The Florida Senate

110.123  State group insurance program.--

(1)  TITLE.--This section may be cited as the "State Group Insurance Program Law."

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

(a)  "Department" means the Department of Management Services.

(b)  "Division" means the Division of State Group Insurance in the department.

(c)  "Enrollee" means all state officers and employees, retired state officers and employees, and surviving spouses of deceased state officers and employees enrolled in an insurance plan offered by the state group insurance program.

(d)  "Full-time state employees" includes all full-time employees of all branches or agencies of state government holding salaried positions and paid by state warrant or from agency funds, and employees paid from regular salary appropriations for 8 months' employment, including university personnel on academic contracts, but in no case shall "state employee" or "salaried position" include persons paid from other-personal-services (OPS) funds.

(e)  "Health maintenance organization" or "HMO" means an entity certified under part I of chapter 641.

(f)  "Part-time state employee" means any employee of any branch or agency of state government paid by state warrant from salary appropriations or from agency funds, and who is employed for less than the normal full-time workweek established by the department or, if on academic contract or seasonal or other type of employment which is less than year-round, is employed for less than 8 months during any 12-month period, but in no case shall "part-time" employee include a person paid from other-personal-services (OPS) funds.

(g)  "Retired state officer or employee" or "retiree" means any state officer or state employee who retires under a state retirement system or a state optional annuity or retirement program or is placed on disability retirement, and who was insured under the state group insurance program at the time of retirement, and who begins receiving retirement benefits immediately after retirement from state office or employment.

(h)  "State agency" or "agency" means any branch, department, or agency of state government.

(i)  "State group health insurance plan" means the state self-insured health insurance plan offered to state officers and employees, retired state officers and employees, and surviving spouses of deceased state officers and employees pursuant to this section.

(j)  "State group insurance program" or "programs" means the package of insurance plans offered to state officers and employees, retired state officers and employees, and surviving spouses of deceased state officers and employees pursuant to this section, including the state group health insurance plan, health maintenance organization plans, and other plans required or authorized by this section.

(k)  "State officer" means any constitutional state officer, any elected state officer paid by state warrant, or any appointed state officer who is commissioned by the Governor and who is paid by state warrant.

(l)  "Surviving spouse" means the widow or widower of a deceased state officer, full-time state employee, part-time state employee, or retiree if such widow or widower was covered as a dependent under the state group health insurance plan or a health maintenance organization plan established pursuant to this section at the time of the death of the deceased officer, employee, or retiree. "Surviving spouse" also means any widow or widower who is receiving or eligible to receive a monthly state warrant from a state retirement system as the beneficiary of a state officer, full-time state employee, or retiree who died prior to July 1, 1979. For the purposes of this section, any such widow or widower shall cease to be a surviving spouse upon his or her remarriage.

(3)  STATE GROUP INSURANCE PROGRAM.--

(a)  The Division of State Group Insurance is created within the Department of Management Services, to be headed by a director who shall be appointed by the Governor and confirmed by the Senate. The division shall be a separate budget entity, and the director shall be its agency head for all purposes. The Department of Management Services shall provide administrative support and service to the division to the extent requested by the director. The division shall not be subject to control, supervision, or direction by the Department of Management Services in any manner, including, but not limited to, personnel, purchasing, transactions involving real or personal property, and budgetary matters, except to the extent as provided in this chapter and chapters 216, 255, 282, and 287 for agencies of the executive branch.

(b)  The director shall be a person qualified by training and experience to understand the problems and needs of state employees in the area of health care coverage and insurance issues. The director shall have training and experience in the field of health care reimbursement, insurance or self-insurance programs, and the administration of such programs in the public or private sector.

(c)  It is the intent of the Legislature to offer a comprehensive package of health insurance benefits for state employees which are provided in a cost-efficient and prudent manner, and to allow state employees the option to choose benefit plans which best suit their individual needs. Therefore, the state group insurance program is established which may include the state group health insurance plan, health maintenance organization plans, group life insurance plans, group accidental death and dismemberment plans, and group disability insurance plans. Furthermore, the division is additionally authorized to establish and provide as part of the state group insurance program any other group insurance plans which are consistent with the provisions of this section.

