STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NATIONAL HEALTH INSURANCE ) COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 95-4821

)

DEPARTMENT OF INSURANCE )

AND TREASURER, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Tallahassee, Florida on December 11, 1995, before Suzanne F. Hood, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Frank Santry, Esquire

Granger, Santry, Mitchell and Heath, P.A. 2833 Remmington Green Circle

Tallahassee, Florida 32317

For Respondent: Michael H. Davidson, Esquire

Department of Insurance Division of Legal Services 612 Larson Building

200 East Gaines Street Tallahassee, Florida 32399-0333

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent properly rejected Petitioner's insurance Policy Form No. SL-94.

PRELIMINARY STATEMENT

On or about August 15, 1995, Petitioner National Health Insurance Company (Petitioner) submitted insurance Policy Form No. SL-94 to the Respondent Department of Insurance and State Treasurer (Respondent) for approval as a "stop loss" policy. Respondent's letter of August 21, 1995, informed Petitioner that Respondent disapproved the subject policy form because it was "considered to be inappropriate for Florida's small group market."

On or about September 11, 1995, Petitioner filed a Petition for Formal Administrative Proceedings. Respondent referred Petitioner's hearing request to the Division of Administrative Hearings on October 2, 1995, for the assignment

of a Hearing Officer. On October 20, 1995, the Hearing Officer issued a Notice of Hearing setting this case for formal hearing on December 11, 1995.

On November 20, 1995, Respondent filed a Motion to Relinquish Jurisdiction alleging that no material facts were in dispute. Petitioner filed a response in opposition to that motion on November 30, 1995. Respondent filed an excerpt of the December 1, 1995, deposition testimony of Ellen Kenney Shipley in support of its Motion to Relinquish Jurisdiction on December 5, 1995.

On December 8, 1995, Respondent filed the entire transcripts of the November 2, 1995, deposition testimony of Bruce G. Lindsay and the December 1, 1995, deposition testimony of Ellen Kenney Shipley.

As a preliminary matter before the hearing on December 11, 1995, the Hearing Officer heard oral argument on Respondent's Motion to Relinquish Jurisdiction. The Hearing Officer reserved ruling on the motion until after the formal hearing.

During the formal hearing, Petitioner presented the testimony of two (2) witnesses and offered six (6) exhibits for admission into evidence.

Petitioner's exhibits one (1) through three (3) and exhibit six (6) were accepted into evidence without objection. The Hearing Officer reserved ruling on the admissibility of Petitioner's exhibit four (4), the National Association of Insurance Commissioners' (NAIC) Small Employer Model Act, and exhibit five (5), the NAIC's Model Stop Loss Law. The Hearing Officer hereby finds that Petitioner's exhibits four (4) and five (5) are admissible over objection pursuant to Rule 60Q-2.027, Florida Administrative Code.

Respondent presented the testimony of one (1) witness and offered no exhibits for admission into evidence.

A transcript of the formal hearing was filed on January 17, 1996. The parties filed Proposed Recommended Orders on February 1, 1996. The Appendix to this Recommended Order contains the Hearing Officer's specific rulings on the parties' proposed findings of fact. Respondent also filed a Proposed Recommended Order on Respondent's Motion to Relinquish Jurisdiction on February 1, 1996. Said motion is hereby denied based on the Hearing Officer's finding that this case presents disputed issues of material facts.

On February 2, 1996, Petitioner filed an unopposed Motion to Correct Transcript. Said motion is hereby granted.

FINDINGS OF FACT

1. Petitioner submitted Policy Form No. SL-94 (hereinafter referred to as "the Policy") to Respondent for approval as a stop loss policy pursuant to Section 627.410, Florida Statutes, on or about August 15, 1995.

   
   

2. The Policy, standing alone, meets all applicable requirements for approval as a stop loss policy under Section 627.410, Florida Statutes.

   
   

3. The Policy obligates Petitioner to pay benefits to an employer, or the trust established by or for the employer, which employer is responsible for the payment of benefits to its employees or their dependents under a self-funded employee welfare benefit plan (hereinafter referred to as "the Plan") qualified under the Employee Retirement Income Security Act of 1974, as amended (ERISA).

4. The Policy purports to provide insurance only to the employer. On its face, the Policy does not assume any of the employer's obligations under the Plan to provide insurance directly to the employer's employees. Under the Policy, Petitioner is obligated to reimburse the employer only after the employer pays a limited amount of benefits under the Plan to any person who is covered under the Plan, i.e. employees or their dependents.

   
   

5. The amount of Plan benefits that an employer must pay before Petitioner is obligated to begin reimbursement is determined by specific and aggregate attachment points or deductibles as defined in the Policy's Schedule of Insurance.

   
   

6. The specific attachment point is the Plan benefit amount which is wholly retained by the employer for all claims incurred by each covered person during each contract year. The Plan benefit amount does not include deductibles, coinsurance amounts or any other expense or claims which are not reimbursable under the terms of the Plan nor does it include expenses which are reimbursable from any other source.

   
   

7. The aggregate attachment point or deductible is the Plan benefit amount which is wholly retained by the employer for all covered persons during a contract year.

   
   

8. The Policy's Schedule of Insurance does not specify what the specific and aggregate attachment points will be. However, record evidence indicates that Petitioner intends to market the policy with a specific attachment point as low as $500. Therefore, if the Plan has a deductible of $250 and the Policy has a specific attachment point of $500, the employee would pay the first $250 of eligible expenses, the employer would pay the next $500 of eligible expenses, and Petitioner would reimburse the employer for 100 percent of any excess eligible expenses, for each covered person during a contract year.

   
   

9. The Policy's eligible expenses are the covered charges or expenses which are incurred by a covered person while covered under the Plan in the course of treatment for an injury or illness and paid under the Plan subject to the terms, conditions and limitations of the Plan document. In other words, the eligible expenses under the Policy will mirror the eligible expenses of the Plan.

   
   

10. Record evidence indicates that Petitioner intends to market the Policy to employers with less than fifty (50) employees.

    
    

11. The Policy does not contain provisions related to the following protections:

    
    

    1. guaranteed availability for any small group employer regardless of whether its employees are sick or have preexisting conditions;

    2. guaranteed renewability unless the policyholder fails to pay the premium or commits fraud;

    3. limitations on exclusions for pre- existing conditions;

    4. portability which allows employees

       to move from one employer to another regard- less of preexisting conditions;

    5. community rated premiums; and,

    6. periods of open enrollment.

       
       

12. ERISA self-funded benefit plans are not regulated by the state regardless of their terms and conditions. They are not required to include the above referenced protections.

