NAIFA-Florida-Session Dispatch Week 8
By Timothy J. Meenan, NAIFA-Florida Lobbyist
LEGISLATION TO ALLOW AGENT FEES IN LIEU OF COMMISSIONS ON INDIVIDUAL HEALTH INSURANCE PLACED ON HOUSE SPECIAL ORDER CALENDAR; CS/CS/HB 1303, CS/CS/SB 1386
The priority agent fee legislation that was sought collectively by NAIFA, NAHU and FAIA, was placed on the Special Order Calendar for March 7, in the House. The companion bill, CS/CS/SB 1386, was passed by the Senate, so NAIFA is optimistic that this good bill will become law.
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 by Senator Richter and CS/CS/HB 1303 by Representative Jones.
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, stalled in committees. Without a compromise on the 2 heavier bills, we were hoping 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 passed by the Senate Appropriations Committee on March 1, and placed on the Senate calendar. 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, but insurers still feel that it provides little relief by removing a provision which provided a right of rescission to homeowners under certain circumstances.
We are planning to continue negotiations with the Senate this week on the AOB issue. At this point, attorney fee reform is off the table and we are trying to get the following:
- 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 and adjust the claim.
- Claim Filing. Allow insurers to require that claims be reported within 3 days of when the policyholder should have known of the claim.
Another key issue is to only allow changes to the statute which do not codify assignments or give them legislative legitimacy in light of cases which are pending regarding whether assignments are legal.
CS/CS/HB 671 by Representative Broxson was placed on Special Order calendar in the House, but it is temporarily postponed as of now. That bill would: (1) ban referral fees; (2) prohibit a vendor from performing public adjuster services; and (3) require a vendor to give estimate, but specifies that it is not a violation if, during the process of adjusting the claim with the insurer, the actual cost of repairs differs from the initial estimate
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 during the final week.
SENATOR BRADLEY WITHDRAWS AMENDMENT ALLOWING EXPORT TO SURPLUS LINES WITHOUT “DILIGENT EFFORT” FOR COMMERCIAL RESIDENTIAL PROPERTY INSURANCE; CS/CS/CS/HB 651
FAIA is seeking legislation to allow an agent to place commercial residential coverage with a surplus lines carrier without requiring that the agent first make a “diligent effort” to find coverage with an authorized insurer. Many in the market argue that some condominium associations – particularly those with very large dollar exposure – may prefer to obtain their common area coverage from a surplus lines carrier with prodigious capital, rather than a smaller authorized carrier. However, if an authorized carrier is aware that a condominium is being written by a surplus lines carrier through a particular agent and makes an offer of coverage to that agent, the agent is prohibited from writing the condo in surplus lines, even if the condo association prefers it.
FAIA acknowledges that there are solid public policy reasons for the existing law requiring the diligent effort, but it believes that condos should be able to access the larger capital market, if it is available to them and they prefer it.
Senator Bradley offered a floor amendment to CS/CS/CS/HB 651 that would have exempted commercial residential property insurance from the current requirement for an agent to make a diligent effort to find coverage from an authorized insurer. The amendment would have also exempted this coverage from the current prohibition against lower rates and more favorable coverage. However, Senator withdrew his amendment.
CS/CS/SB 1170; FLORIDA HEALTH INSURANCE MODERNIZATION BILL SET TO BE ENACTED
CS/CS/SB 1170, by Senator Detert, was passed by the Senate on March 4, and sent to the House. 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.
CS/CS/HB 951 was temporarily postponed on the House floor last week, but has been placed on the special Order calendar for March 7, and now appears to be in a position to pass.
SENATE SPONSOR OFFERS FLOOR AMENDMENT TO BILL THAT AFFECTS AGENTS’ ACCESS TO CERTAIN CITIZENS’ UNDERWRITING DATA; CS/CS/SB 1630
A bill addressing the use of Citizens’ underwriting data, CS/CS/SB 1630 by Senator Flores, was placed on the Senate Special Order calendar for March 4, but was not heard. It has been retained on the calendar, with a pending amendment by Senator Flores.
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, the take-out company increases its rate by more than that allowed for Citizens (10% per year).
