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Monday May 5, 2013
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Really???
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| Using the cool new retort we hear from the “Y” generation meaning, “are you serious”, or “you’ve got to be kidding”, “what were you thinking”, or “what is wrong with you”, we would have to say, “REALLY????” to our legislative body last week. We watched and listened in excruciating pain as “Mary-the computerized voice” read bills over and over and over, and our senators and legislators firmly held their marbles in their hands, ready to take them home and not play anymore. What a week! Hopefully, lessons will be learned and we won’t have to endure this waste of time and taxpayer money in the future. With that said, here are a few tidbits of the “action” or “lack thereof” for last week. |
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Battle over Health Reform Threatened Derail of Session’s Last Week
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By most accounts, Session seemed to be on the right track for about seven weeks with the House and Senate engaging in collegial debate on a host of extremely important issues. For certain there was disagreement on how to address property insurance issues and the reform of Citizens, the state budget, education, pension reform and a number of other issues. However, there were positives as well and the chambers agreed upon and announced a state budget earlier this year than had been accomplished in several years. And then Tuesday happened. Around mid-day, the House legislative process was brought to a painfully slow pace by House Democrats protesting House leadership’s and Republican members’ continued refusal to consider the Senate’s plan to extend health insurance coverage to about 1.1 million uninsured Floridians. House Democrats called upon a rarely used provision in Florida’s Constitution which requires, if one-third of members agree, that every bill be read in its entirety before debate or a vote could be taken. The Senate healthcare proposal, which would use about $51 billion in federal funds in the form of premium subsidies to cover bona fide health insurance policies purchased by the uninsured, was supported by both Senate Republican and Democratic members, in addition to Gov Scott and Florida’s business community. The plan was the Senate’s alternative to expanding traditional Medicaid, a program in which beneficiaries have at times been negatively viewed. In fact, Senate plan sponsor, Sen. Joe Negron (R-Indian River, Martin, Palm Beach and St. Lucie) said this past week, “With Medicaid, persons are “on” Medicaid which sounds demoralizing and dependent but with private insurance, individuals are “covered by” or “covered with” a private insurer which is empowering.”
The House action or better said, lack of action continued throughout the day Wednesday with Republican leaders invoking the same Constitutional provision requiring bills to be read word by word, likely to cause Democratic sponsored bills to suffer the same likelihood of dying without final approval before session’s end. After an almost 12 hour day that started at 8 a.m. with Democrats invoking the Constitutional right for all bills to be read in their entirety page-by-page to slow down the process and prevent bills from passing, the Speaker Will Weatherford closed Wednesday evening’s floor action with this admonition:
“This day has not been our finest hour on anyone’s side – we have two days to go – last night I said we would shrink or we would rise as a body. Members, there’s still a lot of policy to be done and there is a lot of work to do in the next 2 days and I would ask whether you are a Republican or Democrat of this special place that you focus on the task at hand and find a way to get our work done.”
On Thursday morning the House returned to relative normalcy, largely due to the fact that there were no more bills to be heard on third reading. This ended “Mary’s” reading of lengthy bills page-by-page, word-by-word. The change also likely signaled an acknowledgment by House Democrats that Senate sponsored and supported health insurance reform was truly dead for this Session. This belief was further acknowledged late Thursday afternoon by Senate President Don Gaetz when he noted that it took roughly ten years for Congress to pass comprehensive health insurance reform (referring to the Patient Protection and Affordable Care Act). He further stated that the failure of the House and Senate to reach agreement on health insurance reform should in no way negatively reflect on the tremendous success of this Session.
