BILL NUMBER: AB 8 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 20, 2007
AMENDED IN SENATE JULY 18, 2007
AMENDED IN SENATE JULY 3, 2007
AMENDED IN ASSEMBLY MAY 17, 2007
AMENDED IN ASSEMBLY MAY 1, 2007
AMENDED IN ASSEMBLY APRIL 18, 2007
AMENDED IN ASSEMBLY MARCH 29, 2007
INTRODUCED BY Assembly Member Nunez
(Principal coauthor: Senator Perata)
(Coauthors: Assembly Members Bass, Berg, De Leon, DeSaulnier,
Dymally, Eng, Hayashi, Hernandez, and Jones)
(Coauthor: Senator Alquist)
DECEMBER 4, 2006
An act to amend Sections 6254 and 11126 of, and to add Section
12803.2 to, the Government Code, to amend Sections 1363
1357, 1357.12, 1363, and 1378 of, and to add
Article 3.11 (commencing with Section 1357.20) and Article 4.1
(commencing with Section 1366.10) to Chapter 2.2 of Division 2 of,
the Health and Safety Code, to amend Sections 10607, 10700,
10714, 12693.43, 12693.70, 12693.73, 12693.755, and 12693.76
of, to add Sections 10293.5, 12693.58,
12693.57, 12693.58, 12693.59, 12693.621, and 12711.1
to, to add Chapter 1.6 (commencing with Section 10199.10) and
Chapter 8.1 (commencing with Section 10760) to Part 2 of Division 2
of, and to add Part 6.45 (commencing with Section 12699.201) to
Division 2 of, the Insurance Code, to add Part 8.8
(commencing with Section 2200) to Division 2 of the Labor Code, to
add Chapter 11 (commencing with Section 19900) to Part 10.2 of
Division 2 of the Revenue and Taxation Code, to amend
Sections 131 , 144, and 1095 of, and to add Division 1.2
(commencing with Section 4800) to, the Unemployment Insurance Code,
and to amend Sections 14005.23, 14005.30, 14005.31, 14005.32, and
14008.85 of, to amend and repeal Section 14011.16 of, to
add Sections 14005.33 , 14005.34, 14005.33,
14005.331, 14005.82, and 14131.01 to, and to add Article 7
(commencing with Section 14199.10) to Chapter 7 of Part 3 of Division
9 of, the Welfare and Institutions Code, relating to health care
coverage, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 8, as amended, Nunez. Health care coverage: employers and
employees.
(1) Existing law creates the California Health and Human Services
Agency.
This bill would require the agency to encourage fitness, wellness,
and health promotion programs and to establish a program to track
and assess the health care reforms implemented by the bill's
provisions. The bill would create an advisory body, chaired by the
secretary of the agency, to guide the assessment and would require
annual reports to the Legislature relating to the assessment. The
bill would also require the agency, in consultation with the Board of
Administration of the Public Employees' Retirement System (PERS) to
assume lead agency responsibility for professional review and
development of best practice standards for high-cost chronic diseases
that state health care programs would be required to implement upon
their adoption. The bill would additionally require the agency, in
consultation with PERS and health provider groups, to develop health
care provider performance measurement benchmarks, as specified.
(2) Existing law does not provide a system of health care coverage
for all California residents. Existing law does not require
employers to provide health care coverage for employees and
dependents, other than coverage provided as part of the workers'
compensation system for work-related employee injuries, and does not
require individuals to maintain health care coverage. Existing law
provides for the creation of various programs to provide health care
coverage to persons who have limited incomes and meet various
eligibility requirements. These programs include the Healthy Families
Program, administered by the Managed Risk Medical Insurance Board,
and the Medi-Cal program, administered by the State Department of
Health Care Services and county welfare departments. Existing law
provides for the regulation of health care service plans by the
Department of Managed Health Care and health insurers by the
Department of Insurance.
This bill would, as of January 1, 2010
2009 , create the California Cooperative Health Insurance
Purchasing Program (Cal-CHIPP), which would function as a statewide
purchasing pool for health care coverage by employers and be
administered by the Managed Risk Medical Insurance Board. The bill
, as of January 1, 2010, would generally require
employers to make elect prior to July 1,
2009, to make health care expenditures, as
specified, in an amount that is equivalent, at a minimum, to 7.5%,
subject to adjustment by the board, of the employer's total social
security wages for its full-time or part-time employees, or both, or,
alternatively, to elect to pay an employer fee of
that minimum amount for the applicable group of employees, who would
be required to enroll in Cal-CHIPP. The bill would require an
employer to commence paying the employer fee or making the health
expenditures on October 1, 2009. The bill would make it
unlawful for an employer to take certain actions for the purpose of
avoiding this requirement. By creating a new crime, the bill
would impose a state-mandated local program. The bill would
require an employer electing to pay the fee to notify
employers to provide the Employment Development
Department with specified wage and health expenditures
information and comply with other specified requirements
and . The bill would authorize the
department to assess a penalty against an employer who failed to
comply with certain reporting those
requirements or to remit fees within the requisite time
period failed to remit the employer fees and employee
premiu m payments . The bill would require
the department to deposit the penalty revenue into a penalty account
within the California Health Trust Fund and would specify that the
account is not continuously appropriated. The bill would
require employers to set up a pretax Section 125 account under
federal law for each employee to pay health insurance premiums.
Revenues from the employer fees and penalties, and employee
premiums would be collected by the Employment Development
Department for deposit in the California Health Trust Fund created by
the bill, and moneys in the fund , other than penalty revenues,
would be continuously appropriated to the board for the
purposes of the bill. The bill would require the board to offer
Cal-CHIPP enrollees a choice of various health plans. The bill would
exempt certain writings of the board from disclosure under the Public
Records Act and would specify that the board may meet in closed
session to develop rates and contracting strategy pursuant to
Cal-CHIPP.
The bill, subject to future appropriation of funds, would expand
the number of children eligible for coverage under the Healthy
Families Program. The bill would also expand the number of persons
eligible for the Medi-Cal program. The bill would delete as an
eligibility requirement for a child under the Healthy Families
Program and the Medi-Cal program that the child must meet citizen and
immigration status requirements applicable to the program under
federal law, thereby creating a state-only element of the programs.
The bill would additionally, on and after July 1, 2008, disregard all
income over 250% but less than or equal to 300% of the federal
poverty level and would apply Medi-Cal program income deductions to a
family income greater than 300% of the federal poverty level in
determining eligibility for the Healthy Families Program. The bill
would require the State Department of Health Care Services to seek
any necessary federal approval to enable the state to receive federal
Medicaid funds for specified persons who could otherwise be made
eligible for Medi-Cal benefits, with the state share of funds to be
provided from the California Health Trust Fund. The bill would enact
other related provisions. Because each county is required to
determine eligibility for the Medi-Cal program, expansion of program
eligibility would impose a state-mandated local program. The bill
would provide that the board may implement the provisions of the bill
expanding the Healthy Families Program only to the extent that funds
are appropriated for these purposes in the annual Budget Act or in
another statute.
(3) The bill would enact various health insurance market reforms,
to be operative on specified dates, including requirements for
guarantee issue of individual health care service plan contracts and
health insurance policies, simplified benefit designs, modified small
employer coverage, modified disclosures, and other related changes.
The bill would prohibit the application, on and after January 1,
2010, of a risk adjustment factor to plans and contracts issued to
employers with not more than 250 employees. The bill would
require health care service plans and health insurers offering group
plans to offer benchmark plans or policies at a rate negotiated with
and approved by the Managed Risk Medical Insurance Board that is
available to group members and dependents eligible for coverage
through the Medi-Cal or Healthy Families Programs. The bill would
require the Director of the Department of Managed Health Care and the
Insurance Commissioner to adopt regulations by July 1, 2008, to
require at least 85% of full-service health care service plan dues,
fees, and other periodic payments and health insurance premiums to be
spent on health care services and not on administrative costs.
Because a willful violation of the bill's requirements relative to
health care service plans would be a crime, the bill would impose a
state-mandated local program. The bill would also state the intent of
the Legislature that all health care service plans and health
insurers and providers shall adopt standard electronic medical
records by January 1, 2012.
(4) Existing law, the California Major Risk Medical Insurance
Program, administered by the Managed Risk Medical Insurance Board,
provides major risk medical coverage for state residents meeting
specified eligibility requirements.
This bill would require the board to establish a list of
conditions or diagnoses making an applicant automatically eligible
for the program and to develop a standardized questionnaire for
carriers in the individual market to identify persons eligible for
the program. The bill would prohibit a health insurer and a health
care service plan from denying coverage to an individual, except for
those who are automatically eligible for the program.
(5) 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 with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known and may be cited as the
California Health Care Reform and Cost Control Act.
SEC. 2. It is the intent of the Legislature to accomplish the goal
of universal health care coverage for all California residents
within five years. To accomplish this goal, the Legislature proposes
to take all of the following steps:
(a) Ensure that Californians have access to affordable,
comprehensive health care coverage, including all California children
regardless of immigration status, with subsidies for Californians
with low incomes.
(b) Leverage available federal funds to the greatest extent
possible through existing federal programs such as Medicaid and the
State Children's Health Insurance Program in support of health care
coverage for low-income and disabled populations.
(c) Maintain and strengthen the health insurance system and
improve availability and affordability of private health care
coverage for all purchasers through (1) insurance market reforms; (2)
enhanced access to effective primary and preventive services,
including management of chronic illnesses; (3) promotion of
cost-effective health technologies; and (4) implementation of
meaningful, systemwide cost containment strategies.
(d) Engage in early and systematic evaluation at each step of the
implementation process to identify the impacts on state costs, the
costs of coverage, employment and insurance markets, health delivery
systems, quality of care, and overall progress in moving toward
universal coverage.
SEC. 3. Section 6254 of the Government Code is
amended to read:
6254. Except as provided in Sections 6254.7 and 6254.13, nothing
in this chapter shall be construed to require disclosure of records
that are any of the following:
(a) Preliminary drafts, notes, or interagency or intra-agency
memoranda that are not retained by the public agency in the ordinary
course of business, if the public interest in withholding those
records clearly outweighs the public interest in disclosure.
(b) Records pertaining to pending litigation to which the public
agency is a party, or to claims made pursuant to Division 3.6
(commencing with Section 810), until the pending litigation or claim
has been finally adjudicated or otherwise settled.
(c) Personnel, medical, or similar files, the disclosure of which
would constitute an unwarranted invasion of personal privacy.
(d) Contained in or related to any of the following:
(1) Applications filed with any state agency responsible for the
regulation or supervision of the issuance of securities or of
financial institutions, including, but not limited to, banks, savings
and loan associations, industrial loan companies, credit unions, and
insurance companies.
(2) Examination, operating, or condition reports prepared by, on
behalf of, or for the use of, any state agency referred to in
paragraph (1).
(3) Preliminary drafts, notes, or interagency or intra-agency
communications prepared by, on behalf of, or for the use of, any
state agency referred to in paragraph (1).
(4) Information received in confidence by any state agency
referred to in paragraph (1).
(e) Geological and geophysical data, plant production data, and
similar information relating to utility systems development, or
market or crop reports, that are obtained in confidence from any
person.
(f) Records of complaints to, or investigations conducted by, or
records of intelligence information or security procedures of, the
office of the Attorney General and the Department of Justice, and any
state or local police agency, or any investigatory or security files
compiled by any other state or local police agency, or any
investigatory or security files compiled by any other state or local
agency for correctional, law enforcement, or licensing purposes.
However, state and local law enforcement agencies shall disclose the
names and addresses of persons involved in, or witnesses other than
confidential informants to, the incident, the description of any
property involved, the date, time, and location of the incident, all
diagrams, statements of the parties involved in the incident, the
statements of all witnesses, other than confidential informants, to
the victims of an incident, or an authorized representative thereof,
an insurance carrier against which a claim has been or might be made,
and any person suffering bodily injury or property damage or loss,
as the result of the incident caused by arson, burglary, fire,
explosion, larceny, robbery, carjacking, vandalism, vehicle theft, or
a crime as defined by subdivision (b) of Section 13951, unless the
disclosure would endanger the safety of a witness or other person
involved in the investigation, or unless disclosure would endanger
the successful completion of the investigation or a related
investigation. However, nothing in this division shall require the
disclosure of that portion of those investigative files that reflects
the analysis or conclusions of the investigating officer.
Customer lists provided to a state or local police agency by an
alarm or security company at the request of the agency shall be
construed to be records subject to this subdivision.
Notwithstanding any other provision of this subdivision, state and
local law enforcement agencies shall make public the following
information, except to the extent that disclosure of a particular
item of information would endanger the safety of a person involved in
an investigation or would endanger the successful completion of the
investigation or a related investigation:
(1) The full name and occupation of every individual arrested by
the agency, the individual's physical description including date of
birth, color of eyes and hair, sex, height and weight, the time and
date of arrest, the time and date of booking, the location of the
arrest, the factual circumstances surrounding the arrest, the amount
of bail set, the time and manner of release or the location where the
individual is currently being held, and all charges the individual
is being held upon, including any outstanding warrants from other
jurisdictions and parole or probation holds.
(2) Subject to the restrictions imposed by Section 841.5 of the
Penal Code, the time, substance, and location of all complaints or
requests for assistance received by the agency and the time and
nature of the response thereto, including, to the extent the
information regarding crimes alleged or committed or any other
incident investigated is recorded, the time, date, and location of
occurrence, the time and date of the report, the name and age of the
victim, the factual circumstances surrounding the crime or incident,
and a general description of any injuries, property, or weapons
involved. The name of a victim of any crime defined by Section 220,
261, 261.5, 262, 264, 264.1, 273a, 273d, 273.5, 286, 288, 288a, 289,
422.6, 422.7, 422.75, or 646.9 of the Penal Code may be withheld at
the victim's request, or at the request of the victim's parent or
guardian if the victim is a minor. When a person is the victim of
more than one crime, information disclosing that the person is a
victim of a crime defined by Section 220, 261, 261.5, 262, 264,
264.1, 273a, 273d, 286, 288, 288a, 289, 422.6, 422.7, 422.75, or
646.9 of the Penal Code may be deleted at the request of the victim,
or the victim's parent or guardian if the victim is a minor, in
making the report of the crime, or of any crime or incident
accompanying the crime, available to the public in compliance with
the requirements of this paragraph.
(3) Subject to the restrictions of Section 841.5 of the Penal Code
and this subdivision, the current address of every individual
arrested by the agency and the current address of the victim of a
crime, where the requester declares under penalty of perjury that the
request is made for a scholarly, journalistic, political, or
governmental purpose, or that the request is made for investigation
purposes by a licensed private investigator as described in Chapter
11.3 (commencing with Section 7512) of Division 3 of the Business and
Professions Code. However, the address of the victim of any crime
defined by Section 220, 261, 261.5, 262, 264, 264.1, 273a, 273d,
273.5, 286, 288, 288a, 289, 422.6, 422.7, 422.75, or 646.9 of the
Penal Code shall remain confidential. Address information obtained
pursuant to this paragraph may not be used directly or indirectly, or
furnished to another, to sell a product or service to any individual
or group of individuals, and the requester shall execute a
declaration to that effect under penalty of perjury. Nothing in this
paragraph shall be construed to prohibit or limit a scholarly,
journalistic, political, or government use of address information
obtained pursuant to this paragraph.
(g) Test questions, scoring keys, and other examination data used
to administer a licensing examination, examination for employment, or
academic examination, except as provided for in Chapter 3
(commencing with Section 99150) of Part 65 of the Education Code.
(h) The contents of real estate appraisals or engineering or
feasibility estimates and evaluations made for or by the state or
local agency relative to the acquisition of property, or to
prospective public supply and construction contracts, until all of
the property has been acquired or all of the contract agreement
obtained. However, the law of eminent domain shall not be affected by
this provision.
(i) Information required from any taxpayer in connection with the
collection of local taxes that is received in confidence and the
disclosure of the information to other persons would result in unfair
competitive disadvantage to the person supplying the information.
(j) Library circulation records kept for the purpose of
identifying the borrower of items available in libraries, and library
and museum materials made or acquired and presented solely for
reference or exhibition purposes. The exemption in this subdivision
shall not apply to records of fines imposed on the borrowers.
(k) Records, the disclosure of which is exempted or prohibited
pursuant to federal or state law, including, but not limited to,
provisions of the Evidence Code relating to privilege.
(l) Correspondence of and to the Governor or employees of the
Governor's office or in the custody of or maintained by the Governor'
s Legal Affairs Secretary. However, public records shall not be
transferred to the custody of the Governor's Legal Affairs Secretary
to evade the disclosure provisions of this chapter.
(m) In the custody of or maintained by the Legislative Counsel,
except those records in the public database maintained by the
Legislative Counsel that are described in Section 10248.
(n) Statements of personal worth or personal financial data
required by a licensing agency and filed by an applicant with the
licensing agency to establish his or her personal qualification for
the license, certificate, or permit applied for.
(o) Financial data contained in applications for financing under
Division 27 (commencing with Section 44500) of the Health and Safety
Code, where an authorized officer of the California Pollution Control
Financing Authority determines that disclosure of the financial data
would be competitively injurious to the applicant and the data is
required in order to obtain guarantees from the United States Small
Business Administration. The California Pollution Control Financing
Authority shall adopt rules for review of individual requests for
confidentiality under this section and for making available to the
public those portions of an application that are subject to
disclosure under this chapter.
(p) Records of state agencies related to activities governed by
Chapter 10.3 (commencing with Section 3512), Chapter 10.5 (commencing
with Section 3525), and Chapter 12 (commencing with Section 3560) of
Division 4 of Title 1, that reveal a state agency's deliberative
processes, impressions, evaluations, opinions, recommendations,
meeting minutes, research, work products, theories, or strategy, or
that provide instruction, advice, or training to employees who do not
have full collective bargaining and representation rights under
these chapters. Nothing in this subdivision shall be construed to
limit the disclosure duties of a state agency with respect to any
other records relating to the activities governed by the employee
relations acts referred to in this subdivision.
(q) Records of state agencies related to activities governed by
Article 2.6 (commencing with Section 14081), Article 2.8 (commencing
with Section 14087.5), and Article 2.91 (commencing with Section
14089) of Chapter 7 of Part 3 of Division 9 of the Welfare and
Institutions Code, that reveal the special negotiator's deliberative
processes, discussions, communications, or any other portion of the
negotiations with providers of health care services, impressions,
opinions, recommendations, meeting minutes, research, work product,
theories, or strategy, or that provide instruction, advice, or
training to employees.
Except for the portion of a contract containing the rates of
payment, contracts for inpatient services entered into pursuant to
these articles, on or after April 1, 1984, shall be open to
inspection one year after they are fully executed. If a contract for
inpatient services that is entered into prior to April 1, 1984, is
amended on or after April 1, 1984, the amendment, except for any
portion containing the rates of payment, shall be open to inspection
one year after it is fully executed. If the California Medical
Assistance Commission enters into contracts with health care
providers for other than inpatient hospital services, those contracts
shall be open to inspection one year after they are fully executed.
Three years after a contract or amendment is open to inspection
under this subdivision, the portion of the contract or amendment
containing the rates of payment shall be open to inspection.
Notwithstanding any other provision of law, the entire contract or
amendment shall be open to inspection by the Joint Legislative Audit
Committee and the Legislative Analyst's Office. The committee and
that office shall maintain the confidentiality of the contracts and
amendments until the time a contract or amendment is fully open to
inspection by the public.
(r) Records of Native American graves, cemeteries, and sacred
places and records of Native American places, features, and objects
described in Sections 5097.9 and 5097.993 of the Public Resources
Code maintained by, or in the possession of, the Native American
Heritage Commission, another state agency, or a local agency.
(s) A final accreditation report of the Joint Commission on
Accreditation of Hospitals that has been transmitted to the State
Department of Public Health pursuant to subdivision (b) of Section
1282 of the Health and Safety Code.
(t) Records of a local hospital district, formed pursuant to
Division 23 (commencing with Section 32000) of the Health and Safety
Code, or the records of a municipal hospital, formed pursuant to
Article 7 (commencing with Section 37600) or Article 8 (commencing
with Section 37650) of Chapter 5 of Division 3 of Title 4 of this
code, that relate to any contract with an insurer or nonprofit
hospital service plan for inpatient or outpatient services for
alternative rates pursuant to Section 10133 or 11512 of the Insurance
Code. However, the record shall be open to inspection within one
year after the contract is fully executed.
(u) (1) Information contained in applications for licenses to
carry firearms issued pursuant to Section 12050 of the Penal Code by
the sheriff of a county or the chief or other head of a municipal
police department that indicates when or where the applicant is
vulnerable to attack or that concerns the applicant's medical or
psychological history or that of members of his or her family.
(2) The home address and telephone number of peace officers,
judges, court commissioners, and magistrates that are set forth in
applications for licenses to carry firearms issued pursuant to
Section 12050 of the Penal Code by the sheriff of a county or the
chief or other head of a municipal police department.
(3) The home address and telephone number of peace officers,
judges, court commissioners, and magistrates that are set forth in
licenses to carry firearms issued pursuant to Section 12050 of the
Penal Code by the sheriff of a county or the chief or other head of a
municipal police department.
(v) (1) Records of the Major Risk Medical Insurance Program
related to activities governed by Part 6.3 (commencing with Section
12695) and Part 6.5 (commencing with Section 12700) of Division 2 of
the Insurance Code, and that reveal the deliberative processes,
discussions, communications, or any other portion of the negotiations
with health plans, or the impressions, opinions, recommendations,
meeting minutes, research, work product, theories, or strategy of the
board or its staff, or records that provide instructions, advice, or
training to employees.
(2) (A) Except for the portion of a contract that contains the
rates of payment, contracts for health coverage entered into pursuant
to Part 6.3 (commencing with Section 12695) or Part 6.5 (commencing
with Section 12700) of Division 2 of the Insurance Code, on or after
July 1, 1991, shall be open to inspection one year after they have
been fully executed.
(B) If a contract for health coverage that is entered into prior
to July 1, 1991, is amended on or after July 1, 1991, the amendment,
except for any portion containing the rates of payment, shall be open
to inspection one year after the amendment has been fully executed.
(3) Three years after a contract or amendment is open to
inspection pursuant to this subdivision, the portion of the contract
or amendment containing the rates of payment shall be open to
inspection.
(4) Notwithstanding any other provision of law, the entire
contract or amendments to a contract shall be open to inspection by
the Joint Legislative Audit Committee. The committee shall maintain
the confidentiality of the contracts and amendments thereto, until
the contract or amendments to a contract is open to inspection
pursuant to paragraph (3).
(w) (1) Records of the Major Risk Medical Insurance Program
related to activities governed by Chapter 14 (commencing with Section
10700) of Part 2 of Division 2 of the Insurance Code, and that
reveal the deliberative processes, discussions, communications, or
any other portion of the negotiations with health plans, or the
impressions, opinions, recommendations, meeting minutes, research,
work product, theories, or strategy of the board or its staff, or
records that provide instructions, advice, or training to employees.
(2) Except for the portion of a contract that contains the rates
of payment, contracts for health coverage entered into pursuant to
Chapter 14 (commencing with Section 10700) of Part 2 of Division 2 of
the Insurance Code, on or after January 1, 1993, shall be open to
inspection one year after they have been fully executed.
(3) Notwithstanding any other provision of law, the entire
contract or amendments to a contract shall be open to inspection by
the Joint Legislative Audit Committee. The committee shall maintain
the confidentiality of the contracts and amendments thereto, until
the contract or amendments to a contract is open to inspection
pursuant to paragraph (2).
(x) Financial data contained in applications for registration, or
registration renewal, as a service contractor filed with the Director
of Consumer Affairs pursuant to Chapter 20 (commencing with Section
9800) of Division 3 of the Business and Professions Code, for the
purpose of establishing the service contractor's net worth, or
financial data regarding the funded accounts held in escrow for
service contracts held in force in this state by a service
contractor.
(y) (1) Records of the Managed Risk Medical Insurance Board
related to activities governed by Part 6.2 (commencing with Section
12693) or Part 6.4 (commencing with Section 12699.50) of Division 2
of the Insurance Code, and that reveal the deliberative processes,
discussions, communications, or any other portion of the negotiations
with health plans, or the impressions, opinions, recommendations,
meeting minutes, research, work product, theories, or strategy of the
board or its staff, or records that provide instructions, advice, or
training to employees.
(2) (A) Except for the portion of a contract that contains the
rates of payment, contracts entered into pursuant to Part 6.2
(commencing with Section 12693) or Part 6.4 (commencing with Section
12699.50) of Division 2 of the Insurance Code, on or after January 1,
1998, shall be open to inspection one year after they have been
fully executed.
(B) In the event that a contract entered into pursuant to Part 6.2
(commencing with Section 12693) or Part 6.4 (commencing with Section
12699.50) of Division 2 of the Insurance Code is amended, the
amendment shall be open to inspection one year after the amendment
has been fully executed.
(3) Three years after a contract or amendment is open to
inspection pursuant to this subdivision, the portion of the contract
or amendment containing the rates of payment shall be open to
inspection.
(4) Notwithstanding any other provision of law, the entire
contract or amendments to a contract shall be open to inspection by
the Joint Legislative Audit Committee. The committee shall maintain
the confidentiality of the contracts and amendments thereto until the
contract or amendments to a contract are open to inspection pursuant
to paragraph (2) or (3).
(5) The exemption from disclosure provided pursuant to this
subdivision for the contracts, deliberative processes, discussions,
communications, negotiations with health plans, impressions,
opinions, recommendations, meeting minutes, research, work product,
theories, or strategy of the board or its staff shall also apply to
the contracts, deliberative processes, discussions, communications,
negotiations with health plans, impressions, opinions,
recommendations, meeting minutes, research, work product, theories,
or strategy of applicants pursuant to Part 6.4 (commencing with
Section 12699.50) of Division 2 of the Insurance Code.
(z) Records obtained pursuant to paragraph (2) of subdivision (c)
of Section 2891.1 of the Public Utilities Code.
(aa) A document prepared by or for a state or local agency that
assesses its vulnerability to terrorist attack or other criminal acts
intended to disrupt the public agency's operations and that is for
distribution or consideration in a closed session.
(bb) Critical infrastructure information, as defined in Section
131(3) of Title 6 of the United States Code, that is voluntarily
submitted to the California Office of Homeland Security for use by
that office, including the identity of the person who or entity that
voluntarily submitted the information. As used in this subdivision,
"voluntarily submitted" means submitted in the absence of the office
exercising any legal authority to compel access to or submission of
critical infrastructure information. This subdivision shall not
affect the status of information in the possession of any other state
or local governmental agency.
(cc) All information provided to the Secretary of State by a
person for the purpose of registration in the Advance Health Care
Directive Registry, except that those records shall be released at
the request of a health care provider, a public guardian, or the
registrant's legal representative.
(dd) (1) Records of the Managed Risk Medical Insurance Board
relating to activities governed by Part 6.45 (commencing with Section
12699.201) of Division 2 of the Insurance Code, and that reveal the
deliberative processes, discussions, communications, or any other
portion of the negotiations with entities contracting or seeking to
contract with the board, or the impressions, opinions,
recommendations, meeting minutes, research, work product, theories,
or strategy of the board or its staff, or records that provide
instructions, advice, or training to employees.
(2) (A) Except for the portion of a contract that contains the
rates of payment, contracts entered into pursuant to Part 6.45
(commencing with Section 12699.201) of Division 2 of the Insurance
Code on or after January 1, 2008, shall be open to inspection one
year after they have been fully executed.
(B) If a contract entered into pursuant to Part 6.45 (commencing
with Section 12699.201) of Division 2 of the Insurance Code is
amended, the amendment shall be open to inspection one year after the
amendment has been fully executed.
(3) Three years after a contract or amendment is open to
inspection pursuant to this subdivision, the portion of the contract
or amendment containing the rates of payment shall be open to
inspection.
(4) Notwithstanding any other provision of law, the entire
contract or amendments to a contract shall be open to inspection by
the Joint Legislative Audit Committee and the Legislative Analyst's
Office. The committee and the office shall maintain the
confidentiality of the contracts and amendments thereto until the
contract or amendments to a contract are open to inspection pursuant
to paragraph (2) or (3).
Nothing in this section prevents any agency from opening its
records concerning the administration of the agency to public
inspection, unless disclosure is otherwise prohibited by law.
Nothing in this section prevents any health facility from
disclosing to a certified bargaining agent relevant financing
information pursuant to Section 8 of the National Labor Relations Act
(29 U.S.C. Sec. 158).
SEC. 4. Section 11126 of the Government Code is
amended to read:
11126. (a) (1) Nothing in this article shall be construed to
prevent a state body from holding closed sessions during a regular or
special meeting to consider the appointment, employment, evaluation
of performance, or dismissal of a public employee or to hear
complaints or charges brought against that employee by another person
or employee unless the employee requests a public hearing.
(2) As a condition to holding a closed session on the complaints
or charges to consider disciplinary action or to consider dismissal,
the employee shall be given written notice of his or her right to
have a public hearing, rather than a closed session, and that notice
shall be delivered to the employee personally or by mail at least 24
hours before the time for holding a regular or special meeting. If
notice is not given, any disciplinary or other action taken against
any employee at the closed session shall be null and void.
(3) The state body also may exclude from any public or closed
session, during the examination of a witness, any or all other
witnesses in the matter being investigated by the state body.
(4) Following the public hearing or closed session, the body may
deliberate on the decision to be reached in a closed session.
(b) For the purposes of this section, "employee" does not include
any person who is elected to, or appointed to a public office by, any
state body. However, officers of the California State University who
receive compensation for their services, other than per diem and
ordinary and necessary expenses, shall, when engaged in that
capacity, be considered employees. Furthermore, for purposes of this
section, the term employee includes a person exempt from civil
service pursuant to subdivision (e) of Section 4 of Article VII of
the California Constitution.
(c) Nothing in this article shall be construed to do any of the
following:
(1) Prevent state bodies that administer the licensing of persons
engaging in businesses or professions from holding closed sessions to
prepare, approve, grade, or administer examinations.
(2) Prevent an advisory body of a state body that administers the
licensing of persons engaged in businesses or professions from
conducting a closed session to discuss matters that the advisory body
has found would constitute an unwarranted invasion of the privacy of
an individual licensee or applicant if discussed in an open meeting,
provided the advisory body does not include a quorum of the members
of the state body it advises. Those matters may include review of an
applicant's qualifications for licensure and an inquiry specifically
related to the state body's enforcement program concerning an
individual licensee or applicant where the inquiry occurs prior to
the filing of a civil, criminal, or administrative disciplinary
action against the licensee or applicant by the state body.
(3) Prohibit a state body from holding a closed session to
deliberate on a decision to be reached in a proceeding required to be
conducted pursuant to Chapter 5 (commencing with Section 11500) or
similar provisions of law.
(4) Grant a right to enter any correctional institution or the
grounds of a correctional institution where that right is not
otherwise granted by law, nor shall anything in this article be
construed to prevent a state body from holding a closed session when
considering and acting upon the determination of a term, parole, or
release of any individual or other disposition of an individual case,
or if public disclosure of the subjects under discussion or
consideration is expressly prohibited by statute.
(5) Prevent any closed session to consider the conferring of
honorary degrees, or gifts, donations, and bequests that the donor or
proposed donor has requested in writing to be kept confidential.
(6) Prevent the Alcoholic Beverage Control Appeals Board from
holding a closed session for the purpose of holding a deliberative
conference as provided in Section 11125.
(7) (A) Prevent a state body from holding closed sessions with its
negotiator prior to the purchase, sale, exchange, or lease of real
property by or for the state body to give instructions to its
negotiator regarding the price and terms of payment for the purchase,
sale, exchange, or lease.
(B) However, prior to the closed session, the state body shall
hold an open and public session in which it identifies the real
property or real properties that the negotiations may concern and the
person or persons with whom its negotiator may negotiate.
(C) For purposes of this paragraph, the negotiator may be a member
of the state body.
(D) For purposes of this paragraph, "lease" includes renewal or
renegotiation of a lease.
(E) Nothing in this paragraph shall preclude a state body from
holding a closed session for discussions regarding eminent domain
proceedings pursuant to subdivision (e).
(8) Prevent the California Postsecondary Education Commission from
holding closed sessions to consider matters pertaining to the
appointment or termination of the Director of the California
Postsecondary Education Commission.
(9) Prevent the Council for Private Postsecondary and Vocational
Education from holding closed sessions to consider matters pertaining
to the appointment or termination of the Executive Director of the
Council for Private Postsecondary and Vocational Education.
(10) Prevent the Franchise Tax Board from holding closed sessions
for the purpose of discussion of confidential tax returns or
information the public disclosure of which is prohibited by law, or
from considering matters pertaining to the appointment or removal of
the Executive Officer of the Franchise Tax Board.
(11) Require the Franchise Tax Board to notice or disclose any
confidential tax information considered in closed sessions, or
documents executed in connection therewith, the public disclosure of
which is prohibited pursuant to Article 2 (commencing with Section
19542) of Chapter 7 of Part 10.2 of the Revenue and Taxation Code.
(12) Prevent the Board of Corrections from holding closed sessions
when considering reports of crime conditions under Section 6027 of
the Penal Code.
(13) Prevent the State Air Resources Board from holding closed
sessions when considering the proprietary specifications and
performance data of manufacturers.