    
    

13. If the Plan excludes specific health risks or preexisting conditions such as AIDS, emphysema, heart disease, or cancer, neither the employer nor the Petitioner would be obligated to pay benefits for those risks.

    
    

14. Additionally, the Plan is subject to whatever deductible limits the small employer wishes to set.

    
    

15. Respondent disapproved the Policy by letter dated August 21, 1995. Respondent correctly rejected the Policy as being inappropriate for the small group health insurance market. The Policy is inappropriate because Petitioner intends to market it to self-insured small group employers with attachment points so low ($500) that it becomes a de facto health insurance policy instead of a stop loss policy.

    
    

16. Respondent would not approve a stop loss policy for a small group employer's Plan with specific attachment points at $5,000 or less. Respondent would approve a stop loss policy for a small group employer's Plan with specific attachment points as low as $9,000 or $10,000, regardless of the terms and conditions of that Plan. In that instance, the employer assumes significant risk of loss as a self-funded insurer and the stop loss policy operates to limit that loss. However, an ERISA benefit plan combined with a stop loss policy having specific attachment points as low as $500, such as the one at issue here, substantially limits the self-insured employer's risk of loss to a nominal amount and substitutes Petitioner as a small group health insurer with none of the protections required by Section 627.6699, Florida Statutes.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this case. Section 120.57(1), Florida Statutes.

    
    

18. As a general rule, "the burden of proof, apart from statute, is on the party asserting the affirmative of an issue before an administrative tribunal." Florida Dept. of Transp. v. J.W.C., Inc. 396 So. 2d 778 (Fla. 1st DCA 1981). Petitioner has not met its burden of proving that Respondent should approve the Policy.

    
    

19. There is no statute or administrative rule which specifically addresses attachment points in stop loss policies sold in the small group health insurance market. However, Respondent has authority to disapprove any insurance policy form that "[i]s for health insurance, and . . . contains provisions which are unfair or inequitable or contrary to the public policy of this state . . .

    ." Section 627.411(e), Florida Statutes.

20. Section 627.6699(2), Florida Statutes, sets forth the public policy relative to the small group health insurance market:

    
    

    PURPOSE AND INTENT.--The purpose of this section is to promote the availability of health insurance coverage to small employers regardless of their claims experience or their employees' health status, to establish rules regarding renewability of that coverage, to establish limitations on the use of exclusions for preexisting conditions, to provide for development of a standard health benefit plan and a basic health benefit plan to be offered to all small employers, to provide for estab- lishment of a reinsurance program for coverage of small employers, and to improve the overall fairness and efficiency of the small group health insurance market.

    
    

21. Section 627.6699(3)(w), Florida Statutes, defines a "small employer" as follows:

    
    

    any person, sole proprietor, self-employed individual, independent contractor, firm, corporation, partnership, or association that is actively engaged in business and that, on at least 50 percent of its working days during the preceding calendar quarter, employed not more than 50 eligible employees, the majority of whom were employed within this state. . . .

    
    

22. Petitioner's targeted market for the Policy is the same small employer group health insurance market as discussed in Section 627.6699, Florida Statutes. However, the risks for which Section 627.6699, Florida Statutes, requires coverage and the risks which the Plan under ERISA may provide coverage are not necessarily the same.

    
    

23. Health insurance policies issued pursuant to Section 627.6699, Florida Statutes, must provide certain protections for small group employers and their employees which do not apply to other individual and group health insurance policies. Some of the conditions are:

    
    

    1. Small group health insurance must be guaranteed available. Any small employer may purchase a policy or plan regardless of whether its employees are sick or have preexisting conditions.

    2. Small group health insurance must be guaranteed renewable. The policies or plans may not be cancelled unless the policyholder fails to pay the premium or commits fraud.

    3. Small group health insurance must limit exclusions for preexisting conditions to twelve

       (12) months. Furthermore, the insurer must give covered persons credit for meeting time limitations for preexisting conditions under previous qualified coverage. This portability

       allows employees to move from one employer to another regardless of preexisting conditions.

    4. Small group health insurance premiums must be community rated. All policies and plans must be considered together for premium rate purposes. Thus, if small group employers have many people who get sick, their premium rates cannot be increased to the point where they could no longer afford to provide the insurance.

    5. Small group health insurance must provide for periods of open enrollment. This allows employees and their dependents who declined

       the coverage initially to elect the coverage at a later date.

       
       

24. Under ERISA, small group employers may avoid state regulation of the insurance product they provides for their employees by electing to self-insure. It is not the provisions of benefits, or lack thereof, in an ERISA qualified self-insurance plan that offends public policy in this case. However, a stop loss policy with an extremely low specific attachment point offends public policy when it is sold to self-insured small group employers. Such a policy allows an insurance carrier to provide health insurance without meeting the requirements of Section 627.6699, Florida Statutes.

    
    

25. The Policy at issue here is a health insurance policy regardless of its denomination as a stop loss policy. Its low specific attachment point, operating in concert with the deductible of an ERISA benefit plan, effectively relieves the small group employer of anything more than nominal risk of loss. Therefore, Petitioner becomes a de facto health insurer without having to provide coverages and protections for the small group health insurance market as required by Section 627.6699, Florida Statutes.

    
    

26. The Policy, with its extremely low specific attachment point operating in concert with the deductible of an ERISA benefit plan, is a health insurance policy which violates the public policy set forth in Section 627.6699 (2), Florida Statutes, because:

    
    

    1. it may exclude reimbursement for certain risks which are otherwise mandated by said statute;

    2. it may deny coverage to small group employers based on their claims experience or their employees' health status;

    3. it may not guarantee renewability;

    4. it may contain no provisions for open enrollment, portability, or community-based premium rates; and

    5. it may contain no limitations on the use of exclusions for preexisting conditions.

       
       

27. Most important of all, the Policy thwarts the state's goal to improve the overall fairness and efficiency of the small group health insurance market. Section 627.6699(2), Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore recommended that Respondent enter a Final Order disapproving Petitioner's Policy Form No. SL-94, for use in Florida's small group health insurance market.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 15th day of March, 1996.

SUZANNE F. HOOD, Hearing Officer Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1996.

APPENDIX

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

Petitioner's Proposed Findings of Fact

1. Accepted in Findings of Fact 3.

2. Accepted in substance as restated in Findings of Fact 4.

3. Accepted in substance as restated in Findings of Fact 4.

4. Accepted in substance as restated in Findings of Fact 4.

5. Accepted in Findings of Fact 5-7.

6. Accepted as restated in Findings of Fact 4.

7. Not a finding of fact. More like a conclusion of law.

8. Reject the first sentence as contrary to more persuasive evidence. Second sentence accepted as restated in Conclusions of Law 19-21 and 26-27.

