Committee Substitute for Senate Bill 1842 (CS/SB 1842), passed by the 2013 Florida Legislature, enacts changes to the Florida Insurance Code (the “Code”). These changes are necessary to implement and enforce requirements of the federal Patient Protection and Affordable Care Act (the “Act”), which applies to health insurers, health maintenance organizations (“HMOs”), and health insurance policies.
CS/SB 1842 will be presented to the Governor and is subject to his veto authority. CS/SB 1842 is effective upon becoming law, unless otherwise specified in the bill. We recommend you check the ultimate status of CS/SB 1842 by visiting the Florida Legislature’s website (http://www.leg.state.fl.us).
Key provisions of CS/SB 1842 are summarized below1:
- Provides that a provision of the Code or rule adopted pursuant to the Code applies unless such provision or rule prevents the application of a provision of the Act.
- Authorizes the Office of Insurance Regulation (“OIR”) to assist the Department of Health and Human Services (“HHS”) in enforcing the provisions of the Act by reviewing policy forms and performing market conduct examinations or investigations for compliance with the Act. The OIR must first notify the insurer of any non-compliance and then notify the HHS if the insurer does not take corrective action. OIR’s referral of insurers to HHS concerning non-compliance is not subject to Chapter 120, Fla. Stat. (Florida’s Administrative Procedures Act).
- Authorizes the Division of Consumer Services within the Department of Financial Services (“DFS”) to respond to complaints by consumers relating to requirements of the Act, by performing its current statutory responsibilities to prepare and disseminate information to consumers as it deems appropriate, provide direct assistance and advocacy to consumers, and require insurers to respond, in writing, to a complaint, and further authorizes the DFS to report apparent or potential violations to the OIR and to the HHS.
- Temporarily suspends the requirement that health insurers and HMOs obtain approval from the OIR for non-grandfathered health plans (for which rates must be filed with the HHS) for plan years 2014 and 2015. Insurers would still be required to file rates and rate changes for such plans with the OIR prior to use, but such rates could be used without the OIR approval. For this two-year period, the rates for non-grandfathered plans would be exempt from all rating requirements. These rating law changes are repealed on March 1, 2015. Under the Act, insurers must file rate changes with the HHS for non-grandfathered health plans, subject to review and determination of whether the rate increase is unreasonable. Grandfathered health plans are not subject to the Act rate filing requirements and would remain subject to the current Florida law requirements for filing rates for approval with the OIR.
- Requires insurers to provide a notice to individual and small group policyholders of non-grandfathered health plans that describes or illustrates the estimated impact of the Act on monthly premiums. This one-time notice would be required when the policy is issued or renewed on or after January 1, 2014. The notice must be in a format established by rule by the Financial Services Commission. The OIR and the DFS must develop a summary of the estimated impact of the Act on monthly premiums as contained in the notices, which must be available on their respective websites by October 1, 2013.
Allows or require insurers to take certain actions that would preserve the status of grandfathered health plans, which are plans under which an individual was insured on March 23, 2010, and which are exempt from many of the requirements of the Act:
- If a policy form covers both grandfathered health plans and non-grandfathered health plans, the bill allows an insurer to non-renew coverage only for all of the non-grandfathered health plans, subject to certain conditions.
- Requires that the claims experience for grandfathered health plans be separated from non-grandfathered health plans for rating purposes.
- Allows an insurer to discontinue a policy form that does not comply with the Act without being subject to the current prohibition on selling a new, similar policy form after a policy form is discontinued.
Requirements for navigators with the DFS. Navigators are individuals who provide assistance and information to a consumer regarding enrollment choices in a qualified health plan (“QHP”) and facilitate enrollment in a QHP:
- Specifies prohibited acts and grounds for approval, suspension, or revocation of registration.
- Requires that applicants complete all training required by the federal government or the exchange, rather than a state 10-hour course.
- Grants additional powers for the DFS to fine or issue cease and desist orders for violations.
- Requires applicants to pay the fingerprint processing fee.
- Revises the definition of a “navigator” to mean an individual authorized by an exchange to serve as a navigator, or who works on behalf of an entity authorized by an exchange to serve as a navigator, pursuant to 42 U.S.C. § 18031(i)(1), who facilitates the selection of a QHP plan through the exchange and performs any other duties specified under 42 U.S.C. § 200 18031(i)(3).
- Provides two different definitions of “small employer” – one for grandfathered health plans, which is the current law definition, and one for non-grandfathered health plans, which is the same as the federal definition used for the Act (but capped at 50 employees, as allowed by the Act). For non-grandfathered health plans, any state law that applies to small group coverage would apply to coverage for a small employer as defined under the Act and would not apply to an employer who is not a small employer under the federal definition.
Dissolves the Florida Comprehensive Health Association (“FCHA”), the state’s high risk pool for persons unable to obtain health insurance:
- Coverage for each policyholder terminates at midnight on June 30, 2014 or on the date that health insurance coverage is effective with another insurer, whichever occurs first, and such coverage may not be renewed.
- FCHA must provide assistance to each policy concerning how to obtain health insurance.
- Requires FCHA to determine by March 15, 2015 the final assessment to be collected by insurers for funding claims and administrative expenses of FCHA. If a surplus exists, then FCHA must determine the prorated amount to be returned to each insurer.
- Requires FCHA’s Board to wrap-up other FCHA business and activities by September 1, 2015.
- Specifies that health insurers and HMOs may nonrenew individual conversion policies if the individual is eligible for other similar coverage.
- Repeals the statute establishing the Florida Health Insurance Plan.