NAIFA-Florida-Session Dispatch Week 6
By Timothy J. Meenan, NAIFA-Florida Lobbyist
NAIFA SUCCESSFUL IN GETTING PROPOSED AMENDMENT TO ALLOW AGENT FEES IN LIEU OF COMMISSIONS ON INDIVIDUAL HEALTH INSURANCE ADDED TO BILL ON FUNERAL DIRECTORS’ AUTHORITY TO SELL LIMITED LIFE INSURANCE
NAIFA, working with NAHU and FAIA, engineered a victory on February 17, by getting a priority agent fee amendment added to two identical bills in the House and Senate.
Current law drafted and enacted in 2004 by NAIFA (Section 626.593) allows an agent to receive a fee for advising a client on group health insurance or a group health benefit plan, in lieu of receiving the commission from the insurer or health benefit plan. Given the dwindling or non-existent commissions available to agents who counsel clients about individual health coverage, the current allowance to charge a fee should be extended to individual health coverage, as well as group.
NAIFA and NAHU drafted an amendment to allow agent fees on individual health insurance, and worked with House and Senate sponsors to amend the language to CS/CS/SB 1386 and CS/CS/HB 1303.
CS/CS/HB 1303 by Representative Jones, and CS/CS/SB 1386 by Senator Richter, establish $21,000 as the limit of funeral directors’ authority to sell life insurance to cover funeral costs.
Initially, there were parties seeking legislation that would push the limit to $25,000. NAIFA opposed this as being excessive. As a result of NAIFA’s involvement, CS/CS/SB 1386 and CS/CS/HB 1303 were amended to set the limit at $21,000. CS/CS/SB 1386 has been placed on Special Order Calendar for February 23.
NAIFA, working together with other agents groups, is excited to give a fee option to these agents trying to serve individual customers in the age of commission reductions and eliminations.
FIGHT TO CURTAIL ABUSES FROM ASSIGNMENT OF BENEFITS (AOB) HEATS UP
The fight to pass legislation that would curtail abuses from assignment of benefits (AOBs) continues, and forces that seek to maintain their ability to pressure policyholders into signing over their post-claim benefits are trying to prevent meaningful reform.
SB 596 by Senator Hukill is currently the strongest legislation to curtail the assignment of benefits problems. SB 596 has passed the Senate Banking and Insurance Committee with the all-important language stating that an agreement is void if “it purports to assign or transfer the right to enforce payment for post-loss benefits in the policy,” still in the bill. This provision cuts off the vendors from getting attorneys’ fees, and is the root of this problem. Unfortunately, however, its current Committee, the Judiciary Committee, has not yet put it on the agenda. NAIFA is working with several other stakeholders to try to get the Committee to take up some version of legislation that would provide some relief.
In the House, CS/HB 1097 by Representative Caldwell has removed that “enforcement” provision. CS/HB 671 by Representative Broxson, does not address “enforcement.”
Several other interest groups are aligning in opposition to try to prevent any meaningful reform. The trial attorneys have made it a top priority and have aligned with various service vendor groups to fight our efforts. Public adjusters want changes, but their interest is just to keep vendors off their turf. Regardless of the pushback, NAIFA will continue to push hard in both chambers to adopt meaningful reform.
HB 445 PROHIBITING STRANGER ORIGINATED LIFE INSURANCE (STOLI) PASSES KEY COMMITTEE
CS/CS/HB 445 by Representative Stevenson passed the House Regulatory Affairs Committee on February 17. Tim Meenan testified in support of this legislation, as we have in both the House and Senate, and will continue our efforts to push this good legislation through the process. The Senate companion CS/SB 650 by Senator Legg, is in the Senate Appropriations Subcommittee on General Government.