9. Rejected. It is a question of fact whether the Policy is a stop loss policy or a health insurance policy regardless of its denomination.

   Specifically reject Petitioner's finding that the Policy does not violate public policy as expressed in Section 627.6699, Florida Statutes. See Conclusions of Law 24-27.

10. Accepted in Conclusion of Law 23.

11. Accepted in part as restated in Findings of Fact 15-16. See also Conclusions of Law 22, 24-27.

12. Not a finding of fact. More like a conclusion of law and legal argument which is not persuasive as applied to the facts of this case.

13. Not a finding of fact. More like a conclusion of law.

14. Not a finding of fact. More like a conclusion of law.

15. First sentence rejected as contrary to more persuasive evidence. Next five sentences are not findings of fact. Specifically reject any implication

    that the Policy is a stop loss policy. See Findings of Fact 15-16 and Conclusions of Law 24-27.

16. First two sentences are not findings of fact. Reject any implication that there is no public policy "relating to the issuance of a stop loss policy in the State of Florida to a Florida employer employing 50 or fewer employees." Accept that the state does not regulate employer self-funded medical benefit programs. See Finding of Fact 12. Accept the last sentence as restated in Finding of Fact 15 and Conclusion of Law 24.

17. Rejected. Petitioner's Exhibit 3 shows the legislature was aware that "the bill could increase the likelihood that an employer would choose to self- insure and due to ERISA would be able to avoid state regulation of the insurance product provided to employees." However, the referenced exhibit is rejected as evidence of legislative intent to exclude "related insurance products" from "the statute's regulatory or public policy purview."

18. Rejected for the reasons set forth in the ruling above.

19. Rejected. See Conclusions of Law 24.

20. Substance accepted as restated in Findings of Facts 12 and Conclusions of Law 24.

21. Substance accepted as restated in Findings of Facts 16.

22. First sentence not a finding of fact. Second sentence rejected as contrary to more persuasive evidence; See Findings of Fact 15-16 and Conclusions of Law 24-27.

23. Accept in part as restated in Findings of Fact 15-16 and Conclusions of Law 24-27.

24. A recitation of the testimony is not a finding of fact; substance accepted as restated in Finding of Fact 16.

25. Accept that the state has no specific statutes or rules regulating attachment points in stop loss insurance policies. See Conclusions of Law 19. However, Section 627.6699(2), Florida Statutes, is applicable here because the Policy is a de facto health insurance policy. See Findings of Fact 15-16 and Conclusions of Law 24-27.

26. First sentence rejected as contrary to more persuasive evidence. See Findings of Fact 15-16 and Conclusions of Law 19.

27. First sentence rejected; More like a conclusion of law or legal argument the substance of which is not persuasive. Second sentence irrelevant.

28. Irrelevant.

29. Accepted but subordinate to Findings of Fact 15-16. NAIC's stop loss model act supports the proposition that the Policy is not a stop loss insurance policy but rather a health insurance policy.

30. Accepted in part as restated in Conclusions of Law 19.

31. Accepted but subordinate to Findings of Fact 15-16.

32. Accepted but subordinate to Findings of Fact 15-16.

33. Irrelevant.

34. Rejected as contrary to more persuasive evidence.

Respondent's Proposed Findings of Fact

1. Accepted in Findings of Fact 1.

2. Accepted in Findings of Fact 15.

3. Not a finding of fact.

4. Not a finding of fact. More like a conclusion of law.

5. Accepted in Findings of Fact 1.

6. Accepted as restated in Findings of Fact 2.

7. Accepted as restated in Findings of Fact 11, 15-16.

8. Accepted as restated in Findings of Fact 10, 15-16, and Conclusions of Law 22, 24-27.

9. Accepted as restated in Findings of Fact 4.

10. Accepted as restated in Findings of Fact 4-8 and 10.

11. Accepted in Findings of Fact 10 and Conclusions of Law 22.

12. Accept that the Policy provides for a specific attachment point of not less than $500; See Findings of Fact 8, 15 and 16. There is no evidence that the Policy's specific attachment point can be no more than $1,000.

13. Accepted as restated in Findings of Fact 5-8.

14. Accepted as restated in Findings of Fact 8.

15. Accepted as restated in Conclusions of Law 22.

16. Accepted as restated in Findings of Fact 9, 11-13 and Conclusions of Law 22, 24-27.

17. Accepted as restated in Findings of Fact 9-13.

18. Accepted as restated in Findings of Fact 11.

19. Accepted in part in Findings of Fact 14. Reject that Petitioner could totally avoid the coverage responsibilities otherwise imposed by Section 627.6699, Florida Statutes, merely by setting the Policy's attachment points at the same level as the deductible in the Plan. If the Plan's deductible was $500 and the Policy's specific attachment point was $500, the employee would pay the first $500 of expenses, the employer would be responsible for the next $500 of expenses, and Petitioner would reimburse the employer for 100 percent of any excess eligible expenses for that employee during the contract year. However, Petitioner can totally avoid paying for state mandated protections because the Policy will mirror any prohibited exclusions or provisions in the Plan.

20. Substance accepted in part; See Findings of Fact 15-16. There is no evidence that the Policy's specific attachment point can be as high as $2,000.

21. Accepted as restated in Findings of Fact 16; See Conclusions of Law 24-27.

COPIES FURNISHED:

Michael H. Davidson, Esquire Department of Insurance Division of Legal Services

200 E. Gaines Street Tallahassee, Florida 32399-0333

Frank J. Santry, Esquire Granger, Santry, et al. Post Office Box 14129 Tallahassee, Florida 32308

Bill Nelson, State Treasurer Department of Insurance

and Treasurer

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

Dan Sumner, Esquire Department of Insurance

and Treasurer

The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this recommended order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.

================================================================= AGENCY FINAL ORDER

=================================================================

THE TREASURER OF THE STATE OF FLORIDA DEPARTMENT OF INSURANCE

IN THE MATTER OF: CASE: 121300-95-C NATIONAL HEALTH INSURANCE COMPANY DOAH CASE NO. 95-4821

/

FINAL ORDER

THIS CAUSE came on before the undersigned Treasurer and Insurance Commissioner of the State of Florida for consideration and final agency action. On August 21, 1995, the Florida Department of Insurance (hereinafter referred to as "Respondent" or "Department") by letter disapproved a filing (Policy Form No. SL-94) which was submitted to the Department by National Health Insurance Company (hereinafter referred to as "Petitioner"). Petitioner thereafter requested a formal administrative proceeding pursuant to section 120.57(1), Florida Statutes. Pursuant to notice, a formal hearing was held on December 11, 1995, in Tallahassee, Florida, before the Honorable Suzanne F. Hood, a duly appointed Hearing Officer of the Division of Administrative Hearings.