Senator Flores has filed an amendment to her bill with two main provisions. First, the amendment would remove the limit of 6 take-out cycles per year (this change would conform the Senate bill to the House bill on this provision). Second, the amendment would provide that a take-out insurer that experiences an increase in its reinsurance cost of greater than 20% can exceed the 10% annual overall limit without the policyholder being considered as a Citizens’ renewal. This amendment has not yet been acted on.
The primary component of these bills – the limitation on how a general lines agent can use underwriting information obtained from Citizens — 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.
SENATE ADDS TOXIC AMENDMENT TO BILL TO PREVENT OUT-OF-NETWORK HEALTH PROVIDERS FROM BALANCE BILLING POLICYHOLDERS; HB 221
It is a NAIFA legislative priority 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. Both HB 221 and SB 1442 contain provisions that would have helped reverse the trend, but the Senate has added an amendment that makes the legislation unacceptable.
SB 1442 by Senator Garcia was laid on the table by the Senate and substituted with HB 221 by Representative Trujillo, which had been sent over from the House. The Senate then added an amendment that would do two things, both of which would increase premiums. First, the amendment would mandate that all health insurance plans and all health maintenance contracts would be required to cover all developmental disabilities to provide speech therapy, occupational therapy, physical therapy, and applied behavior analysis. These treatments are currently mandated for autism spectrum disorder, and the amendment expands the mandate to all other developmental disabilities.
The second provision of the Senate amendment would provide that a health insurer or HMO cannot retroactively deny a claim due to ineligibility of an insured or subscriber who does not receive federal premium tax credits, if the insurer or HMO has verified the eligibility and issued authorization. For an insured or subscriber who receives advance payments of federal premium tax credits, the insurer or HMO cannot retroactively deny a claim due to ineligibility for services authorized by the insurer or HMO rendered during the first 30 days of a federally required grace period.
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.” The amendment requires insurers and HMOs to pay all provider bills during the first 30 days after enrollment, regardless of whether the policyholder paid! This creates an impossible situation for insurers when a payment method is invalidated.
NAIFA Florida strongly opposes this amendment which would increase costs on policyholders that pay for their coverage.
The anti-balance billing provisions of HB 221 apply to hospitals, ambulatory surgical centers, specialty hospitals and urgent care centers, and provide:
- 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.
At this point, however, all of these provisions are overridden by the amendment that would add substantial costs. NAIFA Florida will be fighting to get this toxic amendment removed when HB 221 returns to the House.
HOUSE PASSES DIRECT PRIMARY CARE AGREEMENT BILL; CS/CS/HB 37
On March 2, the House passed CS/CS/HB 37 by Representatives Costello, Roberson and Renner, by a 116 – 0 vote. The Senate companion, CS/CS/SB 132 by Senator Grimsley, is on the Senate floor. The two bills are very similar and 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 define a “primary care provider” as including a health care provider under chapters 458 (physician), 459 (osteopathic physician), 460 (chiropractor), or 464 (nurse), or a primary care group practice that provides medical services “commonly provided without referral….” The 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.
The House bill has been passed and the Senate bill is on the floor. While a creative option, NAIFA cautions agents that if this becomes law, these direct primary care agreements are no substitute for health insurance and do not meet the minimum requirements of PPACA.
NAIFA CONTINUES TO WATCH FOR AMENDMENTS TO OVERRIDE OF STEP THERAPY PROTOCOLS FOR PRESCRIPTION DRUG USE
CS/SB 1084 by Senator Gaetz, and its House companion, HB 963 by Representative Harrison, would have imposed a major limitation on the use of drug step therapy protocols by managed care plans for Medicaid, by health insurance plans, and by HMOs. Both bills have run out of time, but just like the mandates added to the balance billing legislation, the step therapy language may still show up as an amendment.
NAIFA-Florida continues to oppose legislative efforts that erode health insurers’ and HMOs’ ability to manage costs, and 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 PASSES LEGISLATION TO MAKE MAJOR CHANGES IN REGULATION OF SINKHOLE COVERAGE; CS/CS/SB 1274, CS/CS/HB 1327
CS/CS/SB 1274 by Senator Latvala, was passed by the Senate on March 3, with a “delete-everything” amendment that conformed the bill to its House companion, CS/CS/HB 1327 by Representative Ingoglia. The House bill is on the Special Order calendar for March 7. The bills establish new standards for “sinkhole only” domestic insurers thatsolely 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 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;
- Prohibit Citizens from writing this coverage.
- 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.