CS/CS/HB 445, and CS/SB 650 would explicitly prohibit STOLIs and would render any transaction that meets the definition of STOLI to be void. The bill would also make numerous changes to the products, requirements, and business of viatical arrangements. STOLIs are a scheme where unscrupulous investors prey on elderly life insurance policyholders. In addition to creating a moral hazard of giving benefits to someone who has no insurable interest, STOLIs can prevent an applicant from qualifying for other life insurance by using up the limit for which a person would otherwise qualify. They can also create a tax liability for an elderly person, who will have to pay the tax out-of-pocket, for a product that provided no benefit to them.
CS/HB 951; NAIFA LOBBIES TO MAINTAIN FLORIDA’S CONVERSION AND CONTINUATION LAWS
CS/CS/HB 951 by Representative Cummings was passed by the House Health and Human Services Committee on February 17. That bill, and its Senate companion, CS/SB 1170 by Senator Detert, make numerous changes throughout the statutes repealing or revising state law requirements to reflect current federal law. The federal Patient Protection and Affordable Care Act (PPACA) effectively allows states to adopt and enforce laws that do not directly conflict with PPACA, but preempts any state law that does conflict. As a result, provisions in Florida law that are in conflict with PPACA are preempted and provisions that merely duplicate PPACA continue to be viable and enforceable by OIR.
The bills repeal:
- The medical loss ratio standard for major medical health insurance policies;
- The requirement for insurers to issue a certificate of creditable coverage;
- The requirement for certain insurers to provide an outline of coverage.
In addition, the bills contain numerous sections that revise cross-references and transfer language that is required to continue implementation of requirements unrelated to those that have been repealed.
Of note, the NAIFA Health Committee was opposed to a provision in the original bills eliminating the Florida health insurance conversion and continuation statutes. This could be problematic for groups of less than 20, and also affect the rates of continuation insureds dramatically. With our support, current law was restored in the bills, and Florida conversion and continuation laws will still be in force.
Both bills are headed to the floor and are in a position to pass.
SENATE BILL THAT AFFECT AGENTS’ ACCESS TO CERTAIN CITIZENS’ UNDERWRITING DATA PASSES COMMITTEE WITH SIGNIFICANT AMENDMENT; SB 1630/HB 931
A bill addressing the use of Citizens’ underwriting data, CS/SB 1630 by Senator Flores, was passed by the Senate Ethics and Elections Committee on February, with a significant amendment that would restore a part of current law that the original bill had removed.
Current law allows Citizens to release underwriting and claims files to an authorized insurer, if the insurer is considering underwriting the policyholder and agrees in writing under oath to maintain the confidentiality of the files. Citizens can also release such files to the staff and board of governors of the market assistance plan (MAP), which must retain the confidentiality of the files. Finally, current law allows Citizens or the MAP to release to licensed general lines agents the following information: name, address, and telephone number of the residential property owner or insured; location of the risk; rating information; loss history; and policy type.
The agent receiving the information must retain the confidentiality of the information.
The agent receiving the information must retain the confidentiality of the information.
SB 1630, as originally filed had removed the allowance for Citizens or MAP to release any of the information to an agent. After the amendment, however, CS/CS/SB 1630 would allow Citizens or MAP to release the specified information to a licensed reinsurance broker, a licensed rating organization, a modeling company, or a licensed general lines agent, for the sole purpose of analyzing risks for underwriting or developing rating plans in the private insurance market. The amended bill specifies that the licensed agent receiving this information cannot use the information for the direct solicitation of policyholders.
CS/HB 931 by Representative Passidomo, is on the House floor. CS/HB 931 also allows the release of information to a general lines agents, and places the same restrictions on the use of the information as its Senate companion.
Like CS/SB 1630, CS/HB 931 also provides that an authorized insurer, a reinsurer, a licensed reinsurance broker, a licensed rating organization, or a modeling company can receive this information, for the sole purpose of analyzing risks for underwriting or developing rating plans in the private insurance market, and these entities must retain the confidentiality of the information.