After consideration of the evidence, argument and testimony presented at hearing, and subsequent written submissions of the parties, the Hearing Officer on March 15, 199, issued her Recommended Order (attached hereto as Exhibit A and fully incorporated herein by reference). The Hearing Officer recommended that the Insurance Commissioner enter a Final Order disapproving Petitioner's Policy Form No. SL-94, for use in Florida's small group health insurance market. On March 4, 1996, Petitioner filed exceptions to the Hearing Officer's Recommended Order which are addressed herein.

RULINGS ON PETITIONER'S EXCEPTIONS TO RECOMMENDED ORDER

1. Petitioner's first exception is as follows:

   
   

   "The hearing officer erroneously found that Respondent correctly rejected the policy as being inappropriate for the small group health insurance market. She further erred in finding that the policy is inappropriate

   because petitioner intends to market it to self-insured small group employers with attachment points so low ($500.00) that it becomes a de facto health insurance policy instead of a stop loss policy. Explicitly, the findings of fact in paragraph numbers 2, 3, and 4, are inconsistent with a finding that the policy in question is a de facto health insurance policy instead of a stop loss policy. Further, it is not a legally

   sufficient basis to rule in Respondent's favor that the policy becomes a de facto health insurance policy. Rather, as a matter of law, the hearing officer could only rule in Respondent's favor if she determined that the policy was a health benefit plan pursuant to Ch. 627.6699 Fla. Stat. (1995). No such finding was made. Unrefuted evidence was given in Mr. Lindsay's testimony that the Department of Insurance does not consider a stop loss policy to be a health benefit plan under the Employee Health Care Access

   Act (T:P.65,L.2)

   
   

   In her findings of fact paragraph no. 15, the Hearing Officer found that the Department correctly rejected Policy Form No. SL-94 (hereinafter referred to as the "Policy") as being inappropriate for the small group health insurance market; and that the Policy is inappropriate because Petitioner intends to market it to self-insured small group employers with attachment points so low ($500.00) that it becomes a de facto health Insurance policy instead of a stop loss policy. Petitioner is incorrect in stating that the Hearing Officer's findings of fact in her paragraphs no. 2, no. 3, and no. 4 are inconsistent with the findings of fact in paragraph no. 15. The record is consistent with and supports the Hearing Officer's finding that the Policy becomes a de facto health insurance policy (finding of fact paragraph no. 15) and in fact is a health insurance policy regardless of its denomination as a stop loss policy by Petitioner (conclusions of law paragraph no. 25.) Section 624.601, Florida Statutes, allows that certain insurance cove rages may come within the definition of two or more kinds of insurance and the inclusion of such coverage within one definition shall not exclude it from being considered as any other kind of insurance, the definition of which reasonably includes such coverages.

   Both Mr. Lindsay and Ms. Shipley testified that the Policy operates as a health insurance policy. (See pages 80 and 103 of transcript of proceedings) . The Policy pays benefits to the employer to reimburse the employer for health benefits paid to its employees. Even though denominated as a stop loss policy, the Policy, in operating as health insurance, is properly considered to be health insurance. The Hearing Officer's finding that the Policy is a de facto health insurance policy is based on competent substantial evidence. Further, the Hearing Officer's finding that the Policy is inappropriate for the small group health insurance market is based on competent substantial evidence and correct interpretation of the applicable statutes. The record is clear that the employees of self-insured small group employers covered under the Policy would not receive the protections required pursuant to section 627.6699, Florida Statutes. That would frustrate the public policy of this state as expressed through section 627.6699(2), Florida Statutes. The Hearing Officer appropriately applies section 627.411(1)(e), Florida Statutes, which requires

   disapproval of this Policy if it contains provisions which are contrary to the public policy of this state. Petitioner's first exception is rejected.

2. Petitioner's second exception is as follows: "The hearing officer erroneously found that

   an ERISA benefit plan, combined with a stop loss policy with petitioner's attachment points, substitutes petitioner as a small group health insurer. Once again, the unrebutted testimony of the Department's own representative was to the contrary. Further, the Department predicates its decision

   on the amount of a stop loss policy's attach- ment points despite the fact that there is no Florida Statute or any rule of the Florida Department of Insurance delineating minimum

   attachment points for stop loss policies. (T: P.120, L. 2)."

   
   

   In her findings of fact paragraph no. 16, the Hearing Officer found that an ERISA benefit plan combined with a stop loss policy having specific attachment points as low as $500.00, such as this Policy, substantially limits the self- insured employer's risk of loss to a nominal amount and substitutes Petitioner as a small group health insurer with none of the protections required by section 627.6699, Florida Statutes. No testimony of any Department representative is inconsistent with the position that this Policy, combined with an ERISA qualified self-insured plan, would place Petitioner in the position of offering health insurance. It is clear that none of the section 627.6699, Florida Statutes, protections are afforded to employees in that scenario. The Hearing Officer properly ruled in Respondent's favor as she found that the Policy violated the public policy of this state.

   
   

   For the reasons set forth in the ruling on this exception and in the ruling on Petitioner's first exception, Petitioner's second exception is rejected. The Hearing Officer's finding is based on competent substantial evidence.

   
   

3. Petitioner's third exception is as follows:

   
   

   "The hearing officer erroneously found that Petitioner has not met its burden of proving that respondent should approve the policy."

   
   

   Under her conclusion of law paragraph no. 18, the Hearing Officer concluded that Petitioner had failed to meet its burden of proving that Respondent should approve the Policy.

   
   

   The Hearing Officer concluded that Petitioner failed to meet its burden.

   That conclusion was made in light of the evidence, argument and testimony presented to the Hearing Officer. Petitioner's burden was to show that Respondent incorrectly rejected the Policy for being inappropriate for the small group health insurance market and that the Policy does not contain provisions contrary to the public policy of this state. The Hearing Officer found that Respondent correctly rejected the Policy as being inappropriate for the small group health insurance market. For the reasons set forth in addressing Petitioner's first two exceptions and those set forth in the ruling on this exception, Petitioner's third exception is rejected.

4. Petitioner's fourth exception is as follows:

   
   

   "The hearing officer erroneously found that Respondent has the unbridled discretion to disapprove any insurance policy form that is for health insurance and contains provisions which are unfair or inequitable or contrary to the public policy of the state, when that public policy has not been articulated by applicable statute."

