NAIFA-Florida-Session Dispatch Week 7
By Timothy J. Meenan, NAIFA-Florida Lobbyist
SENATE PASSES LEGISLATION TO ALLOW AGENT FEES IN LIEU OF COMMISSIONS ON INDIVIDUAL HEALTH INSURANCE; CS/CS/SB 1386, CS/CS/HB 1303
On February 24, the Senate passed priority agent fee legislation that was sought collectively by NAIFA, NAHU and FAIA.
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 outside of the exchange, the current statute to charge a fee should be extended to individual health coverage.
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. Both of these sponsors had reduced this limit to $21,000 down from the originally filed $25,000, at the urging of NAIFA.
The Senate has now passed and sent this legislation to the House, which has the companion bill on second reading.
NAIFA, working together with other agents groups, is excited to give a fee option to agents trying to serve individual customers in the age of commission reductions and eliminations.
ASSIGNMENT OF BENEFITS “HEAVY” (SB 596/HB 1097)
Both “AOB Heavy” bills which, as filed, eliminate attorneys fees for vendors, have been delayed in committees for the past 2 weeks. The future of the AOB Heavy bills seems to be stalled for now. Without a compromise on the 2 heavier bills, we are looking to add language onto the AOB Lite bills to increase our chances of success in combatting the AOB problem.
ASSIGNMENT OF BENEFITS “LITE” (SB 1248/HB 671)
Chairman Diaz de la Portilla also sponsored his own bill addressing the AOB issue, which was heard the Senate Banking and Insurance Committee this week. SB 1248 would prohibit several negative components of the AOB process, including a ban on referral fees that steer customers needing emergency services to specific vendors. While his bill did pass through the Senate Banking and Insurance committee, insurers still feel that it provides little relief by removing a provision which provided a right of rescission to homeowners under certain circumstances. In addition, a provision requiring vendors to advise customers to contact an attorney or a public adjuster in the event of problems with a claim or to determine if they have other claims under a policy is unacceptable to the insurance industry.
We are planning to continue negotiations with the Senate this week on the AOB issue. Ideally, we are trying to get the following:
1. Attorney Fee Reform. Either the loser pays, or vendors get no fees, or some kind of compromise or modification that is acceptable to us.
2. Right of Rescission. Three days to rescind the AOB after we receive notification of its existence.
3. AOB Repair Limits. Only allow reasonable costs for temporary measures to protect property from further damage in the initial AOB; no permanent repairs.
4. Disclosure Language. Strong language about giving up rights, right to rescind, etc.
5. Prohibited action against Policyholder. The vendor cannot go against the policyholder for amounts owed under an AOB.
6. Form Changes. A provision allowing forms to be filed by insurers limiting AOBs to only work for temporary measures to protect property from further damage before an insurer can come onsite to inspect.
There are currently two schools of thought regarding what to do if we cannot get an attorney’s fees fix. One option is if there is no attorney’s fees fix, we pass nothing and kill all AOB related legislation. The second option is to pass a bill without an attorney’s fees fix so when we return in a future legislative session, those other “fixes” will already be law and shown to not be working, thus focusing attention on an attorneys fee fix as the ultimate solution.
SB 1248 was heard by the Senate Appropriations committee in a marathon 8-hour committee meeting; the bill was heard un-amended and passed favorably. HB 671 was amended by Representative Broxson to include a provision specifying that a vendor does NOT commit a violation of the law if, as a result of the process of adjusting the claim with the insurer, the actual cost of repairs differs from the initial estimate. The amendment was adopted and the bill, as amended, was reported favorably out of House Regulatory Affairs, its final committee stop before the House floor.
SB 1248 is scheduled to be heard in its final committee stop, Senate Appropriations, on March 1. We are working to ensure that a beneficial bill is passed, or that harmful legislation is stopped before getting to the floor. We appreciate your responsiveness to our emails and calls while we work to come to the best solution possible.
We have worked on draft language to institute a “loser pays” attorney fee statute for vendors taking an AOB. We have drafted the language so that the number we litigate would be the amount the vendor requests. No action has been taking on this draft yet, but could be taken over the weekend, pending your thoughts on the issue.
CS/CS/SB 1170; NAIFA CONTINUES SUCCESSFUL EFFORTS TO MAINTAIN FLORIDA’S CONVERSION AND CONTINUATION LAWS
CS/CS/SB 1170, by Senator Detert, passed the Senate Appropriations Committee on February 25. That bill and its House companion, CS/CS/HB 951 by Representative Cummings, 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 now in a position to pass.
SENATE BILL THAT AFFECTS AGENTS’ ACCESS TO CERTAIN CITIZENS’ UNDERWRITING DATA PASSES FINAL COMMITTEE; CS/CS/SB 1630
A bill addressing the use of Citizens’ underwriting data, CS/CS/SB 1630 by Senator Flores, was passed by the Senate Appropriations Committee on February 25.
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.
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 bill specifies that the licensed agent receiving this information cannot use the information for the direct solicitation of policyholders.
CS/CS/HB 931 by Representative Passidomo, is on the House floor. CS/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/CS/SB 1630, CS/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/CS/HB 931 and CS/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/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 insurers that are targeting commercial residential policies from “poaching” those policies from the agent of record.
BILL TO PREVENT OUT-OF-NETWORK HEALTH PROVIDERS FROM BALANCE BILLING POLICYHOLDERS DODGES TOXIC AMENDMENT IN FINAL SENATE COMMITTEE; 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.