Both CS/HB 931 and CS/SB 1630 require that to maintain a Citizens’ appointment, an agent must also continue to maintain an appointment with a private insurer that is writing or renewing in Florida. Current law requires that the agent must have a private insurer appointment “at the time of the initial appointment by” Citizens.
Both CS/HB 931 and CS/CS/SB 1630 also require a number of changes for Citizens’ take-out process, including:
- CS/HB 931 requires Citizens to publish a schedule of take-out cycles, but does not specify the number. CS/SB 1630 limits it to 6 cycles per year.
- That private insurers must include in their take-out offers to Citizens policyholders, a comparison of coverages and rate between the insurer’s policy and Citizens policy.
- The requirement that private insurers must agree to offer similar coverage to that being offered by Citizens and CS/SB 1630 requires that their initial premium will be within 10 percent of the estimated premium.
- That Citizens compile a list of companies requesting to take out a policy and make the list available to the agent of record.
- Must allow a Citizens policyholder who accepts a take-out offer, the ability to reapply to Citizens and be treated as a renewal through the clearinghouse if within 36 months of leaving Citizens.
This legislation is being pushed by FAIA, and is expected to reduce the opportunity for some aggressive MGAs that are targeting commercial residential policies from “poaching” those policies from the agent of record. NAIFA Florida supports this effort.
HOUSE AND SENATE COMMITTEES PASS BILLS TO PREVENT OUT-OF-NETWORK HEALTH PROVIDERS FROM BALANCE BILLING POLICYHOLDERS; SB 1442/HB 221
SB 1442 by Senator Garcia and HB 221 by Representative Trujillo are NAIFA priority bills that attempt to reverse the current trend of policyholders with health insurance being billed by out-of-network health providers for covered benefits that are received at an in-network hospital. On February 16, the Senate Banking and Insurance Committee passed CS/CS/SB 1442, with a strike-all amendment that expanded the bill’s effect to cover hospitals, ambulatory surgical centers, specialty hospitals and urgent care centers. On February 17, the House Health and Human Services Committee passed CS/CS/CS/HB 221, with an amendment that conformed it in substance to the Senate version.
The problem of balance billing puts the agent in the middle of a very difficult situation. By the terms of the policy, both the policyholder and the agent believe full coverage has been purchased for an event, only to find out after the fact that the policyholder must pay out-of-pocket for the out-of-network provider’s charges above the reimbursement paid by the insures. The agent is on the front line and must work with his or her client to try to make the best of this difficult situation.
CS/SB1442 and CS/CS/HB 221 share a number of similar provisions, including:
- The insurer is solely responsible for payment to a non-participating provider for emergency services; coverage for emergency services cannot require prior authorization and must be provided regardless of whether the service is furnished by a participating or nonparticipating provider.
- The insurer is liable for payment of fees to a non-participating provider for non-emergency services provided in a facility which has a contract with the insurer when the insured has no ability and opportunity to choose a participating provider at the facility.
- The health service provider cannot bill the patient, except for copayments or deductibles.
- The insurer must pay the provider consistent with the current standards applicable for HMOs. A dispute will be resolved in either a court or by the voluntary dispute resolution process in s. 408.7057, F.S. CS/CS/HB 221 creates a new process within that section.
- A hospital must post certain information about all health insurers and HMOs the hospitals contracts with as a network provider or participating provider, and a statement alerting patients that services provided in the hospital may not be included in the hospital’s charge, and health care practitioners who provide services in the hospital may not participate in the same health insurance plans as the hospital.
- Insurers must keep on their websites updated information on all participating providers, including facilities, board specialties, languages spoken, and affiliations with local hospitals. The website must be updated at least monthly.
Both bills are headed to the floor and are in position to pass.
DIRECT PRIMARY CARE AGREEMENT BILLS MAKE IT TO THE FLOOR IN BOTH SENATE AND HOUSE; CS/CS/SB 132 & CS/CS/HB 37
CS/CS/SB 132 by Senator Grimsley and CS/CS/HB 37 by Representatives Costello, Roberson and Renner are very similar bills that create a specific exemption from the Insurance Code for direct primary care agreements.