(14) Prevent the State Board of Education or the Superintendent of
Public Instruction, or any committee advising the board or the
superintendent, from holding closed sessions on those portions of its
review of assessment instruments pursuant to Chapter 5 (commencing
with Section 60600) of, or pursuant to Chapter 8 (commencing with
Section 60850) of, Part 33 of the Education Code during which actual
test content is reviewed and discussed. The purpose of this provision
is to maintain the confidentiality of the assessments under review.
(15) Prevent the California Integrated Waste Management Board or
its auxiliary committees from holding closed sessions for the purpose
of discussing confidential tax returns, discussing trade secrets or
confidential or proprietary information in its possession, or
discussing other data, the public disclosure of which is prohibited
by law.
(16) Prevent a state body that invests retirement, pension, or
endowment funds from holding closed sessions when considering
investment decisions. For purposes of consideration of shareholder
voting on corporate stocks held by the state body, closed sessions
for the purposes of voting may be held only with respect to election
of corporate directors, election of independent auditors, and other
financial issues that could have a material effect on the net income
of the corporation. For the purpose of real property investment
decisions that may be considered in a closed session pursuant to this
paragraph, a state body shall also be exempt from the provisions of
paragraph (7) relating to the identification of real properties prior
to the closed session.
(17) Prevent a state body, or boards, commissions, administrative
officers, or other representatives that may properly be designated by
law or by a state body, from holding closed sessions with its
representatives in discharging its responsibilities under Chapter 10
(commencing with Section 3500), Chapter 10.3 (commencing with Section
3512), Chapter 10.5 (commencing with Section 3525), or Chapter 10.7
(commencing of Section 3540) of Division 4 of Title 1 as the sessions
relate to salaries, salary schedules, or compensation paid in the
form of fringe benefits. For the purposes enumerated in the preceding
sentence, a state body may also meet with a state conciliator who
has intervened in the proceedings.
(18) (A) Prevent a state body from holding closed sessions to
consider matters posing a threat or potential threat of criminal or
terrorist activity against the personnel, property, buildings,
facilities, or equipment, including electronic data, owned, leased,
or controlled by the state body, where disclosure of these
considerations could compromise or impede the safety or security of
the personnel, property, buildings, facilities, or equipment,
including electronic data, owned, leased, or controlled by the state
body.
(B) Notwithstanding any other provision of law, a state body, at
any regular or special meeting, may meet in a closed session pursuant
to subparagraph (A) upon a two-thirds vote of the members present at
the meeting.
(C) After meeting in closed session pursuant to subparagraph (A),
the state body shall reconvene in open session prior to adjournment
and report that a closed session was held pursuant to subparagraph
(A), the general nature of the matters considered, and whether any
action was taken in closed session.
(D) After meeting in closed session pursuant to subparagraph (A),
the state body shall submit to the Legislative Analyst written
notification stating that it held this closed session, the general
reason or reasons for the closed session, the general nature of the
matters considered, and whether any action was taken in closed
session. The Legislative Analyst shall retain for no less than four
years any written notification received from a state body pursuant to
this subparagraph.
(d) (1) Notwithstanding any other provision of law, any meeting of
the Public Utilities Commission at which the rates of entities under
the commission's jurisdiction are changed shall be open and public.
(2) Nothing in this article shall be construed to prevent the
Public Utilities Commission from holding closed sessions to
deliberate on the institution of proceedings, or disciplinary actions
against any person or entity under the jurisdiction of the
commission.
(e) (1) Nothing in this article shall be construed to prevent a
state body, based on the advice of its legal counsel, from holding a
closed session to confer with, or receive advice from, its legal
counsel regarding pending litigation when discussion in open session
concerning those matters would prejudice the position of the state
body in the litigation.
(2) For purposes of this article, all expressions of the
lawyer-client privilege other than those provided in this subdivision
are hereby abrogated. This subdivision is the exclusive expression
of the lawyer-client privilege for purposes of conducting closed
session meetings pursuant to this article. For purposes of this
subdivision, litigation shall be considered pending when any of the
following circumstances exist:
(A) An adjudicatory proceeding before a court, an administrative
body exercising its adjudicatory authority, a hearing officer, or an
arbitrator, to which the state body is a party, has been initiated
formally.
(B) (i) A point has been reached where, in the opinion of the
state body on the advice of its legal counsel, based on existing
facts and circumstances, there is a significant exposure to
litigation against the state body.
(ii) Based on existing facts and circumstances, the state body is
meeting only to decide whether a closed session is authorized
pursuant to clause (i).
(C) (i) Based on existing facts and circumstances, the state body
has decided to initiate or is deciding whether to initiate
litigation.
(ii) The legal counsel of the state body shall prepare and submit
to it a memorandum stating the specific reasons and legal authority
for the closed session. If the closed session is pursuant to
paragraph (1), the memorandum shall include the title of the
litigation. If the closed session is pursuant to subparagraph (A) or
(B), the memorandum shall include the existing facts and
circumstances on which it is based. The legal counsel shall submit
the memorandum to the state body prior to the closed session, if
feasible, and in any case no later than one week after the closed
session. The memorandum shall be exempt from disclosure pursuant to
Section 6254.25.
(iii) For purposes of this subdivision, "litigation" includes any
adjudicatory proceeding, including eminent domain, before a court,
administrative body exercising its adjudicatory authority, hearing
officer, or arbitrator.
(iv) Disclosure of a memorandum required under this subdivision
shall not be deemed as a waiver of the lawyer-client privilege, as
provided for under Article 3 (commencing with Section 950) of Chapter
4 of Division 8 of the Evidence Code.
(f) In addition to subdivisions (a), (b), and (c), nothing in this
article shall be construed to do any of the following:
(1) Prevent a state body operating under a joint powers agreement
for insurance pooling from holding a closed session to discuss a
claim for the payment of tort liability or public liability losses
incurred by the state body or any member agency under the joint
powers agreement.
(2) Prevent the examining committee established by the State Board
of Forestry and Fire Protection, pursuant to Section 763 of the
Public Resources Code, from conducting a closed session to consider
disciplinary action against an individual professional forester prior
to the filing of an accusation against the forester pursuant to
Section 11503.
(3) Prevent an administrative committee established by the
California Board of Accountancy pursuant to Section 5020 of the
Business and Professions Code from conducting a closed session to
consider disciplinary action against an individual accountant prior
to the filing of an accusation against the accountant pursuant to
Section 11503. Nothing in this article shall be construed to prevent
an examining committee established by the California Board of
Accountancy pursuant to Section 5023 of the Business and Professions
Code from conducting a closed hearing to interview an individual
applicant or accountant regarding the applicant's qualifications.
(4) Prevent a state body, as defined in subdivision (b) of Section
11121, from conducting a closed session to consider any matter that
properly could be considered in closed session by the state body
whose authority it exercises.
(5) Prevent a state body, as defined in subdivision (d) of Section
11121, from conducting a closed session to consider any matter that
properly could be considered in a closed session by the body defined
as a state body pursuant to subdivision (a) or (b) of Section 11121.
(6) Prevent a state body, as defined in subdivision (c) of Section
11121, from conducting a closed session to consider any matter that
properly could be considered in a closed session by the state body it
advises.
(7) Prevent the State Board of Equalization from holding closed
sessions for either of the following:
(A) When considering matters pertaining to the appointment or
removal of the Executive Secretary of the State Board of
Equalization.
(B) For the purpose of hearing confidential taxpayer appeals or
data, the public disclosure of which is prohibited by law.
(8) Require the State Board of Equalization to disclose any action
taken in closed session or documents executed in connection with
that action, the public disclosure of which is prohibited by law
pursuant to Sections 15619 and 15641 of this code and Sections 833,
7056, 8255, 9255, 11655, 30455, 32455, 38705, 38706, 43651, 45982,
46751, 50159, 55381, and 60609 of the Revenue and Taxation Code.
(9) Prevent the California Earthquake Prediction Evaluation
Council, or other body appointed to advise the Director of the Office
of Emergency Services or the Governor concerning matters relating to
volcanic or earthquake predictions, from holding closed sessions
when considering the evaluation of possible predictions.
(g) This article does not prevent either of the following:
(1) The Teachers' Retirement Board or the Board of Administration
of the Public Employees' Retirement System from holding closed
sessions when considering matters pertaining to the recruitment,
appointment, employment, or removal of the chief executive officer or
when considering matters pertaining to the recruitment or removal of
the Chief Investment Officer of the State Teachers' Retirement
System or the Public Employees' Retirement System.
(2) The Commission on Teacher Credentialing from holding closed
sessions when considering matters relating to the recruitment,
appointment, or removal of its executive director.
(h) This article does not prevent the Board of Administration of
the Public Employees' Retirement System from holding closed sessions
when considering matters relating to the development of rates and
competitive strategy for plans offered pursuant to Chapter 15
(commencing with Section 21660) of Part 3 of Division 5 of Title 2.
(i) This article does not prevent the Managed Risk Medical
Insurance Board from holding closed sessions when considering matters
related to the development of rates and contracting strategy for
entities contracting or seeking to contract with the board pursuant
ot Part 6.45 (commencing with Section 12699.201) of Division 2 of the
Insurance Code.
SEC. 5. SEC. 3. Section 12803.2 is
added to the Government Code, to read:
12803.2. (a) The California Health and Human Services Agency
shall encourage fitness, wellness, and health promotion programs that
promote safe workplaces, healthy employer practices, and individual
efforts to improve health.
(b) (1) The Secretary of California Health and Human Services
shall establish and administer a program to track and assess the
effects of health care reform as set forth in the California Health
Care Reform and Cost Control Act. The secretary shall either complete
the assessment or contract for its preparation. If the secretary
determines to contract for the preparation of the assessment, he or
she shall seek a partnership and contract with independent, nonprofit
groups or foundations, academic institutions, or governmental
entities providing grants for health-related activities. The
secretary may seek other sources of funding, including grants, to
fund the assessment. The assessment shall include, at minimum, the
following components:
(A) An assessment of the sustainability and solvency of the
California Cooperative Health Insurance Purchasing Program
(Cal-CHIPP) (Part 6.45 (commencing with Section 12699.201) of
Division 2 of the Insurance Code). This assessment shall include the
number of persons purchasing health care coverage through Cal-CHIPP
by income bracket and by the size and type of their employer.
(B) An assessment of the cost and affordability of health care in
California. This assessment shall include the cost of health care
coverage products for individuals and families obtained through
employers, city and county governments, the Medi-Cal program, the
Public Employees' Medical and Hospital Care Act, Medicare Advantage
plans, and the individual market.
(C) An assessment of the health care coverage market in
California, including a review of the various insurers and health
care service plans, their offering and underwriting practices, their
efficiency in providing health care services, and their financial
conditions, including their medical loss ratios. This assessment
shall also include an assessment of risk selection by the plans and
insurers.
(D) An assessment of the effect on employers and employment,
including employer administrative costs, employee turnover rate, and
wages categorized by the type of employer and the size of the
business.
(E) An assessment of employer-based health care coverage,
including the number of employers providing coverage and the number
paying into Cal-CHIPP categorized by employer characteristic.
(F) An assessment of the change in access and availability of
health care throughout the state, including tracking the availability
of health care coverage products in rural and other underserved
areas of the state and assessing the adequacy of the health care
delivery infrastructure to meet the need for health care services.
This assessment shall include a more in-depth review of areas of the
state that were determined to be medically underserved in 2007.
(G) An assessment of the impact on the county health care safety
net system, including a review of the amount of uncompensated care
and emergency room use.
(H) An
assessment of health care coverage as compiled in the California
Health Interview Survey or other applicable surveys.
(I) An assessment of the wellness and health status of
Californians as compiled in the California Health Interview Survey or
other applicable surveys.
(J) An assessment of the capacity of the various health care
professions to provide care to the population included in health care
reform, identifying the number of each profession and their location
in the state.
(K) An assessment of the quality of the health care services, as
determined by recognized measures, provided in California.
(L) An assessment of the availability and potential for increasing
federal funding for health care services and coverage in California.
(M) Any other assessments as determined necessary by the advisory
board established pursuant to paragraph (2).
(2) An advisory body of individuals with knowledge and expertise
in health care policy reflecting the broad range of
interests in health policy that is chaired by the Secretary of
California Health and Human Services shall guide the assessment of
health care reform. The Governor shall appoint five members to the
advisory body, the Senate Committee on Rules shall appoint two
members, and the Speaker of the Assembly shall appoint two members.
(3) To the extent possible, the assessment shall maximize the use
of current surveys and databases, and the secretary shall seek
partnerships with independent, nonprofit groups or foundations or
academic institutions that administer or provide grants for
health-related surveys and data collection activities to build on
these current surveys and databases.
(4) To the extent feasible, in order to track the effect of health
care reform on ongoing trends in the health care field, the
assessments shall include data from years prior to the enactment of
the California Health Care Reform and Cost Control Act.
(5) The Secretary of California Health and Human Services and the
advisory body shall establish a timeline for reporting information to
the appropriate policy and fiscal committees of the Legislature. At
a minimum, the reporting timeline shall include the release of annual
data to serve as a benchmark for the assessment of the health care
reform. These annual benchmarks shall include the employer compliance
rate and the cost of health care coverage in the state. In addition,
the timeline shall include more in-depth reports addressing the
items listed under paragraph (1).
(c) The California Health and Human Services Agency, in
consultation with the Board of Administration of the Public Employees'
Retirement System, and after consultation with affected health care
provider groups, shall develop health care provider performance
measurement benchmarks and incorporate these benchmarks into a common
pay for performance model to be offered in every state-administered
health care program, including, but not limited to, the Public
Employees' Medical and Hospital Care Act, the Healthy Families
Program, the Major Risk Medical Insurance Program, the Medi-Cal
program, and Cal-CHIPP. These benchmarks shall be developed to
advance a common statewide framework for health care quality
measurement and reporting, including, but not limited to, measures
that have been approved by the National Quality Forum (NQF) such as
the Health Plan Employer Data and Information Set (HEDIS) and the
Joint Commission on Accreditation of Health Care Organizations
(JCAHO), and that have been adopted by the Hospitals Quality Alliance
and other national and statewide groups concerned with quality.
(d) The California Health and Human Services Agency, in
consultation with the Board of Administration of the Public Employees'
Retirement System, shall assume lead agency responsibility for
professional review and development of best practice standards in the
care and treatment of patients with high-cost chronic diseases, such
as asthma, diabetes, and heart disease. In developing the best
practice standards, the agency shall consider the use of an annual
health assessment for patients. Upon adoption of the standards,
each state health care program, including, but not limited to,
programs offered under the Public Employees' Medical and Hospital
Care Act, the Medi-Cal program, the Healthy Families Program, the
Major Risk Medical Insurance Program, and the California Cooperative
Health Insurance Purchasing Program, shall implement those standards.
SEC. 4. Section 1357 of the Health and
Safety Code is amended to read:
1357. As used in this article:
(a) "Dependent" means the spouse or child of an eligible employee,
subject to applicable terms of the health care plan contract
covering the employee, and includes dependents of guaranteed
association members if the association elects to include dependents
under its health coverage at the same time it determines its
membership composition pursuant to subdivision (o).
(b) "Eligible employee" means either of the following:
(1) Any permanent employee who is actively engaged on a full-time
basis in the conduct of the business of the small employer with a
normal workweek of at least 30 hours, at the small employer's regular
places of business, who has met any statutorily authorized
applicable waiting period requirements. The term includes sole
proprietors or partners of a partnership, if they are actively
engaged on a full-time basis in the small employer's business and
included as employees under a health care plan contract of a small
employer, but does not include employees who work on a part-time,
temporary, or substitute basis. It includes any eligible employee, as
defined in this paragraph, who obtains coverage through a guaranteed
association. Employees of employers purchasing through a guaranteed
association shall be deemed to be eligible employees if they would
otherwise meet the definition except for the number of persons
employed by the employer. Permanent employees who work at least 20
hours but not more than 29 hours are deemed to be eligible employees
if all four of the following apply:
(A) They otherwise meet the definition of an eligible employee
except for the number of hours worked.
(B) The employer offers the employees health coverage under a
health benefit plan.
(C) All similarly situated individuals are offered coverage under
the health benefit plan.
(D) The employee must have worked at least 20 hours per normal
workweek for at least 50 percent of the weeks in the previous
calendar quarter. The health care service plan may request any
necessary information to document the hours and time period in
question, including, but not limited to, payroll records and employee
wage and tax filings.
(2) Any member of a guaranteed association as defined in
subdivision (o).
(c) "In force business" means an existing health benefit plan
contract issued by the plan to a small employer.
(d) "Late enrollee" means an eligible employee or dependent who
has declined enrollment in a health benefit plan offered by a small
employer at the time of the initial enrollment period provided under
the terms of the health benefit plan and who subsequently requests
enrollment in a health benefit plan of that small employer, provided
that the initial enrollment period shall be a period of at least 30
days. It also means any member of an association that is a guaranteed
association as well as any other person eligible to purchase through
the guaranteed association when that person has failed to purchase
coverage during the initial enrollment period provided under the
terms of the guaranteed association's plan contract and who
subsequently requests enrollment in the plan, provided that the
initial enrollment period shall be a period of at least 30 days.
However, an eligible employee, any other person eligible for coverage
through a guaranteed association pursuant to subdivision (o), or an
eligible dependent shall not be considered a late enrollee if any of
the following is applicable:
(1) The individual meets all of the following requirements:
(A) He or she was covered under another employer health benefit
plan, the Healthy Families Program, or no share-of-cost Medi-Cal
coverage at the time the individual was eligible to enroll.
(B) He or she certified at the time of the initial enrollment that
coverage under another employer health benefit plan, the Healthy
Families Program, or no share-of-cost Medi-Cal coverage was the
reason for declining enrollment, provided that, if the individual was
covered under another employer health plan, the individual was given
the opportunity to make the certification required by this
subdivision and was notified that failure to do so could result in
later treatment as a late enrollee.
(C) He or she has lost or will lose coverage under another
employer health benefit plan as a result of termination of employment
of the individual or of a person through whom the individual was
covered as a dependent, change in employment status of the individual
or of a person through whom the individual was covered as a
dependent, termination of the other plan's coverage, cessation of an
employer's contribution toward an employee or dependent's coverage,
death of the person through whom the individual was covered as a
dependent, legal separation, divorce, loss of coverage under the
Healthy Families Program as a result of exceeding the program's
income or age limits, or loss of no share-of-cost Medi-Cal coverage.
(D) He or she requests enrollment within 30 days after termination
of coverage or employer contribution toward coverage provided under
another employer health benefit plan.
(2) The employer offers multiple health benefit plans and the
employee elects a different plan during an open enrollment period.
(3) A court has ordered that coverage be provided for a spouse or
minor child under a covered employee's health benefit plan.
(4) (A) In the case of an eligible employee, as defined in
paragraph (1) of subdivision (b), the plan cannot produce a written
statement from the employer stating that the individual or the person
through whom the individual was eligible to be covered as a
dependent, prior to declining coverage, was provided with, and
signed, acknowledgment of an explicit written notice in boldface type
specifying that failure to elect coverage during the initial
enrollment period permits the plan to impose, at the time of the
individual's later decision to elect coverage, an exclusion from
coverage for a period of 12 months as well as a six-month preexisting
condition exclusion, unless the individual meets the criteria
specified in paragraph (1), (2), or (3).
(B) In the case of an association member who did not purchase
coverage through a guaranteed association, the plan cannot produce a
written statement from the association stating that the association
sent a written notice in boldface type to all potentially eligible
association members at their last known address prior to the initial
enrollment period informing members that failure to elect coverage
during the initial enrollment period permits the plan to impose, at
the time of the member's later decision to elect coverage, an
exclusion from coverage for a period of 12 months as well as a
six-month preexisting condition exclusion unless the member can
demonstrate that he or she meets the requirements of subparagraphs
(A), (C), and (D) of paragraph (1) or meets the requirements of
paragraph (2) or (3).
(C) In the case of an employer or person who is not a member of an
association, was eligible to purchase coverage through a guaranteed
association, and did not do so, and would not be eligible to purchase
guaranteed coverage unless purchased through a guaranteed
association, the employer or person can demonstrate that he or she
meets the requirements of subparagraphs (A), (C), and (D) of
paragraph (1), or meets the requirements of paragraph (2) or (3), or
that he or she recently had a change in status that would make him or
her eligible and that application for enrollment was made within 30
days of the change.
(5) The individual is an employee or dependent who meets the
criteria described in paragraph (1) and was under a COBRA
continuation provision and the coverage under that provision has been
exhausted. For purposes of this section, the definition of "COBRA"
set forth in subdivision (e) of Section 1373.621 shall apply.
(6) The individual is a dependent of an enrolled eligible employee
who has lost or will lose his or her coverage under the Healthy
Families Program as a result of exceeding the program's income or age
limits or no share-of-cost Medi-Cal coverage and requests enrollment
within 30 days after notification of this loss of coverage.
(7) The individual is an eligible employee who previously declined
coverage under an employer health benefit plan and who has
subsequently acquired a dependent who would be eligible for coverage
as a dependent of the employee through marriage, birth, adoption, or
placement for adoption, and who enrolls for coverage under that
employer health benefit plan on his or her behalf and on behalf of
his or her dependent within 30 days following the date of marriage,
birth, adoption, or placement for adoption, in which case the
effective date of coverage shall be the first day of the month
following the date the completed request for enrollment is received
in the case of marriage, or the date of birth, or the date of
adoption or placement for adoption, whichever applies. Notice of the
special enrollment rights contained in this paragraph shall be
provided by the employer to an employee at or before the time the
employee is offered an opportunity to enroll in plan coverage.
(8) The individual is an eligible employee who has declined
coverage for himself or herself or his or her dependents during a
previous enrollment period because his or her dependents were covered
by another employer health benefit plan at the time of the previous
enrollment period. That individual may enroll himself or herself or
his or her dependents for plan coverage during a special open
enrollment opportunity if his or her dependents have lost or will
lose coverage under that other employer health benefit plan. The
special open enrollment opportunity shall be requested by the
employee not more than 30 days after the date that the other health
coverage is exhausted or terminated. Upon enrollment, coverage shall
be effective not later than the first day of the first calendar month
beginning after the date the request for enrollment is received.
Notice of the special enrollment rights contained in this paragraph
shall be provided by the employer to an employee at or before the
time the employee is offered an opportunity to enroll in plan
coverage.
(e) "New business" means a health care service plan contract
issued to a small employer that is not the plan's in force business.
(f) "Preexisting condition provision" means a contract provision
that excludes coverage for charges or expenses incurred during a
specified period following the employee's effective date of coverage,
as to a condition for which medical advice, diagnosis, care, or
treatment was recommended or received during a specified period
immediately preceding the effective date of coverage.
(g) "Creditable coverage" means:
(1) Any individual or group policy, contract, or program that is
written or administered by a disability insurer, health care service
plan, fraternal benefits society, self-insured employer plan, or any
other entity, in this state or elsewhere, and that arranges or
provides medical, hospital, and surgical coverage not designed to
supplement other private or governmental plans. The term includes
continuation or conversion coverage but does not include accident
only, credit, coverage for onsite medical clinics, disability income,
Medicare supplement, long-term care, dental, vision, coverage issued
as a supplement to liability insurance, insurance arising out of a
workers' compensation or similar law, automobile medical payment
insurance, or insurance under which benefits are payable with or
without regard to fault and that is statutorily required to be
contained in any liability insurance policy or equivalent
self-insurance.
(2) The federal Medicare program pursuant to Title XVIII of the
Social Security Act.
(3) The medicaid Medicaid program
pursuant to Title XIX of the Social Security Act.
(4) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(5) 10 U.S.C. Chapter 55 (commencing with Section 1071) (Civilian
Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6) A medical care program of the Indian Health Service or of a
tribal organization.
(7) A state health benefits risk pool.
(8) A health plan offered under 5 U.S.C. Chapter 89 (commencing
with Section 8901) (Federal Employees Health Benefits Program
(FEHBP)).
(9) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the Public Health Service Act,
as amended by Public Law 104-191, the Health Insurance Portability
and Accountability Act of 1996.
(10) A health benefit plan under Section 5(e) of the Peace Corps
Act (22 U.S.C. Sec. 2504(e)).
(11) Any other creditable coverage as defined by subdivision (c)
of Section 2701 of Title XXVII of the federal Public Health Services
Act (42 U.S.C. Sec. 300gg(c)).
(h) "Rating period" means the period for which premium rates
established by a plan are in effect and shall be no less than six
months.
(i) "Risk adjusted employee risk rate" means the rate determined
for an eligible employee of a small employer in a particular risk
category after applying the risk adjustment factor.
(j) "Risk adjustment factor" means the percentage adjustment to be
applied equally to each standard employee risk rate for a particular
small employer, based upon any expected deviations from standard
cost of services. This factor may not be more than 120 percent or
less than 80 percent until July 1, 1996. Effective July 1, 1996, this
factor may not be more than 110 percent or less than 90 percent.
On and after January 1, 2010, no risk adjustment factor shall be
applied.
(k) "Risk category" means the following characteristics of an
eligible employee: age, geographic region, and family composition of
the employee, plus the health benefit plan selected by the small
employer.
(1) No more than the following age categories may be used in
determining premium rates:
Under 30
30-39
40-49
50-54
55-59
60-64
65 and over
However, for the 65 and over age category, separate premium rates
may be specified depending upon whether coverage under the plan
contract will be primary or secondary to benefits provided by the
federal Medicare program pursuant to Title XVIII of the federal
Social Security Act.
(2) Small employer health care service plans shall base rates to
small employers using no more than the following family size
categories:
(A) Single.
(B) Married couple.
(C) One adult and child or children.
(D) Married couple and child or children.
(3) (A) In determining rates for small employers, a plan that
operates statewide shall use no more than nine geographic regions in
the state, have no region smaller than an area in which the first
three digits of all its ZIP Codes are in common within a county, and
divide no county into more than two regions. Plans shall be deemed to
be operating statewide if their coverage area includes 90 percent or
more of the state's population. Geographic regions established
pursuant to this section shall, as a group, cover the entire state,
and the area encompassed in a geographic region shall be separate and
distinct from areas encompassed in other geographic regions.
Geographic regions may be noncontiguous.
(B) (i) In determining rates for small employers, a plan that does
not operate statewide shall use no more than the number of
geographic regions in the state that is determined by the following
formula: the population, as determined in the last federal census, of
all counties that are included in their entirety in a plan's service
area divided by the total population of the state, as determined in
the last federal census, multiplied by nine. The resulting number
shall be rounded to the nearest whole integer. No region may be
smaller than an area in which the first three digits of all its ZIP
Codes are in common within a county and no county may be divided into
more than two regions. The area encompassed in a geographic region
shall be separate and distinct from areas encompassed in other
geographic regions. Geographic regions may be noncontiguous. No plan
shall have less than one geographic area.
(ii) If the formula in clause (i) results in a plan that operates
in more than one county having only one geographic region, then the
formula in clause (i) shall not apply and the plan may have two
geographic regions, provided that no county is divided into more than
one region.
Nothing in this section shall be construed to require a plan to
establish a new service area or to offer health coverage on a
statewide basis, outside of the plan's existing service area.
(l) "Small employer" means either of the following:
(1) Any person, firm, proprietary or nonprofit corporation,
partnership, public agency, or association that is actively engaged
in business or service, that, on at least 50 percent of its working
days during the preceding calendar quarter or preceding calendar
year, employed at least two, but no more than 50, eligible employees,
the majority of whom were employed within this state, that was not
formed primarily for purposes of buying health care service plan
contracts, and in which a bona fide employer-employee relationship
exists. In determining whether to apply the calendar quarter or
calendar year test, a health care service plan shall use the test
that ensures eligibility if only one test would establish
eligibility. However, for purposes of subdivisions (a), (b), and (c)
of Section 1357.03, the definition shall include employers with at
least three eligible employees until July 1, 1997, and two eligible
employees thereafter. In determining the number of eligible
employees, companies that are affiliated companies and that are
eligible to file a combined tax return for purposes of state taxation
shall be considered one employer. Subsequent to the issuance of a
health care service plan contract to a small employer pursuant to
this article, and for the purpose of determining eligibility, the
size of a small employer shall be determined annually. Except as
otherwise specifically provided in this article, provisions of this
article that apply to a small employer shall continue to apply until
the plan contract anniversary following the date the employer no
longer meets the requirements of this definition. It includes any
small employer as defined in this paragraph who purchases coverage
through a guaranteed association, and any employer purchasing
coverage for employees through a guaranteed association.
(2) Any guaranteed association, as defined in subdivision (n),
that purchases health coverage for members of the association.
(m) "Standard employee risk rate" means the rate applicable to an
eligible employee in a particular risk category in a small employer
group.
(n) "Guaranteed association" means a nonprofit organization
comprised of a group of individuals or employers who associate based
solely on participation in a specified profession or industry,
accepting for membership any individual or employer meeting its
membership criteria, and that (1) includes one or more small
employers as defined in paragraph (1) of subdivision (l), (2) does
not condition membership directly or indirectly on the health or
claims history of any person, (3) uses membership dues solely for and
in consideration of the membership and membership benefits, except
that the amount of the dues shall not depend on whether the member
applies for or purchases insurance offered to the association, (4) is
organized and maintained in good faith for purposes unrelated to
insurance, (5) has been in active existence on January 1, 1992, and
for at least five years prior to that date, (6) has included health
insurance as a membership benefit for at least five years prior to
January 1, 1992, (7) has a constitution and bylaws, or other
analogous governing documents that provide for election of the
governing board of the association by its members, (8) offers any
plan contract that is purchased to all individual members and
employer members in this state, (9) includes any member choosing to
enroll in the plan contracts offered to the association provided that
the member has agreed to make the required premium payments, and
(10) covers at least 1,000 persons with the health care service plan
with which it contracts. The requirement of 1,000 persons may be met
if component chapters of a statewide association contracting
separately with the same carrier cover at least 1,000 persons in the
aggregate.
This subdivision applies regardless of whether a contract issued
by a plan is with an association or a trust formed for, or sponsored
by, an association to administer benefits for association members.
For purposes of this subdivision, an association formed by a
merger of two or more associations after January 1, 1992, and
otherwise meeting the criteria of this subdivision shall be deemed to
have been in active existence on January 1, 1992, if its predecessor
organizations had been in active existence on January 1, 1992, and
for at least five years prior to that date and otherwise met the
criteria of this subdivision.
(o) "Members of a guaranteed association" means any individual or
employer meeting the association's membership criteria if that person
is a member of the association and chooses to purchase health
coverage through the association. At the association's discretion, it
also may include employees of association members, association
staff, retired members, retired employees of members, and surviving
spouses and dependents of deceased members. However, if an
association chooses to include these persons as members of the
guaranteed association, the association shall make that election in
advance of purchasing a plan contract. Health care service plans may
require an association to adhere to the membership composition it
selects for up to 12 months.
(p) "Affiliation period" means a period that, under the terms of
the health care service plan contract, must expire before health care
services under the contract become effective.
SEC. 5.
Section 1357.12 of the Health and Safety Code
is amended to read:
1357.12. Premiums for contracts offered or delivered by plans on
or after the effective date of this article shall be subject to the
following requirements:
(a) (1) The premium for new business shall be determined for an
eligible employee in a particular risk category after applying a risk
adjustment factor to the plan's standard employee risk rates. The
risk adjusted employee risk rate may not be more than 120 percent or
less than 80 percent of the plan's applicable standard employee risk
rate until July 1, 1996. Effective July 1, 1996, this factor may not
be more than 110 percent or less than 90 percent. On and after
January 1, 2010, no risk adjustment factor shall be
applied.
(2) The premium charged a small employer for new business shall be
equal to the sum of the risk adjusted employee risk rates.
(3) The standard employee risk rates applied to a small employer
for new business shall be in effect for no less than six months.
(b) (1) The premium for in force business shall be determined for
an eligible employee in a particular risk category after applying a
risk adjustment factor to the plan's standard employee risk rates.
The risk adjusted employee risk rates may not be more than 120
percent or less than 80 percent of the plan's applicable standard
employee risk rate until July 1, 1996. Effective July 1, 1996, this
factor may not be more than 110 percent or less than 90 percent. The
factor effective July 1, 1996, shall apply to in force business at
the earlier of either the time of renewal or July 1, 1997. The risk
adjustment factor applied to a small employer may not increase by
more than 10 percentage points from the risk adjustment factor
applied in the prior rating period. The risk adjustment factor for a
small employer may not be modified more frequently than every 12
months. On and after January 1, 2010, no risk adjustment factor
shall be applied.
(2) The premium charged a small employer for in force business
shall be equal to the sum of the risk adjusted employee risk rates.
The standard employee risk rates shall be in effect for no less than
six months.
(3) For a contract that a plan has discontinued offering, the risk
adjustment factor applied to the standard employee risk rates for
the first rating period of the new contract that the small employer
elects to purchase shall be no greater than the risk adjustment
factor applied in the prior rating period to the discontinued
contract. However, the risk adjusted employee risk rate may not be
more than 120 percent or less than 80 percent of the plan's
applicable standard employee risk rate until July 1, 1996. Effective
July 1, 1996, this factor may not be more than 110 percent or less
than 90 percent. The factor effective July 1, 1996, shall apply to in
force business at the earlier of either the time of renewal or July
1, 1997. The risk adjustment factor for a small employer may not be
modified more frequently than every 12 months. On and after
January 1, 2010, no risk adjustment factor shall be applied.
