Insurance Advisory Board Wants More Consumer Protections

Nov 16, 2015

Editor's note: This story has been updated and contains a correction.

Florida lawmakers should enact more protections for health-insurance consumers and families of workers in small businesses, a state advisory board says.

The legislative recommendations that emerged from the Florida Health Insurance Advisory Board on Monday included two aimed at fixing problems that have recently erupted in the health-insurance system: “balance-billing” and the “family glitch.”

The first would protect members of preferred provider organizations (PPOs) and certain other network plans from being billed by a hospital or doctor outside their network for charges run up through no fault of their own.

Sometimes this occurs because the PPO member suffers an emergency illness or injury and is taken by ambulance to a hospital.  The ambulance, hospital and doctors may lack contracts with the PPO and may consider the PPO’s offer insufficient.

Surprise out-of-network bills are hitting even patients who planned ahead and went to a hospital in their network. They may unwittingly be treated and billed by a doctor who is not in the plan network.

HMO patients are protected from balance-billing by Florida law, at least in emergencies. But the law does not cover those in other kinds of network plans.

Earlier this year, bills in the state House and Senate that would have plugged this loophole in emergency cases were blocked by lobbyists for medical groups. Rep. Carlos Trujillo, R-Miami-Dade, is trying again for 2016 with HB 221.

Trujillo’s bill doesn’t cover the non-emergency cases. The Health Insurance Advisory Board said that needs to be added.

The board’s other major recommendation is that the Legislature tweak state law to clarify that a small business can indeed buy health policies that cover just the workers, not their family members. While this doesn’t sound like a consumer-protection measure, it is because it would free the spouses and children to seek low-cost coverage through the federal Marketplace.

Small employers – those with two to 50 workers – are exempt from the Affordable Care Act’s mandate to provide coverage that applies to larger companies. But many small employers want to provide some coverage for their workers, and do.

The problem is that many cannot afford to pay anything toward coverage of the family members. As a result, often the worker can afford to insure only himself.  Because family members technically have access to employer coverage under the ACA, even though it’s unaffordable, they don’t qualify for the tax credits that make the federal Marketplace plans affordable.

This has left many spouses and children uninsured in what has come to be called the “family glitch.”

Members of the advisory board say a way around the problem is for employers to buy policies that cover only the workers, not family members.  But many employers -- and even agents -- don’t know that they can legally do this, according to board members.

A change in the wording of state law on small-business coverage would make clear that such policies are acceptable.  That is the change recommended by the advisory board.

A similar measure for large employers was tabled during Monday’s meeting because the board’s legal advisor said there is no state law that could be adapted to address it easily. Instead, OIR is going to write to insurance carriers to let them know about the glitch and the need to offer employers with more than 50 workers the opportunity to buy a policy for employees-only.

The advisory board’s recommendations will be sent to state agencies and the Florida Legislature. (This sentence has been reworded from an earlier version, for clarity.)

In addition, the advisory board on Monday approved the 2015 Gross Annual Premium and Enrollment Report, which documented the huge increase in individual coverage that took place in 2014. That is the year when the major provisions of the ACA took effect, including the mandates that all individuals buy coverage or pay a penalty and the requirement that insurers cover all who apply regardless of their health status.

The combination caused the number of individual-market policies to jump to 1.5 million in 2014, up from about 815,000 the year before. (Incorrect numbers appeared in an earlier version of this article).

Carol Gentry is a special correspondent for WUSF in Tampa. WUSF is part of Health News Florida, which receives support from the Corporation for Public Broadcasting.