The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Banking and Insurance
BILL: SB 1026
INTRODUCER: Senator Cruz
SUBJECT: Living Organ Donors in Insurance Policies
DATE: January 14, 2022
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Schrader Knudson BI Pre-meeting
2. HP
3. RC
I. Summary:
SB 1026 revises Florida’s Unfair Insurance Trade Practices law (part IX of ch. 626, F.S.) and
several parts of Florida’s Insurance Rates and Contracts law (ch. 627, F.S.) to make unlawful the
discrimination against living organ donors in insurance coverage. The insurance types
specifically included in SB 1026 are: life insurance, including industrial life insurance
1
and
group life insurance;
2
health insurance; group,
3
blanket,
4
and franchise health insurance;
5
credit
1
Section 627.502, F.S. defines industrial life insurance as that form of life insurance written under policies under which
premiums are payable monthly or more often, bearing the words “industrial policy” or “weekly premium policy” or words of
similar import imprinted upon the policies as part of the descriptive matter, and issued by an insurer that, as to such industrial
life insurance, is operating under a system of collecting a debit by its agent.
2
Group life insurance is a type of life insurance policy insuring the lives of more than one individual. Pursuant to s. 627.551,
F.S., groups eligible for such coverage include employee, debtor, labor union, and trustee groups, among others.
3
Group life insurance is a type of health insurance policy insuring the health of more than one individual. Pursuant to s.
627.551, F.S., groups eligible for such coverage include employee; labor union, association and small employer health
alliance; debtor; and teacher and student groups, among others.
4
Blanket health insurance is a type of health insurance covering special groups as identified in 627.659, F.S. Generally, such
coverage is more limited than group health insurance and covers a group of individuals engaged in a specific activity.
5
Section 627.663, F.S., defines franchise health insurance as a form of insurance issued to:
Two or more employees of any corporation, professional association, copartnership, or individual employer or of
any governmental corporation, agency, or department; or
Ten or more individuals who are members of any trade association or labor union or any other association having
had an active existence for at least 2 years and meeting certain other specified conditions.
REVISED: BILL: SB 1026 Page 2
life insurance and credit disability insurance;
6
long-term care insurance;
7
health maintenance
contracts
8
provided by health maintenance organizations; and prepaid health clinic contracts.
9
The bill has an effective date of July 1, 2022.
II. Present Situation:
The Florida Office of Insurance Regulation
The Office of Insurance Regulation (OIR) licenses and regulates the activities of life, health,
property, and casualty insurers, health maintenance organizations (HMOs), and other risk-
bearing entities. The OIR is an office within the Financial Services Commission (FSC). The FSC
is composed of the Governor, the Attorney General, the Chief Financial Officer, and the
Commissioner of Agriculture. The FSC members serve as the agency head for purposes of
rulemaking under ss. 120.536-120.565, F.S.
10
Organ Donation
Organ and tissue donation is the process of surgically removing an organ or tissue from one
person (the donor) and transplanting it into another person (the recipient) to save the life of, or
enhance the life of, the organ recipient. Transplantation is generally necessary because the
recipient’s organ has failed or has been damaged by disease or injury. Transplantable organs
include the kidneys, liver, heart, lungs, pancreas and intestine.
11
Certain tissue is also
transplantable and includes skin used as a temporary dressing for burns, serious abrasions and
other exposed areas; heart valves used to replace defective valves; tendons used to repair torn
ligaments on knees or other joints; veins used in cardiac bypass surgery; corneas used to restore
6
Section 627.677, F.S., defines “credit life insurance” as insurance on the life of a debtor pursuant to or in connection with a
specific loan or other credit transaction and defines “credit disability insurance as: insurance under which a borrower of
money or a purchaser or a lessee of goods is insured in connection with a specific loan or credit transaction against loss of
time resulting from accident or sickness.