(d)  Notwithstanding any provision in this section to the contrary, it is the intent of the Legislature that the division shall be responsible for all aspects of the purchase of health care for state employees under the state group health insurance plan and the health maintenance organization plans. Responsibilities shall include, but not be limited to, the development of requests for proposals for state employee health services, the determination of health care benefits to be provided, and the negotiation of contracts for health care and health care administrative services. Prior to the negotiation of contracts for health care services, the Legislature intends that the division shall develop, in consultation with the Department of Management Services with respect to state collective bargaining issues, the health benefits and terms to be included in the state group health insurance program. The division shall adopt rules necessary to perform its responsibilities pursuant to this section. It is the intent of the Legislature that the division shall be responsible for the contract management and day-to-day management of the state employee health insurance program, including, but not limited to, employee enrollment, premium collection, payment to health care providers, and other administrative functions related to the program.

(e)1.  Notwithstanding the provisions of chapter 287 and the authority of the department, for the purpose of protecting the health of, and providing medical services to, state employees participating in the State Employees' Health Self-Insurance Plan, the Division of State Group Insurance may contract to retain the services of professional administrators for the State Employees' Health Self-Insurance Plan. The agency shall follow good purchasing practices of state procurement to the extent practicable under the circumstances.

2.  Each vendor in a major procurement, and any other vendor if the division deems it necessary to protect the state's financial interests, shall, at the time of executing any contract with the division, post an appropriate bond with the division in an amount determined by the division to be adequate to protect the state's interests but not higher than the full amount estimated to be paid annually to the vendor under the contract.

3.  Each major contract entered into by the division pursuant to this section shall contain a provision for payment of liquidated damages to the division for material noncompliance by a vendor with a contract provision. The division may require a liquidated damages provision in any contract if the division deems it necessary to protect the state's financial interests.

4.  The provisions of s. 120.57(3) apply to the division's contracting process, except:

a.  A formal written protest of any decision, intended decision, or other action subject to protest shall be filed within 72 hours after receipt of notice of the decision, intended decision, or other action.

b.  As an alternative to any provision of s. 120.57(3), the division may proceed with the bid selection or contract award process if the director of the department sets forth, in writing, particular facts and circumstances which demonstrate the necessity of continuing the procurement process or the contract award process in order to avoid a substantial disruption to the provision of any scheduled insurance services.

(f)  Except as provided for in subparagraph (h)2., the percentage of state contribution toward the cost of any plan in the state group insurance program shall be uniform with respect to all state employees in state collective bargaining units participating in the same plan or any similar plan. Nothing contained within this section prohibits the development of separate benefit plans for officers and employees exempt from collective bargaining or the development of separate benefit plans for each collective bargaining unit.

(g)  Participation by individuals in the program shall be available to all state officers, full-time state employees, and part-time state employees; and such participation in the program or any plan thereof shall be voluntary. Participation in the program shall also be available to retired state officers and employees who elect at the time of retirement to continue coverage under the program, but they may elect to continue all or only part of the coverage they had at the time of retirement. A surviving spouse may elect to continue coverage only under the state group health insurance plan or a health maintenance organization plan.

(h)1.  A person eligible to participate in the state group health insurance plan may be authorized by rules adopted by the division, in lieu of participating in the state group health insurance plan, to exercise an option to elect membership in a health maintenance organization plan which is under contract with the state in accordance with criteria established by this section and by said rules. The offer of optional membership in a health maintenance organization plan permitted by this paragraph may be limited or conditioned by rule as may be necessary to meet the requirements of state and federal laws.