(c) (1) For any small employer, a plan may, with the consent of
the small employer, establish composite employee and dependent rates
for either new business or renewal of in force business. The
composite rates shall be determined as the average of the risk
adjusted employee risk rates for the small employer, as determined in
accordance with the requirements of subdivisions (a) and (b). The
sum of the composite rates so determined shall be equal to the sum of
the risk adjusted employee risk rates for the small employer.
(2) The composite rates shall be used for all employees and
dependents covered throughout a rating period of no less than six
months nor more than 12 months, except that a plan may reserve the
right to redetermine the composite rates if the enrollment under the
contract changes by more than a specified percentage during the
rating period. Any redetermination of the composite rates shall be
based on the same risk adjusted employee risk rates used to determine
the initial composite rates for the rating period. If a plan
reserves the right to redetermine the rates and the enrollment
changes more than the specified percentage, the plan shall
redetermine the composite rates if the redetermined rates would
result in a lower premium for the small employer. A plan reserving
the right to redetermine the composite rates based upon a change in
enrollment shall use the same specified percentage to measure that
change with respect to all small employers electing composite rates.
(d) Nothing in this section shall be construed to prevent a plan
from changing the standard employee risk rates applied to a small
employer in order to ensure that the plan's rates for a standard
benefit plan design sold pursuant to Section 1357.21 are not less
than the plan's rates for the same benefit plan design sold through
the California Cooperative Health Insurance Purchasing Program (Part
6.45 (commencing with Section 12699.201) of Division 2 of the
Insurance Code).
SEC. 6. Article 3.11 (commencing with Section 1357.20) is added to
Chapter 2.2 of Division 2 of the Health and Safety Code, to read:
Article 3.11. Insurance Market Reform
1357.20. Effective July 1, 2008, every full-service health care
service plan that offers, markets, and sells health plan contracts to
individuals and conducts medical underwriting to determine whether
to issue coverage to a specific individual shall use a standardized
health questionnaire developed by the Managed Risk Medical Insurance
Board in consultation with the Department of Insurance and the
Department of Managed Health Care. A health care service plan subject
to this section may not exclude a potential enrollee from any
individual coverage on the basis of an actual or expected health
condition, type of illness, treatment, medical condition, or
accident, or for a preexisting condition, except as provided by the
board pursuant to Section 12711.1 of the Insurance Code. A
health care service plan that is also a participating health plan in
the California Cooperative Health Insurance Purchasing Program
pursuant to Part 6.45 (commencing with Section 12699.201) of Division
2 of the Insurance Code may not charge a standard rate, with
reference to subscribers of any age, family size, and geographical
region, that is less than the plan's rate for the same benefit plan
design sold through Cal-CHIPP. Code.
1357.21. (a) Every full-service health care service plan shall
offer, market, and sell all of the uniform benefit plan designs made
available through Cal-CHIPP the California
Cooperative Health Insurance Purchasing Program (Cal-CHIPP)
pursuant to Part 6.45 (commencing with Section 12699.201) of Division
2 of the Insurance Code to purchasers in each region and in all
individual and group markets where the plan offers, markets, and
sells health care service plan contracts, consistent with statutory
and regulatory rating and underwriting requirements applicable to the
respective individual and group markets. A health care service
plan that is also a participating health plan in Cal-CHIPP
may not charge a standard rate, with reference to subscribers of any
age, family size, and geographical region, that is less than the
plan's rate for the same benefit plan design sold through Cal-CHIPP.
(b) This section shall not preclude a plan from offering other
benefit plan designs in addition to those required to be offered
under subdivision (a).
1357.22. It is the intent of the Legislature that all health care
providers shall participate in an Internet-based personal health
record system under which patients have access to their own health
care records. A patient's personal health care record shall only be
accessible to that patient or other individual as authorized by the
patient. It is the intent of the Legislature that all health care
service plans and providers shall adopt standard electronic medical
records by January 1, 2012.
1357.23. Effective July 1, 2008, all requirements in Article 3.1
(commencing with Section 1357) applicable to offering, marketing, and
selling health care service plan contracts to small employers as
defined in that article, including, but not limited to, the
obligation to fairly and affirmatively offer, market, and sell all of
the plan's contracts to all employers, guaranteed renewal of all
health care service plan contracts, use of the risk adjustment
factor, and the restriction of risk categories to age, geographic
region, and family composition as described in that article, shall be
applicable to all health care service plan contracts offered to all
employers with 250 or fewer eligible employees, except as follows:
(a) For small employers with 2 to 50, inclusive, eligible
employees, all requirements in that article shall apply.
(b) For employers with 51 to 250, inclusive, eligible employees,
all requirements in that article shall apply, except that the health
care service plan may develop health care coverage benefit plan
designs to fairly and affirmatively market only to employer groups of
51 to 250, inclusive, eligible employees.
(c) Three months after the Managed Risk Medical Insurance Board
notifies the department that enrollment in the California Cooperative
Health Insurance Purchasing Program (Cal-CHIPP) pursuant to Part
6.45 (commencing with Section 12699.201) of Division 2 of the
Insurance Code will commence, notwithstanding subdivision (j) of
Section 1357, no risk adjustment factor shall be permitted in a
contract offered to a small employer, as defined in subdivision (l)
of Section 1357, or to an employer with 51 to 250, inclusive,
eligible employees. A health care service plan contract shall comply
with the requirements of this subdivision on or before the date of
enrollment in Cal-CHIPP commences.
(c) On and after January 1, 2010, no risk adjustment factor shall
be applied to a plan contract offered to an employer with 51 to 250,
inclusive, eligible employees.
1357.24. (a) Every group health care service plan shall obtain
from each employer or group subscriber contracting with the health
care service plan the premium contribution amounts the employer or
group makes for each enrolled group member and dependent using the
family tier size categories premium
payments made to the group plan.
(b) (1) Every health care service plan offering group health plan
contracts shall provide as one coverage option of each group contract
a Healthy Families benchmark plan established by the board so that
group members and their dependents with family incomes at or below
300 percent of the federal poverty level that are determined eligible
for coverage through the Healthy Families Program or who are
eligible for Medi-Cal pursuant to Section 14005.33 of the Welfare and
Institutions Code can enroll in the Healthy Families benchmark plan.
The Healthy Families benchmark plan of a group health care service
plan shall be provided at a rate negotiated with and approved by the
board. The health care service plan shall collect the employer's
applicable dollar premium contribution for employees and, if
applicable, dependents in the Healthy Families benchmark plan and
credit that amount toward the cost of the Healthy Families benchmark
plan.
(2) In lieu of meeting the requirements of paragraph (1), for
employees and, if applicable, dependents eligible for coverage
through the Healthy Families Program who have elected to enroll in
Healthy Families benchmark coverage, the health care service plan
shall instead collect an amount determined by the board but not to
exceed the employer's applicable dollar premium contribution as
identified in subdivision (a) and transmit that amount to the board
towards the premium cost of a Healthy Families benchmark plan in
Cal-CHIPP.
(c) (1) Every health care service plan offering group health plan
contracts shall provide as one coverage option of each group contract
a Medi-Cal benchmark plan established by the board so that group
members and their dependents that are determined eligible for
coverage through the Medi-Cal program, except for coverage pursuant
to Section 14005.33 of the Welfare and Institutions Code, can enroll
in the Medi-Cal benchmark plan. The Medi-Cal benchmark plan of a
group health care service plan shall be provided at a rate negotiated
with and approved by the board. The health care service plan shall
collect the employer's applicable dollar premium contribution for
employees and, if applicable, dependents, in the Medi-Cal benchmark
plan and credit that amount toward the cost of the Medi-Cal benchmark
plan.
(2) In lieu of meeting the requirements of paragraph (1), for
employees and, if applicable, dependents eligible for coverage
through the Medi-Cal program who have elected to enroll in Medi-Cal
benchmark coverage, the health care service plan shall instead
collect an amount determined by the board but not to exceed the
employer's applicable dollar premium contribution as identified in
subdivision (a) and transmit that amount to the board towards the
premium cost of a Medi-Cal benchmark plan in Cal-CHIPP.
(d) Every health care service plan shall include in the plan's
evidence of coverage notice of the ability of employees and
dependents with family incomes at or below 300 percent of the federal
poverty level to enroll in Medi-Cal or Healthy Families coverage
through a Healthy Families benchmark plan or a Medi-Cal benchmark
plan, with instructions on how to apply for coverage.
(e) The department, in consultation with the board, may issue
regulations, as necessary pursuant to the Administrative Procedure
Act, to implement the requirements of this section. Until January 1,
2014 2012 , the adoption and readoption
of regulations pursuant to this Section
section shall be deemed to be an emergency and necessary for
the immediate preservation of public peace, health and safety, or
general welfare.
(f) Employees and dependents receiving coverage through the
Medi-Cal program or Healthy Families Program pursuant to this section
shall make premium payments, if any, as determined by the board and
shall pay other cost sharing amounts. The amount of the premium
payments and cost sharing shall not exceed premium payments or cost
sharing levels for enrollment in those programs required under the
applicable state laws governing those programs. The board shall
consider using the process in effect on January 1, 2008, for
determining eligibility for the Medi-Cal program, including the
eligibility determination made by the counties.
(g) As used in this section, the following terms have the
following meanings:
(1) "Board" means the Managed Risk Medical Insurance Board.
(2) "California Cooperative Health Insurance Purchasing Program"
or "Cal-CHIPP" shall have the same meaning as in subdivision (c) of
Section 12699.201 of the Insurance Code.
(3) "Healthy Families benchmark plan" shall mean coverage
equivalent to coverage provided through the Healthy Families Program
established pursuant to Part 6.2 (commencing with Section 12693) of
Division 2 of the Insurance Code.
(4) "Medi-Cal benchmark plan" shall mean coverage equivalent to
coverage provided through the Medi-Cal program (Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code).
(h) This section shall apply to health care service plan contracts
issued, amended, or renewed on or after July 1, 2008.
1357.25. The requirements of this article shall not apply to a
specialized health care service plan or a Medicare supplement
contract.
1357.26. This article shall become operative on July 1, 2008.
SEC. 7. Section 1363 of the Health and Safety Code is amended to
read:
1363. (a) The director shall require the use by each plan of
disclosure forms or materials containing information regarding the
benefits, services, and terms of the plan contract as the director
may require, so as to afford the public, subscribers, and enrollees
with a full and fair disclosure of the provisions of the plan in
readily understood language and in a clearly organized manner. The
director may require that the materials be presented in a reasonably
uniform manner so as to facilitate comparisons between plan contracts
of the same or other types of plans. Nothing contained in this
chapter shall preclude the director from permitting the disclosure
form to be included with the evidence of coverage or plan contract.
The disclosure form shall provide for at least the following
information, in concise and specific terms, relative to the plan,
together with additional information as may be required by the
director, in connection with the plan or plan contract:
(1) The principal benefits and coverage of the plan, including
coverage for acute care and subacute care.
(2) The exceptions, reductions, and limitations that apply to the
plan.
(3) The full premium cost of the plan.
(4) Any copayment, coinsurance, or deductible requirements that
may be incurred by the member or the member's family in obtaining
coverage under the plan.
(5) The terms under which the plan may be renewed by the plan
member, including any reservation by the plan of any right to change
premiums.
(6) A statement that the disclosure form is a summary only, and
that the plan contract itself should be consulted to determine
governing contractual provisions. The first page of the disclosure
form shall contain a notice that conforms with all of the following
conditions:
(A) (i) States that the evidence of coverage discloses the terms
and conditions of coverage.
(ii) States, with respect to individual plan contracts, small
group plan contracts, and any other group plan contracts for which
health care services are not negotiated, that the applicant has a
right to view the evidence of coverage prior to enrollment, and, if
the evidence of coverage is not combined with the disclosure form,
the notice shall specify where the evidence of coverage can be
obtained prior to enrollment.
(B) Includes a statement that the disclosure and the evidence of
coverage should be read completely and carefully and that individuals
with special health care needs should read carefully those sections
that apply to them.
(C) Includes the plan's telephone number or numbers that may be
used by an applicant to receive additional information about the
benefits of the plan or a statement where the telephone number or
numbers are located in the disclosure form.
(D) For individual contracts, and small group plan contracts as
defined in Article 3.1 (commencing with Section 1357), the disclosure
form shall state where the health plan benefits and coverage matrix
is located.
(E) Is printed in type no smaller than that used for the remainder
of the disclosure form and is displayed prominently on the page.
(7) A statement as to when benefits shall cease in the event of
nonpayment of the prepaid or periodic charge and the effect of
nonpayment upon an enrollee who is hospitalized or undergoing
treatment for an ongoing condition.
(8) To the extent that the plan permits a free choice of provider
to its subscribers and enrollees, the statement shall disclose the
nature and extent of choice permitted and the financial liability
that is, or may be, incurred by the subscriber, enrollee, or a third
party by reason of the exercise of that choice.
(9) A summary of the provisions required by subdivision (g) of
Section 1373, if applicable.
(10) If the plan utilizes arbitration to settle disputes, a
statement of that fact.
(11) A summary of, and a notice of the availability of, the
process the plan uses to authorize, modify, or deny health care
services under the benefits provided by the plan, pursuant to
Sections 1363.5 and 1367.01.
(12) A description of any limitations on the patient's choice of
primary care physician, specialty care physician, or nonphysician
health care practitioner, based on service area and limitations on
the patient's choice of acute care hospital care, subacute or
transitional inpatient care, or skilled nursing facility.
(13) General authorization requirements for referral by a primary
care physician to a specialty care physician or a nonphysician health
care practitioner.
(14) Conditions and procedures for disenrollment.
(15) A description as to how an enrollee may request continuity of
care as required by Section 1373.96 and request a second opinion
pursuant to Section 1383.15.
(16) Information concerning the right of an enrollee to request an
independent review in accordance with Article 5.55 (commencing with
Section 1374.30).
(17) A notice as required by Section 1364.5.
(b) (1) As of July 1, 1999, the director shall require each plan
offering a contract to an individual or small group to provide with
the disclosure form for individual and small group plan contracts a
uniform health plan benefits and coverage matrix containing the plan'
s major provisions in order to facilitate comparisons between plan
contracts. The uniform matrix shall include the following category
descriptions together with the corresponding copayments and
limitations in the following sequence:
(A) Deductibles.
(B) Lifetime maximums.
(C) Professional services.
(D) Outpatient services.
(E) Hospitalization services.
(F) Emergency health coverage.
(G) Ambulance services.
(H) Prescription drug coverage.
(I) Durable medical equipment.
(J) Mental health services.
(K) Chemical dependency services.
(L) Home health services.
(M) Other.
(2) The following statement shall be placed at the top of the
matrix in all capital letters in at least 10-point boldface type:
THIS MATRIX IS INTENDED TO BE USED TO HELP YOU COMPARE COVERAGE
BENEFITS AND IS A SUMMARY ONLY. THE EVIDENCE OF COVERAGE AND PLAN
CONTRACT SHOULD BE CONSULTED FOR A DETAILED DESCRIPTION OF COVERAGE
BENEFITS AND LIMITATIONS.
(c) Nothing in this section shall prevent a plan from using
appropriate footnotes or disclaimers to reasonably and fairly
describe coverage arrangements in order to clarify any part of the
matrix that may be unclear.
(d) All plans, solicitors, and representatives of a plan shall,
when presenting any plan contract for examination or sale to an
individual prospective plan member, provide the individual with a
properly completed disclosure form, as prescribed by the director
pursuant to this section for each plan so examined or sold.
(e) In the case of group contracts, the completed disclosure form
and evidence of coverage shall be presented to the contractholder
upon delivery of the completed health care service plan agreement.
(f) Group contractholders shall disseminate copies of the
completed disclosure form to all persons eligible to be a subscriber
under the group contract at the time those persons are offered the
plan. If the individual group members are offered a choice of plans,
separate disclosure forms shall be supplied for each plan available.
Each group contractholder shall also disseminate or cause to be
disseminated copies of the evidence of coverage to all applicants,
upon request, prior to enrollment and to all subscribers enrolled
under the group contract.
(g) In the case of conflicts between the group contract and the
evidence of coverage, the provisions of the evidence of coverage
shall be binding upon the plan notwithstanding any provisions in the
group contract that may be less favorable to subscribers or
enrollees.
(h) In addition to the other disclosures required by this section,
every health care service plan and any agent or employee of the plan
shall, when presenting a plan for examination or sale to any
individual purchaser or the representative of a group, disclose in
writing the ratio of premium costs to health services paid for plan
contracts with individuals and with groups of the same or similar
size for the plan's preceding fiscal year. A plan may report that
information by geographic area, provided the plan identifies the
geographic area and reports information applicable to that geographic
area.
(i) Subdivision (b) shall not apply to any coverage provided by a
plan for the Medi-Cal program or the Medicare program pursuant to
Title XVIII and Title XIX of the Social Security Act.
SEC. 8. Article 4.1 (commencing with Section 1366.10) is added to
Chapter 2.2 of Division 2 of the Health and Safety Code, to read:
Article 4.1. California Individual Coverage Guarantee Issue
1366.10. It is the intent of the Legislature to do both of the
following:
(a) Guarantee the availability and renewability of qualifying
health coverage through the private health insurance market to
individuals.
(b) Require that health care service plans and health insurers
issuing coverage in the individual market compete on the basis of
price, quality, and service, and not on risk selection.
1366.104. (a) On or before September 1, 2008, the director and
the Insurance Commissioner shall jointly adopt regulations governing
five classes of individual health benefit plans that health care
service plans and health insurers shall make available.
(b) Within 90 days of the adoption of the regulations required by
subdivision (a), the director and the Insurance Commissioner shall
jointly approve five classes of individual health benefit plans for
each health care service plan and health insurer participating in the
individual market, with each class having an increased level of
benefits beginning with the lowest class. Within each class, the
director and the Insurance Commissioner shall jointly approve one
baseline HMO and one baseline PPO, to be issued by health care
service plans and health insurers in the individual market. The
classes of benefits jointly approved by the director and the
Insurance Commissioner shall reflect a reasonable continuum between
the class with the lowest level of benefits and the class with the
highest level of benefits, shall permit reasonable benefit variation
that will allow for a diverse market within each class, and shall be
enforced consistently between health care service plans and health
insurers in the same marketplace regardless of licensure.
(c) In approving the five classes of
plans filed by health care service plans and health insurers, the
director and the Insurance Commissioner shall do both of the
following:
(1) Jointly determine that the plans provide reasonable benefit
variation, allowing a diverse market.
(2) Jointly require either (A) that benefits within each class are
standard and uniform across all plans and insurers, or (B) that
benefits offered in each class are actuarially equivalent across all
plans and insurers.
1366.105. On and after January 1, 2009, health care service plans
and health insurers participating in the individual market shall
, except as provided in Section 12711.1 of the Insurance Code,
guarantee issue the five classes of approved health benefit
plans and shall, at the same time, discontinue offering and selling
health benefit plans other than those within the five approved
classes of benefit plans in the individual market.
1366.106. (a) Individuals may purchase a
health benefit plan from one of the five classes of approved plans on
a guaranteed issue basis. After selecting and purchasing a health
benefit plan within a class of benefits, an individual may change
plans only as set forth in this section. For individuals enrolled as
a family, the subscriber may change classes for himself or herself,
or for all dependents:
(a)
(1) Annually in the month of the subscriber's birth, an
individual may select a different individual plan from another
health care service plan or insurer, within the same class of
benefits or the next higher class of benefits.
(b)
(2) Annually in the month of the subscriber's birth, an
individual may move up one class of benefits offered by the same
health care service plan or health insurer.
(c)
(3) At any time a subscriber may move to a lower class
of benefits.
(d)
(4) At significant life events, the enrollee may move
up to a higher class of benefits as follows:
(1)
(A) Upon marriage or entering into a domestic
partnership.
(2)
(B) Upon divorce.
(3)
(C) Upon the death of a spouse or domestic partner, on
whose qualifying health coverage an individual was a dependent.
(4)
(D) Upon the birth or adoption of a child.
(e)
(5) A dependent child may terminate coverage under a
parent's plan, and select coverage for his or her own account
following his or her 18th birthday.
(f)
(6) If a subscriber becomes eligible for group
benefits, Medicare, or other benefits, and selects those benefits in
lieu of his or her individual coverage, the dependent spouse or
domestic partner may become the subscriber. If there is no dependent
spouse or domestic partner enrolled in the plan, the oldest child may
become the subscriber.
(b) This section shall not apply to an individual included within
the group of the 3 to 5 percent of individuals identified pursuant to
Section 12711.1 of the Insurance Code as the most expensive to
treat.
1366.107. At the time an individual applies for health coverage
from a health care service plan or health insurer participating in
the individual market, an individual shall provide information as
required by a standardized health status questionnaire to assist
plans and insurers in identifying persons in need of disease
management. Health care service plans and health insurers may not use
information provided on the questionnaire to decline coverage or to
limit an individual's choice of health care benefit plan, except as
provided in Section 12711.1 of the Insurance Code.
1366.108. Health benefit plans shall become effective within 31
days of receipt of the individual's application, standardized health
status questionnaire, and premium payment.
1366.109. Health care service plans and health insurers may
reject an application for health care benefits if the individual does
not reside or work in a plan's or insurer's approved service area.
1366.110. The director or the Insurance Commissioner, as
applicable, may require a health care service plan or health insurer
to discontinue the offering of health care benefits, or acceptance of
applications from individuals, upon a determination by the director
or commissioner that the plan or insurer does not have sufficient
financial viability, or organizational and administrative capacity,
to ensure the delivery of health care benefits to its enrollees or
insureds.
1366.111. All health care benefits offered to individuals shall
be renewable with respect to all individuals and dependents at the
option of the subscriber, except:
(a) For nonpayment of the required premiums by the subscriber.
(b) When the plan or insurer withdraws from the individual health
care market, subject to rules and requirements jointly approved by
the director and the Insurance Commissioner.
1366.112. No health care service plan or health insurer shall,
directly or indirectly, enter into any contract, agreement, or
arrangement with a solicitor that provides for or results in the
compensation paid to a solicitor for the sale of a health care
service plan contract or health insurance policy to be varied because
of the health status, claims experience, occupation, or geographic
location of the individual, provided the geographic location is
within the plan's or insurer's approved service area.
1366.113. This article shall not apply to individual health plan
contracts for coverage of Medicare services pursuant to contracts
with the United States Government, Medi-Cal contracts with the State
Department of Health Care Services, Healthy Family contracts with the
Managed Risk Medical Insurance Board, highrisk
high risk pool contracts with the Major Risk Medical
Insurance Program, Medicare supplement policies, long-term care
policies, specialized health plan contracts, or contracts issued to
individuals who secure coverage from Cal-CHIPP.
1366.114. (a) A health care service plan or health insurer may
rate its entire portfolio of health benefit plans in accordance with
expected costs or other market considerations, but the rate for each
plan or insurer shall be set in relation to the balance of the
portfolio as certified by an actuary. Each benefit plan shall be
priced as determined by each health care service plan or health
insurer to reflect the difference in benefit variation, or the
effectiveness of a provider network, but may not adjust the rate for
a specific plan for risk selection. A health care service plan's or
health insurer's rates shall use the same rating factors for age,
family size, and geographic location for each individual health care
benefit plan it issues. Rates for health care benefits may vary from
applicant to applicant only by any of the following:
(1) Age of the subscriber, as determined by the director and the
Insurance Commissioner.
(2) Family size in categories determined by the director and the
Insurance Commissioner.
(3) Geographic rate regions as determined by the director and the
Insurance Commissioner.
(4) Health improvement discounts. A health care service plan or
health insurer may reduce copayments or offer premium discounts for
nonsmokers, individuals demonstrating weight loss through a
measurable health improvement program, or individuals actively
participating in a disease management program, provided discounts are
approved by the director and the Insurance Commissioner.
(b) The director and Insurance Commissioner shall take into
consideration the age, family size, and geographic region rating
categories applicable to small group coverage contracts pursuant to
Section 1357 of this code and Section 10700 of the Insurance Code in
implementing this section.
1366.115. The first term of each health benefit plan contract or
policy issued shall be from the effective date through the last day
of the month immediately preceding the subscriber's next birthday.
Contracts or policies may be renewed by the subscriber as set forth
in this article.
SEC. 9. Section 1378 of the Health and Safety Code is amended to
read:
1378. No plan shall expend for administrative costs in any fiscal
year an excessive amount of the aggregate dues, fees and other
periodic payments received by the plan for providing health care
services to its subscribers or enrollees. The term "administrative
costs," as used herein, includes costs incurred in connection with
the solicitation of subscribers or enrollees for the plan. The
director shall adopt regulations no later than July 1, 2008, to
define "administrative costs" and "health care services" so that at
least 85 percent of aggregate dues, fees, and other periodic payments
received by a full-service plan are spent on health care services.
This section shall not apply to Medicare supplement contracts.
This section shall not preclude a plan from expending additional
sums of money for administrative costs provided such money is not
derived from revenue obtained from subscribers or enrollees of the
plan.
SEC. 10. Chapter 1.6 (commencing with Section 10199.10) is added
to Part 2 of Division 2 of the Insurance Code, to read:
CHAPTER 1.6. CALIFORNIA INDIVIDUAL COVERAGE GUARANTEE ISSUE
10199.10. It is the intent of the Legislature to do both of the
following:
(a) Guarantee the availability and renewability of qualifying
health coverage through the private health insurance market to
individuals.
(b) Require that health care service plans and health insurers
issuing coverage in the individual market compete on the basis of
price, quality, and service, and not on risk selection.
10199.104. (a) On or before September 1, 2008, the commissioner
and the Director of the Department of Managed Health Care shall
jointly adopt regulations governing five classes of individual health
benefit plans that health care service plans and health insurers
shall make available.
(b) Within 90 days of the adoption of the regulations required by
subdivision (a), the commissioner and the Director of the Department
of Managed Health Care shall jointly approve five classes of
individual health benefit plans for each health care service plan and
health insurer participating in the individual market, with each
class having an increased level of benefits beginning with the lowest
class. Within each class, the commissioner and the Director of the
Department of Managed Health Care shall jointly approve one baseline
HMO and one baseline PPO, to be issued by health care service plans
and health insurers in the individual market. The classes of benefits
jointly approved by the commissioner and the Director of the
Department of Managed Health Care shall reflect a reasonable
continuum between the class with the lowest level of benefits and the
class with the highest level of benefits, shall permit reasonable
benefit variation that will allow for a diverse market within each
class, and shall be enforced consistently between health care service
plans and health insurers in the same marketplace regardless of
licensure.
(c) In approving the five classes of plans filed by health care
service plans and health insurers, the commissioner and the Director
of the Department of Managed Health Care shall do both of the
following:
(1) Jointly determine that the plans provide reasonable benefit
variation, allowing a diverse market.
(2) Jointly require either (A) that benefits within each class are
standard and uniform across all plans and insurers, or (B) that
benefits offered in each class are actuarially equivalent across all
plans and insurers.
10199.105. On and after January 1, 2009, health care service
plans and health insurers participating in the individual market
shall , except as provided in Section 12711.1, guarantee
issue the five classes of approved health benefit plans and shall, at
the same time, discontinue offering and selling health benefit plans
other than those within the five approved classes of benefit plans
in the individual market.
10199.106. (a) Individuals may purchase a
health benefit plan from one of the five classes of approved plans on
a guaranteed issue basis. After selecting and purchasing a health
benefit plan within a class of benefits, an individual may change
plans only as set forth in this section. For individuals enrolled as
a family, the subscriber may change classes for himself or herself,
or for all dependents:
(a)
(1) Annually in the month of the subscriber's birth, an
individual may select a different individual plan from another
health care service plan or insurer, within the same class of
benefits or the next higher level of benefits.
(b)
(2) Annually in the month of the subscriber's birth, an
individual may move up one class of benefits offered by the same
health care service plan or health insurer.
(c)
(3) At any time a subscriber may move to a lower class
of benefits.
(d)
(4) At significant life events, the insured may move up
to a higher class of benefits as follows:
(1)
(A) Upon marriage or entering into a domestic
partnership.
(2)
(B) Upon divorce.
(3)
(C) Upon the death of a spouse or domestic partner, on
whose qualifying health coverage an individual was a dependent.
(4)
(D) Upon the birth or adoption of a child.
(e)
(5) A dependent child may terminate coverage under a
parent's plan, and select coverage for his or her own account
following his or her 18th birthday.
(f)
(6) If a subscriber becomes eligible for group
benefits, Medicare, or other benefits, and selects those benefits in
lieu of his or her individual coverage, the dependent spouse or
domestic partner may become the subscriber. If there is no dependent
spouse or domestic partner enrolled in the plan, the oldest child may
become the subscriber.
(b) This section shall not apply to an individual included within
the group of the 3 to 5 percent of individuals identified pursuant to
Section 12711.1 as the most expensive to treat.
10199.107. At the time an individual applies for health coverage
from a health care service plan or health insurer participating in
the individual market, an individual shall provide information as
required by a standardized health status questionnaire to assist
plans and insurers in identifying persons in need of disease
management. Health care service plans and health insurers may not use
information provided on the questionnaire to decline coverage, or to
limit an individual's choice of health care benefit plan, except as
provided in Section 12711.1.
10199.108. Health benefit plans shall become effective within 31
days of receipt of the individual's application, standardized health
status questionnaire, and premium payment.
10199.109. Health care service plans and health insurers may
reject an application for health care benefits if the individual does
not reside or work in a plan's or insurer's approved service area.
10199.110. The commissioner or the Director of the Department of
Managed Health Care, as applicable, may require a health care service
plan or health insurer to discontinue the offering of health care
benefits, or acceptance of applications from individuals, upon a
determination by the director or commissioner that the plan or
insurer does not have sufficient financial viability, or
organizational and administrative capacity, to ensure the delivery of
health care benefits to its enrollees or insureds.
10199.111. All health care benefits offered to individuals shall
be renewable with respect to all individuals and dependents at the
option of the subscriber, except:
(a) For nonpayment of the required premiums by the subscriber.
(b) When the plan or insurer withdraws from the individual health
care market, subject to rules and requirements jointly adopted by the
director and the Insurance Commissioner.
10199.112. No health care service plan or health insurer shall,
directly or indirectly, enter into any contract, agreement, or
arrangement with a solicitor that provides for or results in the
compensation paid to a solicitor for the sale of a health care
service plan contract or health insurance policy to be varied because
of the health status, claims experience, occupation, or geographic
location of the individual, provided the geographic location is
within the plan's or insurer's approved service area.
10199.113. This chapter shall not apply to individual health plan
contracts for coverage of Medicare services pursuant to contracts
with the United States Government, Medi-Cal contracts with the State
Department of Health Care Services, Healthy Family contracts with the
Managed Risk Medical Insurance Board, high-risk pool contracts with
the Major Risk Medical Insurance Program, Medicare supplement
policies, long-term care policies, specialized health plan contracts,
or contracts issued to individuals who secure coverage from
Cal-CHIPP.
10199.114. (a) A health care service plan or health insurer may
rate its entire portfolio of health benefit plans in accordance with
expected costs or other market considerations, but the rate for each
plan or insurer shall be set in relation to the balance of the
portfolio as certified by an actuary. Each benefit plan shall be
priced as determined by each health care service plan or health
insurer to reflect the difference in benefit variation, or the
effectiveness of a provider network, but may not adjust the rate for
a specific plan for risk selection. A health care service plan's or
health insurer's rates shall use the same rating factors for age,
family size, and geographic location for each individual health care
benefit plan it issues. Rates for health care benefits may vary from
applicant to applicant only by any of the following:
(1) Age of the subscriber, as determined by the commissioner and
the Director of the Department of Managed Health Care.
(2) Family size in categories determined by the commissioner and
the Director of the Department of Managed Health Care.
(3) Geographic rate regions as determined by the commissioner and
the Director of the Department of Managed Health Care.
(4) Health improvement discounts. A health care service plan or
health insurer may reduce copayments or offer premium discounts for
nonsmokers, individuals demonstrating weight loss through a
measurable health improvement program, or individuals actively
participating in a disease management program, provided discounts are
approved by the commissioner and the Director of the Department of
Managed Health Care.
(b) The commissioner and the Director of the Department of Managed
Health Care shall take into consideration the age, family size, and
geographic region rating categories applicable to small group
coverage contracts pursuant to Section 1357 of the Health and Safety
Code and Section 10700 of this code in implementing this section.
10199.115. The first term of each health benefit plan contract or
policy issued shall be from the effective date through the last day
of the month immediately preceding the subscriber's next birthday.
Contracts or policies may be renewed by the subscriber as set forth
in this chapter.
SEC. 11. Section 10293.5 is added to the Insurance Code, to read:
10293.5. (a) The commissioner shall adopt regulations no later
than July 1, 2008, to define "administrative costs" and "health care
services" so that at least 85 percent of health insurance premium
revenue received by a health insurer is spent on health care
services.
(b) As used in this section, health insurance shall have the same
meaning as in subdivision (b) of Section 106.
