies are issued to persons
113	age 65 or over.
114	(f)(e)Except as provided in subparagraph 1., an insurer
115	shall continue to make available for purchase any individual
116	policy form issued on or after October 1, 1993. A policy form
117	shall not be considered to be available for purchase unless the
118	insurer has actively offered it for sale in the previous 12
119	months.
120	1. An insurer may discontinue the availability of a policy
121	form if the insurer provides to the department in writing its
122	decision at least 30 days prior to discontinuing the
123	availability of the form of the policy or certificate. After
124	receipt of the notice by the department, the insurer shall no
125	longer offer for sale the policy form or certificate form in
126	this state.
127	2. An insurer that discontinues the availability of a
128	policy form pursuant to subparagraph 1. shall not file for
129	approval a new policy form providing similar benefits as the
130	discontinued form for a period of 5 years after the insurer
131	provides notice to the department of the discontinuance. The
132	period of discontinuance may be reduced if the department
133	determines that a shorter period is appropriate.
134	3. The experience of all policy forms providing similar
135	benefits shall be combined for all rating purposes.
136	Section 2. Subsections (2) and (5) of section 627.6515,
137	Florida Statutes, are amended, and subsections (9), (10), (11),
138	and (12) are added to said section, to read:
139	627.6515 Out-of-state groups.--
140	(2) This part does not apply to a group health insurance
141	policy issued or delivered outside this state under which a
142	resident of this state is provided coverage if the master policy
143	has met the filing requirements of the state of policy situs and
144	is available for sale in the state of policy situs and:
145	(a) The policy is issued to an employee group the
146	composition of which is substantially as described in s.
147	627.653; a labor union group or association group the
148	composition of which is substantially as described in s.
149	627.654; an additional group the composition of which is
150	substantially as described in s. 627.656; a group insured under
151	a blanket health policy when the composition of the group is
152	substantially in compliance with s. 627.659; a group insured
153	under a franchise health policy when the composition of the
154	group is substantially in compliance with s. 627.663; an
155	association group to cover persons associated in any other
156	common group, which common group is formed primarily for
157	purposes other than providing insurance; a group that is
158	established primarily for the purpose of providing group
159	insurance, provided the benefits are reasonable in relation to
160	the premiums charged thereunder and the issuance of the group
161	policy has resulted, or will result, in economies of
162	administration; or a group of insurance agents of an insurer,
163	which insurer is the policyholder;
164	(b) Certificates evidencing coverage under the policy are
165	issued to residents of this state and contain in contrasting
166	color and not less than 10-point type the following statement:
167	"The benefits of the policy providing your coverage are governed
168	primarily by the law of a state other than Florida"; and
169	(c) The policy provides the benefits specified in ss.
170	627.419, 627.6574, 627.6575, 627.6579, 627.6612, 627.66121,
171	627.66122, 627.6613, 627.667, 627.6675, 627.6691, and 627.66911;
172	and
173	(d) Applications for certificates of coverage offered to
174	residents of this state contain, in contrasting color and not
175	less than 12-point type, the following statement on the same
176	page as the applicant signature: “This policy is primarily
177	governed by the laws of [insert state where the master policy is
178	filed]. As a result, all of the rating laws applicable to
179	policies filed in Florida do not apply to this coverage, which
180	may result in increases in your premium at renewal that would
181	not be permissible under a Florida-approved policy. Any purchase
182	of individual health insurance should be considered carefully,
183	as future medical conditions may make it impossible to qualify
184	for another individual health policy. For information concerning
185	individual health coverage that fully complies with Florida’s
186	rating laws, consult your agent or the Florida Department of
187	Financial Services.” The provisions of this paragraph only apply
188	to group certificates for health insurance coverage, as
189	described in s. 627.6561(5)(a)2., which require individual
190	underwriting to determine coverage eligibility for an individual
191	or premium rates to be charged to an individual.
192	(5) Prior to solicitation in this state, an officer of the
193	insurer shall truthfully certify to the department that the
194	policy and certificates evidencing coverage have been reviewed
195	and approved by the state in which the group policy is issued
196	and a certification from an actuary that the premium structure
197	for such policy complies with subsections (9) and (10).