   
   

   In her conclusions of law paragraph no. 19, the Hearing Officer concluded as follows: "... However, Respondent has authority to disapprove any insurance policy form that '[i]s for health insurance, and ... contains provisions which are unfair or inequitable or contrary to the public policy of this state . ...

   Section 627.411(1)(e), Florida Statutes."

   
   

   Petitioner's exception mischaracterizes the Hearing Officer's conclusion. The Hearing Officer did not conclude that Respondent has "unbridled discretion" to disapprove. She concluded that the Respondent has "authority" to disapprove. Respondent is required to disapprove a health insurance policy which contains provisions which are unfair or inequitable or contrary to the public policy of this state, pursuant to section 627.411(1)(e), Florida Statutes. Petitioner's fourth exception is rejected.

   
   

5. Petitioner's fifth exception is as follows:

   
   

   "The hearing officer erroneously found that chapter 627.6699(2) Fla. Stat. sets forth the public policy relative to the small group health insurance market for stop loss policies even though they are not "health benefit plans" governed by the statute."

   
   

   In her conclusions of law paragraph no. 20, the Hearing Officer recited the language of section 627.6699(2), Florida Statutes, concluding that the language contained therein sets forth the public policy relative to the small group health insurance market. The Hearing Officer did not specifically state in that conclusion that section 627.6699(2), Florida Statutes, sets forth the public policy relative to the small group health insurance market "for stop loss policies even though they are not 'health benefit plans' governed by statute".

   Petitioner has mischaracterized the Hearing Officer's statement in its exception. In her conclusions of law paragraph no. 24, the Hearing Officer did properly conclude that a stop loss policy with an extremely low specific attachment point offends public policy when it is sold to self-insured small group employers. She found and concluded that the Policy was health insurance. Petitioner's fifth exception is therefore rejected.

   
   

6. Petitioner's sixth exception is as follows:

   
   

   "The hearing officer correctly found that it is not the provision of benefits, or lack thereof, in an ERISA qualified self-insurance plan that offends public policy in this case,

   then erroneously and irreconcilably found that an ERISA qualified self-insurance plan coupled with a stop loss policy does offend the public policy of the state."

   
   

   In her conclusions of law paragraph no. 24, the Hearing Officer concluded that, "[i]t is not the provisions of benefits, or lack thereof, in an ERISA qualified self-insurance plan that offends public policy in this case. However, a stop loss policy with an extremely low specific attachment point offends public policy when it is sold to self-insured small group employers."

   
   

   The Hearing Officer's conclusion that a stop loss policy with an extremely low specific attachment point offends public policy is, in this context, correct. That conclusion is based on the finding that such a policy allows an insurance carrier to provide de facto health insurance to self-insured small group employers where the protections afforded through section 627.6699, Florida Statutes, are not provided to the employees. That both offends and violates the public policy of this state. The Department is required to disapprove a health insurance filing which contains provisions contrary to the public policy.

   Petitioner's sixth exception is rejected.

   
   

7. Petitioner's seventh exception, concerning the Hearing Officer's conclusions of law paragraph no. 25, is as follows:

   
   

   "The hearing officer's conclusion of law is erroneous. Nothing in the law supports the view that relieving the small group employer of anything more than nominal risk of loss with a stop loss policy would effectively render its ERISA benefit plan illegal."

   
   

   The Hearing Officer concluded in her conclusions of law paragraph no. 25 as follows:

   
   

   "The Policy at issue here is a health insurance policy regardless of its denomination as a stop loss policy. Its low specific attachment point, operating in concert with the deductible of an ERISA bene- fit plan, effectively relieves the small group employer of anything more than nominal risk of loss. Therefore, Petitioner becomes a de facto health insurer without having to provide coverages and protections for the small group health insurance market as

   required by Section 627.6699, Florida Statutes."

   
   

   The Hearing Officer's conclusion is correct. The combination of an ERISA benefit plan with this stop loss policy, which has been determined to be health insurance, would allow Petitioner to provide health insurance without providing the coverages mandated by section 627.6699, Florida Statutes. The combination of the two would not render the ERISA benefit plan itself illegal; it would allow Petitioner to do that which the public policy of this state as expressed through section 627.6699, Florida Statutes, prohibits. Petitioner's seventh exception is rejected.

8. Petitioner's eighth exception, which pertains to the Hearing Officer's conclusions of law paragraph no. 26, is as follows:

   
   

   "The hearing officer erroneously concludes as a matter of law that a stop loss policy which, by its terms, is not a health benefit plan pursuant to Ch. 627.6699 can somehow

   become a health insurance policy which violates the public policy set forth in that statute."

   
   

   The Hearing Officer concluded in conclusions of law paragraph no. 26 that the Policy, with its extremely low specific attachment point operating in concert with the deductible of an ERISA benefit plan, is a health insurance policy which violates public policy. The Hearing Officer found in her findings of fact that the Policy, standing alone, meets all requirements for approval as a stop loss policy, and also found that the Policy becomes a de facto health insurance policy instead of a stop loss policy. The Hearing Officer concluded that this type of policy allows an insurer to provide health insurance to employers employing 50 or fewer employees without those employees being afforded the protections mandated by section 627.6699, Florida Statutes, and further concluded that this policy is a health insurance policy regardless of its denomination as a stop loss policy. The Hearing Officer's conclusion that the Policy is a health insurance policy is correct. It is based on an analysis of the operation of the Policy and its benefits. Petitioner's eighth exception is rejected.

   
   

9. Petitioner's ninth exception, which addresses the Hearing Officer's conclusions of law paragraph no. 27, is as follows:

   
   

   "The hearing officer erroneously concluded as a matter of law that this policy thwarts the state's goal to improve the overall fairness and efficiency of the small group health insurance market pursuant to Ch.

   627.6699 when, in fact, it is the providing of benefits through an ERISA qualified plan which is outside the scope of Ch. 627.6699 and renders its standards inapplicable to

   the employees of the small employer. Further "thwarting a goal" is not a legal basis for disapproving an insurance policy form."

   
   

   The Hearing Officer stated in her conclusions of law paragraph no. 27 that this Policy thwarts the state's goal to improve the overall fairness and efficiency of the small group health insurance market. A specific purpose and intent of section 627.6699, Florida Statutes, is to improve the overall fairness and efficiency of the small group health insurance market. To conclude that the operation of this policy thwarts that goal by allowing the Petitioner to, in effect, provide health insurance coverages to a small employer without providing the employees with the protections required pursuant to section 627.6699, Florida Statutes, is proper and well grounded in statutory authority. The legal basis for disapproving this policy was that it was inappropriate for the small group health insurance market and that it contained provisions which were contrary to the public policy of this state. Petitioner's ninth exception is rejected.