(c) The requirements of this chapter shall not apply to a Medicare
supplement, vision-only, dental-only, or CHAMPUS-supplement
insurance or to hospital indemnity, hospital-only, accident-only, or
specified disease insurance that does not pay benefits on a fixed
benefit, cash payment only basis.
SEC. 12. Section 10607 of the Insurance Code is amended to read:
10607. In addition to the other disclosures required by this
chapter, every insurer and their employees or agents shall, when
presenting a plan for examination or sale to any individual or the
representative of a group, disclose in writing the ratio of incurred
claims to earned premiums (loss-ratio) for the insurer's preceding
calendar year for policies with individuals and with groups of the
same or similar size for the insurer's preceding fiscal year.
SEC. 13. Section 10700 of the Insurance
Code is amended to read:
10700. As used in this chapter:
(a) "Agent or broker" means a person or entity licensed under
Chapter 5 (commencing with Section 1621) of Part 2 of Division 1.
(b) "Benefit plan design" means a specific health coverage product
issued by a carrier to small employers, to trustees of associations
that include small employers, or to individuals if the coverage is
offered through employment or sponsored by an employer. It includes
services covered and the levels of copayment and deductibles, and it
may include the professional providers who are to provide those
services and the sites where those services are to be provided. A
benefit plan design may also be an integrated system for the
financing and delivery of quality health care services which has
significant incentives for the covered individuals to use the system.
(c) "Board" means the Major Risk Medical Insurance Board.
(d) "Carrier" means any disability insurance company or any other
entity that writes, issues, or administers health benefit plans that
cover the employees of small employers, regardless of the situs of
the contract or master policyholder. For the purposes of Articles 3
(commencing with Section 10719) and 4 (commencing with Section
10730), "carrier" also includes health care service plans.
(e) "Dependent" means the spouse or child of an eligible employee,
subject to applicable terms of the health benefit plan covering the
employee, and includes dependents of guaranteed association members
if the association elects to include dependents under its health
coverage at the same time it determines its membership composition
pursuant to subdivision (z).
(f) "Eligible employee" means either of the following:
(1) Any permanent employee who is actively engaged on a full-time
basis in the conduct of the business of the small employer with a
normal workweek of at least 30 hours, in the small employer's regular
place of business, who has met any statutorily authorized applicable
waiting period requirements. The term includes sole proprietors or
partners of a partnership, if they are actively engaged on a
full-time basis in the small employer's business, and they are
included as employees under a health benefit plan of a small
employer, but does not include employees who work on a part-time,
temporary, or substitute basis. It includes any eligible employee as
defined in this paragraph who obtains coverage through a guaranteed
association. Employees of employers purchasing through a guaranteed
association shall be deemed to be eligible employees if they would
otherwise meet the definition except for the number of persons
employed by the employer. A permanent employee who works at least 20
hours but not more than 29 hours is deemed to be an eligible employee
if all four of the following apply:
(A) The employee otherwise meets the definition of an eligible
employee except for the number of hours worked.
(B) The employer offers the employee health coverage under a
health benefit plan.
(C) All similarly situated individuals are offered coverage under
the health benefit plan.
(D) The employee must have worked at least 20 hours per normal
workweek for at least 50 percent of the weeks in the previous
calendar quarter. The insurer may request any necessary information
to document the hours and time period in question, including, but not
limited to, payroll records and employee wage and tax filings.
(2) Any member of a guaranteed association as defined in
subdivision (z).
(g) "Enrollee" means an eligible employee or dependent who
receives health coverage through the program from a participating
carrier.
(h) "Financially impaired" means, for the purposes of this
chapter, a carrier that, on or after the effective date of this
chapter, is not insolvent and is either:
(1) Deemed by the commissioner to be potentially unable to fulfill
its contractual obligations.
(2) Placed under an order of rehabilitation or conservation by a
court of competent jurisdiction.
(i) "Fund" means the California Small Group Reinsurance Fund.
(j) "Health benefit plan" means a policy or contract written or
administered by a carrier that arranges or provides health care
benefits for the covered eligible employees of a small employer and
their dependents. The term does not include accident only, credit,
disability income, coverage of Medicare services pursuant to
contracts with the United States government, Medicare supplement,
long-term care insurance, dental, vision, coverage issued as a
supplement to liability insurance, automobile medical payment
insurance, or insurance under which benefits are payable with or
without regard to fault and that is statutorily required to be
contained in any liability insurance policy or equivalent
self-insurance.
(k) "In force business" means an existing health benefit plan
issued by the carrier to a small employer.
(l) "Late enrollee" means an eligible employee or dependent who
has declined health coverage under a health benefit plan offered by a
small employer at the time of the initial enrollment period provided
under the terms of the health benefit plan, and who subsequently
requests enrollment in a health benefit plan of that small employer,
provided that the initial enrollment period shall be a period of at
least 30 days. It also means any member of an association that is a
guaranteed association as well as any other person eligible to
purchase through the guaranteed association when that person has
failed to purchase coverage during the initial enrollment period
provided under the terms of the guaranteed association's health
benefit plan and who subsequently requests enrollment in the plan,
provided that the initial enrollment period shall be a period of at
least 30 days. However, an eligible employee, another person eligible
for coverage through a guaranteed association pursuant to
subdivision (z), or an eligible dependent shall not be considered a
late enrollee if any of the following is applicable:
(1) The
individual meets all of the following requirements:
(A) He or she was covered under another employer health benefit
plan, the Healthy Families Program, or no share-of-cost Medi-Cal
coverage at the time the individual was eligible to enroll.
(B) He or she certified at the time of the initial enrollment that
coverage under another employer health benefit plan, the Healthy
Families Program, or no share-of-cost Medi-Cal coverage was the
reason for declining enrollment provided that, if the individual was
covered under another employer health plan, the individual was given
the opportunity to make the certification required by this
subdivision and was notified that failure to do so could result in
later treatment as a late enrollee.
(C) He or she has lost or will lose coverage under another
employer health benefit plan as a result of termination of employment
of the individual or of a person through whom the individual was
covered as a dependent, change in employment status of the
individual, or of a person through whom the individual was covered as
a dependent, the termination of the other plan's coverage, cessation
of an employer's contribution toward an employee or dependent's
coverage, death of the person through whom the individual was covered
as a dependent, legal separation, divorce, loss of coverage under
the Healthy Families Program as a result of exceeding the program's
income or age limits, or loss of no share-of-cost Medi-Cal coverage.
(D) He or she requests enrollment within 30 days after termination
of coverage or employer contribution toward coverage provided under
another employer health benefit plan.
(2) The individual is employed by an employer who offers multiple
health benefit plans and the individual elects a different plan
during an open enrollment period.
(3) A court has ordered that coverage be provided for a spouse or
minor child under a covered employee's health benefit plan.
(4) (A) In the case of an eligible employee as defined in
paragraph (1) of subdivision (f), the carrier cannot produce a
written statement from the employer stating that the individual or
the person through whom an individual was eligible to be covered as a
dependent, prior to declining coverage, was provided with, and
signed acknowledgment of, an explicit written notice in boldface type
specifying that failure to elect coverage during the initial
enrollment period permits the carrier to impose, at the time of the
individual's later decision to elect coverage, an exclusion from
coverage for a period of 12 months as well as a six-month preexisting
condition exclusion unless the individual meets the criteria
specified in paragraph (1), (2), or (3).
(B) In the case of an eligible employee who is a guaranteed
association member, the plan cannot produce a written statement from
the guaranteed association stating that the association sent a
written notice in boldface type to all potentially eligible
association members at their last known address prior to the initial
enrollment period informing members that failure to elect coverage
during the initial enrollment period permits the plan to impose, at
the time of the member's later decision to elect coverage, an
exclusion from coverage for a period of 12 months as well as a
six-month preexisting condition exclusion unless the member can
demonstrate that he or she meets the requirements of subparagraphs
(A), (C), and (D) of paragraph (1) or meets the requirements of
paragraph (2) or (3).
(C) In the case of an employer or person who is not a member of an
association, was eligible to purchase coverage through a guaranteed
association, and did not do so, and would not be eligible to purchase
guaranteed coverage unless purchased through a guaranteed
association, the employer or person can demonstrate that he or she
meets the requirements of subparagraphs (A), (C), and (D) of
paragraph (1), or meets the requirements of paragraph (2) or (3), or
that he or she recently had a change in status that would make him or
her eligible and that application for coverage was made within 30
days of the change.
(5) The individual is an employee or dependent who meets the
criteria described in paragraph (1) and was under a COBRA
continuation provision and the coverage under that provision has been
exhausted. For purposes of this section, the definition of "COBRA"
set forth in subdivision (e) of Section 1373.62
1373.621 shall apply.
(6) The individual is a dependent of an enrolled eligible employee
who has lost or will lose his or her coverage under the Healthy
Families Program as a result of exceeding the program's income or age
limits or no share-of-cost Medi-Cal coverage and requests enrollment
within 30 days after notification of this loss of coverage.
(7) The individual is an eligible employee who previously declined
coverage under an employer health benefit plan and who has
subsequently acquired a dependent who would be eligible for coverage
as a dependent of the employee through marriage, birth, adoption, or
placement for adoption, and who enrolls for coverage under that
employer health benefit plan on his or her behalf, and on behalf of
his or her dependent within 30 days following the date of marriage,
birth, adoption, or placement for adoption, in which case the
effective date of coverage shall be the first day of the month
following the date the completed request for enrollment is received
in the case of marriage, or the date of birth, or the date of
adoption or placement for adoption, whichever applies. Notice of the
special enrollment rights contained in this paragraph shall be
provided by the employer to an employee at or before the time the
employee is offered an opportunity to enroll in plan coverage.
(8) The individual is an eligible employee who has declined
coverage for himself or herself or his or her dependents during a
previous enrollment period because his or her dependents were covered
by another employer health benefit plan at the time of the previous
enrollment period. That individual may enroll himself or herself or
his or her dependents for plan coverage during a special open
enrollment opportunity if his or her dependents have lost or will
lose coverage under that other employer health benefit plan. The
special open enrollment opportunity shall be requested by the
employee not more than 30 days after the date that the other health
coverage is exhausted or terminated. Upon enrollment, coverage shall
be effective not later than the first day of the first calendar month
beginning after the date the request for enrollment is received.
Notice of the special enrollment rights contained in this paragraph
shall be provided by the employer to an employee at or before the
time the employee is offered an opportunity to enroll in plan
coverage.
(m) "New business" means a health benefit plan issued to a small
employer that is not the carrier's in force business.
(n) "Participating carrier" means a carrier that has entered into
a contract with the program to provide health benefits coverage under
this part.
(o) "Plan of operation" means the plan of operation of the fund,
including articles, bylaws and operating rules adopted by the fund
pursuant to Article 3 (commencing with Section 10719).
(p) "Program" means the Health Insurance Plan of California.
(q) "Preexisting condition provision" means a policy provision
that excludes coverage for charges or expenses incurred during a
specified period following the insured's effective date of coverage,
as to a condition for which medical advice, diagnosis, care, or
treatment was recommended or received during a specified period
immediately preceding the effective date of coverage.
(r) "Creditable coverage" means:
(1) Any individual or group policy, contract, or program, that is
written or administered by a disability insurer, health care service
plan, fraternal benefits society, self-insured employer plan, or any
other entity, in this state or elsewhere, and that arranges or
provides medical, hospital, and surgical coverage not designed to
supplement other private or governmental plans. The term includes
continuation or conversion coverage but does not include accident
only, credit, coverage for onsite medical clinics, disability income,
Medicare supplement, long-term care, dental, vision, coverage issued
as a supplement to liability insurance, insurance arising out of a
workers' compensation or similar law, automobile medical payment
insurance, or insurance under which benefits are payable with or
without regard to fault and that is statutorily required to be
contained in any liability insurance policy or equivalent
self-insurance.
(2) The federal Medicare program pursuant to Title XVIII of the
Social Security Act.
(3) The medicaid Medicaid program
pursuant to Title XIX of the Social Security Act.
(4) Any other publicly sponsored program, provided in this state
or elsewhere, of medical, hospital, and surgical care.
(5) 10 U.S.C. Chapter 55 (commencing with Section 1071) (Civilian
Health and Medical Program of the Uniformed Services (CHAMPUS)).
(6) A medical care program of the Indian Health Service or of a
tribal organization.
(7) A state health benefits risk pool.
(8) A health plan offered under 5 U.S.C. Chapter 89 (commencing
with Section 8901) (Federal Employees Health Benefits Program
(FEHBP)).
(9) A public health plan as defined in federal regulations
authorized by Section 2701(c)(1)(I) of the Public Health Service Act,
as amended by Public Law 104-191, the Health Insurance Portability
and Accountability Act of 1996.
(10) A health benefit plan under Section 5(e) of the Peace Corps
Act (22 U.S.C. Sec. 2504(e)).
(11) Any other creditable coverage as defined by subdivision (c)
of Section 2701 of Title XXVII of the federal Public Health Services
Act (42 U.S.C. Sec. 300gg(c)).
(s) "Rating period" means the period for which premium rates
established by a carrier are in effect and shall be no less than six
months.
(t) "Risk adjusted employee risk rate" means the rate determined
for an eligible employee of a small employer in a particular risk
category after applying the risk adjustment factor.
(u) "Risk adjustment factor" means the percent adjustment to be
applied equally to each standard employee risk rate for a particular
small employer, based upon any expected deviations from standard
claims. This factor may not be more than 120 percent or less than 80
percent until July 1, 1996. Effective July 1, 1996, this factor may
not be more than 110 percent or less than 90 percent. On and
after January 1, 2010, no risk adjustment factor shall be applied.
(v) "Risk category" means the following characteristics of an
eligible employee: age, geographic region, and family size of the
employee, plus the benefit plan design selected by the small
employer.
(1) No more than the following age categories may be used in
determining premium rates:
Under 30
30-39
40-49
50-54
55-59
60-64
65 and over
However, for the 65 and over age category, separate premium rates
may be specified depending upon whether coverage under the health
benefit plan will be primary or secondary to benefits provided by the
federal Medicare program pursuant to Title XVIII of the federal
Social Security Act.
(2) Small employer carriers shall base rates to small employers
using no more than the following family size categories:
(A) Single.
(B) Married couple.
(C) One adult and child or children.
(D) Married couple and child or children.
(3) (A) In determining rates for small employers, a carrier that
operates statewide shall use no more than nine geographic regions in
the state, have no region smaller than an area in which the first
three digits of all its ZIP Codes are in common within a county and
shall divide no county into more than two regions. Carriers shall be
deemed to be operating statewide if their coverage area includes 90
percent or more of the state's population. Geographic regions
established pursuant to this section shall, as a group, cover the
entire state, and the area encompassed in a geographic region shall
be separate and distinct from areas encompassed in other geographic
regions. Geographic regions may be noncontiguous.
(B) In determining rates for small employers, a carrier that does
not operate statewide shall use no more than the number of geographic
regions in the state than is determined by the following formula:
the population, as determined in the last federal census, of all
counties which are included in their entirety in a carrier's service
area divided by the total population of the state, as determined in
the last federal census, multiplied by nine. The resulting number
shall be rounded to the nearest whole integer. No region may be
smaller than an area in which the first three digits of all its ZIP
Codes are in common within a county and no county may be divided into
more than two regions. The area encompassed in a geographic region
shall be separate and distinct from areas encompassed in other
geographic regions. Geographic regions may be noncontiguous. No
carrier shall have less than one geographic area.
(w) "Small employer" means either of the following:
(1) Any person, proprietary or nonprofit firm, corporation,
partnership, public agency, or association that is actively engaged
in business or service that, on at least 50 percent of its working
days during the preceding calendar quarter, or preceding calendar
year, employed at least two, but not more than 50, eligible
employees, the majority of whom were employed within this state, that
was not formed primarily for purposes of buying health insurance and
in which a bona fide employer-employee relationship exists. In
determining whether to apply the calendar quarter or calendar year
test, the insurer shall use the test that ensures eligibility if only
one test would establish eligibility. However, for purposes of
subdivisions (b) and (h) of Section 10705, the definition shall
include employers with at least three eligible employees until July
1, 1997, and two eligible employees thereafter. In determining the
number of eligible employees, companies that are affiliated companies
and that are eligible to file a combined income tax return for
purposes of state taxation shall be considered one employer.
Subsequent to the issuance of a health benefit plan to a small
employer pursuant to this chapter, and for the purpose of determining
eligibility, the size of a small employer shall be determined
annually. Except as otherwise specifically provided, provisions of
this chapter that apply to a small employer shall continue to apply
until the health benefit plan anniversary following the date the
employer no longer meets the requirements of this definition. It
includes any small employer as defined in this paragraph who
purchases coverage through a guaranteed association, and any employer
purchasing coverage for employees through a guaranteed association.
(2) Any guaranteed association, as defined in subdivision (y),
that purchases health coverage for members of the association.
(x) "Standard employee risk rate" means the rate applicable to an
eligible employee in a particular risk category in a small employer
group.
(y) "Guaranteed association" means a nonprofit organization
comprised of a group of individuals or employers who associate based
solely on participation in a specified profession or industry,
accepting for membership any individual or employer meeting its
membership criteria which (1) includes one or more small employers as
defined in paragraph (1) of subdivision (w), (2) does not condition
membership directly or indirectly on the health or claims history of
any person, (3) uses membership dues solely for and in consideration
of the membership and membership benefits, except that the amount of
the dues shall not depend on whether the member applies for or
purchases insurance offered by the association, (4) is organized and
maintained in good faith for purposes unrelated to insurance, (5) has
been in active existence on January 1, 1992, and for at least five
years prior to that date, (6) has been offering health insurance to
its members for at least five years prior to January 1, 1992, (7) has
a constitution and bylaws, or other analogous governing documents
that provide for election of the governing board of the association
by its members, (8) offers any benefit plan design that is purchased
to all individual members and employer members in this state, (9)
includes any member choosing to enroll in the benefit plan design
offered to the association provided that the member has agreed to
make the required premium payments, and (10) covers at least 1,000
persons with the carrier with which it contracts. The requirement of
1,000 persons may be met if component chapters of a statewide
association contracting separately with the same carrier cover at
least 1,000 persons in the aggregate.
This subdivision applies regardless of whether a master policy by
an admitted insurer is delivered directly to the association or a
trust formed for or sponsored by an association to administer
benefits for association members.
For purposes of this subdivision, an association formed by a
merger of two or more associations after January 1, 1992, and
otherwise meeting the criteria of this subdivision shall be deemed to
have been in active existence on January 1, 1992, if its predecessor
organizations had been in active existence on January 1, 1992, and
for at least five years prior to that date and otherwise met the
criteria of this subdivision.
(z) "Members of a guaranteed association" means any individual or
employer meeting the association's membership criteria if that person
is a member of the association and chooses to purchase health
coverage through the association. At the association's discretion, it
may also include employees of association members, association
staff, retired members, retired employees of members, and surviving
spouses and dependents of deceased members. However, if an
association chooses to include those persons as members of the
guaranteed association, the association must so elect in advance of
purchasing coverage from a plan. Health plans may require an
association to adhere to the membership composition it selects for up
to 12 months.
(aa) "Affiliation period" means a period that, under the terms of
the health benefit plan, must expire before health care services
under the plan become effective.
SEC. 14. Section 10714 of the Insurance
Code is amended to read:
10714. Premiums for benefit plan designs written, issued, or
administered by carriers on or after the effective date of this act,
shall be subject to the following requirements:
(a) (1) The premium for new business shall be determined for an
eligible employee in a particular risk category after applying a risk
adjustment factor to the carrier's standard employee risk rates. The
risk adjusted employee risk rate may not be more than 120 percent or
less than 80 percent of the carrier's applicable standard employee
risk rate until July 1, 1996. Effective July 1, 1996, the risk
adjusted employee risk rate may not be more than 110 percent or less
than 90 percent. On and after January 1, 2010, no risk
adjustment factor shall be applied.
(2) The premium charged a small employer for new business shall be
equal to the sum of the risk adjusted employee risk rates.
(3) The standard employee risk rates applied to a small employer
for new business shall be in effect for no less than six months.
(b) (1) The premium for in force business shall be determined for
an eligible employee in a particular risk category after applying a
risk adjustment factor to the carrier's standard employee risk rates.
The risk adjusted employee risk rates may not be more than 120
percent or less than 80 percent of the carrier's applicable standard
employee risk rate until July 1, 1996. Effective July 1, 1996, the
risk adjusted employee risk rate may not be more than 110 percent or
less than 90 percent. The factor effective July 1, 1996, shall apply
to in force business at the earlier of either the time of renewal or
July 1, 1997. The risk adjustment factor applied to a small employer
may not increase by more than 10 percentage points from the risk
adjustment factor applied in the prior rating period. The risk
adjustment factor for a small employer may not be modified more
frequently than every 12 months. On and after January 1, 2010,
no risk adjustment factor shall be applied.
(2) The premium charged a small employer for in force business
shall be equal to the sum of the risk adjusted employee risk rates.
The standard employee risk rates shall be in effect for no less than
six months.
(3) For a benefit plan design that a carrier has discontinued
offering, the risk adjustment factor applied to the standard employee
risk rates for the first rating period of the new benefit plan
design that the small employer elects to purchase shall be no greater
than the risk adjustment factor applied in the prior rating period
to the discontinued benefit plan design. However, the risk adjusted
employee rate may not be more than 120 percent or less than 80
percent of the carrier's applicable standard employee risk rate until
July 1, 1996. Effective July 1, 1996, the risk adjusted employee
risk rate may not be more than 110 percent or less than 90 percent.
The factor effective July 1, 1996, shall apply to in force business
at the earlier of either the time of renewal or July 1, 1997. The
risk adjustment factor for a small employer may not be modified more
frequently than every 12 months. On and after January 1, 2010,
no risk adjustment factor shall be applied.
(c) (1) For any small employer, a carrier may, with the consent of
the small employer, establish composite employee and dependent rates
for either new business or renewal of in force business. The
composite rates shall be determined as the average of the risk
adjusted employee risk rates for the small employer, as determined in
accordance with the requirements of subdivisions (a) and (b). The
sum of the composite rates so determined shall be equal to the sum of
the risk adjusted employee risk rates for the small employer.
(2) The composite rates shall be used for all employees and
dependents covered throughout a rating period of no less than six
months, nor more than 12 months, except that a carrier may reserve
the right to redetermine the composite rates if the enrollment under
the health benefit plan changes by more than a specified percentage
during the rating period. Any redetermination of the composite rates
shall be based on the same risk adjusted employee risk rates used to
determine the initial composite rates for the rating period. If a
carrier reserves the right to redetermine the rates and the
enrollment changes more than the specified percentage, the carrier
shall redetermine the composite rates if the redetermined rates would
result in a lower premium for the small employer. A carrier
reserving the right to redetermine the composite rates based upon a
change in enrollment shall use the same specified percentage to
measure that change with respect to all small employers electing
composite rates.
(d) Nothing in this section shall be construed to prevent an
insurer from changing the standard employee risk rates applied to a
small employer in order to ensure that the insurer's rates for a
standard benefit plan design sold pursuant to Section 10761 are not
less than the insurer's rates for the same benefit plan design sold
through the California Cooperative Health Insurance Purchasing
Program (Part 6.45 (commencing with Section 12699.201)).
SEC. 13. SEC. 15. Chapter 8.1
(commencing with Section 10760) is added to Part 2 of Division 2 of
the Insurance Code, to read:
CHAPTER 8.1. INSURANCE MARKET REFORM
10760. Effective July 1, 2008, every insurer that offers,
markets, and sells health insurance to individuals and conducts
medical underwriting to determine whether to issue coverage to a
specific individual shall use a standardized health questionnaire
developed by the Managed Risk Medical Insurance Board. A health
insurer subject to this section may not exclude a potential insured
from any individual coverage on the basis of an actual or expected
health condition, type of illness, treatment, medical condition, or
accident, or for a preexisting condition, except as provided by the
board pursuant to Section 12711.1. A health insurer that is
also a participating health insurer in the California Cooperative
Health Insurance Purchasing Program pursuant to Part 6.45 (commencing
with Section 12699.201) may not charge a standard rate, with
reference to subscribers of any age, family size, and geographical
region, that is less than the insurer's rate for the same benefit
plan design sold through Cal-CHIPP.
10761. (a) Every insurer that provides health insurance to
residents of this state shall offer, market, and sell all of the
uniform benefit plan designs made available through
Cal-CHIPP the California Cooperative Health Insurance
Purchasing Program (Cal-CHIPP) pursuant to Part 6.45
(commencing with Section 12699.201) to purchasers in each region and
all individual and group markets where the insurer offers, markets,
and sells health insurance policies, consistent with statutory and
regulatory rating and underwriting requirements applicable to the
respective individual and group markets. A health insurer that
is also a participating health plan in Cal-CHIPP may not charge a
standard rate, with reference to insureds of any age, family size,
and geographical region, that is less than the insurer's rate for the
same benefit plan design sold through Cal-CHIPP.
(b) This section shall not preclude an insurer from offering other
benefit plan designs in addition to those required to be offered
under subdivision (a).
10762. It is the intent of the Legislature that all health care
providers shall participate in an Internet-based personal health
record system under which patients have access to their own health
care records. A patient's personal health care record shall only be
accessible to that patient or other individual as authorized by the
patient. It is the intent of the Legislature that all health insurers
and providers shall adopt standard electronic medical records by
January 1, 2012.
10763.
On and after July 1, 2008, all requirements in Chapter 8
(commencing with Section 10700) applicable to offering, marketing,
and selling health benefit plans to small employers as defined in
that chapter, including, but not limited to, the obligation to fairly
and affirmatively offer, market, and sell all of the carrier's
health benefit plan designs to all employers, guaranteed renewal of
all health benefit plan designs, use of the risk adjustment factor,
and the restriction of risk categories to age, geographic region, and
family composition as described in that chapter, shall be applicable
to all health benefit plan designs offered to all employers with 250
or fewer eligible employees, except as follows:
(a) For small employers with 2 to 50, inclusive, eligible
employees, all requirements in that chapter shall apply.
(b) For employers with 51 to 250, inclusive, eligible employees,
all requirements in that chapter shall apply, except that the carrier
may develop health care coverage benefit plan designs to fairly and
affirmatively market only to employer groups of 51 to 250 eligible
employees.
(c) Three months after the Managed Risk Medical Insurance Board
notifies the department that enrollment in the Cal-CHIPP pursuant to
Part 6.45 (commencing with Section 12699.201) will commence,
notwithstanding subdivision (t) of Section 10700, no risk adjustment
factor shall be permitted in a policy offered to a small employer, as
defined in subdivision (w) of Section 10700, or to an employer with
51 to 250, inclusive, eligible employees. A health insurance policy
shall comply with the requirements of this subdivision on or before
the date of enrollment in Cal-CHIPP commences.
(c) On and after January 1, 2010, no risk adjustment factor shall
be applied to a policy offered to an employer with 51 to 250,
inclusive, eligible employees.
10764. (a) Every group health insurer shall obtain from each
employer or group policyholder contracting with the health insurer
the premium contribution amounts the employer or group makes for each
enrolled group member and dependent using the family tier
size categories premium payments made to the
group plan.
(b) (1) Every health insurer offering group health insurance
policies shall provide as one coverage option of each group policy a
Healthy Families benchmark policy established by the board so that
group members and their dependents with family incomes at or below
300 percent of the federal poverty level that are determined eligible
for coverage through the Healthy Families Program or who are
eligible for Medi-Cal pursuant to Section 14005.33 of the Welfare and
Institutions Code can enroll in the Healthy Families benchmark
policy. The Healthy Families benchmark policy of a group health
insurer shall be provided at a rate negotiated with and approved by
the board. The health insurer shall collect the employer's applicable
dollar premium contribution for employees and, if applicable,
dependents in the Healthy Families benchmark policy and credit that
amount toward the cost of the Healthy Families benchmark policy.
(2) In lieu of meeting the requirements of paragraph (1), for
employees and, if applicable, dependents eligible for coverage
through the Healthy Families Program who have elected to enroll in a
Healthy Families benchmark policy, the health insurer shall instead
collect an amount determined by the board but not to exceed the
employer's applicable dollar premium contribution as identified in
subdivision (a) and transmit that amount to the board towards the
premium cost of a Healthy Families benchmark policy in Cal-CHIPP.
(c) (1) Every health insurer offering group health policies shall
provide as one coverage option of each group contract a Medi-Cal
benchmark policy established by the board so that group members and
their dependents that are determined eligible for coverage through
the Medi-Cal program, except for coverage pursuant to Section
14005.33 of the Welfare and Institutions Code, can enroll in the
Medi-Cal benchmark policy. The Medi-Cal benchmark policy of a group
health insurer shall be provided at a rate negotiated with and
approved by the board. The health insurer shall collect the employer'
s applicable dollar premium contribution for employees and, if
applicable, dependents in the Medi-Cal benchmark plan and credit that
amount toward the cost of the Medi-Cal benchmark plan.
(2) In lieu of meeting the requirements of paragraph (1), for
employees, and, if applicable, dependents eligible for coverage
through the Medi-Cal program who have elected to enroll in Medi-Cal
benchmark coverage, the health insurer shall instead collect an
amount determined by the board but not to exceed the employer's
applicable dollar premium contribution as identified in subdivision
(a) and transmit that amount to the board towards the premium cost of
a Medi-Cal benchmark policy in Cal-CHIPP.
(d) Every health insurer plan shall include in the plan's evidence
of coverage notice of the ability of employees and dependents with
family incomes at or below 300 percent of the federal poverty level
to enroll in Medi-Cal or Healthy Families coverage through a Healthy
Families benchmark policy or a Medi-Cal benchmark policy, with
instructions on how to apply for coverage.
(e) The department, in consultation with the board, may issue
regulations, as necessary pursuant to the Administrative Procedure
Act, to implement the requirements of this section. Until January 1,
2014 2012 , the adoption and readoption
of regulations pursuant to this part chapter
shall be deemed to be an emergency and necessary for the
immediate preservation of public peace, health and safety, or general
welfare.
(f) Employees and dependents receiving coverage through the
Medi-Cal program or Healthy Families Program pursuant to this section
shall make premium payments, if any, as determined by the board and
shall pay other cost sharing amounts. The amount of the premium
payments and cost sharing shall not exceed premium payments or cost
sharing levels for enrollment in those programs required under the
applicable state laws governing those programs. The board shall
consider using the process in effect on January 1, 2008, for
determining eligibility for the Medi-Cal program, including the
eligibility determination made by the counties.
(g) As used in this section, the following terms have the
following meanings:
(1) "Board" means the Managed Risk Medical Insurance Board.
(2) "California Cooperative Health Insurance Purchasing Program"
or "Cal-CHIPP" shall have the same meaning as in subdivision (c) of
Section 12699.201.
(3) "Healthy Families benchmark policy" shall mean coverage
equivalent to coverage provided through the Healthy Families Program
established pursuant to Part 6.2 (commencing with Section 12693).
(4) "Medi-Cal benchmark policy" shall mean coverage equivalent to
coverage provided through the Medi-Cal program (Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code).
(h) This section shall apply to health insurance policies issued,
amended, or renewed on or after July 1, 2008.
10765. (a) As used in this chapter, "health insurance" shall have
the same meaning as in subdivision (b) of Section 106.
(b) The requirements of this chapter shall not apply to a Medicare
supplement, vision-only, dental-only, or CHAMPUS-supplement
insurance or to hospital indemnity, hospital-only, accident-only, or
specified disease insurance that does not pay benefits on a fixed
benefit, cash payment only basis.
10766. This chapter shall become operative on July 1, 2008.
SEC. 14. SEC. 16. Section 12693.43
of the Insurance Code is amended to read:
12693.43. (a) Applicants applying to the purchasing pool shall
agree to pay family contributions, unless the applicant has a family
contribution sponsor. Family contribution amounts consist of the
following two components:
(1) The flat fees described in subdivision (b) or (d).
(2) Any amounts that are charged to the program by participating
health, dental, and vision plans selected by the applicant that
exceed the cost to the program of the highest cost family value
package in a given geographic area.
(b) In each geographic area, the board shall designate one or more
family value packages for which the required total family
contribution is:
(1) Seven dollars ($7) per child with a maximum required
contribution of fourteen dollars ($14) per month per family for
applicants with annual household incomes up to and including 150
percent of the federal poverty level.
(2) Nine dollars ($9) per child with a maximum required
contribution of twenty-seven dollars ($27) per month per family for
applicants with annual household incomes greater than 150 percent and
up to and including 200 percent of the federal poverty level and for
applicants on behalf of children described in clause (ii) of
subparagraph (A) of paragraph (6) of subdivision (a) of Section
12693.70.
(3) On and after July 1, 2005, fifteen dollars ($15) per child
with a maximum required contribution of forty-five dollars ($45) per
month per family for applicants with annual household income to which
subparagraph (B) of paragraph (6) of subdivision (a) of Section
12693.70 is applicable. Notwithstanding any other provision of law,
if an application with an effective date prior to July 1, 2005, was
based on annual household income to which subparagraph (B) of
paragraph (6) of subdivision (a) of Section 12693.70 is applicable,
then this paragraph shall be applicable to the applicant on July 1,
2005, unless subparagraph (B) of paragraph (6) of subdivision (a) of
Section 12693.70 is no longer applicable to the relevant family
income. The program shall provide prior notice to any applicant for
currently enrolled subscribers whose premium will increase on July 1,
2005, pursuant to this paragraph and, prior to the date the premium
increase takes effect, shall provide that applicant with an
opportunity to demonstrate that subparagraph (B) of paragraph (6) of
subdivision (a) of Section 12693.70 is no longer applicable to the
relevant family income.
