Legislature Develops Solution for Long Term Care Insolvencies
The House and Senate based a bill designed to more equitable handle insolvencies associated with long term care insurers. After passing both chambers without opposition, HB 673 goes to Governor Ron DeSantis for action.
The bill largely follows the NAIC Model Act related funding long-term care insolvencies. In general, these insolvencies will be divided evenly between life and health insurers. However, the Florida approach contains an exemption to long-term care insolvency funding that is not found in the NAIC model– certain nonprofit HMOs would be exempt from assessments related to long-term care insolvencies.
Major points of the bill include (1) equally splitting deficits between life and annuity insurers and accident and health insurers for long-term care insolvencies; (2) limiting the long-term care assessment to 0.5% of the sum of the member insurer’s premiums; (3) including HMOs in the assessment; (4) exempting Medicare and Medicaid policies; (5) exempting nonprofit HMOs operating only in Florida with surplus and capital less than $200M from assessments; and (6) exempting insurers or HMOs that are insolvent or impaired prior to the date the bill is signed.