Florida Legislation for Individual and Employee Health Care

Florida Employee Health Care Access Act

The Florida Employee Health Care Access Act regulates the provisions that must be included in health insurance contracts offered to small employers.

Purpose and Definition [627.6699 F.S.]

The purpose of the Florida Employee Health Care Access Act is to • promote the availability of health insurance for small employers, regardless of claims experience or employees' health status; • establish rules regarding renewability of coverage; • limit the use of exclusions for pre-existing conditions; • develop a standard and basic health benefit plan for small employers; • establish a reinsurance program for small employer coverage; and • improve the fairness and efficiency of the small group health insurance market.

Small Employer Defined [627.6699 F.S.]

A small employer in Florida is, for purposes of group health insurance, defined as any person or entity engaged in business that employed between one and 50 employees during the preceding year, the majority of whom worked in Florida. A small employer must also maintain its principal place of business in the state.

Requirements of Act [627.6699 F.S.]

As a condition of transacting insurance in Florida, a small employer insurer must offer at least two health benefit plans: a basic and a standard health benefit plan. The standard policy is a major medical policy and the basic policy is a more affordable, lower benefit option.

Plans must be offered on a guaranteed issue basis, which means that a policy must be offered to a small employer, regardless of employees' health status, pre-existing conditions, or claims history.

If an employer has one employee, an insurer must offer a basic, standard, and high-deductible health benefit plan on a guaranteed issue basis. The insurer must make these plans available during an open enrollment period each year from August 1 to August 31. In addition, one-employee groups may not be established solely to obtain insurance (i.e., they must have a noninsurance purpose).

Small employer plans must allow eligible employees or dependents to enroll during a 30-day open enrollment period each year.

Insurers must use a modified community rating methodology to determine premiums for each small employer. Premiums must be based on eligible employees' gender, age, family composition, tobacco use, and geographic area.

An approved premium rate may be adjusted no more than 15 percent, based on the group's claims experience, health status, or duration of coverage. Any adjustments are applied to the group as a whole rather than to an individual employee. An adjustment based on these factors cannot exceed 10 percent each year. Small group carriers are allowed to provide small employer groups a credit to reflect administrative and acquisition expense savings resulting from the size of the group.

Insurers may not use a composite rating methodology to rate a small employer with fewer than 10 employees. A composite rating methodology averages the impact of the rating factors for age and gender in the premiums charged to all employees, rather than separately listing the applicable rate for each employee.

Small employer health benefits plans may not deny or exclude benefits for losses incurred due to preexisting conditions more than 12 months after an individual's enrollment date, for conditions that began during the previous six months. However, plans covering two or more employees may not impose a preexisting condition exclusion relating to pregnancy. For employers with one worker, pre-existing conditions may be excluded for 24 months if the condition began during the previous 24-month period.

If an insurer offers coverage to a small employer, the insurer must offer coverage to all eligible employees and their dependents. A small employer insurer may not restrict coverage only to certain individuals in the group.

Insurers may nonrenew small employer policies only for the following reasons: • nonpayment of premium • fraud or intentional misrepresentation • failure to comply with a plan's contractual provisions • if it stops offering coverage in the market and certain notice requirements are met

Small Employer Health Alliances [408.70, .617, 627.654, 627.6699 F.S.]

Small Employer Health Alliances are voluntary association group plans that negotiate with various insurers for insurance in the private market. The purpose is to encourage small employers in Florida to join together and purchase health insurance collectively for their employees at a reduced premium rate. If a small employer eventually employs more than 50 but fewer than 75 employees, it may continue coverage under the Alliance for one year only.

Small employers who participate in an Alliance must be formed for a purpose other than to obtain insurance and must certify that employees have not been hired solely to obtain insurance coverage.

Small Employers Access Program [627.6699 F.S.]

In 2004, the Florida legislature added the Small Employers Access Program, which created the Small Business Health Plan. The purpose of the plan is to expand affordable health insurance coverage options for small employers. Notably, small employers can provide health-care benefits to their employees through purchasing pools, which may be comprised of: • employers with up to 25 employees • a municipality, county, school district, or hospital employer located in rural areas • nursing home employers

Specially selected insurers approved by the Office can offer coverage, while licensed and appointed health insurance agents can solicit policies.

Small Employer Rating, Renewability, and Portability Act

The Small Employer Rating, Renewability, and Portability Act requires insurers to set the premiums for an employer’s group policy on the sex, age, family composition, use of tobacco products, or geographical location of the employees and their dependents. Rates cannot depend on the health status or claims experience of any member of the group or of the group as a whole. Once the rates have been set, insurers cannot change them for 12 months after the coverage takes effect or is renewed unless the composition of the group changes or the benefits change.