One bill that did reach final passage this Session relating to the Patient Protection and Affordability Care Act (PPACA) was SB 1842 (Sen. Simmons-R-Seminole/Volusia) which clarifies that federal PPACA regulations will control over-conflicting provisions within the state’s Insurance Code. It also authorizes the Office of Insurance Regulation (OIR) to conduct market conduct examinations of health insurers to verify their compliance with PPACA requirements and provisions, as well as to refer potential violations to the US Department of Health and Human Services. The bill also grants the Department of Financial Services (DFS) broad authority to license and regulate Federal health insurance “Navigators”, a move strongly supported by Florida’s agent trade associations. Although Session has ended with no comprehensive health insurance overhaul in one form or another under PPACA, it is believed that Governor Scott may well call for a special session this summer to again tackle this major issue. |
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House-Diluted Property Reform Package Heads to Governor
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After working exhaustively for the vast majority of Session to craft and guide a far reaching overhaul of property insurance, including major changes concerning rates and eligibility for coverage in Citizens Property Insurance Corporation, Sen. David Simmons (R-Seminole/Volusia) and the Florida Senate early Thursday afternoon gave final legislative approval to a vastly scaled-down version of reform. The package (SB 1770) was drastically amended by the House over concerns about potential “rate shock” tied to “actuarially sound” rating language contained in the Senate’s version, in addition to other concerns held by legislators, especially those representing consumers living in coastal regions. The following list of major components is included in the final version of SB 1770 as passed by the Legislature:
Provisions Pertaining Specifically to Public Adjusters:
We will continue to watch this legislation very closely as it moves to the Governor’s desk and let you know when/if it is signed into law. |
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Legislature Corrects Problem Caused For Captives during 2012 Session
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| As a result of an inadvertent drafting error during the 2012 Session, domestic captive insurers have been restricted in their writing of workers’ compensation and excess employer liability insurance. Rep. Bryan Nelson (R-Lake/Orange) filed a bill this session (CS/HB 1191) to correct this problem and free up captive insurers to fully conduct business in Florida. This past Monday both the House and Senate took up final versions of Rep. Nelson’s bill with the Senate taking final approval action. The bill will now be prepared for transmission to the Governor’s office where it will hopefully be signed in to law. The 2012 captive insurers legislation (HB 1101) was designed to make up-to-date changes to Florida’s aging captive insurer laws and encourage more companies to establish captive insurance companies in our state. Unfortunately, the previously mentioned drafting error restricted one or more Florida captives from writing new excess employer liability and workers’ compensation business. This is one of several business-friendly insurance bills we’ve been closely following for you and it’s great to report this legislation’s success thus far. |
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Electronic Mailing and Posting of Insurance Policies OK’d By Legislature
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| In another effort to help streamline insurance company operations and speed up delivery to insureds, the Legislature gave final approval on Tuesday to the electronic transmission of insurance policies. On Tuesday the Senate took up and gave final passage to HB 157 sponsored by Rep. Doug Holder (R-Sarasota). The bill adds electronic transmission of policies to the list of delivery methods contained in current law (s. 627.421, F.S.) and makes it clear that such transmission of policies for commercial risks (including workers’ compensation, employers’ liability, commercial automobile and commercial residential property) constitutes official delivery unless the insured, or other person entitled to delivery, communicates to the insurer, in writing or electronically, that he or she does not agree to delivery by electronic means. The electronic transmission of a policy must contain a notice of the insured’s right to receive the policy via United States mail. Further, a paper copy of the policy must be provided to the insured upon his or her request.In last week’s newsletter we reported that on Thursday, April 25, the Senate took up and gave final passage to CS/HB 223 (Rep. Larry Lee, Jr. D-St. Lucie and State Farm agent), which will allow insurers to post property & casualty policy forms and endorsements to their web sites for ease of access by consumers and reduction of mailing costs. The legislation was officially ordered enrolled on Friday, April 26. It is clear in this bill that policy forms and endorsements posted on insurer websites cannot contain any personally identifiable information regarding a consumer. The forms and endorsements posted on the websites shall remain for as long as the policies and endorsements continue in force, and must also be posted in a manner that allows consumers to print and save such documents free of charge. Insurers must notify its policyholders that a paper or electronic copy may be obtained from the insurer upon request. HB 157noted above, as well as HB 223, address very similar issues and amends the exact same section of law (s. 627.421, F.S.). At this juncture we don’t know to what extent, if any, the two bills conflict; however, under normal legislative procedure the bill last to pass, trumps the earlier. We’ll continue to follow these bills closely and update you if any clarification is needed. |