10. Petitioner's next exception is that Petitioner's proposed finding of fact (the first sentence of Petitioner's proposed finding of fact paragraph no.

    8) should not have been rejected as contrary to the more persuasive evidence, as it was unrefuted as a matter of fact.

    
    

    The sentence at issue is as follows:

    
    

    "The Department of Insurance does not contend that the insurance policy form is in violation of or does not comply with the insurance code."

    
    

    That statement is inconsistent with the Respondent's position that section 627.411(1)(e), Florida Statutes, precluded approval of this policy as it contains provisions which are contrary to the public policy of this state as expressed through section 627.6699, Florida Statutes. The Hearing Officer found that the policy, standing alone, meets all applicable requirements for approval as a stop loss policy under section 627.410, Florida Statutes. The Department's position was that there was no statutory basis nor rule basis for disapproval other than section 627.411(1)(e), Florida Statutes. Petitioner's exception is rejected.

    
    

11. Petitioner's next exception is that Petitioner's proposed finding of fact no. 9 was improperly rejected. Petitioner's proposed finding of fact no. 9 reads as follows:

    
    

    "The issue of whether this stop-loss insurance policy violates the public policy of the State with respect to the small group market, as expressed in Ch. 627.6699, is a question of fact which I resolve in favor of National Health Insurance Company for the reasons stated below."

    
    

    The Hearing Officer ruled as follows:

    
    

    "Rejected. It is a question of fact whether the Policy is a stop loss policy or a health insurance policy regardless of its denomination. Specifically reject Petitioner's finding that the Policy does not violate public policy as expressed in section 627.6699, Florida Statutes.

    See conclusions of law 24-27."

    
    

    The Hearing Officer specifically concluded that the Policy, with its low specific attachment points, offends public policy when sold to self-insured small group employers, as it allows Petitioner to provide health insurance without the employees being provided with the protections afforded by section 627.6699, Florida Statutes. Petitioner's exception is rejected.

    
    

12. Petitioner's next exception is that Petitioner's proposed finding of fact no. 12 should not have been rejected as a finding of fact nor should it have been rejected as a conclusion of law. Petitioner's proposed finding of fact is as follows:

    
    

    "While Ch. 627.6699 does express the public policy of the State of Florida with regard to insurance products within its ambit,

    neither this Hearing Officer nor the Department of Insurance are free to extend that expression of public policy beyond the scope of the legislation itself. The legis- lature determines the state's public policy. Delegation of such authority by the legis- lature to an agency, without standards and guidelines, would violate the requirement

    of separation of powers between government branches. See, State ex rel. Palm Beach Jockey Club, Inc. v. Fla. State Racing Com., 158 Fla. 335, 28 So.2d 330 (1946); Amara v.

    Daytona Beach Shores, 181 So.2d 722 (Fla. 1st DCA 1966)

    
    

    Section 627.411(1)(e), Florida Statutes, authorizes and requires the Department to deny a form filed under section 627.410, Florida Statutes, for certain enumerated reasons. One such reason to deny, which stands on its own, is that the form contains provisions which are contrary to the public policy of this state. The public policy of this state, as it relates to the denial of this policy, is found in section 627.6699, Florida Statutes. The Department has not extended the expression of public policy beyond the scope of any legislation. Petitioner's exception is rejected.

    
    

13. Petitioner's next exception is that its proposed finding of fact no.

    13 should not have been rejected as a finding of fact. Petitioner's proposed finding of fact no. 13 is that subdivision (4) of the Employee Health Care Access Act establishes the applicability and scope of the Act and it provides that the section applies to a health insurance benefit plan under certain specified circumstances. The Hearing Officer's ruling was, "[n]ot a finding of fact. [m]ore like a conclusion of law."

    
    

    The Hearing Officer's ruling is correct. The proposed "finding of fact" does not address a disputed issue of fact. Rather, it addresses an interpretation of a statute. Petitioner's exception is rejected.

    
    

14. Petitioner's next-exception is that its proposed finding of fact no. 14, even if not a finding of fact, should not have been rejected as a conclusion of law. Petitioner's proposed finding of fact no. 14, pertaining to section 627.6699, Florida Statutes, is that subsection (3)(j) defines "health benefit plan" to mean any hospital or medical policy or certificate, hospital or medical service plan contract, or health maintenance organization subscriber contract. The Hearing Officer's ruling was, "[n]ot a finding of fact. [m]ore like a conclusion of law."

    
    

    The Hearing Officer's ruling is correct. The proposed "finding of fact" does not address a disputed issue of fact. Rather, it addresses an interpretation of a statute. Petitioner's exception is rejected.

    
    

15. Petitioner's next exception, which pertains to Petitioner's proposed finding of fact no. 15, is that the first sentence should not have been rejected as contrary to the more persuasive evidence as it was an unrefuted fact, and that the rejection of the remainder of the proposed finding of fact paragraph is unsubstantiated because it constitutes the unrebutted testimony of Respondent's witness on a matter of fact.

    
    

    Petitioner's proposed finding of fact is as follows:

    "The evidence in this case is unrefuted and I find that petitioner's Policy Form SL-94 is not a health benefit plan under the Employee Health Care Access Act. I rely upon the testimony of Bruce George Lindsay in that respect. Mr. Lindsay is an actuary of 33 years experience who is and has been employed by the Florida Department of Insurance over five years. He is an associate of the Society of Actuaries and a member of the American Academy of Actuaries.

    (T: P. 44, L. 2-19). When a stop-loss policy is submitted to the Florida Department of Insurance for approval, it is Mr. Lindsay

    who reviews the policy for compliance with Florida law. Mr. Lindsay unequivocal testified that the Department of Insurance does not consider a

    stop-loss policy to be a health benefit plan under the Employee Health Care Access Act. (T: P. 65, L. 2)."

    
    

    Mr. Lindsay testified that the Department does not consider the policy to be a health benefit plan under section 627.6699, Florida Statutes. The Departments position as accepted by the Hearing Officer is that this Policy, operating as a health insurance policy, offends the public policy of this State as set forth through section 627.6699, Florida Statutes. To the extent that the Hearing Officer's ruling indicates that the Policy is a health benefit plan specifically included in the definition of section 627.6699, Florida Statutes, the first part of Petitioner's exception is accepted. The Policy is not specifically included in section 627.6699(3)(j), Florida Statutes. Further, the Hearing Officer's rejection of the third and fourth sentences of Petitioner's proposed finding of fact paragraph no. 15 (dealing with Mr. Lindsay's experience and qualifications), although not pertaining to disputed issues of material fact, is improper. Petitioner's exception in that regard is accepted. Also, Mr. Lindsay testified that he reviews stop-loss policies submitted to the Department for approval. To the extent that Petitioner's proposed finding of fact indicates that Mr. Lindsay has in the past reviewed these policies, that part of the exception is accepted. For reasons stated throughout this Final Order, the Hearing Officer's rejection of the implication that the Policy operates only as a stop-loss policy is appropriate and that portion of the exception is rejected.