Florida Health Insurance Coverage Continuation Act [627.6692]

The purpose of the Florida Health Insurance Coverage Continuation Act is to ensure continued access to affordable health insurance coverage for employees of small employers and their dependents who are not currently protected by the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).

Group health plans issued to small employers must provide that each person who would lose coverage under the group plan (due to job loss, death, divorce, or ceasing to be a dependent) is entitled to continue coverage under the group plan. Evidence of insurability is not required.

A person must notify the insurer that he or she elects to continue coverage and must pay the first premium within 30 days after receiving an election and premium notice form from the insurer.

Coverage under the group plan must be extended until the earliest of: • 18 months after the date group coverage would have ended • the date the person fails to pay premiums • the date the person is covered by another group plan • the date the person becomes eligible for Medicare • the date group coverage is terminated for all employees

Florida Healthy Kids

The Florida Healthy Kids Corporation is a public-private initiative designed to improve access to comprehensive insurance and health care for uninsured children ages 5 through 18 in the state. Coverage is provided for doctor visits, immunizations, dental care, emergency care, and hospital stays, among other benefits. Healthy Kids uses local, state, federal, and family funds to pay premiums to commercial health insurers, who agree to provide insurance. Families pay a nominal premium amount per month, along with co-payments for certain services.

To qualify for coverage, a child must be a Florida resident and must • be uninsured; • be age 5 through 18; • not be eligible for Medicaid; and • not be a child of a state employee.

Cover Florida

Cover Florida Health Care was designed to guarantee affordable health-care coverage to Florida residents who have been uninsured for at least six months. The program is administered by the state of Florida along with private health insurers.

Individuals between the ages of 19 and 64 who have been without health insurance for the past six months are eligible for a Cover Florida policy, even if they have pre-existing conditions. Florida residents may also be eligible to purchase Cover Florida plans if they lost employer-sponsored health insurance due to job loss, death, divorce, or exhaustion of COBRA or state continuation coverage.

Insurers offer two types of policies: catastrophic and noncatastrophic plans. All Cover Florida policies, however, must offer some coverage for preventive care, physicians' visits, outpatient surgery, mental health benefits, and diabetes supplies. Policies must also provide coverage for prescription drugs or a prescription drug discount plan. "Catastrophic" Cover Florida plans must include limited coverage for inpatient hospital services, hospital emergency care services, urgent care services, and outpatient facility services.

Due to new federal requirements enacted in 2010, providers can no longer offer new policies under the Cover Florida program.

For Your Review

• The Florida Employee Health Care Access Act promotes the availability of health insurance for small employers, regardless of claims experience or employees' health status. • A small employer in Florida is, for purposes of group health insurance, defined as any person or entity engaged in business that employed between one and 50 employees during the preceding year, the majority of whom worked in Florida. • As a condition of transacting insurance in Florida, a small employer insurer must offer a basic and a standard health benefit plan. • Small Employer Health Alliances are voluntary association group plans that negotiate with various insurers for insurance in the private market. • The Small Employers Access Program expands affordable health insurance coverage options for small employers, which can provide health-care benefits to employees through purchasing pools. • Group health plans issued to small employers must allow each person who would lose coverage under the group plan (due to job loss, death, divorce, or ceasing to be a dependent) to continue coverage under the group plan. • The Florida Healthy Kids Corporation offers comprehensive insurance and health care for uninsured children ages 5 through 18 in the state. • Cover Florida Health Care guarantees affordable health-care coverage to Florida residents ages 19 to 64 who have been uninsured for at least six months.

QUIZ

Question 1

Which organization provides access to comprehensive insurance and health care for uninsured children ages 5 through 18 in Florida? a) Florida Kids' Care b) Cover Florida c) Florida Health Alliance

d) Florida Healthy Kids

Question 2

Which of the following statements about the renewability of small employer health plans is NOT true? a) Plans can be canceled due to fraud by the policyholder. b) Plans can be canceled if an insurer stops offering coverage in the small employer market.

c) Plans can be canceled only after the insurer provides 180 days' prior notice.

d) Plans can be canceled for nonpayment of premiums.

Question 3

For purposes of group health insurance, a small employer is defined in Florida as any person or entity that employs no more than how many employees?

a) 50

b) 20 c) 100 d) 2