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Commercial Lines Forms & Rates Deregulation Continues
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| On Tuesday the Florida House took final action to approveSB 468 sponsored by Sen. Dorothy Hukill (R-Lake, Marion and Volusia) further deregulating commercial lines products requiring advanced form and rate approval by the OIR. The additional lines exempt include medical malpractice coverage for a facility that is not a nursing home, assisted living facility or hospital, as well as medical malpractice coverage for practitioners who are not licensed physicians, dentists, chiropractors or podiatrists. The legislation also establishes an alternative process to the form filing and approval requirements in the Insurance Code for all lines of property & casualty insurance, with the exception of personal lines and workers’ compensation. Under the bill, insurers may also choose to certify through an informational filing that their forms comply with Florida law and forego the normal filing and approval process contained within the Code. OIR will retain the ability to disapprove filings if they are later found to be in non-compliance.The bill also contains a provision which extends the repeal of the medical malpractice premium exemption from Hurricane CAT Fund assessments to May 31, 2016, an issue which became rather controversial as the Session progressed. Representatives of the Florida trial bar strongly questioned the propriety of extending the CAT Fund assessment repeal for another three years stating that medical malpractice rates have reduced in recent years and those physicians should not continue to enjoy an exemption that is not available to other professionals. However, proponents of the extension testified in several committee meetings that Florida’s medical malpractice rates remain extremely high, if not the highest in the nation, and that extending the repeal would continue to attract the best and brightest physicians to Florida. |
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Workers’ Compensation Improvements Made a Priority
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| During the closing week of Session the Legislature took significant strides to further improve Florida’s workers’ compensation system by creating a new and improved “wrap-up” policy for large construction projects and also addressing drug repackaging, an issue many have said to be causing an unnecessary financial drain on the system. The first bill, SB 810, sponsored by Sen. David Simmons (R-Seminole/Volusia) received final legislative approval by the House on Tuesday. The wrap-up policies will apply only to large, non-public construction projects where the project owner or general contractor will procure the policy covering all contractors, sub-contractors and other parties performing work on the project. Access to such policies will be restricted to nonpublic construction projects with an estimated total cost of $25 million or more to include large deductibles for workers’ compensation claims when the combined standard premium for all covered entities, when aggregated, exceeds $500,000. Under this new policy type, insurers must also require the first named insured to reimburse the insurer for losses paid within the deductible. The second bill, SB 662, sponsored by Sen. Alan Hays (R-Lake, Marion, Orange and Sumter) tackling drug repackaging within the workers’ compensation system met with final legislative approval early Wednesday morning on the House floor. The final compromised bill perhaps signals the end of a lengthy tussle between workers’ comp insurers and the workers’ compensation coalition of employers on one side and the drug re-packagers and state medical association on the other. The legislation imposes a limit on what physicians can charge when they in-office dispense medications to workers’ compensation patients. The bill allows physicians to charge 112.5% of drugs’ average wholesale prices (AWP) and $8.00 dispensing fees. According to a recent legislative analysis, the bill also:
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More on the Assignment of Benefits Issue
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| In last week’s newsletter we shared with you our efforts to raise awareness with legislators and other stakeholders of the growing abuses by some water extraction and remediation firms’ inappropriate use of assignment of benefits. Due to number of other major priorities being dealt with, our friends in the House and Senate were unable to tackled the problem this Session. We do have their commitment, however, to continue working with us on this critical issue. Our collective efforts to address this problem, however, are not limited to seeking statutory changes. Litigation is occurring in state courts on behalf of a number of insurers being sued by water extraction/remediation firms over the assignment of benefits issue. One such recent court case involved American Traditions Insurance Company that was being sued for breach of contract by Emergency Services 24, Inc. concerning a water loss claim and $13,449.73 it claimed it was owed under the policy. In this case, Kimberly Salmon, Esq., with the Groelle and Salmon Law Firm, won a motion to dismiss on April 26 by asserting that Emergency Services 24 had no standing to file suit. In her Motion to Dismiss, Ms. Salmon argued that the “Authorization Form to Perform Emergency and Complete Repairs and Assignment of Benefits and Rights” held Emergency Services 24 out as a public adjuster as defined by Florida law and therefore constituted an invalid contract. Hillsborough County Court Judge Frances Perrone agreed and entered an order dismissing the complaint against the insurer. This is only one in a number of similar Motions to Dismiss Ms. Salmon has obtained on behalf of insurers. You can read the court’s order by clicking on the following link: (enter link to PDF file of Order Granting Defendant’s Motion to Dismiss). |