7
Section 627.9404, F.S., defines a “long-term care insurance policy” as an insurance policy or rider advertised, marketed,
offered, or designed to provide coverage on an expense-incurred, indemnity, prepaid, or other basis for one or more necessary
or medically necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative, maintenance, or
personal care services provided in a setting other than an acute care unit of a hospital.
8
Section 641.19, F.S., defines a “health maintenance contract” as contract entered into by a health maintenance organization
(also commonly known as HMOs) with a subscriber or group of subscribers to provide coverage for comprehensive health
care services in exchange for a prepaid per capita or prepaid aggregate fixed sum. A health maintenance organization
generally will utilize or cover care from doctors who work for or under contract with the health maintenance organization.
See Healthcare.gov, Health Maintenance Organization (HMO), https://www.healthcare.gov/glossary/health-maintenance-
organization-hmo/ (last visited Jan. 13, 2021).
9
Section 641.402 defines a “prepaid health clinic contract” as a contract entered into by a prepaid health clinic with a
subscriber or group of subscribers to provide any of the basic services in exchange for a prepaid per capita or prepaid
aggregate fixed sum. The section also defines a prepaid health clinic as an organization which provides, either directly or
through arrangements with other persons, basic services to persons enrolled with such organization, on a prepaid per capita or
prepaid aggregate fixed-sum basis, including those basic services which subscribers might reasonably require to maintain
good health.
10
Section 20.121(3), F.S.
11
Donate Life Florida, Frequently Asked Questions, available at https://www.donatelifeflorida.org/categories/donation/ (last visited Jan.
13, 2022). BILL: SB 1026 Page 3
sight; and bone used in orthopedic surgery to facilitate healing of fractures or prevent
amputation.
12
A single person can save up to eight lives through organ donation, and dozens more lives may be
improved through tissue donation. Nearly 120,000 children and adults are presently awaiting
potentially life-saving organ transplants and every day 22 people die awaiting organ transplant.
13
While most organ and tissue donations occur after the donor has died, some organs and tissues
can be donated while the donor is alive, such as a kidney or part of a liver or lung.
14
There are
approximately as many living donors every year as there are deceased donors and only about
three in every 1,000 people actually become donors—despite 169 million in the United States
being registered.
15
According to United Network for Organ Sharing (UNOS), between 2017 and
2021, there were an average of 6,539 living donor transplants per year in the United States.
16
Organ Donation, Procurement, and Transplant Process
Established by the National Organ Transplant Act (NOTA) of 1984, the Organ Procurement and
Transplantation Network (OPTN) is a public-private partnership that links all professionals
involved in the nation’s donation and transplant system.
17
The UNOS, a private, non-profit
organization serves as the OPTN under contract with the U.S. Department of Health and Human
Services.
18
UNOS coordinates how donor organs are matched and allocated to patients on the
waiting list.
19
Non-profit, federally designated organ procurement organizations (OPOs) work
closely with UNOS, hospitals, and transplant centers to facilitate the organ donation and
transplantation process.
20
Potential Financial Impacts Relating to Organ Donation
The buying and selling of organs is unlawful under the National Organ Transplant Act of 1984.
21
However, certain organ donor expenses relating to transplant may be paid for by the recipient (or
their insurer). Generally, an organ donor and their family are not charged for the medical care
required to donate an organ.
22
Costs related to living or deceased donation are paid by the
recipient, usually through insurance.
23
Typically, any cost that falls outside of the transplant
center’s donor evaluation or actual surgery, such as travel, lodging, lost wages, and other non-
12
Id.
13
Id.
14
U.S. Government Information on Organ Donation and Transplantation, U.S. Department of Health & Human Services, How Organ
Donation Works, available at https://organdonor.gov/about/process.html (last visited Jan. 13, 2022).
15
Id.
16
UNOS, Living Donation, https://unos.org/transplant/living-donation/ (Jan 13, 2022).
17
U.S. Department of Health and Human Services, Organ Procurement and Transplantation Network – About the OPTN, available at
https://optn.transplant.hrsa.gov/governance/about-the-optn/ (last visited Jan. 13, 2022).