2.  The division shall contract with health maintenance organizations to participate in the state group insurance program through a request for proposal based upon a premium and a minimum benefit package as follows:

a.  A minimum benefit package to be provided by a participating HMO shall include: physician services; inpatient and outpatient hospital services; emergency medical services, including out-of-area emergency coverage; diagnostic laboratory and diagnostic and therapeutic radiologic services; mental health, alcohol, and chemical dependency treatment services meeting the minimum requirements of state and federal law; skilled nursing facilities and services; prescription drugs; and other benefits as may be required by the division. Additional services may be provided subject to the contract between the division and the HMO.

b.  A uniform schedule for deductibles and copayments may be established for all participating HMOs.

c.  Based upon the minimum benefit package and copayments and deductibles contained in sub-subparagraphs a. and b., the division shall issue a request for proposal for all HMOs which are interested in participating in the state group insurance program. Upon receipt of all proposals, the division may, as it deems appropriate, enter into contract negotiations with HMOs submitting bids. As part of the request for proposal process, the division may require detailed financial data from each HMO which participates in the bidding process for the purpose of determining the financial stability of the HMO.

d.  In determining which HMOs to contract with, the division shall, at a minimum, consider: each proposed contractor's previous experience and expertise in providing prepaid health benefits; each proposed contractor's historical experience in enrolling and providing health care services to participants in the state group insurance program; the cost of the premiums; the plan's ability to adequately provide service coverage and administrative support services as determined by the division; plan benefits in addition to the minimum benefit package; accessibility to providers; and the financial solvency of the plan. Nothing shall preclude the division from negotiating regional or statewide contracts with health maintenance organization plans when this is cost-effective and when the division determines the plan has the best overall benefit package for the service areas involved. However, no HMO shall be eligible for a contract if the HMO's retiree Medicare premium exceeds the retiree rate as set by the division for the state group health insurance plan.

e.  The division may limit the number of HMOs that it contracts with in each service area based on the nature of the bids the division receives, the number of state employees in the service area, and any unique geographical characteristics of the service area. The division shall establish by rule service areas throughout the state.

f.  All persons participating in the state group insurance program who are required to contribute towards a total state group health premium shall be subject to the same dollar contribution regardless of whether the enrollee enrolls in the state group health insurance plan or in an HMO plan.

3.  The division is authorized to negotiate and to contract with specialty psychiatric hospitals for mental health benefits, on a regional basis, for alcohol, drug abuse, and mental and nervous disorders. The division may establish, subject to the approval of the Legislature pursuant to subsection (5), any such regional plan upon completion of an actuarial study to determine any impact on plan benefits and premiums.

4.  In addition to contracting pursuant to subparagraph 2., the division shall enter into contract with any HMO to participate in the state group insurance program which:

a.  Serves greater than 5,000 recipients on a prepaid basis under the Medicaid program;

b.  Does not currently meet the 25 percent non-Medicare/non-Medicaid enrollment composition requirement established by the Department of Health and Human Services excluding participants enrolled in the state group insurance program;

c.  Meets the minimum benefit package and copayments and deductibles contained in sub-subparagraphs 2.a. and b.;

d.  Is willing to participate in the state group insurance program at a cost of premiums that is not greater than 95 percent of the cost of HMO premiums accepted by the division in each service area; and

e.  Meets the minimum surplus requirements of s. 641.225.

The division is authorized to contract with HMOs that meet the requirements of sub-subparagraphs a. through d. prior to the open enrollment period for state employees. The division is not required to renew the contract with the HMOs as set forth in this paragraph more than twice. Thereafter, the HMOs shall be eligible to participate in the state group insurance program only through the request for proposal process described in subparagraph 2.

5.  All enrollees in the state group health insurance plan or any health maintenance organization plan shall have the option of changing to any other health plan which is offered by the state within any open enrollment period designated by the division. Open enrollment shall be held at least once each calendar year.

6.  Any HMO participating in the state group insurance program shall, upon the request of the division, submit to the division standardized data for the purpose of comparison of the appropriateness, quality, and efficiency of care provided by the HMO. Such standardized data shall include: membership profiles; inpatient and outpatient utilization by age and sex, type of service, provider type, and facility; and emergency care experience. Requirements and timetables for submission of such standardized data and such other data as the division deems necessary to evaluate the performance of participating HMOs shall be adopted by rule.

