Small employer group health requirements

Florida's small employer health rules

Florida regulates health coverage sold to small businesses through the Employee Health Care Access Act, section 627.6699 of the Florida Insurance Code. Its purpose is simple: a small employer should be able to buy group health coverage without being turned away, carved up, or priced out because of the health of its workers. The Act's rating rules speak of small employer groups of 2 to 50 eligible employees, and allow carriers to rate groups of fewer than 2 eligible employees separately.

Access: guaranteed issue and the whole group

• Guaranteed issue. Small employer carriers must actively market their plans and must offer and issue all plans on a guaranteed-issue basis.
• The whole group. A carrier that offers coverage to a small employer must offer it to all eligible employees and their dependents. It may not cover only certain people or part of a group, except for late enrollees.
• No condition carve-outs. A carrier may not use riders or endorsements to exclude coverage for particular diseases or conditions the plan otherwise covers.
• Enrollment windows. There must be an initial enrollment period of at least 30 days and an annual 30-day open enrollment for eligible employees and dependents, plus special enrollment periods.

Participation and contribution requirements

Carriers may set minimum participation and minimum employer contribution requirements, but they must apply them uniformly to all groups of the same size, and may vary them only by group size. When counting participation, employees who already have coverage under another employer-based group plan or an ERISA self-insured plan are not counted against the group. Once a group is accepted, the carrier may not raise these requirements unless the group's size changes.

Rating: modified community rating

Premiums use a modified community rating method: each small employer's premium is based only on the employees' and dependents' age, gender, family composition, tobacco use, and geographic area. Other key limits:

• Geographic rating areas must follow county lines.
• The rate may not be changed for 12 months from issue or renewal unless group composition or benefits change.
• Adjustments for claims experience, health status or duration may not be charged to individual employees, may not move the group more than 15 percent from the approved rate, and renewal adjustments are capped at 10 percent a year.
• Composite rating may not be used for employers with fewer than 10 employees.

Renewal and disclosure

A plan subject to the Act is renewable for all eligible employees and dependents. When offering a plan, the carrier must disclose that information is available about its right to change premiums, renewability, preexisting condition provisions, and the benefits and premiums available. A denial of coverage must be in writing and state the reasons.

Fair marketing and the agent

Carriers and agents may not steer a small employer away from applying, or toward another carrier, because of health status, claims experience, industry, occupation or location.

Agent commissions may not vary with the group's health or claims; a percentage-of-premium commission is allowed if the percentage does not vary for those reasons. An agent may not encourage an employer to exclude an employee from coverage. A violation is an unfair trade practice.