18
Id. and UNOS, Who we are, available at: https://unos.org/about/ (last visited Jan 13, 2022).
19
U.S. Government Information on Organ Donation and Transplantation, U.S. Department of Health & Human Services, The Organ
Transplant Process, available at https://organdonor.gov/about/process/transplant-process.html (last visited Jan. 13, 2022).
20
Donate Life Florida, Organ Procurement Organizations and Transplant Centers, available at https://www.donatelifeflorida.org/local-
resources/transplant-centers/ (last visited Jan 13, 2022).
21
National Organ Transplant Act, 42 U.S.C. s. 274.
22
Health Resources Services Administration, Organ Donation Frequently Asked Questions, available at
https://www.organdonor.gov/learn/faq (last visited Jan. 13, 2022).
23
Id. BILL: SB 1026 Page 4
medical expenses, is borne by the living donor or recipient.
24
In addition, treatment for
conditions discovered during the evaluation portion of the donation process and some post-
donation follow-up expenses are not covered. UNOS also warns potential donors that “living
donation may have a negative impact on the ability to obtain, maintain, or afford health,
disability and life insurance.”
25
Obtaining and Affording Insurance
In 2014, the American Journal of Transplantation published a study of 1,046 donors who
underwent living kidney donation at Johns Hopkins Hospital. Of these donors, 25 percent of
those who reporting attempting to obtain new or revise life insurance policies post-procedure
reported difficulty in doing so. The difficulties reported included outright denials in obtaining
coverage, higher premiums, and the notation of a pre-existing condition relating to the kidney
donation. The same survey also noted that of the surveyed donors who reported attempting to
obtain new or revise health insurance policies post-procedure, 7 percent reported difficulties in
doing so.
26
Another study, also published in the American Journal of Transplantation (in 2007), which
reviewed 23 different studies over a 35-year period, concluded that a significant number of living
kidney donors do encounter difficulties in obtaining or maintaining insurance (with anywhere
between 3 to 11 percent of those surveyed reporting difficulties). That same study also found that
insurability issues caused significant stress for between 11 and 13 percent of kidney donors and
that “insurability may negatively influence one’s decision to become a living organ donor.”
27
This same study also found that these insurability issues are not isolated to kidney donors.
28
The
National Kidney Foundation also advises potential donors, in accessing the risk of donation, that
“some donors have reported difficulty in getting, affording, or keeping disability or life
insurance.”
There is some evidence that these increased difficulties and costs in obtaining life insurance is
not always based on the actual additional loss risk that organ donation presents. A 2015 study of
living kidney donors found that such donation “does not appear to increase long-term mortality
compared with controls;” however, the study did advise that it was limited in scope and more
research was needed.
29
A study of living kidney donors in Korea, published in 2019, found that,
“the risk of all-cause mortality was comparable between live kidney donors and matched non-
donor healthy controls with similar health status.”
30
A 2012 study of live liver donors found that
while 90-day mortality rates were elevated for such donors, the rates of long-term mortality were
essentially the same for live liver donors, for live kidney donors, and for healthy controls.
31
24
UNOS, Living Donation Costs, available at https://transplantliving.org/financing-a-transplant/living-donation-costs/ (last visited Mar.
23, 2021).
25
Id.
26
B.J. Boyarsky, et al, Experiences Obtaining Insurance After Live Kidney Donation, 14(9) AM J TRANSPLANT. 2168-72
(2014).
27
R.C. Yang, et al, Insurability of Living Organ Donors: A Systematic Review, 7(6) AM J TRANSPLANT. 1547-48 (2007).
28
Id. and Nissing MH & Hayashi PH, Right hepatic lobe donation adversely affects donor life insurability up to one year
after donation, 11 LIVER TRANSPL 843–847 (2005).
29
K.L. Lentine & A. Patel, Risks and outcomes of living donation, 19(4) ADV CHRONIC KIDNEY DIS. 220-8 (2012).