    
    

16. Petitioner's next exception, which pertains to its proposed finding of fact paragraph no. 16, is that the Hearing Officer improperly rejected the proposed findings. The proposed findings in the paragraph are based on the testimony of Mr. Lindsay and the letter of disapproval. To the extent that the Hearing Officer rejected the subject of this specific testimony as not being a finding of fact, the exception is accepted. It should be noted that Mr. Lindsay was not asked whether the State of Florida had a public policy relating to a policy denominated as a stop-loss policy which operates as and is considered a health insurance policy due to its low attachment points issued to a Florida employer employing 50 or fewer employees. The record is clear that the public policy of the State of Florida would prohibit such a policy.

17. Petitioner's next exception, pertaining to Petitioner's proposed finding of fact paragraph no. 17, is that the Hearing Officer rejected items from the legislative history which, as Petitioner maintains, can be given no other reading than the one provided by Petitioner.

    Petitioner's proposed finding of fact no. 17 is as follows: "The legislative history of recent amendments

    to Ch. 627.6699 evidence the fact that the

    Legislature knew, when it adopted pertinent provisions of the Employee Health Care Access Act, that ERISA qualified self-insurance plans and related insurance products would not fall under the statute's regulatory or public policy purview. Petitioner's Exhibit P3 is the May 11, 1993, Final Bill Analysis and Economic Impact Statement of the House of Represent- tives' Committee on Health Care of Ch. 93-129, laws of Florida. At page 43, the legislative staff noted:

    'There is also the related concern that the bill could increase the likelihood that an employer would choose to self-insure and due to

    ERISA would be able to avoid state regulation of the insurance product provided to employees.'"

    The Hearing Officer ruled on the proposed finding as follows: "Rejected. Petitioner's Exhibit 3 shows the

    legislature was aware that 'the bill could

    increase the likelihood that an employer would choose to self-insure and due to ERISA

    would be able to avoid state regulation of the insurance product provided to employees.' However, the referenced exhibit is rejected as evidence of legislative intent to exclude 'related insurance products' from 'the statute's regulatory or public policy purview.'"

    
    

    There is no indication in Petitioner's Exhibit no. 3 that the legislature contemplated a lack of state regulation where a stop-loss policy with low attachment points operating as a health insurance policy was sold to an employer who chose to self-insure where the stop loss policy provided none of the protections afforded to employees under section 627.6699, Florida Statutes. It is also plausible that "to avoid state regulation of the insurance product" is referencing the self-insured plan itself, not other health insurance products providing benefits for the employers based on employee claims. Petitioner's exception is rejected.

    
    

18. Petitioner's next exception, which pertains to the Hearing Officer's rejection of Petitioner's proposed finding of fact no. 18, which proposed that the legislature itself acknowledged that insurance products affecting an ERISA qualified self-insurance plan would fall outside the scope of the Employee Health Care Access Act. For the reasons stated in ruling on Petitioner's exception no. 17 above, Petitioner's exception is rejected.

19. Petitioner's next exception deals with the Hearing Officer's rejection of Petitioner's proposed finding of fact paragraph no. 19, which proposed:

    
    

    "Even if the spirit of the protections afforded by Ch. 627.6699 Fla. Stat. could arguably provide a public policy expression which could be invoked by the Department of Insurance to disapprove an insurance policy form under Ch. 627.411(1)(e), it is the providing of benefits under an ERISA qualified self-insurance plan, not the existence or terms of a stop-loss policy issued to the self

    insured employer, that avoids these protections."

    
    

    The Hearing Officer recognized that under ERISA, small group employers may avoid state regulation of the insurance product they provide to their employees when they choose to self-insure; that it is not the provisions of benefits, or lack thereof, in an ERISA-qualified self-insurance plan that offends public policy in this case; and that a stop loss policy with extremely low specific attachment points offends public policy when it is sold to self-insured small- group employers as such a policy allows the insurance carrier to provide health insurance without meeting the requirements of section 627.6699, Florida Statutes.

    
    

    The Department cannot and does not seek to regulate an ERISA-qualified self-insured plan. The Department is mandated to regulate this stop-loss policy, which operates as a health insurance policy. Petitioner's proposed finding is rebutted. Petitioner's exception is rejected.

    
    

20. Petitioner's next exception pertains to the Hearing Officer's rejection of the second sentence of Petitioner's proposed finding of fact paragraph no. 22, which proposed that this Policy was disapproved because of its attachment points and not because of any noncompliance with the spirit or letter of section 627.6699, Florida Statutes. The Hearing Officer rejected the proposed sentence as contrary to more persuasive evidence.

    
    

    The record clearly establishes that the Policy was disapproved because it is inappropriate for the small group market as it offends the public policy of this state due to the low attachment points, which allows Petitioner to, in effect, market this de facto health insurance policy to small group employers without offering the protections provided for under section 627.6699, Florida Statutes. Petitioner's exception is rejected.

    
    

21. Petitioner's next exception pertains to the Hearing Officer's statement that section 627.6699(2), Florida Statutes, is applicable here because the Policy is a de facto health insurance policy. The issue of whether this Policy is or operates as a health insurance policy has been addressed in rulings on other exceptions. For the reasons stated in those rulings, Petitioner's contention that the Policy is not a de facto health insurance policy is rejected. Section 627.6699, Florida Statutes, sets forth the purpose and intent of the Employee Health Care Access Act. The public policy stated therein is applicable to health insurance sold to self-insured employers covering 50 or fewer employees, excluding ERISA qualified self-insurance plans. Petitioner's exception is rejected.

    
    

22. Petitioner's next exception is that the first sentence of Petitioner's proposed finding of fact paragraph no. 26 should not have been rejected as it is

    wholly unrebutted. That sentence stated that the Department has not established a policy on what attachment points are acceptable. The Hearing Officer stated that the sentence was rejected as contrary to more persuasive evidence.

    
    

    The record in this case is clear that there is no statute or rule of the Department addressing the attachment points. The record also is clear that the Department would approve a stop loss policy for a small group employer's plan with attachment points as low as $9,000.00 or $10,000.00, and would not approve one with attachment points as low as $5,000.00. To the extent that the exception addresses the Hearing Officer's failure to recognize that there is no Department rule or statute addressing the attachment points, it is accepted.