7.  The division shall, after consultation with representatives from each of the unions representing state and university employees, establish a comprehensive package of insurance benefits including, but not limited to, supplemental health and life coverage, dental care, long-term care, and vision care to allow state employees the option to choose the benefit plans which best suit their individual needs.

a.  Based upon a desired benefit package, the division shall issue a request for proposal for health insurance providers interested in participating in the state group insurance program, and the division shall issue a request for proposal for insurance providers interested in participating in the non-health-related components of the state group insurance program. Upon receipt of all proposals, the division may enter into contract negotiations with insurance providers submitting bids or negotiate a specially designed benefit package. Insurance providers offering or providing supplemental coverage as of May 30, 1991, which qualify for pretax benefit treatment pursuant to s. 125 of the Internal Revenue Code of 1986, with 5,500 or more state employees currently enrolled may be included by the division in the supplemental insurance benefit plan established by the division without participating in a request for proposal, submitting bids, negotiating contracts, or negotiating a specially designed benefit package. These contracts shall provide state employees with the most cost-effective and comprehensive coverage available; however, no state or agency funds shall be contributed toward the cost of any part of the premium of such supplemental benefit plans.

b.  Pursuant to the applicable provisions of s. 110.161, and s. 125 of the Internal Revenue Code of 1986, the division shall enroll in the pretax benefit program those state employees who voluntarily elect coverage in any of the supplemental insurance benefit plans as provided by sub-subparagraph a.

c.  Nothing herein contained shall be construed to prohibit insurance providers from continuing to provide or offer supplemental benefit coverage to state employees as provided under existing agency plans.

(i)  The benefits of the insurance authorized by this section shall not be in lieu of any benefits payable under chapter 440, the Workers' Compensation Law. The insurance authorized by this law shall not be deemed to constitute insurance to secure workers' compensation benefits as required by chapter 440.

(4)  PAYMENT OF PREMIUMS; CONTRIBUTION BY STATE; LIMITATION ON ACTIONS TO PAY AND COLLECT PREMIUMS.--

(a)  Except as provided in paragraph (e) with respect to law enforcement, correctional, and correctional probation officers, legislative authorization through the appropriations act is required for payment by a state agency of any part of the premium cost of participation in any group insurance plan. However, the state contribution for full-time employees or part-time permanent employees shall continue in the respective proportions for up to 6 months for any such officer or employee who has been granted an approved parental or medical leave of absence without pay.

(b)  If a state officer or full-time state employee selects membership in a health maintenance organization as authorized by ¹paragraph (3)(g), the officer or employee is entitled to a state contribution toward individual and dependent membership as provided by the Legislature through the appropriations act.

(c)  During each policy or budget year, no state agency shall contribute a greater percentage of the premium cost for its officers or employees for any type of coverage under the state group insurance program than any other agency, nor shall any greater percentage contribution of premium cost be made for employees in one state collective bargaining unit than for those in any other state collective bargaining unit.

(d)  The state contribution for a part-time permanent state employee who elects to participate in the program shall be prorated so that the percentage of the cost contributed for the part-time permanent employee bears that relation to the percentage of cost contributed for a similar full-time employee that the part-time employee's normal workday bears to a full-time employee's normal workday.

(e)  No state contribution for the cost of any part of the premium shall be made for retirees or surviving spouses for any type of coverage under the state group insurance program. However, any state agency that employs a full-time law enforcement officer, correctional officer, or correctional probation officer who is killed in the line of duty on or after July 1, 1980, as a result of an act of violence inflicted by another person while the officer is engaged in the performance of law enforcement duties or as a result of an assault against the officer under riot conditions shall pay the entire premium of the state group health insurance plan for the employee's surviving spouse until remarried, and for each dependent child of the employee until the child reaches the age of majority or until the end of the calendar year in which the child reaches the age of 25 if:

1.  At the time of the employee's death, the child is dependent upon the employee for support; and

2.  The surviving child continues to be a dependent for support, or the surviving child is a full-time or part-time student and is dependent for support.

(f)  Pursuant to the request of each state officer, full-time or part-time state employee, or retiree participating in the state group insurance program, and upon certification of the employing agency approved by the Division of State Group Insurance, the Comptroller shall deduct from the salary or retirement warrant payable to each participant the amount so certified and shall handle such deductions in accordance with rules established by the division.