30
Y. Kim, et al, Long-term Mortality Risks Among Living Kidney Donors in Korea. 75(6) Am J Kidney Dis. 925 (2019).
31
A.D. Muzaale, et al, Estimates of early death, acute liver failure, and long-term mortality among live liver donors, 142(2)
Gastroenterology 273-80 (2012). BILL: SB 1026 Page 5
Affordable Care Act
The federal Affordable Care Act (ACA), formally known as the Patient Protection and
Affordable Care Act, was signed into law in 2010, with its major provisions coming into force in
2014.
32
Among its sweeping changes to the U.S. health insurance system are requirements for
health insurers to make coverage available to all individuals and employers, without exclusions,
for preexisting medical conditions and without basing premiums on any health-related factors.
The ACA imposes many insurance requirements, including an individual mandate of coverage,
required benefits, rating and underwriting standards, mandatory review of rate increases,
reporting of medical loss ratios and payment of rebates, internal and external appeals of adverse
benefit determinations, and other requirements.
33
The ACA preempts any state law that prevents
the application of a provision of ACA.
34
Preexisting Condition Exclusions
The ACA prohibits health insurance policies from excluding coverage for any preexisting
condition.
35
A health insurer that offers individual or group health insurance coverage may not
impose any preexisting condition exclusion.
36
Rules define the term, “preexisting condition
exclusion” to include a denial of coverage.
37
Individual (but not group) grandfathered health
plans are exempt from this requirement.
38
This requirement of the ACA preempts state laws that
allow such insurers to utilize preexisting condition exclusions.
III. Effect of Proposed Changes:
Bill Provisions
Section 1 creates s. 626.97075, F.S. within Florida’s Unfair Trade Practices law (part IX of ch.
626). The section creates a definition of “policy” as a life insurance policy, including those for
32
PATIENT PROTECTION AND AFFORD ABLE CARE ACT, PL 111-148, March 23, 2010, 124 Stat 119.
33
Most of the insurance regulatory provisions in ACA amend Title XXVII of the Public Health Service Act (PHSA),
(42 U.S.C. s. 300gg et seq.).
34
The ACA preempts any state law that prevents the application of a provision of the ACA. The ACA effectively allows
states to adopt and enforce laws that provide greater consumer protections than the ACA, but any state law that does not meet
the federal minimum standards will be preempted. ACA s. 1321(d).
35
ACA s. 1201; PHSA s. 2704 (42 U.S.C. 300gg-3).
36
45 CFR 144.108.
37
Preexisting condition exclusion means a limitation or exclusion of benefits (including a denial of coverage) based on the
fact that the condition was present before the effective date of coverage (or if coverage is denied, the date of the denial) under
a group health plan or group or individual health insurance coverage…whether or not any medical advice, diagnosis, care, or
treatment was recommended or received before that day. A preexisting condition exclusion includes any limitation or
exclusion of benefits (including a denial of coverage) applicable to an individual as a result of information relating to an
individual’s health status before the individual’s effective date of coverage (or if coverage is denied, the date of the denial)
under a group health plan, or group or individual health insurance coverage…such as a condition identified as a result of a
pre-enrollment questionnaire or physical examination given to the individual, or review of medical records relating to the pre-
enrollment period. See 45 C.F.R. s. 144.013.
38
A grandfathered health plan can be an individual or group health insurance policy purchased on or before March 23, 2010.
