Final answer:
The correct option is B). In Florida, small employer health policy carriers must utilize community rating to set premium rates, mixing health risks among a group to mitigate adverse selection.
Step-by-step explanation:
Small employer health policy carriers in Florida are required to use community rating for establishing premium rates. This rating method is designed to spread risks among a group, helping to solve the adverse selection problem in health insurance markets. Community rating, by grouping together individuals with various health risks, reduces the insurance firm's concern of only attracting high-risk individuals. Under the Patient Protection and Affordable Care Act, the approach of providing health insurance via employment or through state-sponsored health exchange markets has become widespread.