The bills define the term “direct primary care agreement” to be a contract between a primary care provider and a patient, or the patient’s legal representative or employer. The bills differ, however, in how they define a “primary care provider.” The House version defines a primary care provider as including a health care provider under chapters 458 (physician), 459 (osteopathic physician), or 464 (nurse), or a primary care group practice that provides medical services “commonly provided without referral….” The Senate specifically adds chapter 460 practitioners (chiropractors) into the definition. Both bills define “primary care service” as the screening, diagnosis, and treatment for the purpose of promoting health or detecting and managing disease or injury.
The bills specify that a direct primary care agreement does not constitute insurance and is not subject to the Insurance Code, and that a primary care provider or agent thereof is not required to obtain a certificate of authority or license to sell or market a direct primary care agreement.
The bills require that a direct primary care agreement must:
- Be in writing and be signed by the primary care provider and by the patient or legal representative or employer;
- Allow a party to terminate the agreement by giving 30 days’ written notice, except that the agreement may allow immediate termination for violation of the physician-patient relationship or a breach of the agreement;
- Specify a monthly fee, describe the scope of services covered by the fee, the duration of the agreement and any automatic renewal provisions;
- Offer a refund of advance payments if the provider ceases to provide services;
- State that the agreement is not health insurance, that the provider will not file any claims against the patient’s health insurer, and that the agreement does not qualify as minimum essential coverage required under PPACA.
Both bills have passed all committees of reference and are on the floor of their respective chambers.
PROPOSED LEGISLATION TO OVERRIDE OF STEP THERAPY PROTOCOLS FOR PRESCRIPTION DRUG USE; CS/SB 1084 & HB 963
CS/SB 1084 by Senator Gaetz, and its House companion, HB 963 by Representative Harrison, would impose a major limitation on the use of drug step therapy protocols by managed care plans for Medicaid, by health insurance plans, and by HMOs.
NAIFA-Florida continues to oppose legislative efforts that continue to erode health insurers’ and HMOs’ ability to manage costs.
The bills require that health plans must provide a “clear and convenient process” for a prescribing physician to request an override of the plan’s step therapy protocols for prescribed drugs. The plan must grant the prescribing physician’s override within 24 hours if the physician concludes that the preferred treatment has been ineffective or the physician believes that the preferred treatment is likely to be ineffective or cause an adverse reaction. If the prescribing physician does follow the preferred treatment protocol, the duration of that treatment cannot exceed a period deemed appropriate by the physician.
NAIFA-Florida opposes this proposed legislation. It would allow physicians to side step lower cost treatment options and increase premiums to employers and individual health insurance purchasers. CS/SB 1084 is currently in Appropriations Committee, and HB 963 has not yet been heard.
SENATE BILL REGULATING TRANSPORTATION NETWORK COMPANIES (TNC) REACHES SENATE FLOOR; CS/SB 1118 & CS/HB 509
CS/CS/HB 509 has passed the House and CS/CS/SB 1118 passed the Senate Appropriations Committee on February 18, and is now on the Senate floor. CS/CS/HB 509 by Representative Gaetz contains most of the provisions that developed last year from a national compromise between some of the TNCs – primarily Uber – and the national property and casualty trades. CS/CS/SB 1118 by Senator Simmons, contains different coverage requirements than the House bill.
HOUSE BILL 509. When a driver is logged into the network and available to receive transportation requests, but is not actually providing TNC service at the time, there must be liability coverage of $50,000 for death or bodily injury per person and $100,000 per incident, and $25,000 for property damage (plus requirements of no-fault law). When a driver is actually providing TNC service at the time, there must be liability coverage of $1 million for death, bodily injury, or property damage.
