Legislature Addresses the Patient Protection and Affordable Care Act (PPACA)
While Florida did not take any action on new Medicaid choices under the federal law, it did enact CS/SB 1842 for the purpose of making changes to the Florida Insurance Code related to health insurance policies to address provisions of the Patient Protection and Affordable Care Act (PPACA).
The PPACA requires health insurers to make coverage available to all individuals and employers and prohibits exclusions for pre-existing conditions. States are permitted to enforce these provisions, but if the U.S. Department of Health and Human Services (HHS) determines that a state has failed to substantially do so, it must step in and enforce the law. HHS currently is proposing a collaborative agreement with OIR to define each entities role in the enforcement of the PPACA in Florida.
According to the staff report Senate Bill 1842 makes the following changes to the insurance code:
- Provides that a provision of the Florida Insurance Code or rule adopted pursuant to the Code applies unless such provision or rule prevents the application of a provision of the PPACA. This is substantially the same preemption provision that is included in the PPACA.
- Authorizes the OIR to assist the HHS in enforcing the provisions of the PPACA by reviewing policy forms and performing market conduct examinations or investigations for compliance with the PPACA. The OIR must first notify the insurer of any non-compliance and then notify the HHS if the insurer does not take corrective action. This is similar to the “collaborative arrangement” that the HHS has already entered with the OIR, except that it does not authorize the OIR to review rates for compliance with the PPACA.
- Authorizes the Division of Consumer Services within the Department of Financial Services (DFS) to respond to complaints by consumers relating to requirements of the PPACA, 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 division to report apparent or potential violations to the OIR and to the HHS.
- Temporarily suspends the requirement that health insurers and HMOs (insurers) 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 PPACA, 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 PPACA 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 PPACA on monthly premiums. This notice would be required one time, 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 PPACA on monthly premiums as contained in the notices, which must be available on their respective websites by October 1, 2013.
- Makes the following changes that would allow or require insurers to take certain actions that would preserve the status of grandfathered health plans which, in general, are plans under which an individual was insured on March 23, 2010, and which are exempt from many of the requirements of the PPACA:
- 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, as also required by the PPACA.
- Allows an insurer to discontinue a policy form that does not comply with the PPACA without being subject to the current prohibition on selling a new, similar policy form after a policy form is discontinued.
- Requires DFS registration of navigators, who are individuals who provide assistance and information to an individual regarding choices for enrollment in a qualified health plan (QHP) and facilitates enrollment in a QHP.
- 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 PPACA (but capped at 50 employees, as allowed by the PPACA). 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 PPACA and no longer would apply to an employer who is not a small employer under the federal definition.
- Requires the dissolution of the Florida Comprehensive Health Association (FCHA), which is the state’s high risk pool for persons unable to obtain health insurance, by September 1, 2015. Coverage for the current 170 (approx.) FCHA policyholders would be terminated by June 30, 2014. The FCHA would be required to assist each policyholder in obtaining health insurance coverage.
- Specifies that health insurers and HMOs may non-renew individual conversion policies if the individual is eligible for other similar coverage.
- Repeals the statute that establishes the Florida Health Insurance Plan, which has never been implemented.
How these provisions are implemented will, obviously, be critical to the insurance industry in Florida. We will stay on top of that process. Please do not hesite to contact us for more information.