BILL NUMBER: AB 1359	CHAPTERED  09/06/05

	CHAPTER  230
	FILED WITH SECRETARY OF STATE  SEPTEMBER 6, 2005
	APPROVED BY GOVERNOR  SEPTEMBER 6, 2005
	PASSED THE SENATE  AUGUST 23, 2005
	PASSED THE ASSEMBLY  JUNE 1, 2005
	AMENDED IN ASSEMBLY  MAY 31, 2005
	AMENDED IN ASSEMBLY  APRIL 19, 2005

INTRODUCED BY   Assembly Member Chan

                        FEBRUARY 22, 2005

   An act to add Section 1350 to the Health and Safety Code, and to
add Section 10112.6 to the Insurance Code, relating to health care
coverage, and declaring the urgency thereof, to take effect
immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1359, Chan  Prescription drug plans.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
the willful violation of which is a crime, provides for the
licensure and regulation of health care service plans and specialized
health care service plans by the Department of Managed Health Care
and other provisions of law provide for the regulation of life and
disability insurers by the Department of Insurance.
   This bill would require a sponsor of a prescription drug plan
authorized by the federal Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 in this state to be licensed as a
health care service plan or as a life and disability insurer.
   Because a willful violation of the bill would be a crime, it would
impose a state-mandated local program.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   The bill would declare that it is to take effect immediately as an
urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1350 is added to the Health and Safety Code, to
read:
   1350.  (a) Consistent with federal law, a sponsor of a
prescription drug plan authorized by the federal Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (P.L.
108-173) shall hold a valid license as a health care service plan
issued by the department or as a life and disability insurer by the
Department of Insurance.
   (b) An entity that is licensed as a health care service plan and
that operates a prescription drug plan shall be subject to the
provisions of this chapter, unless preempted by federal law.
  SEC. 2.  Section 10112.6 is added to the Insurance Code, to read:
   10112.6.  (a) Consistent with federal law, a sponsor of a
prescription drug plan authorized by the federal Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (P.L.
108-173) shall hold a valid license as a life and disability insurer
issued by the department or as a health care service plan issued by
the Department of Managed Health Care.
   (b) An entity that is licensed as a life and disability insurer
and that operates a prescription drug plan shall be subject to the
provisions of this code, unless preempted by federal law.
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
  SEC. 4.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   Due to the specified deadlines for complying with the licensure
requirements for prescription drug plans imposed by federal law, it
is necessary that this act take effect immediately.