    Otherwise, the exception is rejected.

    
    

23. Petitioner's next exception, which pertains to Petitioner's proposed finding of fact paragraph no. 27, is as follows:

    
    

    "That legislation would be necessary to govern this area is manifest from a review of NAIC model laws pertinent to this case. The Commissioner of Insurance of the State of Florida is a member of, and active participant in, the National Association of Insurance Commissioners [hereinafter NAIC]. (T: P.97, L.1.)"

    
    

    The Hearing Officer rejected the first sentence, stating that it is more like a conclusion of law or legal argument, the substance of which is not persuasive. The second sentence of the proposed finding of fact is accurate and, as noted by the Hearing Officer, irrelevant. There is no evidence that legislation is necessary to govern this area; the statement is legal argument, as recognized by the Hearing Officer. Petitioner's exception is rejected.

    
    

24. Petitioner's next exception pertains to Petitioner's proposed finding of fact paragraph no. 28, which proposed that the senior staff members of the Florida Department of Insurance routinely attend meetings and have representatives on many of the major committees and working groups of the NAIC. The Hearing Officer stated that the proposed finding is irrelevant. Petitioner states that the proposed finding is not irrelevant because it "establishes Respondent's knowledge by its involvement in the affairs of the National Association of Insurance Commissioners."

    
    

    This proposed finding is irrelevant. It does not tend to prove or establish whether the Policy at issue is or is not inappropriate for the small employer group market or offends the public policy of the state. Petitioner's exception is rejected.

    
    

25. Petitioner's next exception pertains to Petitioner's proposed finding of fact paragraph no. 29, which stated:

    
    

    "Petitioner's Exhibits P4 and PS are NAIC model acts. Ellen Kenney Shipley, the Bureau Chief of the Department of Insurance bureau with responsibility for approval of insurance policy forms, acknowledged that Petitioner's Exhibit P4, the NAIC Small Employer Model Act, is very similar to Ch. 627.6699, Fla. Stat. (1995) . She

    acknowledged that the NAIC and also adopted Petitioner's Exhibit PS, a stop-loss insurance model act. That act codifies a

    standard for attachment points for the purpose of determining whether an insurance policy will be treated as a stop-loss policy or a health insurance policy."

    
    

    The Hearing Officer ruled that the proposed finding is accepted but subordinate to findings of fact 15-16. The Hearing Officer also stated that the NAIC's stop loss model act supports the proposition that the Policy at issue here is not a stop loss policy but rather a health insurance policy. Petitioner now says that the model act does not support the proposition that the Policy at issue is not a stop loss policy, rather, it supports the proposition that there is no delegated legislative authority to be exercised by the Department in determining the effect of stop loss policy attachment points.

    
    

    The Hearing Officer accepted Petitioner's proposed finding of fact paragraph. Petitioner is incorrect in stating that there is no delegated legislative authority in determining the effect of stop loss policy attachment points. The legislative authority is expressed through section 627.411(1)(e), Florida Statutes. Petitioner's exception is rejected.

    
    

26. Petitioner's next exception pertains to Petitioner's proposed finding of fact paragraph no. 33, which proposed that Ms. Shipley conceded that a Florida employee would have more solvency protection if his employer's self- funded ERISA medical benefit plan was secured by a stop-loss policy with lower attachment points than if the stop-loss policy had higher attachment points. The Hearing Officer ruled that the proposed finding is irrelevant. Petitioner contests the irrelevancy ruling by stating that "the asserted basis of Respondent's view of conformity with public policy of the state is the protection of the welfare of Florida policyholders. [t]his fact specifically tends to disprove a claim of harm to that welfare which was a fact at issue."

    
    

    The public policy of this state was an issue for determination by the Hearing Officer in this case; specifically, whether or not this health insurance policy violated the public policy. An issue in this case was not whether there would be more solvency protection, or greater protection for insureds, if a self-funded ERISA qualified plan is supplemented by a stop-loss policy with low attachment points. If Petitioner engages in argument regarding protections for insureds, it should include in the analysis whether failure to provide employees with the protections required by section 627.6699, Florida Statutes, reflects the public policy. Petitioner's exception is rejected.

    
    

27. Petitioner's next exception pertains to Petitioner's proposed finding of fact paragraph no. 34, in which Petitioner proposed as follows:

"Thus, predicated on the findings of fact recited above, I find that Petitioner's insurance policy Form SL-94 does not contain provisions which are contrary to the public policy of this State. The facts of this case do not support the lawful invocation of Ch.

627.411(1)(e) to disapprove the policy form."

The Hearing Officer rejected the proposed finding of fact paragraph as contrary to more persuasive evidence. Petitioner asserts it is not contrary to more persuasive evidence.

For all of the reasons set forth above in addressing the various exceptions filed by Petitioner, the exception is rejected. The Hearing Officer has correctly concluded that this Policy as filed violates the public policy of this state and, pursuant to section 627.411(1)(e), Florida Statutes, should be disapproved.

After careful consideration of the record in this matter, the submissions of the parties, and being otherwise fully advised in the premises, it is

ORDERED:

1. The findings of fact of the Hearing Officer are adopted in full as the Department's findings of fact except as rejected or modified above.

   
   

2. The conclusions of law of the Hearing Officer are adopted in full as the Department's conclusions of law except as rejected or modified above.

   
   

3. The Hearing Officer's recommendation that the Department enter a Final Order disapproving Petitioner's Policy Form No. SL-94 for use in Florida's small group health insurance market is approved and accepted as being the appropriate disposition of this case.

ACCORDINGLY, Petitioner's Policy Form No. SL-94 is disapproved for use in Florida's small group health insurance market.

NOTICE OF RIGHTS

Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to section 120.68, Florida Statutes, and Rule 9.110, Florida Rules of Appellate Procedure. Review proceedings must be instituted by filing a Notice of Appeal with the General Counsel, acting as the agency clerk, at 612 Larson Building, Tallahassee, Florida 32399-0333, and a copy of the same and the filing fee with the appropriate District Court of Appeal within thirty (30) days of rendition of this Order.

DONE and ORDERED this 2nd ,1996, in Tallahassee, Florida.

BILL NELSON

Treasurer and

Insurance Commissioner

COPIES FURNISHED:

Frank Santry, Esquire

Granger, Santry, Mitchell & Heath, P.A.

P.O. Box 14129

Tallahassee, Florida 32317

Suzanne F. Hood, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Michael Davidson, Esquire Division of Legal Services

200 East Gaines Street Tallahassee, Florida 32399-0333

Docket for Case No: 95-004821

Orders for Case No: 95-004821