(g)  No administrative or civil proceeding shall be commenced to collect an underpayment or refund an overpayment of premiums collected pursuant to this subsection unless such claim is filed with the Division of State Group Insurance within 2 years after the alleged underpayment or overpayment was made. For purposes of this paragraph, a payroll deduction, salary reduction, or contribution by an agency is deemed to be made on the date the salary warrant is issued.

(5)  DIVISION OF STATE GROUP INSURANCE; POWERS AND DUTIES.--The division is responsible for the administration of the state group insurance program. The division shall initiate and supervise the program as established by this section and shall adopt such rules as are necessary to perform its responsibilities. To implement this program, the division shall, with prior approval by the Legislature:

(a)  Determine the benefits to be provided and the contributions to be required for the state group insurance program. Such determinations, whether for a contracted plan or a self-insurance plan pursuant to paragraph (c), do not constitute rules within the meaning of s. 120.52 or final orders within the meaning of s. 120.52. Any physician's fee schedule used in the health and accident plan shall not be available for inspection or copying by medical providers or other persons not involved in the administration of the program. However, in the determination of the design of the program, the division shall consider existing and complementary benefits provided by the Florida Retirement System and the Social Security System.

(b)  Prepare, in cooperation with the Department of Insurance, the specifications necessary to implement the program.

(c)  Contract on a competitive proposal basis with an insurance carrier or carriers, or professional administrator, determined by the Department of Insurance to be fully qualified, financially sound, and capable of meeting all servicing requirements. Alternatively, the division may self-insure any plan or plans contained in the state group insurance program subject to approval based on actuarial soundness by the Department of Insurance. The division may contract with an insurance company or professional administrator qualified and approved by the Department of Insurance to administer such plan. Before entering into any contract, the division shall advertise for competitive proposals, and such contract shall be let upon the consideration of the benefits provided in relationship to the cost of such benefits. In determining which entity to contract with, the division shall, at a minimum, consider: the entity's previous experience and expertise in administering group insurance programs of the type it proposes to administer; the entity's ability to specifically perform its contractual obligations in this state and other governmental jurisdictions; the entity's anticipated administrative costs and claims experience; the entity's capability to adequately provide service coverage and sufficient number of experienced and qualified personnel in the areas of claims processing, recordkeeping, and underwriting, as determined by the division; the entity's accessibility to state employees and providers; the financial solvency of the entity, ²using accepted business sector measures of financial performance. The division may contract for medical services which will improve the health or reduce medical costs for employees who participate in the state group insurance plan.

(d)  With respect to the state group health insurance plan, be authorized to require copayments with respect to all providers under the plan.

(e)  Have authority to establish a voluntary program for comprehensive health maintenance, which may include health educational components and health appraisals.

(f)  With respect to any contract with an insurance carrier or carriers or professional administrator entered into by the division, require that the state and the enrollees be held harmless and indemnified for any financial loss caused by the failure of the insurance carrier or professional administrator to comply with the terms of the contract.

(g)  With respect to any contract with an insurance carrier or carriers, or professional administrator entered into by the division, require that the carrier or professional administrator provide written notice to individual enrollees if any payment due to any health care provider of the enrollee remains unpaid beyond a period of time as specified in the contract.

(h)  Have authority to establish a voluntary group long-term care program or other programs to be funded on a pretax contribution basis or on a posttax contribution basis, as the division determines.

³(i)  Beginning November 1, 1998, and for the 1998-1999 fiscal year only, continue to process health insurance claims for the 1996 and 1997 calendar years, subject to the review and approval process provided in s. 216.177. This paragraph is repealed on July 1, 1999.

Final decisions concerning the existence of coverage or benefits under the state group health insurance plan shall not be delegated or deemed to have been delegated by the division.