(4) On and after July 1, 2008, twenty-five dollars ($25) per child
with a maximum required contribution of seventy-five dollars ($75)
per month per family for applicants with annual household incomes
greater than 250 percent and up to and including 300 percent of the
federal poverty level.
(c) Combinations of health, dental, and vision plans that are more
expensive to the program than the highest cost family value package
may be offered to and selected by applicants. However, the cost to
the program of those combinations that exceeds the price to the
program of the highest cost family value package shall be paid by the
applicant as part of the family contribution.
(d) The board shall provide a family contribution discount to
those applicants who select the health plan in a geographic area that
has been designated as the Community Provider Plan. The discount
shall reduce the portion of the family contribution described in
subdivision (b) to the following:
(1) A family contribution of four dollars ($4) per child with a
maximum required contribution of eight dollars ($8) per month per
family for applicants with annual household incomes up to and
including 150 percent of the federal poverty level.
(2) Six dollars ($6) per child with a maximum required
contribution of eighteen dollars ($18) per month per family for
applicants with annual household incomes greater than 150 percent and
up to and including 200 percent of the federal poverty level and for
applicants on behalf of children described in clause (ii) of
subparagraph (A) of paragraph (6) of subdivision (a) of Section
12693.70.
(3) On and after July 1, 2005, twelve dollars ($12) per child with
a maximum required contribution of thirty-six dollars ($36) per
month per family for applicants with annual household income to which
subparagraph (B) of paragraph (6) of subdivision (a) of Section
12693.70 is applicable. Notwithstanding any other provision of law,
if an application with an effective date prior to July 1, 2005, was
based on annual household income to which subparagraph (B) of
paragraph (6) of subdivision (a) of Section 12693.70 is applicable,
then this paragraph shall be applicable to the applicant on July 1,
2005, unless subparagraph (B) of paragraph (6) of subdivision (a) of
Section 12693.70 is no longer applicable to the relevant family
income. The program shall provide prior notice to any applicant for
currently enrolled subscribers whose premium will increase on July 1,
2005, pursuant to this paragraph and, prior to the date the premium
increase takes effect, shall provide that applicant with an
opportunity to demonstrate that subparagraph (B) of paragraph (6) of
subdivision (a) of Section 12693.70 is no longer applicable to the
relevant family income.
(4) On and after July 1, 2008, twenty-two dollars ($22) per child
with a maximum required contribution of sixty-six dollars ($66) per
month per family for applicants with annual household incomes greater
than 250 percent and up to and including 300 percent of the federal
poverty level.
(e) Applicants, but not family contribution sponsors, who pay
three months of required family contributions in advance shall
receive the fourth consecutive month of coverage with no family
contribution required.
(f) Applicants, but not family contribution sponsors, who pay the
required family contributions by an approved means of electronic fund
transfer shall receive a 25-percent discount from the required
family contributions.
(g) It is the intent of the Legislature that the family
contribution amounts described in this section comply with the
premium cost sharing limits contained in Section 2103 of Title XXI of
the Social Security Act. If the amounts described in subdivision (a)
are not approved by the federal government, the board may adjust
these amounts to the extent required to achieve approval of the state
plan.
(h) The adoption and one readoption of regulations to implement
paragraph (3) of subdivision (b) and paragraph (3) of subdivision (d)
shall be deemed to be an emergency and necessary for the immediate
preservation of public peace, health, and safety, or general welfare
for purposes of Sections 11346.1 and 11349.6 of the Government Code,
and the board is hereby exempted from the requirement that it
describe specific facts showing the need for immediate action and
from review by the Office of Administrative Law. For purposes of
subdivision (e) of Section 11346.1 of the Government Code, the
120-day period, as applicable to the effective period of an emergency
regulatory action and submission of specified materials to the
Office of Administrative Law, is hereby extended to 180 days.
SEC. 17. Section 12693.57 is added to the
Insurance Code , to read:
12693.57. Every person administering or providing benefits under
the program shall perform his or her duties in such a manner as to
secure for every subscriber the amount of assistance to which the
subscriber is entitled, without attempting to elicit any information
that is not required to carry out the provisions of law applicable to
the program.
SEC. 15. SEC. 18. Section 12693.58
is added to the Insurance Code, to read:
12693.58. (a) All types of information, whether written or oral,
concerning an applicant, subscriber, or household member, made or
kept by any public officer or agency in connection with the
administration of any provision of this part shall be confidential,
and shall not be open to examination other than for purposes directly
connected with the administration of the Healthy Families Program or
the Medi-Cal program.
(b) Except as provided in this section and to the extent permitted
by federal law or regulation, all information about applicants,
subscribers, and household members to be safeguarded as provided for
in subdivision (a) includes, but is not limited to, names and
addresses, medical services provided, social and economic conditions
or circumstances, agency evaluation of personal information, and
medical data, including diagnosis and past history of disease or
disability.
(c) Purposes directly connected with the administration of the
Healthy Families Program or the Medi-Cal program encompass all
activities and responsibilities in which the Managed Risk Medical
Insurance Board or State Department of Health Care Services and their
agents, officers, trustees, employees, consultants, and contractors
engage to conduct program operations.
(d) Nothing in this section shall be construed to prohibit the
disclosure of information about the applicant, subscriber, or
household member when the applicant, subscriber, or household member
to whom the information pertains or the parent or adult with legal
custody provides express written authorization.
(e) Nothing in this part shall prohibit the disclosure of
protected health information as provided in 45 C.F.R. 164.512.
SEC. 19. Section 12693.59 is added to the
Insurance Code , to read:
12693.59. Nothing in this part shall preclude the board from
soliciting voluntary participation by applicants and subscribers in
communicating with the board, or with any other party, concerning
their needs as well as the needs of others who are not adequately
covered by existing private and public health care delivery systems
or concerning means of ensuring the availability of adequate health
care services. The board shall inform applicants and subscribers that
their participation is voluntary and shall inform them of the uses
for which the information is intended.
SEC. 16. SEC. 20. Section 12693.621
is added to the Insurance Code, to read:
12693.621. The coverage under this part for a child who is a
dependent of an employee of an employer electing to make a payment to
the California Health Trust Fund in lieu of making health
care expenditures pursuant to Section 2200 of the
Labor 4802.1 of the Unemployment Insurance Code,
shall be provided through a Healthy Families benchmark plan under
Part 6.45 (commencing with Section 12699.201).
SEC. 17. SEC. 21. Section 12693.70
of the Insurance Code is amended to read:
12693.70. To be eligible to participate in the program, an
applicant shall meet all of the following requirements:
(a) Be an applicant applying on behalf of an eligible child, which
means a child who is all of the following:
(1) Less than 19 years of age. An application may be made on
behalf of a child not yet born up to three months prior to the
expected date of delivery. Coverage shall begin as soon as
administratively feasible, as determined by the board, after the
board receives notification of the birth. However, no child less than
12 months of age shall be eligible for coverage until 90 days after
the enactment of the Budget Act of 1999.
(2) Not eligible for no-cost full-scope Medi-Cal or Medicare
coverage at the time of application.
(3) In compliance with Sections 12693.71 and 12693.72.
(4) (Reserved).
(5) A resident of the State of California pursuant to Section 244
of the Government Code; or, if not a resident pursuant to Section 244
of the Government Code, is physically present in California and
entered the state with a job commitment or to seek employment,
whether or not employed at the time of application to or after
acceptance in, the program.
(6) (A) In either of the following:
(i) In a family with an annual or monthly household income equal
to or less than 200 percent of the federal poverty level.
(ii) When implemented by the board, subject to subdivision (b) of
Section 12693.765 and pursuant to this section, a child under the age
of two years who was delivered by a mother enrolled in the Access
for Infants and Mothers Program as described in Part 6.3 (commencing
with Section 12695). Commencing July 1, 2007, eligibility under this
subparagraph shall not include infants during any time they are
enrolled in employer-sponsored health insurance or are subject to an
exclusion pursuant to Section 12693.71 or 12693.72, or are enrolled
in the full scope of benefits under the Medi-Cal program at no share
of cost. For purposes of this clause, any infant born to a woman
whose enrollment in the Access for Infants and Mothers Program begins
after June 30, 2004, shall be automatically enrolled in the Healthy
Families Program, except during any time on or after July 1, 2007,
that the infant is enrolled in employer-sponsored health insurance or
is subject to an exclusion pursuant to Section 12693.71 or 12693.72,
or is enrolled in the full scope of benefits under the Medi-Cal
program at no share of cost. Except as otherwise specified in this
section, this enrollment shall cover the first 12 months of the
infant's life. At the end of the 12 months, as a condition of
continued eligibility, the applicant shall provide income
information. The infant shall be disenrolled if the gross annual
household income exceeds the income eligibility standard that was in
effect in the Access for Infants and Mothers Program at the time the
infant's mother became eligible, or following the two-month period
established in Section 12693.981 if the infant is eligible for
Medi-Cal with no share of cost. At the end of the second year,
infants shall again be screened for program eligibility pursuant to
this section, with income eligibility evaluated pursuant to clause
(i), subparagraphs (B) and (C), and paragraph (2) of subdivision (a).
(B) All income over 200 percent of the federal poverty level but
less than or equal to 250 percent of the federal poverty level shall
be disregarded in calculating annual or monthly household income. On
and after July 1, 2008, all income over 250 percent of the federal
poverty level but less than or equal to 300 percent of the federal
poverty level shall be disregarded in calculating annual or monthly
household income.
(C) In a family with an annual or monthly household income greater
than 250 percent of the federal poverty level, any income deduction
that is applicable to a child under Medi-Cal shall be applied in
determining the annual or monthly household income. If the income
deductions reduce the annual or monthly household income to 250
percent or less of the federal poverty level, subparagraph (B) shall
be applied.
(D) On and after July 1, 2008, in a family with an annual or
monthly household income greater than 300 percent of the federal
poverty level, any income deduction that is applicable to a child
under the Medi-Cal program shall be applied in determining the annual
or monthly household income. If the income deductions reduce the
annual or monthly household income to 300 percent or less of the
federal poverty level, subparagraph (B) shall apply.
(b) The applicant shall agree to remain in the program for six
months, unless other coverage is obtained and proof of the coverage
is provided to the program.
(c) An applicant shall enroll all of the applicant's eligible
children in the program.
(d) In filing documentation to meet program eligibility
requirements, if the applicant's income documentation cannot be
provided, as defined in regulations promulgated by the board, the
applicant's signed statement as to the value or amount of income
shall be deemed to constitute verification.
(e) An applicant shall pay in full any family contributions owed
in arrears for any health, dental, or vision coverage provided by the
program within the prior 12 months.
(f) By January 2008, the board, in consultation with stakeholders,
shall implement processes by which applicants for subscribers may
certify income at the time of annual eligibility review, including
rules concerning which applicants shall be permitted to certify
income and the circumstances in which supplemental information or
documentation may be required. The board may terminate using these
processes not sooner than 90 days after providing notification to the
Chair of the Joint Legislative Budget Committee. This notification
shall articulate the specific reasons for the termination and shall
include all relevant data elements that are applicable to document
the reasons for the termination. Upon the request of the Chair of the
Joint Legislative Budget Committee, the board shall promptly provide
any additional clarifying information regarding implementation of
the processes required by this subdivision.
SEC. 18. SEC. 22. Section 12693.73
of the Insurance Code is amended to read:
12693.73. Notwithstanding any other provision of law, children
excluded from coverage under Title XXI of the Social Security Act are
not eligible for coverage under the program, except as specified in
clause (ii) of subparagraph (A) of paragraph (6) of subdivision (a)
of Section 12693.70 and Section 12693.76, or except children who
otherwise meet eligibility requirements for the program but for their
immigration status.
SEC. 19. SEC. 23. Section 12693.755
of the Insurance Code is amended to read:
12693.755. (a) Subject to subdivision (b), but no later than July
1, 2008, the board shall expand eligibility under this part to
uninsured parents of, and as defined by the board, adults responsible
for, children enrolled to receive coverage under this part whose
income does not exceed 300 percent of the federal poverty level,
before applying the income disregard provided for in subparagraph (B)
of paragraph (6) of subdivision (a) of Section 12693.70.
(b) (1) The board shall implement a program to provide coverage
under this part to any uninsured parent or responsible adult who is
eligible pursuant to subdivision (a), pursuant to the waiver or
approval identified in paragraph (2).
(2) The program shall be implemented only in accordance with a
State Child Health Insurance Program waiver or other federal approval
pursuant to Section 1397gg(e)(2)(A) of Title 42 of the United States
Code, or pursuant to the Deficit Reduction Act of 2005, Section 6044
of Public Law 109-171, to provide coverage to uninsured parents and
responsible adults, and shall be subject to the terms, conditions,
and duration of the waiver or other federal approval. The services
shall be provided under the program only if the waiver or other
federal approval is approved by the federal Centers for Medicare and
Medicaid Services, and, except as provided under
the terms and conditions of the waiver or
other federal approval, only to the extent that federal financial
participation is available and funds are appropriated specifically
for this purpose.
(c) The coverage under this section for a person who is an
employee or, if applicable, an adult dependent of an employee, of an
employer electing to make a payment to the California Health Trust
Fund in lieu of making health care expenditures
pursuant to Section 2200 of the Labor 4802.1
of the Unemployment Insurance Code, shall be provided through a
Healthy Families benchmark plan under Part 6.45 (commencing with
Section 12699.201).
SEC. 20. SEC. 24. Section 12693.76
of the Insurance Code is amended to read:
12693.76. (a) Notwithstanding any other provision of law, a child
who is a qualified alien as defined in Section 1641 of Title 8 of
the United States Code shall not be determined ineligible solely on
the basis of his or her date of entry into the United States.
(b) Notwithstanding any other provision of law, subdivision (a)
may only be implemented to the extent provided in the annual Budget
Act.
(c) Notwithstanding any other provision of law, any uninsured
parent or responsible adult who is a qualified alien, as defined in
Section 1641 of Title 8 of the United States Code, shall not be
determined to be ineligible solely on the basis of his or her date of
entry into the United States.
(d) Notwithstanding any other provision of law, subdivision (c)
may only be implemented to the extent of funding provided in the
annual Budget Act.
(e) Notwithstanding any other provision of law, a child who is
otherwise eligible to participate in the program shall not be
determined ineligible solely on the basis of his or her immigration
status.
(f) The coverage provided under this section to a child who is a
dependent of an employee of an employer electing to make a payment to
the California Health Care Trust Fund in lieu of making health care
expenditures pursuant to Section 2200 of the Labor Code, shall be
provided through a benchmark plan under Part 6.45 (commencing with
Section 12699.201).
SEC. 21. SEC. 25. Part 6.45
(commencing with Section 12699.201) is added to Division 2 of the
Insurance Code, to read:
PART 6.45. THE CALIFORNIA COOPERATIVE HEALTH INSURANCE
PURCHASING PROGRAM
CHAPTER 1. GENERAL PROVISIONS
12699.201. For the purposes of this part, the following terms
have the following meanings:
(a) "Benefit plan design" means a specific health coverage product
offered for sale and includes services covered and the levels of
copayments, deductibles, and annual out-of-pocket expenses, and may
include the professional providers who are to provide those services
and the sites where those services are to be provided. A benefit plan
design may also be an integrated system for the financing and
delivery of quality health care services that has significant
incentives for the covered individuals to use the system.
(b) "Board" means the Managed Risk Medical Insurance Board.
(c) "California Cooperative Health Insurance Purchasing Program"
or "Cal-CHIPP" means the statewide purchasing pool established
pursuant to this part and administered by the board.
(d) "Enrollee" means an individual who is eligible for, and
participates in, Cal-CHIPP.
(e) "Fund" means the California Health Trust Fund established
pursuant to Section 12699.212.
(f) "Healthy Families benchmark plan" means coverage equivalent to
coverage provided through the Healthy Families Program (Part 6.2
(commencing with Section 12693)).
(g) "Medi-Cal benchmark plan" means coverage equivalent to the
coverage provided through the Medi-Cal program (Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code).
(h) "Participating dental plan" means either a dental insurer
holding a valid certificate of authority from the commissioner or a
specialized health care service plan, as defined by subdivision (o)
of Section 1345 of the Health and Safety Code, that contracts with
the board to provide dental coverage to enrollees.
(i) "Participating health plan" means either a private health
insurer holding a valid outstanding certificate of authority from the
commissioner or a health care service plan as defined under
subdivision (f) of Section 1345 of the Health and Safety Code that
contracts with the board to provide coverage in Cal-CHIPP and,
pursuant to its contract with the board, provides, arranges, pays
for, or reimburses the costs of health services for Cal-CHIPP
enrollees.
(j) "Participating vision care plan" means either an insurer
holding a valid certificate of authority from the commissioner that
issues vision-only coverage or a specialized health care service
plan, as defined by subdivision (o) of Section 1345 of the Health and
Safety Code, that contracts with the board to provide vision
coverage to enrollees.
CHAPTER 2. ADMINISTRATION
12699.202. (a) The board shall be responsible for establishing
Cal-CHIPP and administering this part.
(b) The board may do all of the following consistent with the
standards of this part:
(1) Determine eligibility and enrollment criteria and processes
for Cal-CHIPP consistent with the eligibility standards in Chapter 3
(commencing with Section 12699.211).
(2) Determine the participation requirements for enrollees.
(3) Determine the participation requirements and the standards and
selection criteria for participating health, dental, and vision care
plans, including reasonable limits on a plan's administrative costs
to ensure that a plan expends on patient care not less than 85
percent of aggregate dues, fees, and other periodic payments received
by the plan.
(4) Determine when an enrollee's coverage commences and the extent
and scope of coverage.
(5) Determine premium schedules, collect the premiums, and
administer subsidies to eligible enrollees with a household
income at or below 300 percent of the federal poverty level.
.
(6) Determine rates paid to participating health, dental, and
vision care plans.
(7) Provide, or make available, coverage through participating
health plans in Cal-CHIPP.
(8) Provide, or make available, coverage through participating
dental and vision care plans in Cal-CHIPP.
(9) Provide for the processing of applications and the enrollment
of enrollees.
(10) Determine and approve the benefit designs and copayments for
participating health, dental, and vision care plans.
(11) Enter into contracts.
(12) Sue and be sued.
(13) Employ necessary staff.
(14) Authorize expenditures, as necessary, from the fund to pay
program expenses that exceed enrollee contributions and to administer
Cal-CHIPP.
(15) Issue rules and regulations, as necessary. During
the period from January 1, 2008, to December 31, 2011, inclusive, the
adoption and readoption of regulations pursuant to the California
Health Care Reform and Cost Control Act shall be deemed to be an
emergency and necessary for the immediate preservation of public
peace, health, and safety, or the general welfare.
(16) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenue available in the
fund, and if sufficient revenue is not available to pay the estimated
expenditures, the board shall institute appropriate measures to
ensure fiscal solvency. This paragraph shall not be construed to
allow the board to deny enrollment of a person who otherwise meets
the eligibility requirements of Chapter 3 (commencing with Section
12699.211) in order to ensure the fiscal solvency of the fund.
(17) Establish the criteria and procedures through which employers
direct employees' premium dollars, withheld under the terms
of cafeteria plans pursuant to Chapter 11 (commencing with Section
19900) of Part 10.2 of Division 2 of the Revenue and Taxation Code
terms of cafeteria plans pursuant to Section 4809 of
the Unemployment Insurance Code , to Cal-CHIPP to be credited
against the employees' premium obligations.
(18) Share information obtained pursuant to this part with the
Employment Development Department solely for the purpose of the
administration and enforcement of this part.
(19) Exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed by this
part.
12699.203. The board shall develop and offer at least three
uniform benefit plan designs to Cal-CHIPP enrollees. One of
the benefit plan designs offered by each participating health plan
shall be a Healthy Families benchmark plan and another of the benefit
plan designs shall be a Medi-Cal benchmark plan. The
In addition to the three uniform benefit plan designs, each
participating health plan shall offer a Healthy Families benchmark
plan and a Medi-Cal benchmark plan. For purposes of the Medi-Cal
benchmark plan offered in Cal-CHIPP, the board shall enter into an
agreement with the State Department of Health Care Services for the
provision of the Medi-Cal benchmark plan by the Medi-Cal
program. The three uniform benefit plan designs
shall include varying benefit levels, deductibles, coinsurance
factors, or copayments, and annual limits on out-of-pocket expenses.
In developing the benefit plan designs, the board shall comply with
all of the following:
(a) The board shall take into consideration the levels of health
care coverage provided in the state and medical economic factors as
may be deemed appropriate. The board shall include coverage and
design elements that are reflective of and commensurate with health
insurance coverage provided through a representative number of large
insured employers in the state.
(b) All benefit plan designs shall meet the requirements of the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code) and shall include prescription drug benefits, combined with
enrollee cost-sharing levels that promote prevention and health
maintenance, including appropriate cost sharing for physician office
visits, diagnostic laboratory services, and maintenance medications
to manage chronic diseases, such as asthma, diabetes, and heart
disease.
(c) In determining the enrollee and dependent deductibles,
coinsurance, and copayment requirements, the board shall consider
whether those costs would deter an enrollee or his or her dependents
from obtaining appropriate and timely care, including those enrollees
with a low- or moderate-family income. The board shall also consider
the impact of these costs on an enrollee's ability to afford health
care services.
(d) The board shall consult with the Insurance Commissioner, the
Director of the Department of Managed Health Care, and the Director
of the Department of Health Care Services.
12699.204. (a) The board may adjust premiums at a public meeting
of the board after providing, at minimum, 30 days' public notice of
the adjustment. In making the adjustment, the board shall take into
account the costs of health care typically paid for by employers and
employees in California.
(b) Notwithstanding subdivision (a), the amount of the premium
paid by an employee with a household income at or below 300 percent
of the federal poverty level shall not exceed 0 to 5 percent of the
household income, depending on the income, after taking into account
the tax savings the employee is able to realize by using the
cafeteria plan made available by his or her employer
pursuant to Chapter 11 (commencing with Section 19900) of Part 10.2
of Division 2 of the Revenue and Taxation Code.
pursuant to Section 4809 of the Unemployment Insurance Code.
(c) An employer may pay all, or a portion of, the premium payment
required of its employees enrolled in Cal-CHIPP.
(d) Employees and dependents receiving coverage though the
Medi-Cal program or the Healthy Families Program pursuant to this
part shall make premium payments, if any, as determined by the board,
and pay other cost sharing amounts that do not exceed premium
payments and cost sharing levels for enrollment in those programs
required under the applicable state laws governing those programs.
The board shall consider using the process in effect on January 1,
2008, for determining eligibility for the Medi-Cal program including
the eligibility determination made by the counties.
12699.205. The board, in its contract with a participating health
plan, shall require that the plan utilize efficient practices to
improve and control costs. These practices shall include, but are not
limited to, the following:
(a) Preventive care.
(b) Care management for chronic diseases.
(c) Promotion of health information technology.
(d) Standardized billing practices.
(e) Reduction of medical errors.
(f) Incentives for healthy lifestyles.
(g) Patient cost-sharing to encourage the use of preventive and
appropriate care.
(h) Rational use of new technology.
12699.206. (a) The board shall negotiate with Medi-Cal managed
care plans to obtain affordable coverage for eligible enrollees.
(b) The board shall implement the requirements for a benchmark
plan or policy as required pursuant to Section 1357.24 of the Health
and Safety Code and Section 10764 , and shall limit enrollment
in these plans or policies only to eligible individuals .
(c) The board, in consultation with the State Department of Health
Care Services, shall take all reasonable steps necessary to maximize
federal funding and support federal claiming in the administration
of the purchasing pool created pursuant to this part.
12699.206.1. (a) To provide prescription drug coverage for
Cal-CHIPP enrollees, the board may take any of the following actions:
(1) Contract directly with health care service plans or health
insurers for prescription drug coverage as a component of a health
care service plan contract or a health insurance policy.
(2) Contract with a pharmacy benefits manager (PBM) if the PBM
meets transparency and disclosure requirements established by the
board.
(3) Procure products directly through the prescription drug
purchasing program established pursuant to Chapter 12 (commencing
with Section 14977) of Part 5.5 of Division 3 of Title 2 of the
Government Code.
(b) The board may engage in any of the activities described in
subdivision (a), or in any cost-effective combination of those
activities.
(c) If the board enters into a prescription drug purchasing
arrangement pursuant to paragraph (2) or (3) of subdivision (a), the
board may allow any of the following entities to participate in that
arrangement:
(1) Employers.
(2) Any state, district, county, city, municipal, or other public
agency or governmental entity.
(3) A board or administrator responsible for providing or
delivering health care coverage pursuant to a collective bargaining
agreement, memorandum of understanding, or other similar agreement
with a labor organization.
12699.206.2. (a) All information, whether written or oral,
concerning an applicant to Cal-CHIPP, an enrollee in Cal-CHIPP, or a
household member of the applicant or enrollee, created or maintained
by a public officer or agency in connection with the administration
of this part shall be confidential and shall not be open to
examination other than for purposes directly connected with the
administration of this part. "Purposes directly connected with the
administration of this part" includes all activities and
responsibilities in which the board or the State Department of Health
Care Services and their agents, officers, trustees, employees,
consultants, and contractors engage to conduct program operations.
(b) Information subject to the provisions of this section
includes, but is not limited to, names and addresses, medical
services provided to an enrollee, social and economic conditions or
circumstances, agency evaluation of personal information, and medical
data, such as diagnosis and health history.
(c) Nothing in this section shall be construed to prohibit the
disclosure of information about applicants and enrollees, or their
household members, if express written authorization for the
disclosure has been provided by the person to whom the information
pertains or, if that person is a minor, authorization has been
provided by the minor's parent or other adult with legal custody of
the minor.
(d) Nothing in this part shall prohibit the disclosure of
protected health information as provided in Section 164.152 of Title
45 of the Code of Federal Regulations.
12699.207. (a) Notwithstanding any other provision of law, the
board shall not be subject to licensure or regulation by the
Department of Insurance or the Department of Managed Health Care.
(b) Participating health, dental, and vision care plans that
contract with the board shall be regulated by either the Insurance
Commissioner or the Department of Managed Health Care and shall be
licensed and in good standing with their respective licensing agency.
In their application to Cal-CHIPP and upon request by the board, the
participating health, dental, and vision care plans shall provide
assurance of their licensure and standing with the appropriate
licensing agency.
12699.208. The board shall collect and disseminate, as
appropriate and to the extent possible, information on the quality of
participating health, dental, and vision care plans and each plan's
cost-effectiveness to assist enrollees in selecting a plan.
12699.209. The board shall establish a working group for the
purpose of developing recommendations to broaden access to Cal-CHIPP
to all self-employed individuals and submit the recommendations to
the Legislature on or before January 1, 2009.
12699.210. The provisions of Section 12693.54 shall apply to a
contract entered into pursuant to this part.
CHAPTER 3. ELIGIBILITY
12699.211. (a) To be eligible to enroll in Cal-CHIPP, an
individual shall meet all of the following requirements:
(1) Is a resident of the state pursuant to Section 244 of the
Government Code or is physically present in the state, having entered
the state with an employment commitment or to obtain employment,
whether or not employed at the time of application to Cal-CHIPP or
after enrollment in Cal-CHIPP.
(2) Is an employee or a dependent of an employee of an employer
who elected to pay into the California Health Trust Fund in lieu of
making health care expenditures for its
employees and, if applicable, dependents pursuant to Section 2200 of
the Labor Code. pursuant to Section 4802.1 of the
Unemployment Insurance Code.
(b) Notwithstanding paragraph (2) of subdivision (a), eligible
employees and, if applicable, dependents of eligible employees,
receiving eligible for coverage through
a Medi-Cal or Healthy Families benchmark plan or policy pursuant to
paragraph (2) of subdivision (b) and paragraph (2) of subdivision (c)
of Section 1357.24 of the Health and Safety Code or paragraph (2) of
subdivision (b) and paragraph (2) of subdivision (c) of Section
10764 are eligible for Cal-CHIPP. These employees and, if applicable,
their dependents shall be limited to the choice of a benchmark plan
or policy under Cal-CHIPP and shall not have access to other benefit
plan options available to Cal-CHIPP enrollees pursuant to Section
12699.203.
12699.211.01. (c) (a)
The failure of an employer to continue to
pay the fee required by Section 4805 4802.1
of the Unemployment Insurance Code shall not make an enrollee
employed by that employer and , if applicable, the employee'
s dependents the employee's dependents, if any ,
ineligible for participation in Cal-CHIPP until the last day of
the second month following the month in which the employer failed to
make the fee payment .
(b) If an employer fails to make the fee payment by the 15th day
of each month, the board shall notify the employer and its employees
enrolled in Cal-CHIPP of the following information within 15 days of
the employer's failure to make the required fee payment:
(1) The employer's failure to pay the fee by the 15th day of the
month.
(2) The coverage of the employee and his or her dependents, if
any, will terminate on the last day of the second month following the
month in which the employer failed to make the fee payment, and the
employee and his or her dependents, if any, shall be ineligible for
Cal-CHIPP.
(3) Their rights and remedies under law.
(c) The board may, through regulations adopted pursuant to Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code, allow an employee and his or her
dependents, if any, whose employer failed to pay the fee required by
Section 4802.1 of the Unemployment Insurance Code, to continue
coverage for up to 36 months from the date of ineligibility described
in subdivision (b) if the employee pays the entire cost for the
coverage. Subject to the availability of funds, the board may, upon
appropriation by the Legislature, use revenue in the penalty account
in the fund to subsidize the cost of coverage under this subdivision.
CHAPTER 4. FISCAL
12699.212. (a) The California Health Trust
Fund is hereby created in the State Treasury. Notwithstanding Section
13340 of the Government Code, the moneys in the fund shall be
continuously appropriated to the board , withou t
regard to fiscal year, for the purposes of providing health
care coverage pursuant to this part. Notwithstanding
Any moneys in the fund that are unexpended or
unencumbered at the end of a fiscal year, may be carried
forward to the next succeeding fiscal year.
(b) The board shall establish a prudent reserve in the fund.
(c) Notwithstanding Section
16305.7 of the Government Code, all interest earned on the moneys
that have been deposited into the fund shall be retained in the fund.
12699.213. The board, subject to the approval of the Department
of Finance, may obtain loans from the General Fund for all necessary
and reasonable expenses related to the administration of the fund.
12699.214. The board shall authorize, for the purposes of this
part, the expenditure from the fund of any state or federal revenue
or other revenue received from any source.
12699.215. The board may solicit and accept gifts, contributions,
and grants from any source, public or private, to administer the
program and shall deposit all revenue from those sources into the
fund.
12699.213. 12699.216. The board,
subject to federal approval pursuant to Section 14199.10 of the
Welfare and Institutions Code, shall pay the nonfederal share of cost
from the California Health Trust Fund fund
for employees and dependents eligible under that federal
approval.
12699.214. 12699.217. This part
shall become operative on January 1, 2010 2009
.
SEC. 22. SEC. 26. Section 12711.1 is
added to the Insurance Code, to read:
12711.1. (a) The board shall establish a list of serious health
conditions or diagnoses making an applicant automatically eligible
for the program based on the standardized health questionnaire
developed pursuant to subdivision (b) . In developing the list
of conditions, the board shall consult with the Director of the
Department of Managed Health Care and the commissioner to identify
common health plan and insurer underwriting criteria.
(b) The board shall develop a standardized health questionnaire to
be used by all health plans and insurers that offer and sell
individual coverage. The questionnaire shall provide for an objective
evaluation of a person's health status by assigning a discrete
measure, such as a system of point scoring, to each person. The
questionnaire shall be designed to identify the 3 to 5 percent of
persons who are the most expensive to treat if covered under an
individual health care service plan or an individual health insurance
policy, and the board shall obtain from an actuary a certification
that the standard health questionnaire meets this requirement. The
questionnaire shall be designed to collect only that information
necessary to identify if a person is eligible for coverage in the
program pursuant to subdivision (a). Consistent with Section 1357.21
of the Health and Safety Code and Section 10761, health plans and
insurers shall not deny coverage for any individual except for those
who qualify for automatic eligibility for the program as determined
by the board pursuant to this section.
(c) This section shall become operative on July 1, 2008.
SEC. 23. Part 8.8 (commencing with Section
2200) is added to Division 2 of the Labor Code, to read:
PART 8.8. EMPLOYER ELECTION
2200. (a) (1) Each employer shall elect to take one of the
following actions:
(A) Make health care expenditures as provided in subparagraph (A)
of paragraph (3) for its full-time employees, and, if applicable,
their dependents.
(B) Pay an equivalent amount into the California Health Trust
Fund.
(2) Each employer also shall elect to take one of the following
actions:
(A) Make health care expenditures as provided in subparagraph (B)
of paragraph (3) for its part-time employees, and, if applicable,
their dependents.
(B) Pay an equivalent amount into the California Health Trust
Fund.
(3) (A) An employer's cumulative
amount of health care expenditures for the employer's full-time
employees working 30 or more hours per week shall be equivalent, at a
minimum, to 7.5 percent of wages paid by the employer to its
full-time employees. In computing this amount, wages paid to an
employee that are in excess of wages subject to withholding by the
Social Security Administration shall be excluded.
