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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
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An act relating to group health plans; amending s. 2
624.438, F.S.; making technical changes; revising the 3
definition of and providing requirements for bona fide 4
groups for purposes of issuance of certificates of 5
authority and multiple -employer welfare arrangements; 6
amending s. 624.441, F.S.; making a technical change; 7
amending s. 627.654, F.S.; conforming a provision to 8
changes made by the act; providing an effect ive date. 9
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Be It Enacted by the Legislature of the State of Florida: 11
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Section 1. Paragraph (b) of subsection (1) of section 13
624.438, Florida Statutes, is amended to read: 14
624.438 General eligibility. — 15
(1) To meet the requirements for issuance o f a certificate 16
of authority and to maintain a multiple -employer welfare 17
arrangement, an arrangement: 18
(b) Must be established by a trade association, industry 19
association, professional association of employers or 20
professionals, or a bona fide group that as defined in 29 C.F.R. 21
part 2510.3-5 which has a constitution or bylaws specifically 22
stating its purpose and that which has been organized for 23
purposes in addition to obtaining or providing insurance. 24
1. A trade association consists of employer members member 25
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employers who are in the same trade as recognized by the 26
appropriate licensing agency. 27
2. An industry association consists of employer members 28
member employers who are in the same major group code, as 29
defined by the Standard Industrial Classificat ion Manual issued 30
by the federal Office of Management and Budget, unless 31
restricted by subparagraph 1. or subparagraph 3. 32
3. A professional association consists of employer members 33
member employers who are of the same profession as recognized by 34
the appropriate licensing agency. 35
4. A bona fide group is a group or association of 36
employers which meets the following requirements: 37
a. The primary purpose of the group or association may be 38
to offer and provide health coverage to its employer members and 39
their employees. However, the group or association must also 40
have at least one substantial business purpose unrelated to such 41
primary purpose. For purposes of this sub -subparagraph, a 42
substantial business purpose is deemed to exist if the group or 43
association would be a viable entity in the absence of 44
sponsoring an employee benefit plan. A substantial business 45
purpose includes promoting common business interests in a given 46
trade or employer community and is not required to be a for -47
profit activity. 48
b. Each employer member of the group or association which 49
participates in the group health plan is a person acting 50
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directly as an employer of at least one employee who is a 51
participant covered under the plan. 52
c. The group or association has a formal organizationa l 53
structure with a governing body and has bylaws or other similar 54
indications of formality. 55
d. The functions and activities of the group or 56
association are controlled by its employer members, and the 57
group's or association's employer members that partici pate in 58
the group health plan control the plan. Control must be present 59
both in form and in substance. 60
e. The employer members have a principal place of business 61
in the same region that does not exceed the boundaries of a 62
single state or metropolitan are a, even if the metropolitan area 63
includes more than one state. 64
f. The group or association does not make health coverage 65
through the group's or association's group health plan available 66
to any person other than: 67
(I) An employee of a current employer member of the group 68
or association; 69
(II) A former employee of a current employer member of the 70
group or association who became eligible for coverage under the 71
group health plan when the former employee was an employ ee of 72
the employer; or 73
(III) A beneficiary, such as a spouse or dependent child, 74
of an individual described in sub -sub-subparagraph (I) or sub -75
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sub-subparagraph (II). 76
g. The group or association and the health coverage 77
offered by the group or associatio n comply with the 78
nondiscrimination provisions of s. 627.6699. 79
h. The group or association is not a health insurance 80
issuer as defined in s. 733(b)(2) of the Employee Retirement 81
Income Security Act of 1974, 29 U.S.C. s. 1191b(b)(2), or owned 82
or controlled by such a health insurance issuer or by a 83
subsidiary or affiliate of such a health insurance issuer, other 84
than to the extent such entities participate in the group or 85
association in their capacity as employer members of the group 86
or association. 87
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The requirements of this paragraph do not apply to an 89
arrangement licensed before April 1, 1995, regardless of the 90
nature of its business. However, an arrangement exempt from the 91
requirements of this paragraph may not expand the nature of its 92
business beyond that set forth in the articles of incorporation 93
of its sponsoring association as of April 1, 1995, except as 94
authorized in this paragraph. 95
Section 2. Subsection (1) of section 624.441, Florida 96
Statutes, is amended to read: 97
624.441 Insolvency protection. — 98
(1) To assure the faithful performance of its obligations 99
to its employer members member employers and covered employees 100
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and their dependents, every arrangement shall deposit with the 101
department cash, securities of the type eligible for deposit by 102
insurers under s. 625.52, or any combination of these, in an 103
amount equal to 25 percent of the preceding 12 months' health 104
care claims expenditures or 5 percent of gross annual premiums 105
for the succeeding year, whichever is greater, which deposit 106
shall be made within 30 days after the close of each fiscal 107
year; however, in no case shall the amount of the deposit exceed 108
$500,000. 109
Section 3. Paragraph (a) of subsection (1) of section 110
627.654, Florida Statutes, is amended to read: 111
627.654 Labor union, associa tion, and small employer health 112
alliance groups.— 113
(1)(a) A bona fide group as defined in s. 624.438(1)(b)4., 114
an or association of employers, as defined in 29 C.F.R. part 115
2510.3-5, or a group of individuals may be insured under a 116
policy issued to an assoc iation, including a labor union, which 117
association has a constitution and bylaws and which has been 118
organized for purposes in addition to that of obtaining 119
insurance, or to the trustees of a fund established by such an 120
association, which association or tru stees shall be deemed the 121
policyholder, insuring at least 15 individual members of the 122
association for the benefit of persons other than the officers 123
of the association, the association, or trustees. 124
Section 4. This act shall take effect upon becoming a law. 125