SENATE BILL 1118. When the driver is logged in and available, regardless of whether he/she is actually providing a ride or not, there must be liability coverage of $125,000 for death or bodily injury per person and $250,000 per incident, and $50,000 for property damage (plus requirements of no-fault law). When a driver is not logged in or providing a ride, there must be liability insurance of at least $25,000 for death or bodily injury per person and $50,000 per incident, and $10,000 for property damage (plus requirements of no-fault law).
There are also some differences between the House and the Senate on the non-insurance provisions of the bill. NAIFA – Florida is neutral on the issues of general taxi regulatory authority, but strongly supports efforts to establish clear insurance requirements. Until clear requirements are established, an agent is in an extremely difficult situation because a personal lines policy likely won’t pay a claim when a car is utilized for commercial use, such as providing TNC services. NAIFA will continue to support this important legislation.
HB 543 CLARIFYING SMALL EMPLOYER HEALTH INSURANCE COVERAGE PASSES FINAL HOUSE COMMITTEE
HB 543 by Representative Stark was passed by the House Health and Human Services Committee on February 17. Its Senate companion, SB 910 by Senator Braynon, has not yet been heard. The bills would make it clear that a small business can buy a health insurance policy that covers only its employees, and is not required to cover the employees’ family members. Currently, Florida’s small group statute is not absolutely clear about whether a small employer is allowed to buy health policies that cover only its employees, without being required to also provide the coverage for their family members as well.
Small employers are exempt from the PPACA’s mandate to provide coverage, but they often want to provide some coverage for their workers. When a small employer provides coverage for its employees but cannot afford to pay the additional coverage for the employees’ family members, they offer the family coverage as an option, if the employee wants to pay for it. The problem is that because of that offer of coverage, the family members technically have access to employer coverage — even though it’s unaffordable – and under PPACA, that access to coverage means they don’t qualify for the tax credits that make the Federal Marketplace plans affordable. This has left many spouses and children uninsured in what has come to be called the “family glitch.”
This bills tweak state law to clarify that a small business can indeed buy health policies that cover only its employees, without being required to cover their family members.
HOUSE COMMITTEE HEARS BILL MAKING MAJOR CHANGES IN REGULATION OF SINKHOLE COVERAGE TO BE HEARD IN HOUSE SUBCOMMITTEE; HB 1327
CS/HB 1327 by Representative Ingoglia was passed by the House Government Operations Appropriations Subcommittee on February 16. That bill and its Senate companion, CS/SB 1274 by Senator Latvala, would establish new standards for “sinkhole only” domestic insurers that solely transact personal residential property insurance for the peril of sinkhole.
The bills create a new type of sinkhole coverage. Among the key features, the bills:
- Permit an authorized insurer to issue a “limited sinkhole coverage insurance” policy providing personal lines residential coverage for the peril of sinkhole loss on any structure or the contents of personal property;
- Cover only losses from the perils of sinkhole loss as the term “sinkhole loss” is currently defined in law;
- Coverage of loss of personal property or contents is not required; coverage may be limited to stabilization of the building and repair of the foundation; coverage of land stabilization is not required;
- Allow policy limits, subject to a minimum limit, and deductibles as agreed by the insurer and insured which could be far less than the value of the home;
- Require the insured’s signed acknowledgement of reading and understanding the policy limitations;
- Do not apply to commercial lines residential, commercial lines nonresidential coverage, or excess coverage for the peril of sinkholes;
- Do not require form filing;
- Lower surplus requirements for a new or existing domestic insurer that only transacts limited sinkhole coverage insurance for personal lines residential property to a minimum of $7.5 million.;
- Remove the due diligence requirement on the exportation of policies to surplus lines insurers until July 1, 2020;
- Until October 1, 2019, these limited sinkhole coverage insurers will not be subject to file and use rate review by the Office of Insurance Regulation;
- Prohibit assignment of a post-loss claim, except to a certain property purchasers.
NAIFA was successful in getting the house sponsor to increase the solvency level up to $7.5 million from original bill, which had required only $2.5 million to obtain a certificate and $1.5 million to maintain it.