(B) An employer's cumulative amount of health care expenditures
for the employer's part-time employees working less than 30 hours per
week shall be equivalent, at a minimum, to 7.5 percent of wages paid
by the employer to part-time employees. In computing this amount,
wages paid to an employee that are in excess of wages subject to
withholding by the Social Security Administration shall be excluded.
(b) (1) The amount payable to the California Health Trust Fund by
an employer electing to pay shall be deposited into the fund.
(2) The Employment Development Department, in consultation with
the board, shall ensure that funds are deposited in the California
Health Trust Fund pursuant to this section and are available to
ensure the timely enrollment of eligible employees and, if
applicable, their dependents in the Cal-CHIPP purchasing pool.
(c) Notwithstanding subparagraphs (A) and (B) of paragraph (3) of
subdivision (a), the board may adjust the health care expenditure
amounts required by those subparagraphs. The adjustments shall be
made by the board at a public meeting of the board. On or before
October 31 of each year, the board shall prepare a statement, which
shall be a public record, setting forth the adjustments for the next
calendar year and shall promptly notify the Employment Development
Department of those adjustments.
2203. An employee working for an employer that elects, pursuant
to Section 2200, to pay an equivalent amount in lieu of making health
care expenditures shall be required to enroll in the California
Cooperative Health Insurance Purchasing Program pursuant to Part 6.45
(commencing with Section 12699.201) of Division 2 of the Insurance
Code to receive coverage from a participating health plan contracting
with the board through the program. However, an employee is exempt
from this requirement if the employee is able to demonstrate that the
employee is covered by individual coverage that is in force on the
effective date of this section, a public program, or other group
health care coverage, such as an employer-sponsored retiree health
plan or group coverage made available by an employer to the employee'
s spouse that also covers the employee. An employee who is exempt
under this section from the requirement to enroll in the California
Cooperative Health Insurance Purchasing Program may choose to enroll
in that program.
2204. Unless the context requires otherwise, the definitions set
forth in this section shall govern the construction and meaning of
the terms and phrases used in this part:
(a) "Board" means the Managed Risk Medical Insurance Board.
(b) "Employer" means any individual, corporation, association,
partnership, or limited liability company doing business in this
state, deriving income from sources within this state, or in any
manner whatsoever subject to the laws of this state, the State of
California or any political subdivision or agency thereof, including
the Regents of the University of California, any city organized under
a freeholders' charter, or any political body not a subdivision or
agency of the state, any person, officer, employee, department, or
agency thereof, making payment of wages to employees for services
performed within this state.
(c) "Fund" means the California Health Trust Fund created pursuant
to Section 12699.212 of the Insurance Code.
(d) (1) "Health care expenditures" means any amount paid by an
employer subject to this section to, or on behalf of, its employees
and dependents, if applicable, to provide health care or
health-related services or to reimburse the costs of those services,
including, but not limited to, any of the following:
(A) Contributions to a health savings account as defined by
Section 223 of the Internal Revenue Code.
(B) Reimbursement by the employer to its employees, and their
dependents, if applicable, for incurred health care expenses, where
those recipients have no entitlement to that reimbursement under any
plan, fund, or program maintained by the employer. As used in this
subparagraph, "health care expenses" includes, but is not limited to,
an expense for which payment is deductible from personal income
under Section 213(d) of the Internal Revenue Code.
(C) Programs to assist employees to attain and maintain healthy
lifestyles, including, but not limited to, onsite wellness programs,
reimbursement for attending offsite wellness programs, onsite health
fairs and clinics, and financial incentives for participating in
health screenings and other wellness activities.
(D) Disease management programs.
(E) Pharmacy benefit management programs.
(F) Care rendered to employees and their dependents by health care
providers employed by or under contract to employers, such as
employer-sponsored primary care clinics.
(G) Purchasing health care coverage from a health care service
plan or a health insurer.
(2) "Health care expenditures" does not include a payment made
directly or indirectly for workers' compensation, Medicare benefits,
or any other health benefit cost, taxes, penalties, or assessment
that the employer is required to pay by state or federal law, other
than as required by Section 2200. "Health care expenditures" does not
include penalties imposed pursuant to Section 4820 of the
Unemployment Insurance Code.
(e) "Public program" means publicly funded health care coverage
that is defined as creditable coverage in paragraphs (2) to (10),
inclusive, of subdivision (g) of Section 1357 of the Health and
Safety Code.
(f) "Wages" means all remuneration, as defined in Article 2
(commencing with Section 926) of Chapter 4 of Part 1 of Division 1 of
the Unemployment Insurance Code. "Wages" does not include
remuneration described in Sections 930, 930.1, and 930.5 of the
Unemployment Insurance Code.
2205. This part shall become operative on January 1, 2010.
SEC. 24. Chapter 11 (commencing with Section
19900) is added to Part 10.2 of Division 2 of the Revenue and
Taxation Code, to read:
CHAPTER 11. HEALTH CARE CAFETERIA PLAN
19900. This chapter shall be known and may be cited as the Health
Care Cafeteria Plan.
19901. Unless federal law or the law of this state provides
otherwise, each employer in this state during a taxable year shall
adopt and maintain a cafeteria plan, within the meaning of Section
125 of the Internal Revenue Code, to allow employees to pay for
health insurance premiums, to the extent amounts for such benefits
are excludable from the gross income of the employee under Section
106 of the Internal Revenue Code.
SEC. 25. SEC. 27. Section 131 of the
Unemployment Insurance Code is amended to read:
131. "Contributions" means the money payments to the Unemployment
Fund, Employment Training Fund, California Health Trust Fund, or
Unemployment Compensation Disability Fund that are required by this
division code .
SEC. 28. Section 144 of the
Unemployment Insurance Code is amended to read:
144. "Worker contributions," "contributions by workers,"
"employee contributions," or "contributions by employees" mean
contributions to the Disability Fund and to the California
Health Trust Fund .
SEC. 26. SEC. 29. Section 1095 of
the Unemployment Insurance Code is amended to read:
1095. The director shall permit the use of any information in his
or her possession to the extent necessary for any of the following
purposes and may require reimbursement for all direct costs incurred
in providing any and all information specified in this section,
except information specified in subdivisions (a) to (e), inclusive:
(a) To enable the director or his or her representative to carry
out his or her responsibilities under this code.
(b) To properly present a claim for benefits.
(c) To acquaint a worker or his or her authorized agent with his
or her existing or prospective right to benefits.
(d) To furnish an employer or his or her authorized agent with
information to enable him or her to fully discharge his or her
obligations or safeguard his or her rights under this division or
Division 3 (commencing with Section 9000).
(e) To enable an employer to receive a reduction in contribution
rate.
(f) To enable federal, state, or local government departments or
agencies, subject to federal law, to verify or determine the
eligibility or entitlement of an applicant for, or a recipient of,
public social services provided pursuant to Division 9 (commencing
with Section 10000) of the Welfare and Institutions Code, or Part A
of Title IV of the Social Security Act, where the verification or
determination is directly connected with, and limited to, the
administration of public social services.
(g) To enable county administrators of general relief or
assistance, or their representatives, to determine entitlement to
locally provided general relief or assistance, where the
determination is directly connected with, and limited to, the
administration of general relief or assistance.
(h) To enable state or local governmental departments or agencies
to seek criminal, civil, or administrative remedies in connection
with the unlawful application for, or receipt of, relief provided
under Division 9 (commencing with Section 10000) of the Welfare and
Institutions Code or to enable the collection of expenditures for
medical assistance services pursuant to Part 5 (commencing with
Section 17000) of Division 9 of the Welfare and Institutions Code.
(i) To provide any law enforcement agency with the name, address,
telephone number, birth date, social security number, physical
description, and names and addresses of present and past employers,
of any victim, suspect, missing person, potential witness, or person
for whom a felony arrest warrant has been issued, when a request for
this information is made by any investigator or peace officer as
defined by Sections 830.1 and 830.2 of the Penal Code, or by any
federal law enforcement officer to whom the Attorney General has
delegated authority to enforce federal search warrants, as defined
under Sections 60.2 and 60.3 of Title 28 of the Code of Federal
Regulations, as amended, and when the requesting officer has been
designated by the head of the law enforcement agency and requests
this information in the course of and as a part of an investigation
into the commission of a crime when there is a reasonable suspicion
that the crime is a felony and that the information would lead to
relevant evidence. The information provided pursuant to this
subdivision shall be provided to the extent permitted by federal law
and regulations, and to the extent the information is available and
accessible within the constraints and configurations of existing
department records. Any person who receives any information under
this subdivision shall make a written report of the information to
the law enforcement agency that employs him or her, for filing under
the normal procedures of that agency.
(1) This subdivision shall not be construed to authorize the
release to any law enforcement agency of a general list identifying
individuals applying for or receiving benefits.
(2) The department shall maintain records pursuant to this
subdivision only for periods required under regulations or statutes
enacted for the administration of its programs.
(3) This subdivision shall not be construed as limiting the
information provided to law enforcement agencies to that pertaining
only to applicants for, or recipients of, benefits.
(4) The department shall notify all applicants for benefits that
release of confidential information from their records will not be
protected should there be a felony arrest warrant issued against the
applicant or in the event of an investigation by a law enforcement
agency into the commission of a felony.
(j) To provide public employee retirement systems in California
with information relating to the earnings of any person who has
applied for or is receiving a disability income, disability
allowance, or disability retirement allowance, from a public employee
retirement system. The earnings information shall be released only
upon written request from the governing board specifying that the
person has applied for or is receiving a disability allowance or
disability retirement allowance from its retirement system. The
request may be made by the chief executive officer of the system or
by an employee of the system so authorized and identified by name and
title by the chief executive officer in writing.
(k) To enable the Division of Labor Standards Enforcement in the
Department of Industrial Relations to seek criminal, civil, or
administrative remedies in connection with the failure to pay, or the
unlawful payment of, wages pursuant to Chapter 1 (commencing with
Section 200) of Part 1 of Division 2 of, and Chapter 1 (commencing
with Section 1720) of Part 7 of Division 2 of, the Labor Code.
() To enable federal, state, or local governmental departments or
agencies to administer child support enforcement programs under Title
IV of the Social Security Act (42 U.S.C. Sec. 651 et seq.).
(m) To provide federal, state, or local governmental departments
or agencies with wage and claim information in its possession that
will assist those departments and agencies in the administration of
the Victims of Crime Program or in the location of victims of crime
who, by state mandate or court order, are entitled to restitution
that has been or can be recovered.
(n) To provide federal, state, or local governmental departments
or agencies with information concerning any individuals who are or
have been:
(1) Directed by state mandate or court order to pay restitution,
fines, penalties, assessments, or fees as a result of a violation of
law.
(2) Delinquent or in default on guaranteed student loans or who
owe repayment of funds received through other financial assistance
programs administered by those agencies. The information released by
the director for the purposes of this paragraph shall not include
unemployment insurance benefit information.
(o) To provide an authorized governmental agency with any or all
relevant information that relates to any specific workers'
compensation insurance fraud investigation. The information shall be
provided to the extent permitted by federal law and regulations. For
the purposes of this subdivision, "authorized governmental agency"
means the district attorney of any county, the office of the Attorney
General, the Department of Industrial Relations, and the Department
of Insurance. An authorized governmental agency may disclose this
information to the State Bar, the Medical Board of California, or any
other licensing board or department whose licensee is the subject of
a workers' compensation insurance fraud investigation. This
subdivision shall not prevent any authorized governmental agency from
reporting to any board or department the suspected misconduct of any
licensee of that body.
(p) To enable the Director of the Bureau for Private Postsecondary
and Vocational Education, or his or her representatives, to access
unemployment insurance quarterly wage data on a case-by-case basis to
verify information on school administrators, school staff, and
students provided by those schools who are being investigated for
possible violations of Chapter 7 (commencing with Section 94700) of
Part 59 of the Education Code.
(q) To provide employment tax information to the tax officials of
Mexico, if a reciprocal agreement exists. For purposes of this
subdivision, "reciprocal agreement" means a formal agreement to
exchange information between national taxing officials of Mexico and
taxing authorities of the State Board of Equalization, the Franchise
Tax Board, and the Employment Development Department. Furthermore,
the reciprocal agreement shall be limited to the exchange of
information that is essential for tax administration purposes only.
Taxing authorities of the State of California shall be granted tax
information only on California residents. Taxing authorities of
Mexico shall be granted tax information only on Mexican nationals.
(r) To enable city and county planning agencies to develop
economic forecasts for planning purposes. The information shall be
limited to businesses within the jurisdiction of the city or county
whose planning agency is requesting the information, and shall not
include information regarding individual employees.
(s) To provide the State Department of Developmental Services with
wage and employer information that will assist in the collection of
moneys owed by the recipient, parent, or any other legally liable
individual for services and supports provided pursuant to Chapter 9
(commencing with Section 4775) of Division 4.5 of, and Chapter 2
(commencing with Section 7200) and Chapter 3 (commencing with Section
7500) of Division 7 of, the Welfare and Institutions Code.
(t) Nothing in this section shall be construed to authorize or
permit the use of information obtained in the administration of this
code by any private collection agency.
(u) The disclosure of the name and address of an individual or
business entity that was issued an assessment that included penalties
under Section 1128 or 1128.1 shall not be in violation of Section
1094 if the assessment is final. The disclosure may also include any
of the following:
(1) The total amount of the assessment.
(2) The amount of the penalty imposed under Section 1128 or 1128.1
that is included in the assessment.
(3) The facts that resulted in the charging of the penalty under
Section 1128 or 1128.1.
(v) To enable the Contractors' State License Board to verify the
employment history of an individual applying for licensure pursuant
to Section 7068 of the Business and Professions Code.
(w) To provide any peace officer with the Division of
Investigation in the Department of Consumer Affairs information
pursuant to subdivision (i) when the requesting peace officer has
been designated by the Chief of the Division of Investigations and
requests this information in the course of and in part of an
investigation into the commission of a crime or other unlawful act
when there is reasonable suspicion to believe that the crime or act
may be connected to the information requested and would lead to
relevant information regarding the crime or unlawful act.
(x) To provide information obtained in the administration and
enforcement of the California Health Insurance Purchasing Pool
Program (Division 1.2 (commencing with Section 4800) to the Managed
Risk Medical Insurance Board for the purpose of administering the
California Health Care Reform and Cost Control Act.
SEC. 27. SEC. 30. Division 1.2
(commencing with Section 4800) is added to the Unemployment Insurance
Code, to read:
DIVISION 1.2. California Health Insurance Purchasing Pool
Program
4800. The department shall have the powers and duties necessary
to administer the enforcement of employer contributions required to
be paid pursuant to this division and the reporting and collecting of
those contributions and making refunds to the employer.
4801. The following provisions of this code shall apply to any
amount required to be deducted, reported, and paid to the department
under this division:
(a) Sections 301, 305, 306, 310, 311, 317, and 318, relating to
general administrative powers of the department.
(b) Sections 403 to 413, inclusive of Section 1336, and Chapter 8
(commencing with Section 1951) of Part 1 of Division 1, relating to
appeals and hearing procedures.
(c) Article 8 (commencing with Section 1126) of Chapter 4 of Part
1 of Division 1, relating to assessments.
(d) Article 9 (commencing with Section 1176), except Section 1176,
of Chapter 4 of Part 1 of Division 1, relating to refunds and
overpayments.
(e) Article 10 (commencing with Section 1206) of Chapter 4 of Part
1 of Division 1, relating to notice.
(f) Article 11 (commencing with Section 1221) of Chapter 4 of Part
1 of Division 1, relating to administrative appellate review.
(g) Article 12 (commencing with Section 1241) of Chapter 4 of Part
1 of Division 1, relating to judicial review.
(h) Chapter 7 (commencing with Section 1701) of Part 1 of Division
1, relating to collections.
(i) Chapter 10 (commencing with Section 2101) of Part 1 of
Division 1, relating to violations.
(j) Sections 1110.6, 1111, 1111.5, 1112, 1113, 1113.1, 1114, 1115,
1116, and 1117 relating to the making of returns or the payment of
reported contributions.
4802. For the purposes of this division, the following
definitions apply:
(a) "Board" means the Managed Risk Medical Insurance Board.
(b) "California Cooperative Health Insurance Purchasing Program"
or "Cal-CHIPP" shall have the same meaning as in Section 12699.201 of
the Insurance Code.
(c) "Contribution" means employer fees required by Part 8.8
(commencing with Section 2200) of the Labor Code.
(d) "Employer" has the same meaning as set forth in Section 13005.
(e) "Employment" has the same meaning as set forth in Article 1
(commencing with Section 601) of Chapter 3 of Part 1 of Division 1.
(f) "Wages" means all remuneration as defined in Article 2
(commencing with Section 926) of Chapter 4 of Part 1 of Division 1.
As used in this subdivision, "wages" does not include remuneration
described in Sections 930, 930.1, and 930.5.
(g) The definitions set forth in Sections 126, 127, 129, 133, and
134 shall apply to this division.
4805. On and after October 1, 2009, in addition to other payments
required by this code and consistent with the requirements of
Section 2200 of the Labor Code, an employer electing to pay into the
California Health Trust Fund pursuant to Section 2200 of the Labor
Code shall pay to the department for deposit into that fund the
amount required by that section. These contributions shall be
collected in the same manner as any contributions required under Part
1 (commencing with Section 100) of Division 1 and Division 6
(commencing with Section 13000). The department shall deposit these
contributions in the California Health Trust Fund.
4806. An employer electing to pay a fee pursuant to Section 2200
of the Labor Code shall complete the following actions:
(a) Notify the department of that election by September 15th of
the calendar year prior to the inception of coverage in Cal-CHIPP.
(b) Notify the department by September 15th of the intention to
terminate employee coverage through Cal-CHIPP for the following year.
(c) Advise all employees of the requirement in Section 2203 of the
Labor Code to enroll in Cal-CHIPP to receive coverage from a
participating health plan and advise employees of the exemption from
that requirement under Section 2203 of the Labor Code.
(d) Report to the department the hiring of an employee who works
in this state and to whom the employer anticipates paying wages. The
report shall contain the name, address, and social security number of
the employee; the employer's name, address, and state employer
identification number; and the first date the employee worked for the
employer. An employer shall submit this report within 20 days of
hiring or rehiring an employee.
(e) Report to the department the termination of an employee who
works in this state within 20 days of the last date of his or her
employment.
(f) Remit contributions required by Section 2200 of the Labor
Code.
4807. The employer shall provide its employees the option of
declining coverage through Cal-CHIPP if the employee certifies that
he or she is exempt from this requirement pursuant to Section 2203 of
the Labor Code.
4808. The employer shall advise its employees of the right to
apply to the board to determine eligibility for a subsidy under
Cal-CHIPP if the employee's household income is at or below 300
percent of the federal poverty level.
4809. An employer electing to pay the fee pursuant to Section
2200 of the Labor Code shall remain in Cal-CHIPP for not less than
two calendar years and shall not be eligible to rejoin Cal-CHIPP for
a minimum of two calendar years after terminating participation in
Cal-CHIPP.
4810. The board shall annually publish information describing
health plan choices in Cal-CHIPP for the department to disseminate to
all participating employers.
4820. (a) The department may assess a penalty against an
employer for failure to make the report required by subdivision (d)
of Section 4806 within the specified timeframe, unless the failure is
due to good cause, as determined by the department. The director
shall adopt regulations establishing a schedule of penalties to be
imposed depending upon the frequency of violations, the history of
previous violations, if any, and the seriousness of the violation.
The schedule shall provide for a penalty of up to one hundred dollars
($100) for an initial violation and for the imposition of penalties
in progressively higher amounts for the most serious types of
violations, to a maximum amount of five thousand dollars ($5,000) per
violation.
(b) Notwithstanding any other provision of this code, an employer
electing to pay the contribution who fails to file or remit the
contribution and employee health care contributions under this
division within the time required, shall become liable for a penalty
of ____ dollars ($____) and interest on those contributions at an
annual rate of ____ from the due date until the date they are paid.
4821. It shall be unlawful for an employer to take any of the
following actions if a purpose for the actionis to avoid the
requirements of this division:
(a) Designate an employee as an independent contractor or
temporary employee.
(b) Reduce the number of hours of work of an employee.
(c) Terminate and rehire an employee.
4825. The department shall deposit all employer and employee
contributions in the California Health Trust Fund created pursuant to
Section 12699.212 of the Insurance Code. The department shall
deposit all fines, penalties, and interest collected pursuant to this
division into a penalty account within the California Health Trust
Fund. Notwithstanding the provisions of Section 12699.212 of the
Insurance Code, the revenue in the penalty account shall not be
continuously appropriated to the board and shall be available for
expenditure only upon appropriation by the Legislature.
4826. The department shall provide the board with identifying
information for employees eligible for Cal-CHIPP whose employer has
elected to pay the fee under Section 2200 of the Labor Code.
4830. The department shall adopt rules and regulations to
implement the provisions of this division.
4835. The department is authorized to obtain a loan from the
General Fund for all necessary and reasonable expenses incurred prior
to January 1, 2011 related to implementing this division and
administering its provisions. The proceeds of the loan are subject to
appropriation in the annual Budget Act. The department shall repay
principal and interest, using the pooled money investment account
rate of interest, to the General Fund no later than January 1, 2016.
4836. This division shall become operative on January 1, 2010.
CHAPTER 1. ADMINISTRATION AND GENERAL
PROVISIONS
4800. The Employment Development Department shall administer and
enforce this division. The department, in conjunction with other
state entities, shall establish a process to resolve complaints
regarding the administration of this division, including a toll-free
telephone hotline number and an Internet Web site for employers,
employees, and their dependents to access information and file
complaints.
4800.01. The following provisions of this code shall apply to any
amount required to be reported and paid under this division:
(a) Sections 301, 305, 306, 310, 311, 317, and 318, relating to
general administrative powers of the department.
(b) Sections 403 to 413, inclusive, Section 1336, and Chapter 8
(commencing with Section 1951) of Part 1 of Division 1, relating to
appeals and hearing procedures.
(c) Article 7 (commencing with Section 1110) of Chapter 4 of Part
1 of Division 1 relating to making of returns or payment of reported
contributions.
(d) Article 8 (commencing with Section 1126) of Chapter 4 of Part
1 of Division 1, relating to assessments.
(e) Article 9 (commencing with Section 1176), except Section 1176,
of Chapter 4 of Part 1 of Division 1, relating to refunds and
overpayments.
(f) Article 10 (commencing with Section 1206) of Chapter 4 of Part
1 of Division 1, relating to notice.
(g) Article 11 (commencing with Section 1221) of Chapter 4 of Part
1 of Division 1, relating to administrative appellate review.
(h) Article 12 (commencing with Section 1241) of Chapter 4 of Part
1 of Division 1, relating to judicial review.
(i) Chapter 7 (commencing with Section 1701) of Part 1 of Division
1, relating to collections.
(j) Chapter 10 (commencing with Section 2101) of Part 1 of
Division 1, relating to violations.
4800.02. For the purposes of this division, the following
definitions apply:
(a) "Board" means the Managed Risk Medical Insurance Board.
(b) "California Cooperative Health Insurance Purchasing Program"
or "Cal-CHIPP" shall have the same meaning as in Section 12699.201 of
the Insurance Code.
(c) "Department" means the Employment Development Department.
(d) "Dependent" means any of the following persons:
(1) The spouse or registered domestic partner of an employee.
(2) (A) An unmarried child under 26 years of age who is the
natural child of the employee or an adopted child or a stepchild of
the employee, as described in subparagraph (B), and who meets either
of the following criteria:
(i) Lives with the employee.
(ii) Is economically dependent upon the employee.
(B) (i) A child shall be considered to be adopted from the date on
which the adoptive child's birth parents, or other appropriate legal
authority, sign a written document, including, but not limited to, a
health facility minor release report, a medical authorization form,
or a relinquishment form, granting the employee, or the spouse of the
employee, the right to control health care for the adoptive child
or, absent this written document, on the date evidence exists of the
right of the employee, or the spouse of the employee, to control the
health care of the child placed for adoption.
(ii) A child shall be considered a stepchild upon the employee's
marriage to the natural or adopted stepchild's parent.
(3) An unmarried child 26 years of age or older who is an adopted
child or stepchild, as described in subparagraph (B) of paragraph
(2), of the enrollee or a natural child of the enrollee and who at
the time of attaining 26 years of age was incapable of self-support
because of a physical or mental disability that existed continuously
from a date prior to the child's attainment of 26 years of age.
(e) "Director" means the Director of Employment Development.
(f) "Employer" has the same meaning as set forth in Article 3
(commencing with Section 675) of Chapter 3 of Part 1 of Division 1.
(g) "Employer fee" means the payment required of an employer
electing to pay an equivalent amount into the fund pursuant to
subdivision (a) of Section 4802.1.
(h) "Employing unit" has the same meaning as set forth in Section
135.
(i) "Employment" has the same meaning as set forth in Article 1
(commencing with Section 601) of Chapter 3 of Part 1 of Division 1.
Employment does not include services provided pursuant to Sections
629 to 657, inclusive.
(j) "Fund" means the California Health Trust Fund established
pursuant to Section 12699.212 of the Insurance Code.
(k) (1) "Health expenditures" means any amount paid by an employer
subject to this division to, or on behalf of, its employees and
their dependents, if applicable, to provide health care or
health-related services or to reimburse the costs of those services,
including, but not limited to, any of the following:
(A) Contributions to a health savings account as defined by
Section 223 of the Internal Revenue Code or any other account having
substantially the same purpose or effect.
(B) Reimbursement by the employer to its employees, and their
dependents, if applicable, for incurred health care expenses, if
those recipients have no entitlement to that reimbursement under any
plan, fund, or program maintained by the employer. As used in this
subparagraph, "health care expenses" includes, but is not limited to,
an expense for which payment is deductible from personal income
under Section 213(d) of the Internal Revenue Code.
(C) Programs to assist employees to attain and maintain healthy
lifestyles, including, but not limited to, onsite wellness programs,
reimbursement for attending offsite wellness programs, onsite health
fairs and clinics, and financial incentives for participating in
health screenings and other wellness activities.
(D) Disease management programs.
(E) Pharmacy benefit management programs.
(F) Care rendered to employees and their dependents by health care
providers employed by or under contract to employers, such as
employer-sponsored primary care clinics.
(G) Contributions made pursuant to Section 302 (c)(5) of the Labor
Management Relations Act, under a collective bargaining agreement.
(H) Purchasing health care coverage from a health care service
plan or a health insurer.
(2) "Health expenditures" does not include a payment made directly
or indirectly for workers' compensation, Medicare benefits, or any
other health benefit cost or taxes, penalties, or assessment that the
employer is required to pay by state or federal law, other than as
required by Section 4802.1. "Health expenditures" does not include
penalties imposed pursuant to this division.
(l) "Public program" means publicly funded health care coverage
that is defined as creditable coverage in paragraphs (2) to (10),
inclusive, of subdivision (g) of Section 1357 of the Health and
Safety Code.
(m) "Wages" means all remuneration, as defined in Section 13009.5.
Wages paid to an employee that are in excess of the applicable
contribution and benefit base, as determined under Section 230 of the
Social Security Act (42 U.S.C. Sec. 430), for the calendar year
subject to withholding by the Social Security Administration shall be
excluded for the purposes of Section 4802.1.
(n) The definitions set forth in Sections 126, 127, 129, 133, and
134 shall apply to this division.
4800.03. The board shall annually publish information describing
health plan choices in Cal-CHIPP for the department to disseminate to
all employers making employer fee payments to the fund. The employer
shall provide this information to all of its employees.
4800.04. The director shall provide to each employer a notice
pursuant to Section 1089 and the employer shall post and distribute
it in accordance with Section 1089 to inform employees and their
dependents of the requirements of this division.
4800.05. The department shall provide information obtained in the
administration and enforcement of this division to the board for the
purpose of administering Cal-CHIPP.
4800.06. The department shall adopt rules and regulations to
implement the provisions of this division.
4800.07. An employer shall file all forms required by this
division by electronic means and shall remit all moneys owed pursuant
to this division by electronic funds transfer. If an employer
demonstrates to the director's satisfaction that undue hardship would
be imposed on it by this section, the director may authorize an
exemption from this requirement. The director may assess a penalty of
twenty-five dollars ($25) for each remittance that is not filed
electronically.
CHAPTER 2. EMPLOYER ELECTION
4802.1. (a) (1) Each employer shall elect to take one of the
following actions:
(A) Make health expenditures as provided in subparagraph (A) of
paragraph (3) for its full-time employees, and, if applicable, their
dependents.
(B) Pay an equivalent amount into the fund.
(2) Each employer also shall elect to take one of the following
actions:
(A) Make health expenditures as provided in subparagraph (B) of
paragraph (3) for its part-time employees, and, if applicable, their
dependents.
(B) Pay an equivalent amount into the fund.
(3) (A) An employer's cumulative amount of health expenditures for
the employer's full-time employees working 120 or more hours per
month shall be equivalent, at a minimum, to 7.5 percent of wages paid
by the employer to its full-time employees. In computing this
amount, wages paid to an employee that are in excess of the
applicable contribution and benefit base, as determined under Section
230 of the Social Security Act (42 U.S.C. Sec. 430), for the
calendar year subject to withholding by the Social Security
Administration shall be excluded.
(B) An employer's cumulative amount of health expenditures for the
employer's part-time employees working less than 120 hours per month
shall be equivalent, at a minimum, to 7.5 percent of wages paid by
the employer to its part-time employees. In computing this amount,
wages paid to an employee that are in excess of the applicable
contribution and benefit base, as determined under Section 230 of the
Social Security Act (42 U.S.C. Sec. 430), for the calendar year
subject to withholding by the Social Security Administration shall be
excluded.
(b) (1) The amount payable to the fund by an employer electing to
pay shall be deposited into the fund.
(2) The department, in consultation with the board, shall ensure
that the employer fees paid pursuant to this section are deposited in
the fund and are available to ensure the timely enrollment of
eligible employees and their dependents, if any, in Cal-CHIPP.
(c) Notwithstanding subparagraphs (A) and (B) of paragraph (3) of
subdivision (a), the board may adjust the health expenditure amounts
required by those subparagraphs. The adjustments shall be made by the
board at a public meeting of the board. On or before October 31 of
each year, the board shall prepare a statement, which shall be a
public record, setting forth the adjustments for the next calendar
year and shall promptly notify the department of those adjustments.
4802.2. (a) If an employer is required by a collective bargaining
agreement to make health expenditures on behalf of bargaining unit
employees pursuant to Section 302 (c)(5) of the Labor Management
Relations Act that, in the aggregate, equal or exceed the percentage
of wages set forth in paragraph (3) of subdivision (a) of Section
4802.1 for those bargaining unit employees, the employer shall be
deemed to have satisfied the requirements of subdivision (a) of
Section 4802.1 with respect to those bargaining unit employees.
(b) For purposes of the health expenditures requirement in
subdivision (a) of Section 4802.1, the department shall not accept
any employer fees made to the fund by an employer on behalf of
bargaining unit employees represented by a labor organization for
purposes of collective bargaining if notified by the labor
organization that the expenditures were made without express written
mutual agreement of the employer and the applicable labor
organization.
(c) An employer with employees represented by a labor organization
for purposes of collective bargaining shall participate in the
elections required by subdivision (a) of Section 4802.1 separately
for each bargaining unit unless otherwise provided for in the
collective bargaining agreement.
(d) For all non-bargaining unit employees, the employer shall
participate in the elections as set forth in subdivision (a) of
Section 4802.1.
4802.3. (a) An employee of an employer that elects, pursuant to
Section 4802.1, to pay an employer fee in lieu of making health
expenditures shall be required to enroll in Cal-CHIPP to receive
coverage under Cal-CHIPP.
(b) Notwithstanding subdivision (a), an employee is exempt from
enrolling in Cal-CHIPP if the employee is able to demonstrate that he
or she is covered by individual coverage that is in force on the
effective date of this section, a public program, or other group
health care coverage. An employee who is exempt under this
subdivision from enrolling in Cal-CHIPP may choose to enroll in that
program, however.
(c) (1) An employee of an employer that elects, pursuant to
Section 4802.1, to make health expenditures shall accept the health
expenditures made by the employer. However, for any employee with a
household income of 300 percent of the federal poverty level or less,
if accepting an employer's health expenditures would result in
annual health expenditures by that employee in excess of 5 percent of
his or her household income after taking into account any tax
savings the employee is able to realize, that employee shall be
exempt from the requirement to accept health expenditures made by his
or her employer.
(2) An employee that shows evidence of other group health care
coverage or is covered by individual coverage that is in force on the
effective date of this section shall not be required to accept
health expenditures made by his or her employer.
4803. (a) Each employer, prior to July 1, 2009, shall make an
election pursuant to subdivision (a) of Section 4802.1 for its
full-time employees and its part-time employees and notify the
department of its election. An employer that fails to make an
election by August 1, 2009, shall, within 30 days of that date be
deemed to be an employer electing to pay an employer fee into the
fund, unless the employer is able to demonstrate to the satisfaction
of the department good cause for failure to make the election and
that it is making health expenditures as described in Section 4802.1.
