Florida Governor Rick Scott Signs Interstate Insurance Product Regulation Compact, Workers’ Compensation Bills into Law

 

Florida Governor Rick Scott signed the following insurance-related bills into law last Friday, June 7, 2013:

SB 356, relating to Mutual Insurance Corporations and sponsored by Senator Joseph Abruzzo, authorizes mutual insurance companies to transact financial guaranty insurance in Florida.  The bill permits a mutual insurance holding company to acquire a not-for-profit insurance company or nonprofit health care plan through the merger with a mutual insurance company’s subsidiary or intermediate holding company. 

In addition, SB 356 provides that mutual insurance companies include licensed mutual insurers as well as licensed stock insurers.  The bill also provides that certain dividends or distributions by a not-for-profit insurance company to its mutual insurance holding company which meet certain requirements are permitted under provisions relating to stock and mutual insurers.

Except for Sections 3 through 8, which shall take effect January 1, 2014, SB 356 became effective June 7, upon becoming a law.

 

CS/CS/HB 383, relating to the Interstate Insurance Product Regulation Compact and sponsored by State Representatives Matt Hudson, Douglas Broxon and David Santiago, enacts the Interstate Insurance Product Regulation Commission (“IIPRC”) in Florida for the approval of life, annuity, disability income and long-term care products.  Established by the Interstate Insurance Compact, the IIPRC is a multi-state public entity which serves as a central point of electronic filing for certain insurance products to develop uniform product standards, affording a high level of protection to purchasers of asset protection insurance products.  It is composed of 41 Member States and represents approximately two-thirds of nationwide premium volume.

Through the IIPRC, insurance companies can file in one place and get their insurance product approved in multiple participating Member States.  The bill designates Florida Insurance Commissioner Kevin McCarty as the State’s representative on the IIPRC. 

HB 383 will become effective July 1, 2014, except as otherwise provided.

 

CS/CS/HB 553, relating to Workers’ Compensation System Administration and sponsored by State Representatives Bill Hager and Daphne Campbell, amends various provisions relating to the administration of Florida’s workers’ compensation system.  Effective July 1, 2013, these changes include the following:

• Provides that stop-work orders and penalties assessed against a limited liability company (“LLC”) continue in force against successor companies of the LLC to the same extent (and under the same conditions) that they remain in force against successor companies of corporations, partnerships, and sole proprietorships.
• Clarifies the process for allowing out-of-state corporate officers to electronically apply for an exemption from coverage requirements.
• Eliminates the requirement that workers’ compensation health care providers be certified by the Florida Department of Financial Services (“DFS”)
• Increases timeframes for health care providers to file medical reimbursement disputes with the DFS, for carriers to respond to the petition, and for the DFS to issue a written determination
• Continues increased benefits for injured employees with a catastrophic temporary total disability, but removes the $700 weekly cap on such benefits, which is lower than the maximum weekly benefit allowable under the current workers’ compensation law
• Resolves a statutory inconsistency as to the penalties that may be assessed against employers or carriers for violation of reporting requirements
• Eliminates the following requirements: (1) that the DFS approve the advance payment of workers’ compensation benefits in certain circumstances; (2) that carriers submit reemployment status reports to the DFS for review; (3) that a vocational evaluation always be conducted prior to the DFS authorizing training and education for an injured employee; and (4) that the DFS serve as custodian of certain collective bargaining agreements
• Clarifies the authority of the Florida Self-Insurers Guaranty Association under workers’ compensation law
• Amends statutory language to accurately reflect that the DFS is responsible for monitoring and auditing workers’ compensation insurers and for assessing penalties for violations
• Amends the administrative fine that may be assessed against health care providers that engage in a pattern or practice of overutilization or otherwise violate the workers’ compensation law or rules

 

CS/SB 662, relating to Workers’ Compensation and sponsored by Senator Alan Hays, changes provisions related to the amount of service fees that may be charged for repackaged drugs through Florida’s workers’ compensation laws.

Implementation of the bill is estimated to reduce workers’ compensation insurance costs by 0.7 percent, or approximately $20 million, based on preliminary 2012 statewide workers’ compensation insurance premium (insurers and self-insurers).

The Florida Division of Risk Management estimates that implementation of the bill would result in an estimated annual increase in prescription drug costs of $210,377 to the State Risk Management Program.

CS/SB 662, which will be effective July 1, 2013, provides for the following changes:

• Revises the amount of reimbursement for prescription medications of workers’ compensation claimants by providing that the reimbursement rate for repackaged or relabeled drugs dispensed by a dispensing practitioner would be capped at 112.5 percent of the average wholesale price (“AWP”), plus $8.00 for the dispensing fee.
• Maintains the reimbursement rate for other prescription medications at AWP plus $4.18 dispensing fee.
• Provides that the average wholesale price would be calculated by multiplying the number of units dispensed times the per-unit average wholesale price set by the original manufacturer of the underlying drug dispensed, based upon the published manufacturer average wholesale price published in the Medi-Span Master Drug Database as of the date of dispensing.
• Provides an exception to the reimbursement schedule if the employer or carrier, or a third party acting on behalf of the employer or carrier, directly contracts with a provider seeking reimbursement at a lower rate
• Prohibits a dispensing practitioner from possessing such medications unless payment has been made to the supplying manufacturer, wholesaler, distributor, or drug repackager within 60 days of the dispensing practitioner taking possession of the medication

 

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