198	(9) For purposes of this section, any insurer that issues
199	any group health benefit plan, as defined in s. 627.6699(3)(k),
200	except for policies issued to provide coverage to groups of
201	persons all of whom are in the same or functionally related
202	licensed professions and provide coverage only to such licensed
203	professionals, their employees, or their dependents, to a
204	resident of this state requiring individual underwriting to
205	determine eligibility for coverage or initial premium rates to
206	be charged, shall not take into account the individual claims
207	experience or any change in the personal health status of a
208	covered person that occurs after the initial issuance of the
209	health benefit plan to determine his or her renewal premium
210	rates. No premium increase, including a reduced premium increase
211	in the form of a discount, may be implemented for an insured
212	individual under existing group health plan coverage subsequent
213	to the initial effective date of coverage under such policy or
214	certificate to the extent that such premium increase is
215	determined based upon a change in a health-status related factor
216	of the individual insured or the past or prospective claim
217	experience of the individual insured. No reduction in benefits
218	may be implemented for an insured individual under existing
219	group health plan coverage subsequent to the initial effective
220	date of coverage under such policy or certificate to the extent
221	that such reduction in benefits is determined based upon a
222	change in a health-status related factor of the individual
223	insured or the past or prospective claim experience of the
224	individual insured. No modifications to contractual terms and
225	conditions may be implemented for an insured individual under
226	existing group health coverage subsequent to the initial
227	effective date of coverage under such policy or certificate to
228	the extent that such modifications to contractual terms and
229	conditions are determined based upon a change in a health-status
230	related factor of the individual insured or the past or
231	prospective claim experience of the individual insured. Nothing
232	in this section shall be construed to require uniform premium
233	rates, restrict the use of any rating factors, or restrict
234	experience-based renewal premium rating practices that are
235	applied to all individuals insured by a particular health
236	benefit plan or group of health benefit plans. The stated intent
237	and purpose of this subsection is to prohibit renewal premium
238	rating practices that are based exclusively upon a covered
239	person’s individual claims experience or a change in a covered
240	person’s personal health status. If an insurer has ever used the
241	renewal premium adjustments prohibited in this subsection, the
242	insurer shall file new renewal premium rates with the department
243	for informational purposes only. The new rates must eliminate
244	the effects of the prohibited renewal premium adjustments on a
245	revenue neutral basis. This new renewal premium rate filing must
246	be accompanied by a certification by a member of the American
247	Academy of Actuaries that the filing complies with the
248	requirements of this act. The filing must be made within 90 days
249	after the effective day of this act. The new renewal premium
250	rates must be implemented within 90 days after the filing. This
251	provision does not prohibit adjustments in an individual’s
252	premiums in lieu of a rescission that would be allowed under
253	applicable law due to a fraudulent or material misstatement in
254	an application or based upon changes required by law, benefit
255	changes requested by the insured, or a requested reinstatement
256	of lapsed coverage. For purposes of this subsection, group
257	health insurance policy means any hospital or medical policy,
258	hospital or medical service plan contract, or health maintenance
259	organization subscriber contract. The term does not include
260	accidental death, accidental death and dismemberment, accident-
261	only, vision-only, dental-only, hospital indemnity, hospital
262	accident, cancer, specified disease, Medicare supplement,
263	products that supplement Medicare, long-term care, or disability
264	income insurance, similar supplemental plans provided under a
265	separate policy, certificate, or contract of insurance, which
266	cannot duplicate coverage under an underlying health plan and
267	are specifically designed to fill gaps in the underlying health
268	plan, coinsurance, or deductibles; coverage issued as a
269	supplement to liability insurance; workers’ compensation, or
270	similar insurance; or automobile medical-payment insurance.
271	(10) A group health insurance policy issued or delivered
272	outside this state to an association group to cover persons
273	associated in any other common group, which common group is
274	formed primarily for purposes other than providing insurance,
275	except for policies issued to provide coverage to groups of
276	persons all of whom are in the same or functionally related
277	licensed professions and provide coverage only to such licensed
278	professionals, their employees, or their dependents, under which
279	a resident of this state is provided coverage which has been in
280	force for a period of 30 months, and which applies individual
281	underwriting to determine eligibility or premium rates charged,
282	shall not increase premiums charged to a resident of this state
283	by a percentage greater than the percentage increase applied to
284	premiums charged to a resident of this state for coverage that
285	has been in force for a period of 30 months under any
286	association group policy with substantially similar benefits.
287	The commission may adopt rules to establish the meaning of the
288	term “substantially similar benefits.” This subsection shall
289	apply to all policies issued or renewed after the effective date
290	of this act. For purposes of this subsection, a group health
291	policy means any hospital or medical policy, hospital or medical
292	service plan contract, or health maintenance organization
293	subscriber contract. The term does not include accidental death,
294	accidental death and dismemberment, accident-only, vision-only,
295	dental-only, hospital indemnity, hospital accident, cancer,
296	specified disease, Medicare Supplement, products that supplement
297	Medicare, long-term care, or disability income insurance,
298	similar supplemental plans provided under a separate policy,
299	certificate, or contract of insurance which cannot duplicate
300	coverage under an underlying health plan and are specifically
301	designed to fill gaps in the underlying health plan,
302	coinsurance, or deductibles; coverage issued as a supplement to
303	liability insurance; workers’ compensation or similar insurance;
304	or automobile medical-payment insurance.
305	(11) Any person insured under a certificate issued through
306	an association group health insurance policy who voluntarily
307	terminates such certificate shall not be eligible for coverage
308	under any other group health insurance policy issued by the same
309	insurer to that same association for a period of 6 months after
310	the date such certificate was terminated unless such new policy
311	is available to all other insureds under the existing policy
312	without regard to health status.
313	(12) If the office determines on or after July 1, 2006,
314	through public hearings, that the pooling provided for in this
315	section has failed to adequately prohibit rating practices that
316	disproportionately discriminate against individuals who have
317	filed claims or developed medical conditions, then
318	notwithstanding any other provision of this section or s.
319	627.401(2), any group health insurance policy or group
320	certificate for health insurance, as described in s.
321	627.6561(5)(a)2., which is issued to a resident of this state
322	and requires individual underwriting to determine coverage
323	eligibility for an individual or premium rates to be charged to
324	an individual is considered a policy issued on a individual
325	basis and is subject to and must comply with the Florida
326	Insurance Code in the same manner as individual insurance
327	policies issued in this state.
328	Section 3. This act shall take effect July 1, 2003.