(b) After January 1, 2010, each employer shall notify the
department on or before September 15 of each year of its election
pursuant to subdivision (a) of Section 4802.1 for the subsequent
calendar year, if different from the current year, on a form and in a
format required by the department.
(c) A new employer, on and after July 1, 2009, within 30 days of
paying total wages of one hundred dollars ($100) or more, shall make
an election pursuant to subdivision (a) of Section 4802.1 for its
full-time employees and its part-time employees. For purposes of this
subdivision, "new employer" shall have the same meaning as set forth
in Section 675. A new employer that fails to make an election shall,
within 30 days of the date of paying total wages of one hundred
dollars ($100) or more, be deemed to be an employer electing to pay
an employer fee into the fund, unless the new employer is able to
demonstrate to the satisfaction of the department good cause for
failure to make the election and that it is making health
expenditures as described in Section 4802.1.
4804. (a) On and after October 1, 2009, an employer electing to
pay an employer fee into the fund pursuant to subdivision (a) of
Section 4802.1 shall complete all of the following actions:
(1) File a monthly return with the department by the 15th day of
each month based on wages paid in the prior month. If an employer
paid no wages, the employer shall file a no payroll return with the
department.
(2) File with the department an annual return by January 31 of
each year on wages paid that month and in the prior calendar year.
(3) Remit the employer fee required by Section 4802.1 to the
department by the 15th day of each month based on wages paid in the
prior month.
(4) Notify all employees annually through a written notice to each
employee of the requirement in Section 4802.3 to enroll in Cal-CHIPP
and advise employees of the exemption from that requirement under
that section.
(5) Notify employees annually, through a written notice to each
employee, of the right to apply to the board to determine eligibility
for a subsidy under Cal-CHIPP.
(6) Comply with the requirements of Section 4807.
(b) An employer shall use the format developed by the department
for making the returns required by paragraphs (1) and (2) of
subdivision (a) and the remittance of the employer fee required by
paragraph (3) of subdivision (a).
4805. An employer that elects to pay an employer fee into the
fund pursuant to subdivision (a) of Section 4802.1 shall not change
that election for, at minimum, 24 months from the date of its first
payment into the fund.
4806. (a) On and after October 1, 2009, an employer electing to
make health expenditures pursuant to subdivision (a) of Section
4802.1 shall complete the following actions:
(1) File a quarterly return with the department on April 15, July
15, October 15, and January 15 of each year, reporting its wages and
health expenditures for the prior quarter.
(2) File an annual return with the department by January 31 of
each year reporting wages and health expenditures paid in the prior
calendar year.
(3) Notify all employees annually through a written notice to each
employee that employees with a family income at or below 300 percent
of the federal poverty level are eligible to apply for the Medi-Cal
program or the Healthy Families Program, including instructions on
the application process for those programs.
(4) Comply with the requirements of subdivisions (a) and (b) of
Section 4807.
(b) An employer shall use the format developed by the department
to make the returns required by paragraphs (1) and (2) of subdivision
(a).
4807. (a) An employer shall notify its employees of its election
pursuant to subdivision (a) of Section 4802.1 to make health
expenditures or to pay an employer fee into the fund within five
business days of making the election and shall notify an employee
hired after the date of that notification within five days of the
employee's date of hire.
(b) The employer shall notify its employees within five business
days of the date it makes a change to its election decision.
(c) (1) An employer electing pursuant to subdivision (a) of
Section 4802.1 to pay an employer fee shall within five business days
of making that election notify its employees of the following:
(A) The employee's requirement to enroll in Cal-CHIPP pursuant to
Section 4802.3 and the exemption from enrollment in that section.
(B) The employee's right to apply for a subsidy under Cal-CHIPP.
(2) The employer shall provide the notice required by this
subdivision to an employee hired after the timeframe described in
paragraph (1), within five business days of the employee's date of
hire.
CHAPTER 3. CAFETERIA PLAN
4809. (a) Unless provided otherwise by state or federal law, each
employer in this state during a taxable year shall adopt and retain
a cafeteria plan, within the meaning of Section 125 of the Internal
Revenue Code, to allow employees to pay premiums for health care
coverage, to the extent those payments are excludable from the gross
income of the employee under Section 106 of the Internal Revenue
Code.
(b) An employer that fails to establish a cafeteria plan is
subject to a penalty of one hundred dollars ($100) for each of its
employees during the taxable year unless the employer establishes, to
the department's satisfaction, good cause for the failure to
establish the plan. An employer who willfully fails
to establish a cafeteria plan is
subject to a penalty of five hundred dollars ($500) for each of its
employees during the taxable year.
CHAPTER 4. ENFORCEMENT
4811. (a) An employer that without good cause, as determined by
the department, fails to complete any of the following actions shall
be subject to assessment of a penalty as described in subdivision
(b):
(1) Notify the department of its election pursuant to Section
4803.
(2) File returns required by Sections 4804 and 4806.
(3) Provide notices to its employees as required by Sections 4804,
4806, and 4807.
(b) The amount of the penalty for a first violation shall be
twenty-five dollars ($25) for each of the employer's employees at the
time of the violation. The amount of the penalty for a second
violation shall be fifty dollars ($50) for each of the employer's
employees at the time of the violation. The amount of the penalty for
all subsequent violations shall be one hundred dollars ($100) for
each of the employer's employees at the time of the violation.
(c) The amount of the penalty described in subdivision (b) shall
be increased by 10 percent if the employer without good cause, as
determined by the department, fails to complete any of the actions
described in subdivision (a) within 60 days of the date it is
required to be completed.
(d) (1) An employer that, without good cause, as determined by the
department, fails to make any payments required of it or of its
employees within the time required by this division, shall be
assessed a penalty equaling 10 percent of the amount of the payment
it failed to make or equaling 10 percent of the unpaid payment
amount, if the employer failed to make the payment in its entirety.
(2) The amount of the penalty described in paragraph (1) shall be
increased by 10 percent if the employer without good cause, as
determined by the department, fails to make the payment required by
this division within 60 days of the date the employer is required to
make the payment.
(e) An employer that fails to file the annual return required by
Sections 4804 and 4806 within 30 days of the date the employer was
notified of its failure to file the return shall, in addition to any
other penalties imposed by this code, be assessed an additional
penalty of up to one hundred dollars ($100) for each of its employees
at the time the return was due, unless the employer demonstrates, to
the department's satisfaction, good cause for its failure to file
the return.
4812. If the director determines a return made by an employer
inaccurately reports the amount of health expenditures or the amount
of its employer fee payment required pursuant to Section 4802.1, he
or she shall assess a penalty. The penalty amount shall be determined
by the director based on the facts contained in the return or on his
or her estimate of the correct amount of health expenditures or
employer fees based on any information in his or her possession or
that may come into his or her possession. If any part of the
deficiency in the health expenditures or employer fee amount is due
to negligence or intentional disregard of this division or the
regulations adopted pursuant to it, the penalty shall be increased by
an amount equaling 10 percent of the amount of the deficiency in the
amount of the health expenditures or employer fees.
4813. If the employer's failure to file a return or to make a
payment within the time required by this division, and the
regulations adopted pursuant to it, is due to fraud or to an intent
to evade the provisions of this division, or of the regulations
adopted pursuant to it, a penalty equaling 50 percent of the amount
of the payment or of the health expenditures the employer was
required to make shall be assessed against the employer.
4814. (a) An employer that elects to pay the employer fee and
fails to withhold premium payment amounts authorized by an employee
pursuant to Section 12699.203 of the Insurance Code and Section 4809
of this code is subject to a penalty equaling 200 percent of the
amount the employer failed to withhold.
(b) An employer that fails to remit premium payment amounts it
withheld as authorized by an employee is subject to a penalty
equaling 200 percent of the amount the employer failed to remit.
(c) In addition to the penalties set forth in subdivisions (a) and
(b), the employer shall reimburse the employee for any health care
expenses incurred by the employee and his or her dependents because
of a lapse or cancellation of health care coverage resulting from the
employer's failure to withhold or remit the employee's premium
payment amounts.
4815. (a) An employer electing to make health expenditures
pursuant to Section 4802.1 that fails to make expenditures in the
amount required by that section shall be subject to a penalty in an
amount equaling 10 percent of the balance between the amount required
by Section 4802.1 and the amount of the health expenditures made by
the employer and shall be subject to a penalty in an amount equaling
20 percent of that balance amount if the amount of health
expenditures made by the employer is less than 80 percent of the
amount required by Section 4802.1.
(b) If the employer fails to pay the penalty assessed pursuant to
subdivision (a) within 60 days of its assessment date, an additional
penalty shall be assessed against the employer the employer in an
amount equaling 10 percent of the penalty assessed under subdivision
(a).
(c) Notwithstanding subdivisions (a) and (b), an employer that
demonstrates good cause, as determined by the department, for its
failure to make the health expenditures amount required by Section
4802.1 is not subject to a penalty under this section.
(d) Penalties shall be assessed under this section pursuant to an
annual reconciliation and review process by the department.
4816. If the director is not satisfied with the accuracy or the
sufficiency of a return filed by an employer or of an employer fee
paid by an employer, he or she may assess a civil penalty in the sum
of ____ dollars ($____).
4817. It shall be unlawful for an employer to take any of the
following actions if a purpose for the action is to avoid the
requirements of this division:
(a) Designate an employee as a temporary employee.
(b) Reduce the number of hours of work of an employee.
(c) Terminate and rehire an employee.
4818. It is unlawful for a person to take any of the following
actions.
(a) Willfully misclassify an employee as an independent contractor
which misclassification results in avoiding the requirements of this
division.
(b) Procure, counsel, advise, or coerce another to willfully make
a false statement or representation or to knowingly fail to disclose
a material fact in order to avoid the requirements of this division.
4819. An employer that takes any of the actions described in
Section 4818 shall, in addition to any other fees or penalties
imposed pursuant to this code, pay a penalty equaling 50 percent of
the amount of all employer fees that would be required by this
division if the employer elected to pay the employer fee or a penalty
equaling 50 percent of the amount of all health expenditures that
would be required by this division if the employer elected to make
health care expenditures.
4821. (a) The director shall provide to each service recipient,
as defined in paragraph (1) of subdivision (b) of Section 1088.8, a
notice informing each service provider, as defined in paragraph (2)
of subdivision (b) of Section 1088.8, of their rights,
responsibilities, and the differences in workplace benefit coverage
as an independent contractor, including their right to file for a
status determination with the department. This notice shall be given
by every service recipient required pursuant to Section 1088.8 to
report payments equal to, or in excess of, six hundred dollars ($600)
in any year to a service provider when the first payment is made.
(b) In order to ensure the proper implementation of this division,
the department shall adopt regulations for accelerating the appeal
process for issues relating to misclassification of an employee as an
independent contractor pursuant to this division.
4822. The penalties and remedies provided pursuant to this
division are cumulative and in addition to any other penalties or
remedies provided by law.
CHAPTER 5. FISCAL
4823. The department shall deposit all employer fees and employee
premium payments into the fund. The department shall deposit all
fines, penalties, and interest collected pursuant to this division
into a penalty account within the fund. Notwithstanding the
provisions of Section 12699.212 of the Insurance Code, the revenue in
the penalty account shall not be continuously appropriated to the
board and shall be available for expenditure only upon appropriation
by the Legislature.
4824. The department is authorized to obtain a loan from the
General Fund for all necessary and reasonable expenses incurred prior
to January 1, 2011, related to implementing this division and
administering its provisions. The proceeds of the loan are subject to
appropriation in the annual Budget Act. The department shall repay
principal and interest, using the pooled money investment account
rate of interest, to the General Fund no later than January 1, 2016.
CHAPTER 6. OPERATIVE PROVISIONS
4829. This division shall become operative on January 1, 2009.
SEC. 28. SEC. 31. Section 14005.23
of the Welfare and Institutions Code is amended to read:
14005.23. (a) To the extent federal financial participation is
available, the department shall, when determining eligibility for
children under Section 1396a()(1)(D) of Title 42 of the United States
Code, designate a birth date by which all children who have not
attained the age of 19 years will meet the age requirement of Section
1396a()(1)(D) of Title 42 of the United States Code.
(b) Commencing July 1, 2008, to the extent federal financial
participation is available, the department shall apply a less
restrictive income deduction described in Section 1396a(r) of Title
42 of the United States Code when determining eligibility for the
children identified in subdivision (a). The amount of this deduction
shall be the difference between 133 percent and 100 percent of the
federal poverty level applicable to the size of the family.
(c) For children enrolled in the Healthy Families Program as
of July 1, 2008, the income limit in subdivision (b) shall be applied
in determining eligibility at the next annual redetermination for
that program, or earlier upon request of the beneficiary. The
coverage under this section for a child who is a dependent of an
employee of an employer electing to make a payment to the California
Health Trust Fund in lieu of making health care
expenditures pursuant to Section 2200 of the Labor
4802.1 of the Unemployment Insurance Code, shall be
provided through a Medi-Cal benchmark plan under Part 6.45
(commencing with Section 12699.201) of Division 2 of the Insurance
Code.
SEC. 29. SEC. 32. Section 14005.30
of the Welfare and Institutions Code is amended to read:
14005.30. (a) (1) To the extent that federal financial
participation is available, Medi-Cal benefits under this chapter
shall be provided to individuals eligible for services under Section
1396u-1 of Title 42 of the United States Code, including any options
under Section 1396u-1(b)(2)(C) made available to and exercised by the
state.
(2) The department shall exercise its option under Section 1396u-1
(b)(2)(C) of Title 42 of the United States Code to adopt less
restrictive income and resource eligibility standards and
methodologies to the extent necessary to allow all recipients of
benefits under Chapter 2 (commencing with Section 11200) to be
eligible for Medi-Cal under paragraph (1).
(3) To the extent federal financial participation is available,
the department shall exercise its option under Section 1396u-1(b)(2)
(C) of Title 42 of the United States Code authorizing the state to
disregard all changes in income or assets of a beneficiary until the
next annual redetermination under Section 14012. The department shall
implement this paragraph only if, and to the extent that the State
Child Health Insurance Program waiver described in Section 12693.755
of the Insurance Code extending Healthy Families Program eligibility
to parents and certain other adults is approved and implemented.
(b) To the extent that federal financial participation is
available, the department shall exercise its option under Section
1396u-1(b)(2)(C) of Title 42 of the United States Code as necessary
to simplify eligibility for Medi-Cal under subdivision (a) by
exempting all resources for applicants and recipients.
(c) To the extent federal financial participation is available,
the department shall, commencing March 1, 2000, adopt an income
disregard for applicants equal to the difference between the income
standard under the program adopted pursuant to Section 1931(b) of the
federal Social Security Act (42 U.S.C. Sec. 1396u-1) and the amount
equal to 100 percent of the federal poverty level applicable to the
size of the family. A recipient shall be entitled to the same
disregard, but only to the extent it is more beneficial than, and is
substituted for, the earned income disregard available to recipients.
(d) Commencing July 1, 2008, the department shall adopt an income
disregard for applicants equal to the difference between the income
standard under the program adopted pursuant to Section 1931(b) of the
federal Social Security Act (42 U.S.C. Sec. 1396u-1(b)) and the
amount equal to 133 percent of the federal poverty level applicable
to the size of the family. A recipient shall be entitled to the same
disregard, but only to the extent it is more generous than, and is
substituted for, the earned income disregard available to recipients.
Implementation of this subdivision is contingent upon federal
financial participation. Upon implementation of this subdivision, the
income disregard described in subdivision (c) shall no longer apply.
(e) For purposes of calculating income under this section during
any calendar year, increases in social security benefit payments
under Title II of the federal Social Security Act (42 U.S.C. Sec. 401
and following) arising from cost-of-living adjustments shall be
disregarded commencing in the month that these social security
benefit payments are increased by the cost-of-living adjustment
through the month before the month in which a change in the federal
poverty level requires the department to modify the income disregard
pursuant to subdivision (c) and in which new income limits for the
program established by this section are adopted by the department.
(f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall implement, without taking regulatory action,
subdivisions (a) and (b) of this section by means of an all county
letter or similar instruction. Thereafter, the department shall adopt
regulations in accordance with the requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. Beginning six months after the effective date
of this section, the department shall provide a status report to the
Legislature on a semiannual basis until regulations have been
adopted.
SEC. 30. SEC. 33. Section 14005.31 of
the Welfare and Institutions Code is amended to read:
14005.31. (a) (1) Subject to paragraph (2), for any person whose
eligibility for benefits under Section 14005.30 has been determined
with a concurrent determination of eligibility for cash aid under
Chapter 2 (commencing with Section 11200), loss of eligibility or
termination of cash aid under Chapter 2 (commencing with Section
11200) shall not result in a loss of eligibility or termination of
benefits under Section 14005.30 absent the existence of a factor that
would result in loss of eligibility for benefits under Section
14005.30 for a person whose eligibility under Section 14005.30 was
determined without a concurrent determination of eligibility for
benefits under Chapter 2 (commencing with Section 11200).
(2) Notwithstanding paragraph (1), a person whose eligibility
would otherwise be terminated pursuant to that paragraph shall not
have his or her eligibility terminated until the transfer procedures
set forth in Section 14005.32 or the redetermination procedures set
forth in Section 14005.37 and all due process requirements have been
met.
(b) The department, in consultation with the counties and
representatives of consumers, managed care plans, and Medi-Cal
providers, shall prepare a simple, clear, consumer-friendly notice to
be used by the counties, to inform Medi-Cal beneficiaries whose
eligibility for cash aid under Chapter 2 (commencing with Section
11200) has ended, but whose eligibility for benefits under Section
14005.30 continues pursuant to subdivision (a), that their benefits
will continue. To the extent feasible, the notice shall be sent out
at the same time as the notice of discontinuation of cash aid, and
shall include all of the following:
(1) A statement that Medi-Cal benefits will continue even though
cash aid under the CalWORKs program has been terminated.
(2) A statement that continued receipt of Medi-Cal benefits will
not be counted against any time limits in existence for receipt of
cash aid under the CalWORKs program.
(3) A statement that the Medi-Cal beneficiary does not need to
fill out monthly status reports in order to remain eligible for
Medi-Cal, but shall be required to submit a semiannual status report
and annual reaffirmation forms, except that the semiannual status
report shall no longer be required on and after July 1, 2008. The
notice shall remind individuals whose cash aid ended under the
CalWORKs program as a result of not submitting a status report that
he or she should review his or her circumstances to determine if
changes have occurred that should be reported to the Medi-Cal
eligibility worker.
(4) A statement describing the responsibility of the Medi-Cal
beneficiary to report to the county, within 10 days, significant
changes that may affect eligibility.
(5) A telephone number to call for more information.
(6) A statement that the Medi-Cal beneficiary's eligibility worker
will not change, or, if the case has been reassigned, the new worker'
s name, address, and telephone number, and the hours during which the
county's eligibility workers can be contacted.
(c) This section shall be implemented on or before July 1, 2001,
but only to the extent that federal financial participation under
Title XIX of the federal Social Security Act (Title 42 U.S.C. Sec.
1396 and following) is available.
(d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall, without taking any regulatory action, implement
this section by means of all county letters or similar instructions.
Thereafter, the department shall adopt regulations in accordance with
the requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code. Comprehensive
implementing instructions shall be issued to the counties no later
than March 1, 2001.
SEC. 31. SEC. 34. Section 14005.32
of the Welfare and Institutions Code is amended to read:
14005.32. (a) (1) If the county has evidence clearly
demonstrating that a beneficiary is not eligible for benefits under
this chapter pursuant to Section 14005.30, but is eligible for
benefits under this chapter pursuant to other provisions of law, the
county shall transfer the individual to the corresponding Medi-Cal
program. Eligibility under Section 14005.30 shall continue until the
transfer is complete.
(2) The department, in consultation with the counties and
representatives of consumers, managed care plans, and Medi-Cal
providers, shall prepare a simple, clear, consumer-friendly notice to
be used by the counties, to inform beneficiaries that their Medi-Cal
benefits have been transferred pursuant to paragraph (1) and to
inform them about the program to which they have been transferred. To
the extent feasible, the notice shall be issued with the notice of
discontinuance from cash aid, and shall include all of the following:
(A) A statement that Medi-Cal benefits will continue under another
program, even though aid under Chapter 2 (commencing with Section
11200) has been terminated.
(B) The name of the program under which benefits will continue,
and an explanation of that program.
(C) A statement that continued receipt of Medi-Cal benefits will
not be counted against any time limits in existence for receipt of
cash aid under the CalWORKs program.
(D) A statement that the Medi-Cal beneficiary does not need to
fill out monthly status reports in order to remain eligible for
Medi-Cal, but shall be required to submit a semiannual status report
and annual reaffirmation forms, except that the semiannual status
report shall no longer be required on and after July 1, 2008. In
addition, if the person or persons to whom the notice is directed has
been found eligible for transitional Medi-Cal as described in
Section 14005.8, 14005.81, or 14005.85, the statement shall explain
the reporting requirements and duration of benefits under those
programs, and shall further explain that, at the end of the duration
of these benefits, a redetermination, as provided for in Section
14005.37 shall be conducted to determine whether benefits are
available under any other provision of law.
(E) A statement describing the beneficiary's responsibility to
report to the county, within 10 days, significant changes that may
affect eligibility or share of cost.
(F) A telephone number to call for more information.
(G) A statement that the beneficiary's eligibility worker will not
change, or, if the case has been reassigned, the new worker's name,
address, and telephone number, and the hours during which the county'
s Medi-Cal eligibility workers can be contacted.
(b) No later than September 1, 2001, the department shall submit a
federal waiver application seeking authority to eliminate the
reporting requirements imposed by transitional medicaid under Section
1925 of the federal Social Security Act (Title 42 U.S.C. Sec.
1396r-6).
(c) This section shall be implemented on or before July 1, 2001,
but only to the extent that federal financial participation under
Title XIX of the federal Social Security Act (Title 42 U.S.C. Sec.
1396 and following) is available.
(d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall, without taking any regulatory action, implement
this section by means of all county letters or similar instructions.
Thereafter, the department shall adopt regulations in accordance with
the requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code. Comprehensive
implementing instructions shall be issued to the counties no later
than March 1, 2001.
SEC. 32. SEC. 35 .
Section 14005.33 is added to the Welfare and Institutions Code, to
read:
14005.33. (a) Notwithstanding Section 14005.30, to the extent
that federal financial participation is available, Medi-Cal benefits
under a Healthy Families benchmark plan as permitted under Section
6044 of the federal Deficit Reduction Act of 2005 (42 U.S.C. Sec.
1396u-7) shall be provided to a population composed of parents and
other caretaker relatives with a household income at or below 300
percent of the federal poverty level who are not otherwise eligible
for full scope benefits with no share of cost.
(b) The Healthy Families benchmark benefit plan referenced in
subdivision (a) shall be equivalent to the coverage established under
Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code.
(c) The eligibility determination under this section shall not
include an asset test.
(d) To the extent necessary to implement this section, the
department shall seek federal approval to modify the definition of
"unemployed parent" in Section 14008.85.
(e) The department shall implement this section by means of a
state plan amendment. If this section cannot be implemented by a
state plan amendment, the department shall seek a waiver or a waiver
and a state plan amendment necessary to accomplish the intent of this
section.
(f) This section shall become operative on July 1, 2008.
SEC. 33. Section 14005.34
SEC. 36. Section 14005.331 is added to the
Welfare and Institutions Code, to read:
14005.34. (a) Notwithstanding any other provision of law, all
children under 19 years of age who meet the state residency
requirements of the Medi-Cal program shall be eligible for full scope
benefits under this chapter if they satisfy
either of the following criteria:
(1) Live in families with countable household income at or below
133 percent of the federal poverty level.
(2) Meet the income and resource requirements of Section 14005.7
or 14005.30, including those children for whom federal financial
participation is not available under Title XXI of the federal Social
Security Act (42 U.S.C. Sec. 1396 et seq.), or under Title XIX of the
federal Social Security Act (42 U.S.C. Sec. 1397aa et seq.).
(b) Notwithstanding any other provision of law, an infant under 1
year of age who meets the state residency requirements of the
Medi-Cal program shall be eligible for full scope benefits under this
chapter if the infant lives in a family with countable household
income at or below 200 percent of the federal poverty level,
including those children for whom federal financial participation is
not available under Title XXI of the federal Social Security Act (42
U.S.C. Sec. 1396 et seq.) or under Title XIX of the federal Social
Security Act (42 U.S.C. Sec. 1397aa et seq.).
14005.331. (a) Notwithstanding any other provision
of law, all individuals under 19 years of age with a countable
family income at or below 133 percent of the federal poverty level
who would be eligible for full-scope benefits under the Medi-Cal
program without a share of cost if not for their immigration status,
shall be eligible for full-scope benefits under the Medi-Cal program
if the individual meets the state residency requirements of the
Medi-Cal program.
(b) Notwithstanding any other provision of law, all infants under
1 year of age with a countable family income at or below 200 percent
of the federal poverty level who would be eligible for full-scope
benefits under the Medi-Cal program if not for their immigration
status, shall be eligible for full-scope benefits under the Medi-Cal
program if the infant meets the state residency requirements of the
Medi-Cal program.
(c) The coverage under this section for a child who is an employee
or, if applicable, a dependent of an employee of an employer
electing to make a payment to the California Health Trust Fund in
lieu of making health care expenditures pursuant
to Section 2200 of the Labor 4802.1 of the
Unemployment Insurance Code, shall be provided through a
Medi-Cal benchmark plan under Part 6.45 (commencing with Section
12699.201) of Division 2 of the Insurance Code.
SEC. 37. Section 14005.82 is added to the
Welfare and Institutions Code , to read:
14005.82. (a) The department shall exercise its options under
Section 1906 of Title 19 of the federal Social Security Act (42
U.S.C. Sec. 1396e) to require, as a condition of an individual
becoming or remaining eligible for the Medi-Cal program, that the
individual, or if a child, the child's parent, offered the option of
enrolling in a Medi-Cal benchmark plan pursuant to Section 1357.24 of
the Health and Safety Code or Section 10764 of the Insurance Code
enroll in that benchmark plan. If the individual is eligible for the
Medi-Cal program under Section 14005.33 and the individual is offered
the option of enrolling in a Healthy Families benchmark plan
pursuant to Section 1357.24 of the Health and Safety Code or Section
10764 of the Insurance Code, the individual shall, as a condition of
the individual becoming or remaining eligible for the Medi-Cal
program, enroll in the Healthy Families Program benchmark plan.
(b) The requirement that an individual enroll in a benchmark plan,
as described in subdivision (a), shall apply to an individual
enrolled in the Medi-Cal program or in the Healthy Families Program
at the individual's next annual redetermination of eligibility for
the Medi-Cal program or the Healthy Families Program, or before that
time if requested by the beneficiary or subscriber.
SEC. 34. SEC. 38. Section 14008.85
of the Welfare and Institutions Code is amended to read:
14008.85. (a) To the extent federal financial participation is
available, a parent who is the principal wage earner shall be
considered an unemployed parent for purposes of establishing
eligibility based upon deprivation of a child where any of the
following applies:
(1) The parent works less than 100 hours per month as determined
pursuant to the rules of the Aid to Families with Dependent Children
program as it existed on July 16, 1996, including the rule allowing a
temporary excess of hours due to intermittent work.
(2) The total net nonexempt earned income for the family is not
more than 100 percent of the federal poverty level as most recently
calculated by the federal government. The department may adopt
additional deductions to be taken from a family's income.
(3) The parent is considered unemployed under the terms of an
existing federal waiver of the 100-hour rule for recipients under the
program established by Section 1931(b) of the federal Social
Security Act (42 U.S.C. Sec. 1396u-1).
(4) The parent is eligible for services under Section 1396u-1 of
Title 42 of the United States Code, including any options under
Section 1396u-1(b)(2)(C) made available and exercised by the state.
(b) The coverage under this section for a person who is an
employee or, if applicable, a dependent of an employee, of an
employer electing to make a payment to the California Health Trust
Fund in lieu of making health care expenditures pursuant to Section
2200 of the Labor Code, shall be provided through a Medi-Cal
benchmark plan under Part 6.45 (commencing with Section 12699.201) of
Division 2 of the Insurance Code.
(b) The department shall seek any federal approval required to
waive or to increase the income limit in paragraph (2) of subdivision
(a) to the extent necessary to implement Sections 14005.30 and
14005.33.
(c) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall implement this section by means of an all county
letter or similar instruction without taking regulatory action.
Thereafter, the department shall adopt regulations in accordance with
the requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
SEC. 39. Sectio n 14011.16 of the
Welfare and Institutions Code is amended to read:
14011.16. (a) Commencing August 1, 2003, the department shall
implement a requirement for beneficiaries to file semiannual status
reports as part of the department's procedures to ensure that
beneficiaries make timely and accurate reports of any change in
circumstance that may affect their eligibility. The department shall
develop a simplified form to be used for this purpose. The department
shall explore the feasibility of using a form that allows a
beneficiary who has not had any changes to so indicate by checking a
box and signing and returning the form.
(b) Beneficiaries who have been granted continuous eligibility
under Section 14005.25 shall not be required to submit semiannual
status reports. To the extent federal financial participation is
available, all children under 19 years of age shall be exempt from
the requirement to submit semiannual status reports.
(c) Beneficiaries whose eligibility is based on a determination of
disability or on their status as aged or blind shall be exempt from
the semiannual status report requirement described in subdivision
(a). The department may exempt other groups from the semiannual
status report requirement as necessary for simplicity of
administration.
(d) When a beneficiary has completed, signed, and filed a
semiannual status report that indicated a change in circumstance,
eligibility shall be redetermined.
(e) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department shall implement this section by means of all county
letters or similar instructions without taking regulatory action.
Thereafter, the department shall adopt regulations in accordance with
the requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
(f) This section shall be implemented only if and to the extent
federal financial participation is available.
(g) This section shall become inoperative on July 1, 2008, and, as
of January 1, 2009, is repealed, unless a later enacted statute that
is enacted before January 1, 2009, deletes or extends the dates on
which it becomes inoperative and is repealed.
SEC. 35. SEC. 40. Section 14131.01
is added to the Welfare and Institutions Code, to read:
14131.01. The coverage under this chapter to a person who is an
employee or, if applicable, a dependent of an employee, of an
employer electing to make a payment to the California Health Trust
Fund in lieu of making health care expenditures
pursuant to Section 2200 of the Labor 4802.1
of the Unemployment Insurance Code, shall be provided through a
Medi-Cal benchmark plan under Part 6.45 (commencing with Section
12699.201) of the Insurance Code.
SEC. 36. SEC. 41. Article 7
(commencing with Section 14199.10) is added to Chapter 7 of Part 3 of
Division 9 of the Welfare and Institutions Code, to read:
Article 7. Coordination with the California Health Trust Fund
14199.10. The department shall seek any necessary federal
approval to enable the state to receive federal funds for coverage
provided through the California Cooperative Health Insurance
Purchasing Program (Cal-CHIPP) to persons who would be eligible for
the Medi-Cal program if the state expanded eligibility to a
population composed of parents and other caretaker relatives with a
household income at or below 300 percent of the federal poverty level
who are not otherwise eligible for fullscope
full scope benefits with no share of cost. Revenues in the
California Health Trust Fund created pursuant to Section 12699.212 of
the Insurance Code shall be used as state matching funds for receipt
of federal funds resulting from the implementation of this section.
All federal funds received pursuant to that federal approval shall be
deposited in the California Health Trust Fund.
SEC. 42. Section 6254 of the Government
Code is amended to read:
6254. Except as provided in Sections 6254.7 and 6254.13, nothing
in this chapter shall be construed to require disclosure of records
that are any of the following:
(a) Preliminary drafts, notes, or interagency or intra-agency
memoranda that are not retained by the public agency in the ordinary
course of business, if the public interest in withholding those
records clearly outweighs the public interest in disclosure.
(b) Records pertaining to pending litigation to which the public
agency is a party, or to claims made pursuant to Division 3.6
(commencing with Section 810), until the pending litigation or claim
has been finally adjudicated or otherwise settled.
(c) Personnel, medical, or similar files, the disclosure of which
would constitute an unwarranted invasion of personal privacy.
(d) Contained in or related to any of the following:
(1) Applications filed with any state agency responsible for the
regulation or supervision of the issuance of securities or of
financial institutions, including, but not limited to, banks, savings
and loan associations, industrial loan companies, credit unions, and
insurance companies.
(2) Examination, operating, or condition reports prepared by, on
behalf of, or for the use of, any state agency referred to in
paragraph (1).
(3) Preliminary drafts, notes, or interagency or intra-agency
communications prepared by, on behalf of, or for the use of, any
state agency referred to in paragraph (1).
(4) Information received in confidence by any state agency
referred to in paragraph (1).
(e) Geological and geophysical data, plant production data, and
similar information relating to utility systems development, or
market or crop reports, that are obtained in confidence from any
person.
(f) Records of complaints to, or investigations conducted by, or
records of intelligence information or security procedures of, the
office of the Attorney General and the Department of Justice, and any
state or local police agency, or any investigatory or security files
compiled by any other state or local police agency, or any
investigatory or security files compiled by any other state or local
agency for correctional, law enforcement, or licensing purposes.