Such plans are not subject to the ACA prohibition on pre-existing conditions (except individual health plans) and other
specified ACA requirements. A plan can lose its grandfathered status if it is significantly changed. See Healthcare.gov,
Grandfathered Health Insurance Plans, available at https://www.healthcare.gov/health-care-law-protections/grandfathered-
plans (last viewed Jan. 13, 2022). BILL: SB 1026 Page 6
industrial life insurance and group life insurance; a health insurance policy; a group, blanket, and
franchise health insurance policy; a credit life insurance and credit disability insurance policy;
long-term care insurance policy; health maintenance contracts provided by health maintenance
organizations; and prepaid health clinic contracts. The section specifies that an insurer, health
maintenance organization, or prepaid health clinic may not, in a policy, as defined by the section:
Decline or limit coverage of a person solely due to that person’s status as a living organ
donor;
Preclude an insured person or subscriber from donating all, or part of, an organ as a
condition to continuing to receive coverage under that person’s insurance policy; or
Otherwise discriminate in the offering, issuance, cancellation, coverage, premium, or any
other condition of a person’s policy without any additional actuarial risk, and based
solely on that person’s status as a living organ donor.
This section also grants the Financial Services Commission the authority to adopt rules and
enforce these prohibitions.
Pursuant to s. 626.9521, F.S., which specifies penalties for violations of part IX of ch. 626, F.S.,
a violation of proposed s. 626.97075, F.S., would subject a person a fine of up to $5,000 for each
nonwillful violation and up to $40,000 for each willful violation. Insurers violating the proposed
section may be fined an aggregate amount of up to $20,000 for all nonwillful violations arising
out of the same action or an aggregate amount of up to $200,000 for all willful violations arising
out of the same action. These specified fines may be imposed in additional to any specified
penalty elsewhere in law.
Sections 2 through 8 create ss. 627.4795, 627.5215, 627.5585, 627.6443, 627.65624, 627.6813,
and 627.94065, F.S. These sections set out a number of prohibitions relating to life insurance
policies; industrial life insurance policies; group life insurance policies; health insurance
policies; group, blanket, or franchise health insurance policies; credit life and credit disability
insurance policies; and long-term care insurance policies, respectively. Specifically, these
prohibit insurers under such policies, notwithstanding other state law to the contrary, from:
Declining or limiting insurance coverage of a person solely due to that person’s status as
a living organ donor;
Precluding an insured person from donating all, or part of, an organ as a condition to
continuing to receive coverage under that person’s insurance policy; or
Otherwise discriminating in the offering, issuance, cancellation, coverage, premium, or
any other condition of a person’s insurance without any additional actuarial risk, and
based solely on that person’s status as a living organ donor.
These sections also grant the Financial Services Commission the authority to adopt rules and
enforce these prohibitions.
Sections 9 and 10 create 641.31065, and 641.4275, F.S. These sections prohibit health
maintenance contracts by health maintenance organizations and prepaid health clinic contracts
by prepaid health clinics from:
Declining or limiting coverage of a person solely due to that person’s status as a living
organ donor; BILL: SB 1026 Page 7
Precluding a subscriber from donating all, or part of, an organ as a condition to
continuing to receive coverage under that person’s insurance policy; or
Otherwise discriminating in the offering, issuance, cancellation, coverage, premium, or
any other condition of a person’s contract without any additional actuarial risk, and based
solely on that person’s status as a living organ donor.
These sections also grant the Financial Services Commission the authority to adopt rules and
enforce these prohibitions.
Section 11 provides an effective date of the bill of July 1, 2022.
Impact of the Affordable Care Act
As mentioned above, the ACA prohibits the denial of health insurance coverage, or the charging
of higher premiums, due to pre-existing health conditions. Thus, unless there is a change to the
ACA or other change to federal law impacting this prohibition, SB 1026 would not impact health
coverage in Florida except for individual grandfathered health plans that are exempt from the
preexisting condition requirements of the ACA.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None. BILL: SB 1026 Page 8
B. Private Sector Impact:
Passage of this bill should have minimal fiscal impact on insurers. As stated in the
analysis, this bill would have no impact on most health insurance plans. Also, given the
minimal to no impact on long term mortality for the living donation of organs the passage
of this bill should have little impact on risk carried by other insurers.
C. Government Sector Impact:
None.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill creates the following sections of the Florida Statutes: 626.97075, 627.4795, 627.5215,
627.5585, 627.6443, 627.65624, 627.6813, 627.94065, 641.31065, and 641.4275.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.