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.
On February 25, during the Senate Appropriations Committee hearing on CS/CS/CS/SB 1442, Senator Negron sought to add an amendment that would provide that if a health insurer has verified the eligibility of an insured at the time of treatment and provided an authorization number, it cannot retroactively deny a claim because of insured ineligibility. Under PPACA, providers calling a health plan to determine the eligibility of a new health plan subscriber on the exchange may only confirm, in the 30 days following enrollment (regardless of whether the subscriber has paid for the policy) that the policyholder is “eligible for coverage.” From day 31 through day 90, the health plan may tell the provider that the policyholder has not yet paid for the policy. After day 90, the insurer may, only then, cancel the policyholder for non-payment of premium. The Negron amendment would have required insurers to pay all provider bills during the first 90 days after enrollment, regardless of whether the policyholder paid! This creates an impossible situation for insurers when a payment method is invalidated. Initially, the Chair ruled that the amendment passed on a voice vote, but when members asked for a count, the amendment failed. NAIFA Florida strongly opposes this amendment which would increase costs on policyholders that pay for their coverage.
The House companion, CS/CS/CS/HB 221 is on the House floor. The provisions of both bills apply to hospitals, ambulatory surgical centers, specialty hospitals and urgent care centers. CS/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.
- Under those circumstances, 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 dispute resolution process in s. 408.7057, F.S.
- The bills add a new provision to s. 408.7057 that if the final payment awarded is more than 10% more favorable than an offer made by a party, the party refusing to accept that offer must pay the costs of the dispute resolution process.
- A hospital must post certain information on its website, including the names and hyperlinks for direct access to the websites of all health insurers and HMOs which the hospital contracts as a network provider or preferred provider and a statement that:
- Services may be provided in the hospital by health care practitioners who may separately bill the patient;
- Health care practitioners in the hospital may not participate with the same HMOs or health insurers as the hospital;
- Prospective patients should contact the practitioner who will provide services to determine the health insurers and HMOs they are with;
- Has the names, mailing addresses, and telephone numbers of the practitioners and medical groups which it contracts to provide services in the hospital and instructions on how to contact the practitioners and groups.
- 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 in position to pass.
HOUSE BILL TO OVERRIDE OF STEP THERAPY PROTOCOLS FOR PRESCRIPTION DRUG USE RUNS OUT OF TIME – WATCH FOR AMENDMENTS; 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 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, but HB 963 has not yet been heard by a committee, so time has run out for the bill to reach the floor. NAIFA will be alert to any creative efforts to revive the language through the amendatory process.
TRANSPORTATION NETWORK COMPANY BILLS; CS/CS/SB 1118 & CS/CS/HB 509
While the “Uber” bills were not heard this week, talks between the taxi industry and Uber continue. New discussions appear to include insurance requirements for TNC drivers of $250,000 for death and bodily injury per accident and $50,000 for property damage while logged into the app waiting to connect with passengers. It is also possible that language might be included to require TNC drivers to have clean driving records and pass level two criminal background checks.
The House bill, HB 509, that passed last month contained lower insurance requirements than the potential compromise.
SENATE BILL CLARIFYING SMALL EMPLOYER HEALTH INSURANCE COVERAGE RUNS OUT OF TIME
SB 910 by Senator Braynon, has not yet been heard, and there will be no more meetings for it to be passed by a committee. That bill and its House companion, HB 543 by Representative Stark, which made it to the House floor, 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.”
HOUSE AND SENATE COMMITTEES PASS BILLS MAKING MAJOR CHANGES IN REGULATION OF SINKHOLE COVERAGE; CS/CS/HB 1327, CS/CS/SB 1274
CS/CS/HB 1327 by Representative Ingoglia was passed by the House Regulatory Affairs Committee on February 25, and CS/CS/SB 1274 by Senator Latvala, passed the Senate Appropriations Committee on February 24. The bills establish new standards for “sinkhole only” domestic insurers that solely transact personal residential property insurance for the peril of sinkhole. The House version prohibits Citizens from writing this coverage.
The bills create a new type of sinkhole coverage. Among the key features, the bills allow:
- 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;
- Coverage for only losses from the perils of sinkhole loss as the term “sinkhole loss” is currently defined in law;
- Coverage that excludes loss of contents or ALE; coverage may be limited to stabilization of the building and repair of the foundation;
- An insurer to limit coverage to stabilize the building and repair the foundation;
- An insurer to offer policy limits and deductibles that are agreed to by the insured; Except that policy limits must be at least $50,000, unless the amount exceeds the replacement cost of the property;
- 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;
- 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;
- Do not require a form filing;
- 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, but must set its rates in accordance with s. 627.062, F.S.
NAIFA was successful in getting the bill sponsors 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.
LEGISLATION ON MERGERS AND ACQUISITIONS BROKERS PASSES SENATE;
CS/CS/SB 286, CS/CS/HB 817
On February 24, the Senate passed CS/CS/SB 286 by Senator Brandes. Its House companion, CS/CS/HB 817 by Representative Raulerson, is on the House floor. The bills provide a definition for mergers and acquisitions brokers, and would provide an exemption from registration with the Office of Financial Regulation for the brokers facilitating the offer or sale of securities in connection with the transfer of ownership of an eligible privately held company.