However, state and local law enforcement agencies shall disclose the
names and addresses of persons involved in, or witnesses other than
confidential informants to, the incident, the description of any
property involved, the date, time, and location of the incident, all
diagrams, statements of the parties involved in the incident, the
statements of all witnesses, other than confidential informants, to
the victims of an incident, or an authorized representative thereof,
an insurance carrier against which a claim has been or might be made,
and any person suffering bodily injury or property damage or loss,
as the result of the incident caused by arson, burglary, fire,
explosion, larceny, robbery, carjacking, vandalism, vehicle theft, or
a crime as defined by subdivision (b) of Section 13951, unless the
disclosure would endanger the safety of a witness or other person
involved in the investigation, or unless disclosure would endanger
the successful completion of the investigation or a related
investigation. However, nothing in this division shall require the
disclosure of that portion of those investigative files that reflects
the analysis or conclusions of the investigating officer.
Customer lists provided to a state or local police agency by an
alarm or security company at the request of the agency shall be
construed to be records subject to this subdivision.
Notwithstanding any other provision of this subdivision, state and
local law enforcement agencies shall make public the following
information, except to the extent that disclosure of a particular
item of information would endanger the safety of a person involved in
an investigation or would endanger the successful completion of the
investigation or a related investigation:
(1) The full name and occupation of every individual arrested by
the agency, the individual's physical description including date of
birth, color of eyes and hair, sex, height and weight, the time and
date of arrest, the time and date of booking, the location of the
arrest, the factual circumstances surrounding the arrest, the amount
of bail set, the time and manner of release or the location where the
individual is currently being held, and all charges the individual
is being held upon, including any outstanding warrants from other
jurisdictions and parole or probation holds.
(2) Subject to the restrictions imposed by Section 841.5 of the
Penal Code, the time, substance, and location of all complaints or
requests for assistance received by the agency and the time and
nature of the response thereto, including, to the extent the
information regarding crimes alleged or committed or any other
incident investigated is recorded, the time, date, and location of
occurrence, the time and date of the report, the name and age of the
victim, the factual circumstances surrounding the crime or incident,
and a general description of any injuries, property, or weapons
involved. The name of a victim of any crime defined by Section 220,
261, 261.5, 262, 264, 264.1, 273a, 273d, 273.5, 286, 288, 288a, 289,
422.6, 422.7, 422.75, or 646.9 of the Penal Code may be withheld at
the victim's request, or at the request of the victim's parent or
guardian if the victim is a minor. When a person is the victim of
more than one crime, information disclosing that the person is a
victim of a crime defined by Section 220, 261, 261.5, 262, 264,
264.1, 273a, 273d, 286, 288, 288a, 289, 422.6, 422.7, 422.75, or
646.9 of the Penal Code may be deleted at the request of the victim,
or the victim's parent or guardian if the victim is a minor, in
making the report of the crime, or of any crime or incident
accompanying the crime, available to the public in compliance with
the requirements of this paragraph.
(3) Subject to the restrictions of Section 841.5 of the Penal Code
and this subdivision, the current address of every individual
arrested by the agency and the current address of the victim of a
crime, where the requester declares under penalty of perjury that the
request is made for a scholarly, journalistic, political, or
governmental purpose, or that the request is made for investigation
purposes by a licensed private investigator as described in Chapter
11.3 (commencing with Section 7512) of Division 3 of the Business and
Professions Code. However, the address of the victim of any crime
defined by Section 220, 261, 261.5, 262, 264, 264.1, 273a, 273d,
273.5, 286, 288, 288a, 289, 422.6, 422.7, 422.75, or 646.9 of the
Penal Code shall remain confidential. Address information obtained
pursuant to this paragraph may not be used directly or indirectly, or
furnished to another, to sell a product or service to any individual
or group of individuals, and the requester shall execute a
declaration to that effect under penalty of perjury. Nothing in this
paragraph shall be construed to prohibit or limit a scholarly,
journalistic, political, or government use of address information
obtained pursuant to this paragraph.
(g) Test questions, scoring keys, and other examination data used
to administer a licensing examination, examination for employment, or
academic examination, except as provided for in Chapter 3
(commencing with Section 99150) of Part 65 of the Education Code.
(h) The contents of real estate appraisals or engineering or
feasibility estimates and evaluations made for or by the state or
local agency relative to the acquisition of property, or to
prospective public supply and construction contracts, until all of
the property has been acquired or all of the contract agreement
obtained. However, the law of eminent domain shall not be affected by
this provision.
(i) Information required from any taxpayer in connection with the
collection of local taxes that is received in confidence and the
disclosure of the information to other persons would result in unfair
competitive disadvantage to the person supplying the information.
(j) Library circulation records kept for the purpose of
identifying the borrower of items available in libraries, and library
and museum materials made or acquired and presented solely for
reference or exhibition purposes. The exemption in this subdivision
shall not apply to records of fines imposed on the borrowers.
(k) Records, the disclosure of which is exempted or prohibited
pursuant to federal or state law, including, but not limited to,
provisions of the Evidence Code relating to privilege.
() Correspondence of and to the Governor or employees of the
Governor's office or in the custody of or maintained by the Governor'
s Legal Affairs Secretary. However, public records shall not be
transferred to the custody of the Governor's Legal Affairs Secretary
to evade the disclosure provisions of this chapter.
(m) In the custody of or maintained by the Legislative Counsel,
except those records in the public database maintained by the
Legislative Counsel that are described in Section 10248.
(n) Statements of personal worth or personal financial data
required by a licensing agency and filed by an applicant with the
licensing agency to establish his or her personal qualification for
the license, certificate, or permit applied for.
(o) Financial data contained in applications for financing under
Division 27 (commencing with Section 44500) of the Health and Safety
Code, where an authorized officer of the California Pollution Control
Financing Authority determines that disclosure of the financial data
would be competitively injurious to the applicant and the data is
required in order to obtain guarantees from the United States Small
Business Administration. The California Pollution Control Financing
Authority shall adopt rules for review of individual requests for
confidentiality under this section and for making available to the
public those portions of an application that are subject to
disclosure under this chapter.
(p) Records of state agencies related to activities governed by
Chapter 10.3 (commencing with Section 3512), Chapter 10.5 (commencing
with Section 3525), and Chapter 12 (commencing with Section 3560) of
Division 4 of Title 1, that reveal a state agency's deliberative
processes, impressions, evaluations, opinions, recommendations,
meeting minutes, research, work products, theories, or strategy, or
that provide instruction, advice, or training to employees who do not
have full collective bargaining and representation rights under
these chapters. Nothing in this subdivision shall be construed to
limit the disclosure duties of a state agency with respect to any
other records relating to the activities governed by the employee
relations acts referred to in this subdivision.
(q) Records of state agencies related to activities governed by
Article 2.6 (commencing with Section 14081), Article 2.8 (commencing
with Section 14087.5), and Article 2.91 (commencing with Section
14089) of Chapter 7 of Part 3 of Division 9 of the Welfare and
Institutions Code, that reveal the special negotiator's deliberative
processes, discussions, communications, or any other portion of the
negotiations with providers of health care services, impressions,
opinions, recommendations, meeting minutes, research, work product,
theories, or strategy, or that provide instruction, advice, or
training to employees.
Except for the portion of a contract containing the rates of
payment, contracts for inpatient services entered into pursuant to
these articles, on or after April 1, 1984, shall be open to
inspection one year after they are fully executed. If a contract for
inpatient services that is entered into prior to April 1, 1984, is
amended on or after April 1, 1984, the amendment, except for any
portion containing the rates of payment, shall be open to inspection
one year after it is fully executed. If the California Medical
Assistance Commission enters into contracts with health care
providers for other than inpatient hospital services, those contracts
shall be open to inspection one year after they are fully executed.
Three years after a contract or amendment is open to inspection
under this subdivision, the portion of the contract or amendment
containing the rates of payment shall be open to inspection.
Notwithstanding any other provision of law, the entire contract or
amendment shall be open to inspection by the Joint Legislative Audit
Committee and the Legislative Analyst's Office. The committee and
that office shall maintain the confidentiality of the contracts and
amendments until the time a contract or amendment is fully open to
inspection by the public.
(r) Records of Native American graves, cemeteries, and sacred
places and records of Native American places, features, and objects
described in Sections 5097.9 and 5097.993 of the Public Resources
Code maintained by, or in the possession of, the Native American
Heritage Commission, another state agency, or a local agency.
(s) A final accreditation report of the Joint Commission on
Accreditation of Hospitals that has been transmitted to the State
Department of Health Services Public Health
pursuant to subdivision (b) of Section 1282 of the Health and
Safety Code.
(t) Records of a local hospital district, formed pursuant to
Division 23 (commencing with Section 32000) of the Health and Safety
Code, or the records of a municipal hospital, formed pursuant to
Article 7 (commencing with Section 37600) or Article 8 (commencing
with Section 37650) of Chapter 5 of Division 3 of Title 4 of this
code, that relate to any contract with an insurer or nonprofit
hospital service plan for inpatient or outpatient services for
alternative rates pursuant to Section 10133 or 11512 of the Insurance
Code. However, the record shall be open to inspection within one
year after the contract is fully executed.
(u) (1) Information contained in applications for licenses to
carry firearms issued pursuant to Section 12050 of the Penal Code by
the sheriff of a county or the chief or other head of a municipal
police department that indicates when or where the applicant is
vulnerable to attack or that concerns the applicant's medical or
psychological history or that of members of his or her family.
(2) The home address and telephone number of peace officers,
judges, court commissioners, and magistrates that are set forth in
applications for licenses to carry firearms issued pursuant to
Section 12050 of the Penal Code by the sheriff of a county or the
chief or other head of a municipal police department.
(3) The home address and telephone number of peace officers,
judges, court commissioners, and magistrates that are set forth in
licenses to carry firearms issued pursuant to Section 12050 of the
Penal Code by the sheriff of a county or the chief or other head of a
municipal police department.
(v) (1) Records of the Major Risk Medical Insurance Program
related to activities governed by Part 6.3 (commencing with Section
12695) and Part 6.5 (commencing with Section 12700) of Division 2 of
the Insurance Code, and that reveal the deliberative processes,
discussions, communications, or any other portion of the negotiations
with health plans, or the impressions, opinions, recommendations,
meeting minutes, research, work product, theories, or strategy of the
board or its staff, or records that provide instructions, advice, or
training to employees.
(2) (A) Except for the portion of a contract that contains the
rates of payment, contracts for health coverage entered into pursuant
to Part 6.3 (commencing with Section 12695) or Part 6.5 (commencing
with Section 12700) of Division 2 of the
Insurance Code, on or after July 1, 1991, shall
be open to inspection one year after they have been fully executed.
(B) If a contract for health coverage that is entered into prior
to July 1, 1991, is amended on or after July 1, 1991, the amendment,
except for any portion containing the rates of payment, shall be open
to inspection one year after the amendment has been fully executed.
(3) Three years after a contract or amendment is open to
inspection pursuant to this subdivision, the portion of the contract
or amendment containing the rates of payment shall be open to
inspection.
(4) Notwithstanding any other provision of law, the entire
contract or amendments to a contract shall be open to inspection by
the Joint Legislative Audit Committee. The committee shall maintain
the confidentiality of the contracts and amendments thereto, until
the contract or amendments to a contract is open to inspection
pursuant to paragraph (3).
(w) (1) Records of the Major Risk Medical Insurance Program
related to activities governed by Chapter 14 (commencing with Section
10700) of Part 2 of Division 2 of the Insurance Code, and that
reveal the deliberative processes, discussions, communications, or
any other portion of the negotiations with health plans, or the
impressions, opinions, recommendations, meeting minutes, research,
work product, theories, or strategy of the board or its staff, or
records that provide instructions, advice, or training to employees.
(2) Except for the portion of a contract that contains the rates
of payment, contracts for health coverage entered into pursuant to
Chapter 14 (commencing with Section 10700) of Part 2 of Division 2 of
the Insurance Code, on or after January 1, 1993, shall be open to
inspection one year after they have been fully executed.
(3) Notwithstanding any other provision of law, the entire
contract or amendments to a contract shall be open to inspection by
the Joint Legislative Audit Committee. The committee shall maintain
the confidentiality of the contracts and amendments thereto, until
the contract or amendments to a contract is open to inspection
pursuant to paragraph (2).
(x) Financial data contained in applications for registration, or
registration renewal, as a service contractor filed with the Director
of Consumer Affairs pursuant to Chapter 20 (commencing with Section
9800) of Division 3 of the Business and Professions Code, for the
purpose of establishing the service contractor's net worth, or
financial data regarding the funded accounts held in escrow for
service contracts held in force in this state by a service
contractor.
(y) (1) Records of the Managed Risk Medical Insurance Board
related to activities governed by Part 6.2 (commencing with Section
12693) or Part 6.4 (commencing with Section 12699.50) of Division 2
of the Insurance Code, and that reveal the deliberative processes,
discussions, communications, or any other portion of the negotiations
with health plans, or the impressions, opinions, recommendations,
meeting minutes, research, work product, theories, or strategy of the
board or its staff, or records that provide instructions, advice, or
training to employees.
(2) (A) Except for the portion of a contract that contains the
rates of payment, contracts entered into pursuant to Part 6.2
(commencing with Section 12693) or Part 6.4 (commencing with Section
12699.50) of Division 2 of the Insurance Code, on or after January 1,
1998, shall be open to inspection one year after they have been
fully executed.
(B) In the event that a contract entered into pursuant to Part 6.2
(commencing with Section 12693) or Part 6.4 (commencing with Section
12699.50) of Division 2 of the Insurance Code is amended, the
amendment shall be open to inspection one year after the amendment
has been fully executed.
(3) Three years after a contract or amendment is open to
inspection pursuant to this subdivision, the portion of the contract
or amendment containing the rates of payment shall be open to
inspection.
(4) Notwithstanding any other provision of law, the entire
contract or amendments to a contract shall be open to inspection by
the Joint Legislative Audit Committee. The committee shall maintain
the confidentiality of the contracts and amendments thereto until the
contract or amendments to a contract are open to inspection pursuant
to paragraph (2) or (3).
(5) The exemption from disclosure provided pursuant to this
subdivision for the contracts, deliberative processes, discussions,
communications, negotiations with health plans, impressions,
opinions, recommendations, meeting minutes, research, work product,
theories, or strategy of the board or its staff shall also apply to
the contracts, deliberative processes, discussions, communications,
negotiations with health plans, impressions, opinions,
recommendations, meeting minutes, research, work product, theories,
or strategy of applicants pursuant to Part 6.4 (commencing with
Section 12699.50) of Division 2 of the Insurance Code.
(z) Records obtained pursuant to paragraph (2) of subdivision (c)
of Section 2891.1 of the Public Utilities Code.
(aa) A document prepared by or for a state or local agency that
assesses its vulnerability to terrorist attack or other criminal acts
intended to disrupt the public agency's operations and that is for
distribution or consideration in a closed session.
(bb) Critical infrastructure information, as defined in Section
131(3) of Title 6 of the United States Code, that is voluntarily
submitted to the California Office of Homeland Security for use by
that office, including the identity of the person who or entity that
voluntarily submitted the information. As used in this subdivision,
"voluntarily submitted" means submitted in the absence of the office
exercising any legal authority to compel access to or submission of
critical infrastructure information. This subdivision shall not
affect the status of information in the possession of any other state
or local governmental agency.
(cc) All information provided to the Secretary of State by a
person for the purpose of registration in the Advance Health Care
Directive Registry, except that those records shall be released at
the request of a health care provider, a public guardian, or the
registrant's legal representative.
(dd) (1) Records of the Managed Risk Medical Insurance Board
relating to activities governed by Part 6.45 (commencing with Section
12699.201) of Division 2 of the Insurance Code, and that reveal the
deliberative processes, discussions, communications, or any other
portion of the negotiations with entities contracting or seeking to
contract with the board, or the impressions, opinions,
recommendations, meeting minutes, research, work product, theories,
or strategy of the board or its staff, or records that provide
instructions, advice, or training to employees.
(2) (A) Except for the portion of a contract that contains the
rates of payment, contracts entered into pursuant to Part 6.45
(commencing with Section 12699.201) of Division 2 of the Insurance
Code on or after January 1, 2008, shall be open to inspection one
year after they have been fully executed.
(B) If a contract entered into pursuant to Part 6.45 (commencing
with Section 12699.201) of Division 2 of the Insurance Code is
amended, the amendment shall be open to inspection one year after the
amendment has been fully executed.
(3) Three years after a contract or amendment is open to
inspection pursuant to this subdivision, the portion of the contract
or amendment containing the rates of payment shall be open to
inspection.
(4) Notwithstanding any other provision of law, the entire
contract or amendments to a contract shall be open to inspection by
the Joint Legislative Audit Committee and the Legislative Analyst's
Office. The committee and the office shall maintain the
confidentiality of the contracts and amendments thereto until the
contract or amendments to a contract are open to inspection pursuant
to paragraph (2) or (3).
Nothing in this section prevents any agency from opening its
records concerning the administration of the agency to public
inspection, unless disclosure is otherwise prohibited by law.
Nothing in this section prevents any health facility from
disclosing to a certified bargaining agent relevant financing
information pursuant to Section 8 of the National Labor Relations Act
(29 U.S.C. Sec. 158).
SEC. 43. Section 11126 of the
Government Code is amended to read:
11126. (a) (1) Nothing in this article shall be construed to
prevent a state body from holding closed sessions during a regular or
special meeting to consider the appointment, employment, evaluation
of performance, or dismissal of a public employee or to hear
complaints or charges brought against that employee by another person
or employee unless the employee requests a public hearing.
(2) As a condition to holding a closed session on the complaints
or charges to consider disciplinary action or to consider dismissal,
the employee shall be given written notice of his or her right to
have a public hearing, rather than a closed session, and that notice
shall be delivered to the employee personally or by mail at least 24
hours before the time for holding a regular or special meeting. If
notice is not given, any disciplinary or other action taken against
any employee at the closed session shall be null and void.
(3) The state body also may exclude from any public or closed
session, during the examination of a witness, any or all other
witnesses in the matter being investigated by the state body.
(4) Following the public hearing or closed session, the body may
deliberate on the decision to be reached in a closed session.
(b) For the purposes of this section, "employee" does not include
any person who is elected to, or appointed to a public office by, any
state body. However, officers of the California State University who
receive compensation for their services, other than per diem and
ordinary and necessary expenses, shall, when engaged in that
capacity, be considered employees. Furthermore, for purposes of this
section, the term employee includes a person exempt from civil
service pursuant to subdivision (e) of Section 4 of Article VII of
the California Constitution.
(c) Nothing in this article shall be construed to do any of the
following:
(1) Prevent state bodies that administer the licensing of persons
engaging in businesses or professions from holding closed sessions to
prepare, approve, grade, or administer examinations.
(2) Prevent an advisory body of a state body that administers the
licensing of persons engaged in businesses or professions from
conducting a closed session to discuss matters that the advisory body
has found would constitute an unwarranted invasion of the privacy of
an individual licensee or applicant if discussed in an open meeting,
provided the advisory body does not include a quorum of the members
of the state body it advises. Those matters may include review of an
applicant's qualifications for licensure and an inquiry specifically
related to the state body's enforcement program concerning an
individual licensee or applicant where the inquiry occurs prior to
the filing of a civil, criminal, or administrative disciplinary
action against the licensee or applicant by the state body.
(3) Prohibit a state body from holding a closed session to
deliberate on a decision to be reached in a proceeding required to be
conducted pursuant to Chapter 5 (commencing with Section 11500) or
similar provisions of law.
(4) Grant a right to enter any correctional institution or the
grounds of a correctional institution where that right is not
otherwise granted by law, nor shall anything in this article be
construed to prevent a state body from holding a closed session when
considering and acting upon the determination of a term, parole, or
release of any individual or other disposition of an individual case,
or if public disclosure of the subjects under discussion or
consideration is expressly prohibited by statute.
(5) Prevent any closed session to consider the conferring of
honorary degrees, or gifts, donations, and bequests that the donor or
proposed donor has requested in writing to be kept confidential.
(6) Prevent the Alcoholic Beverage Control Appeals Board from
holding a closed session for the purpose of holding a deliberative
conference as provided in Section 11125.
(7) (A) Prevent a state body from holding closed sessions with its
negotiator prior to the purchase, sale, exchange, or lease of real
property by or for the state body to give instructions to its
negotiator regarding the price and terms of payment for the purchase,
sale, exchange, or lease.
(B) However, prior to the closed session, the state body shall
hold an open and public session in which it identifies the real
property or real properties that the negotiations may concern and the
person or persons with whom its negotiator may negotiate.
(C) For purposes of this paragraph, the negotiator may be a member
of the state body.
(D) For purposes of this paragraph, "lease" includes renewal or
renegotiation of a lease.
(E) Nothing in this paragraph shall preclude a state body from
holding a closed session for discussions regarding eminent domain
proceedings pursuant to subdivision (e).
(8) Prevent the California Postsecondary Education Commission from
holding closed sessions to consider matters pertaining to the
appointment or termination of the Director of the California
Postsecondary Education Commission.
(9) Prevent the Council for Private Postsecondary and Vocational
Education from holding closed sessions to consider matters pertaining
to the appointment or termination of the Executive Director of the
Council for Private Postsecondary and Vocational Education.
(10) Prevent the Franchise Tax Board from holding closed sessions
for the purpose of discussion of confidential tax returns or
information the public disclosure of which is prohibited by law, or
from considering matters pertaining to the appointment or removal of
the Executive Officer of the Franchise Tax Board.
(11) Require the Franchise Tax Board to notice or disclose any
confidential tax information considered in closed sessions, or
documents executed in connection therewith, the public disclosure of
which is prohibited pursuant to Article 2 (commencing with Section
19542) of Chapter 7 of Part 10.2 of the Revenue and Taxation Code.
(12) Prevent the Board of Corrections from holding closed sessions
when considering reports of crime conditions under Section 6027 of
the Penal Code.
(13) Prevent the State Air Resources Board from holding closed
sessions when considering the proprietary specifications and
performance data of manufacturers.
(14) Prevent the State Board of Education or the Superintendent of
Public Instruction, or any committee advising the board or the
superintendent, from holding closed sessions on those portions of its
review of assessment instruments pursuant to Chapter 5 (commencing
with Section 60600) of, or pursuant to Chapter 8 (commencing with
Section 60850) of, Part 33 of the Education Code during which actual
test content is reviewed and discussed. The purpose of this provision
is to maintain the confidentiality of the assessments under review.
(15) Prevent the California Integrated Waste Management Board or
its auxiliary committees from holding closed sessions for the purpose
of discussing confidential tax returns, discussing trade secrets or
confidential or proprietary information in its possession, or
discussing other data, the public disclosure of which is prohibited
by law.
(16) Prevent a state body that invests retirement, pension, or
endowment funds from holding closed sessions when considering
investment decisions. For purposes of consideration of shareholder
voting on corporate stocks held by the state body, closed sessions
for the purposes of voting may be held only with respect to election
of corporate directors, election of independent auditors, and other
financial issues that could have a material effect on the net income
of the corporation. For the purpose of real property investment
decisions that may be considered in a closed session pursuant to this
paragraph, a state body shall also be exempt from the provisions of
paragraph (7) relating to the identification of real properties prior
to the closed session.
(17) Prevent a state body, or boards, commissions, administrative
officers, or other representatives that may properly be designated by
law or by a state body, from holding closed sessions with its
representatives in discharging its responsibilities under Chapter 10
(commencing with Section 3500), Chapter 10.3 (commencing with Section
3512), Chapter 10.5 (commencing with Section 3525), or Chapter 10.7
(commencing of Section 3540) of Division 4 of Title 1 as the sessions
relate to salaries, salary schedules, or compensation paid in the
form of fringe benefits. For the purposes enumerated in the preceding
sentence, a state body may also meet with a state conciliator who
has intervened in the proceedings.
(18) (A) Prevent a state body from holding closed sessions to
consider matters posing a threat or potential threat of criminal or
terrorist activity against the personnel, property, buildings,
facilities, or equipment, including electronic data, owned, leased,
or controlled by the state body, where disclosure of these
considerations could compromise or impede the safety or security of
the personnel, property, buildings, facilities, or equipment,
including electronic data, owned, leased, or controlled by the state
body.
(B) Notwithstanding any other provision of law, a state body, at
any regular or special meeting, may meet in a closed session pursuant
to subparagraph (A) upon a two-thirds vote of the members present at
the meeting.
(C) After meeting in closed session pursuant to subparagraph (A),
the state body shall reconvene in open session prior to adjournment
and report that a closed session was held pursuant to subparagraph
(A), the general nature of the matters considered, and whether any
action was taken in closed session.
(D) After meeting in closed session pursuant to subparagraph (A),
the state body shall submit to the Legislative Analyst written
notification stating that it held this closed session, the general
reason or reasons for the closed session, the general nature of the
matters considered, and whether any action was taken in closed
session. The Legislative Analyst shall retain for no less than four
years any written notification received from a state body pursuant to
this subparagraph.
(d) (1) Notwithstanding any other provision of law, any meeting of
the Public Utilities Commission at which the rates of entities under
the commission's jurisdiction are changed shall be open and public.
(2) Nothing in this article shall be construed to prevent the
Public Utilities Commission from holding closed sessions to
deliberate on the institution of proceedings, or disciplinary actions
against any person or entity under the jurisdiction of the
commission.
(e) (1) Nothing in this article shall be construed to prevent a
state body, based on the advice of its legal counsel, from holding a
closed session to confer with, or receive advice from, its legal
counsel regarding pending litigation when discussion in open session
concerning those matters would prejudice the position of the state
body in the litigation.
(2) For purposes of this article, all expressions of the
lawyer-client privilege other than those provided in this subdivision
are hereby abrogated. This subdivision is the exclusive expression
of the lawyer-client privilege for purposes of conducting closed
session meetings pursuant to this article. For purposes of this
subdivision, litigation shall be considered pending when any of the
following circumstances exist:
(A) An adjudicatory proceeding before a court, an administrative
body exercising its adjudicatory authority, a hearing officer, or an
arbitrator, to which the state body is a party, has been initiated
formally.
(B) (i) A point has been reached where, in the opinion of the
state body on the advice of its legal counsel, based on existing
facts and circumstances, there is a significant exposure to
litigation against the state body.
(ii) Based on existing facts and circumstances, the state body is
meeting only to decide whether a closed session is authorized
pursuant to clause (i).
(C) (i) Based on existing facts and circumstances, the state body
has decided to initiate or is deciding whether to initiate
litigation.
(ii) The legal counsel of the state body shall prepare and submit
to it a memorandum stating the specific reasons and legal authority
for the closed session. If the closed session is pursuant to
paragraph (1), the memorandum shall include the title of the
litigation. If the closed session is pursuant to subparagraph (A) or
(B), the memorandum shall include the existing facts and
circumstances on which it is based. The legal counsel shall submit
the memorandum to the state body prior to the closed session, if
feasible, and in any case no later than one week after the closed
session. The memorandum shall be exempt from disclosure pursuant to
Section 6254.25.
(iii) For purposes of this subdivision, "litigation" includes any
adjudicatory proceeding, including eminent domain, before a court,
administrative body exercising its adjudicatory authority, hearing
officer, or arbitrator.
(iv) Disclosure of a memorandum required under this subdivision
shall not be deemed as a waiver of the lawyer-client privilege, as
provided for under Article 3 (commencing with Section 950) of Chapter
4 of Division 8 of the Evidence Code.
(f) In addition to subdivisions (a), (b), and (c), nothing in this
article shall be construed to do any of the following:
(1) Prevent a state body operating under a joint powers agreement
for insurance pooling from holding a closed session to discuss a
claim for the payment of tort liability or public liability losses
incurred by the state body or any member agency under the joint
powers agreement.
(2) Prevent the examining committee established by the State Board
of Forestry and Fire Protection, pursuant to Section 763 of the
Public Resources Code, from conducting a closed session to consider
disciplinary action against an individual professional forester prior
to the filing of an accusation against the forester pursuant to
Section 11503.
(3) Prevent an administrative committee established by the
California Board of Accountancy pursuant to Section 5020 of the
Business and Professions Code from conducting a closed session to
consider disciplinary action against an individual accountant prior
to the filing of an accusation against the accountant pursuant to
Section 11503. Nothing in this article shall be construed to prevent
an examining committee established by the California Board of
Accountancy pursuant to Section 5023 of the Business and Professions
Code from conducting a closed hearing to interview an individual
applicant or accountant regarding the applicant's qualifications.
(4) Prevent a state body, as defined in subdivision (b) of Section
11121, from conducting a closed session to consider any matter that
properly could be considered in closed session by the state body
whose authority it exercises.
(5) Prevent a state body, as defined in subdivision (d) of Section
11121, from conducting a closed session to consider any matter that
properly could be considered in a closed session by the body defined
as a state body pursuant to subdivision (a) or (b) of Section 11121.
(6) Prevent a state body, as defined in subdivision (c) of Section
11121, from conducting a closed session to consider any matter that
properly could be considered in a closed session by the state body it
advises.
(7) Prevent the State Board of Equalization from holding closed
sessions for either of the following:
(A) When considering matters pertaining to the appointment or
removal of the Executive Secretary of the State Board of
Equalization.
(B) For the purpose of hearing confidential taxpayer appeals or
data, the public disclosure of which is prohibited by law.
(8) Require the State Board of Equalization to disclose any action
taken in closed session or documents executed in connection with
that action, the public disclosure of which is prohibited by law
pursuant to Sections 15619 and 15641 of this code and Sections 833,
7056, 8255, 9255, 11655, 30455, 32455, 38705, 38706, 43651, 45982,
46751, 50159, 55381, and 60609 of the Revenue and Taxation Code.
(9) Prevent the California Earthquake Prediction Evaluation
Council, or other body appointed to advise the Director of the Office
of Emergency Services or the Governor concerning matters relating to
volcanic or earthquake predictions, from holding closed sessions
when considering the evaluation of possible predictions.
(g) This article does not prevent either of the following:
(1) The Teachers' Retirement Board or the Board of Administration
of the Public Employees' Retirement System from holding closed
sessions when considering matters pertaining to the recruitment,
appointment, employment, or removal of the chief executive officer or
when considering matters pertaining to the recruitment or removal of
the Chief Investment Officer of the State Teachers' Retirement
System or the Public Employees' Retirement System.
(2) The Commission on Teacher Credentialing from holding closed
sessions when considering matters relating to the recruitment,
appointment, or removal of its executive director.
(h) This article does not prevent the Board of Administration of
the Public Employees' Retirement System from holding closed sessions
when considering matters relating to the development of rates and
competitive strategy for plans offered pursuant to Chapter 15
(commencing with Section 21660) of Part 3 of Division 5 of Title 2.
(i) This article does not prevent the Managed Risk Medical
Insurance Board from holding closed sessions when considering matters
related to the development of rates and contracting strategy for
entities contracting or seeking to contract with the board pursuant
ot Part 6.45 (commencing with Section 12699.201) of Division 2 of the
Insurance Code.
SEC. 37. SEC. 44. The State Department of
Health Care Services, in consultation with the Managed Risk Medical
Insurance Board, shall take all reasonable steps that are required to
obtain the maximum amount of federal funds and to support federal
claiming procedures in the administration of this act.
SEC. 45. Notwithstanding Chapter 3.5 (commencing
with section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, during the period January 1, 2008, to December 31,
2011, inclusive, the State Department of Health Care Services may
implement this act by means of all county letters or similar
instructions without taking regulatory action. Prior to December 31,
2011, the department shall adopt all necessary regulations in
accordance with the requirements of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.
SEC. 38. Sections 22 and 32 of this act shall
become operative on July 1, 2008.
SEC. 39. SEC. 46. The Legislature
finds and declares that Section 3 42 of
this act, which amends Section 6254 of the Government Code, and
Section 4 43 , which amends Section
11126 of the Government Code, impose a limitation on the public's
right of access to the meetings of public bodies or the writings of
public officials and agencies within the meaning of Section 3 of
Article I of the California Constitution. Pursuant to that
constitutional provision, the Legislature makes the following
findings to demonstrate the interest protected by this limitation and
the need for protecting that interest:
In order to maximize the ability of the Managed Risk Medical
Insurance Board to implement agreements with health plans and to
provide a wide choice of plans at minimal cost under the California
Cooperative Health Insurance Purchasing Program created pursuant to
Part 6.45 (commencing with Section 12699.201) of Division 2 of the
Insurance Code, it is necessary and appropriate to provide limited
confidentiality to certain writings developed in that regard and
meetings related thereto .
SEC. 40. SEC . 47.
Notwithstanding any other provision of law, the Managed Risk Medical
Insurance Board may implement the provisions of this act expanding
the Healthy Families Program only to the extent that funds are
appropriated for those purposes in the annual Budget Act or in
another statute.
SEC. 48. During the period from January 1, 2008 to
December 31, 2011, inclusive, the adoption of regulations pursuant
to this act by the Managed Risk Medical Insurance Board shall be
deemed to be an emergency and necessary for the immediate
preservation of public peace, health, and safety, or the general
welfare.
SEC. 41. SEC. 49. No reimbursement
is required by this act pursuant to Section 6 of Article XIII B of
the California Constitution for certain costs that may be incurred by
a local agency or school district because, in that regard, 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.
However, if the Commission on State Mandates determines that this
act contains other costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division 4 of
Title 2 of the Government Code.