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FIGA Legislation Comes So Very Close To Passage
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| Lisa Miller & Associates was part of a strong coalition leading the effort to reform the Florida Insurance Guaranty Association’s (FIGA) assessment mechanism. HB 211 by Rep Jake Raburn (R-Hillsborough) and SB 324 by Sen. Jeff Brandes (R-Hillsborough/Pinellas) were strong sponsors who believed passionately that the FIGA Board of Directors should have the flexibility to determine and fund their financial needs versus simply sending a bill to insurance companies, payable in 30 days, when there isn’t an immediate need for cash. The FIGA bill was the result of Florida-based insurance companies, realtors, and the state’s leading consumer group coming together on a critical public policy issue. The bill accomplish two important changes: 1) it removed a barrier to private risk capital investment in Florida, and; 2) it corrected an assessment mechanism that is currently unfair and when changed, would have assessed all insurance consumers equally. Three national brand insurance carriers opposed the legislation, but the coalition supporting this bill successfully carried it through all of its committee stops with only one no vote. The challenge was the Senate and procedurally, the bill’s progress was stymied by the clock, with this bill not making it this Session. Those of us involved have vowed to “give it another go” in the 2014 session because this bill personifies the new working relationships between the spectrum of insurance stakeholders, which is a major step forward for achieving balanced long term insurance public policy for Florida. |
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House and Senate Pass Two Bills Addressing Tort Reform
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| On May 1, the Senate gave final legislative approval to SB 1792 by Sen. Tom Lee (R-Hillsborough), making law changes in three areas related to medical malpractice liability. The bill addresses the issue of “ex-parte” communications between a treating physician who is not being sued and the attorney for the physician who is named in a law suit. The bill also nullifies the case law known as “Hasan” to make certain that a non-defendant physician can seek legal counsel through his or her liability insurer. An additional provision was added to prevent a carrier from contacting a physician to encourage the retention of counsel and a carrier may only recommend a particular lawyer if first contacted by their policyholder. SB 1792 also makes it clear that an expert witnesses in a med mal case must be in the same specialty as the physician being sued.Also passing with the House’s final blessing was HB 7015by Rep. Larry Metz (R-Lake). This bill changes Florida’s standard and criteria for the admissibility of scientific evidence and expert testimony from the existing Frye standard to the Daubert standard. The Daubert standard, believed to be superior, has been used in federal courts for some time. |
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Only “Must Pass” Legislation Usually The Last To Pass
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| Interestingly, the only bill the Legislature is constitutionally required to pass is the state budget. In keeping with historical practice, the House and Senate waited until the very last day of Session to agree and approve the budget for next year. Here are some of the major highlights contained within the budget: Total Budget: Next Year’s budget totals $74.493 billion which includes $26.828 billion in General Revenue. The approved budget is about $4.5 billion more than our current year budget.Higher Education: A 3% college and university tuition increase will be imposed. The Legislature also provided $144 million for college and university building projects. PreK-12th Grade Education: The Legislature granted a $1.1 billion increase over current year funding. This also results in a $404.00 per student funding increase.Teacher Pay Increases: A general pay increase of up to $3,500 for teachers assessed to be “highly effective” and a pay increase of at least $2,500 for those teachers assessed to be “effective.”Human Services: This category was funded at a total of $31.1 billion. Nursing home provider rates were increased by 2% and the remainder of health provider reimbursement rates were left static. The Legislature also granted funding to increase enrollment in Florida’s KidCare program by 6,899 children. Reserve Funding: $2.4 billion was earmarked as reserve funding, including $1.2 billion in general revenue reserves. |
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Sine Die – Really!!!!
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| Yes…it did happen at 7:16 p.m. yesterday. (For those of us who love the details of what that really means, the term adjournment sine die, from the Latin “without day” means, “without assigning a day for a further meeting or hearing. To adjourn an assembly sine die is to adjourn it for an indefinite period. So when our legislative body adjourns sine die it adjourns without appointing a day on which to assemble again.) So with all that good detail, it just means, it’s over. However, for us at LMA, it’s never really over because we don’t even take a breath before we start working again to tackle all those important concerns of our clients, constituents, and the good folks of the state of Florida who care. As we promised last week, we are already working on the Legislative Wrap-up Newsletter where we will try to thoroughly and succinctly recap those items that we all followed so carefully and had an impact on what we do each day. We want it to be “just right”, so watch for that in an upcoming newsletter.Until then, warmest regards always, Lisa |