(6)  DEPOSIT OF PREMIUMS AND REFUNDS.--Premium dollars collected and not required to pay the costs of the program, prior to being paid to the carrier insurance company, shall be invested, and the earnings from such investment shall be deposited in a trust fund to be designated in the State Treasury and utilized for increased benefits or reduced premiums for the participants or may be used to pay for the administration of the state group insurance program. Any refunds paid the state by the insurance carrier from premium dollar reserves held by the carrier and earned on such refunds shall be deposited in the trust fund and used for such purposes.

(7)  CONTINUATION OF AGENCY INSURANCE PLANS.--Nothing contained in this section shall require the discontinuation of any insurance plan provided by any state agency; however, no state or agency funds shall be contributed toward the cost of any part of the premium of such agency plans. Such agency plans shall not be deemed to be included in the state group insurance program.

(8)  COVERAGE FOR LEGISLATIVE MEMBERS AND EMPLOYEES.--The Legislature may provide coverage for its members and employees under all or any part of the state group insurance program; may provide coverage for its members and employees under a legislative group insurance program in lieu of all or any part of the state group insurance program; and, notwithstanding the provisions of paragraph (4)(c), may assume the cost of any group insurance coverage provided to its members and employees.

(9)  PUBLIC RECORDS LAW; EXEMPTION.--Patient medical records and medical claims records of state employees, former employees, and eligible dependents in the custody or control of the state group insurance program are confidential and exempt from the provisions of s. 119.07(1). Such records shall not be furnished to any person other than the employee or the employee's legal representative, except upon written authorization of the employee, but may be furnished in any civil or criminal action, unless otherwise prohibited by law, upon the issuance of a subpoena from a court of competent jurisdiction and proper notice to the employee or the employee's legal representative by the party seeking such records.

(10)  STATEMENTS OF PURPOSE AND INTENT AND OTHER PROVISIONS REQUIRED FOR QUALIFICATION UNDER THE INTERNAL REVENUE CODE OF THE UNITED STATES.--Any other provisions in this chapter to the contrary notwithstanding:

(a)  Any provision in this chapter relating to a state group insurance program shall be construed and administered to the extent possible to qualify such program to be a qualified and nondiscriminatory employee benefit plan under existing or hereafter-enacted provisions of the Internal Revenue Code of the United States.

(b)  The division may adopt any rule necessary to accomplish the purposes of this subsection not inconsistent with this chapter.

(c)  This subsection is declaratory of the legislative intent upon the original enactment of this section and is deemed to have been in effect since that date.

(11)  NOTICE BY HEALTH CARE PROVIDERS.--Any health care provider that has entered into a contract with a carrier or professional administrator that has contracted with the division to administer the self-insurance program under this section shall provide written notification to the enrollee and the carrier or administrator at least 10 days before assigning or transferring the responsibility for collecting any payment or debt related to the plan to a collection agency or to any other third party.

History.--s. 20, ch. 79-190; ss. 3, 4, ch. 81-186; s. 1, ch. 83-72; s. 1, ch. 84-3; s. 3, ch. 84-35; ss. 1, 2, ch. 86-27; s. 3, ch. 86-180; s. 1, ch. 87-156; s. 1, ch. 88-126; s. 6, ch. 88-290; s. 1, ch. 89-22; s. 1, ch 89-277; s. 3, ch. 90-196; s. 23, ch. 90-360; s. 76, ch. 91-45; s. 1, ch. 91-148; s. 1, ch. 91-264; s. 53, ch. 91-282; s. 6, ch. 91-431; s. 18, ch. 92-279; s. 55, ch. 92-326; s. 6, ch. 93-129; s. 2, ch. 93-149; s. 1, ch. 94-171; s. 29, ch. 95-146; s. 1400, ch. 95-147; s. 30, ch. 96-406; s. 10, ch. 96-410; s. 3, ch. 97-92; ss. 24, 38, ch. 98-46; s. 2, ch. 98-279.

¹Note.--Paragraph (3)(e) was redesignated as paragraph (3)(h), not paragraph (3)(g), by s. 3, ch. 97-92.

²Note.--The word "and" preceding the word "using" was deleted by the editors.

³Note.--Section 24, ch. 98-46, added paragraph (5)(i) "[i]n order to implement Specific Appropriation 1579 of the 1998-1999 General Appropriations Act."