BILL NUMBER: SB 1669 INTRODUCED
BILL TEXT
INTRODUCED BY Senator McClintock
FEBRUARY 22, 2008
An act to amend Sections 1357.50 and 1357.51 of the Health and
Safety Code, and to amend Sections 10198.6 and 10198.7 of the
Insurance Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 1669, as introduced, McClintock. Health care coverage: waivered
conditions.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care. Existing law also
provides for the regulation of health insurers by the Department of
Insurance. Existing law prohibits health care service plan contracts
and health insurance policies that cover one or 2 individuals from
excluding coverage on the basis of a preexisting condition provision
for a period greater than 12 months following the individual's
effective date of coverage. Existing law authorizes contracts and
policies covering one or 2 individuals that do not utilize a
preexisting condition provision to impose a contract provision that
excludes coverage for up to 12 months following the effective date of
coverage for conditions for which medical advice, diagnosis, care,
or treatment was recommended or received from a licensed health
practitioner during the 12 months immediately preceding the effective
date of coverage.
This bill would instead authorize a health care service plan
contract or health insurance policy covering one or 2 individuals to
include a provision that excludes coverage for any length of time for
a condition for which medical advice, diagnosis, care, or treatment
was recommended or received from a licensed health practitioner
during the 10 years immediately preceding the effective date of
coverage.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1357.50 of the Health and Safety Code is
amended to read:
1357.50. For purposes of this article:
(a) "Health benefit plan" means any individual or group insurance
policy or health care service plan contract that provides medical,
hospital, and surgical benefits. 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, 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.
(b) "Late enrollee" means an eligible employee or dependent who
has declined health coverage under a health benefit plan offered
through employment or sponsored by an 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 employer, provided that the initial enrollment
period shall be a period of at least 30 days. However, an eligible
employee or 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) The individual 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) The individual 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 benefit 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) The individual 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 a 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) The individual requests enrollment within 30 days after
termination of coverage, or cessation of employer contribution toward
coverage provided under another employer health benefit plan.
(2) The individual is employed by an employer that 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. The
health benefit plan shall enroll a dependent child within 30 days
after receipt of a court order or request from the district attorney,
either parent or the person having custody of the child as defined
in Section 3751.5 of the Family Code, the employer, or the group
administrator. In the case of children who are eligible for medicaid,
the State Department of Health Services may also make the request.
(4) The plan cannot produce a written statement from the employer
stating that, prior to declining coverage, the individual or the
person through whom the individual was eligible to be covered as a
dependent was provided with, and signed acknowledgment of, 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).
(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 of 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.
(c) "Preexisting condition provision" means a contract provision
that excludes coverage for charges or expenses incurred during a
specified period following the enrollee'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.
(d) "Creditable coverage" means:
(1) Any individual or group policy, contract, or program that is
written or administered by a disability insurance company, nonprofit
hospital service plan, 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 insurance, 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 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)).
(e) "Waivered condition" means a contract provision that excludes
coverage for charges or expenses incurred during a specified
period of time for one or more specific, identified,
medical conditions.
(f) "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. 2. Section 1357.51 of the Health and Safety Code is amended
to read:
1357.51. (a) No plan contract that covers three or more
enrollees shall exclude coverage for any individual on the basis of a
preexisting condition provision for a period greater than six months
following the individual's effective date of coverage. Preexisting
condition provisions contained in plan contracts may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the six months immediately
preceding the effective date of coverage.
(b) No plan contract that covers one or two individuals shall
exclude coverage on the basis of a preexisting condition provision
for a period greater than 12 months following the individual's
effective date of coverage, nor shall the plan limit or exclude
coverage for a specific enrollee by type of illness, treatment,
medical condition, or accident, except for satisfaction of a
preexisting condition clause pursuant to this article. Preexisting
condition provisions contained in plan contracts may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the 12 months immediately
preceding the effective date of coverage.
(c) A plan that does not utilize a preexisting condition
provision may impose a waiting or affiliation period not to exceed 60
days, before the coverage issued subject to this article shall
become effective. During the waiting or affiliation period, the plan
is not required to provide health care services and no premium shall
be charged to the subscriber or enrollee.
(d) A Notwithstanding subdivision (b), a
plan that does not utilize a preexisting condition
provision in plan contracts contract that
cover covers one or two individuals may
impose , instead of including a
preexisting condition provision, include a contract provision
excluding coverage for waivered conditions for any length of
time . No plan may exclude coverage on the basis of a
waivered condition for a period greater than 12 months following the
individual's effective date of coverage. A waivered
condition provision contained in plan contracts may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the 12 months
10 years immediately preceding the effective
date of coverage.
(e) In determining whether a preexisting condition provision
, a waivered condition provision, or a waiting or
affiliation period applies to any enrollee, a plan shall credit the
time the enrollee was covered under creditable coverage, provided
that the enrollee becomes eligible for coverage under the succeeding
plan contract within 62 days of termination of prior coverage,
exclusive of any waiting or affiliation period, and applies for
coverage under the succeeding plan within the applicable enrollment
period. A plan shall also credit any time that an eligible employee
must wait before enrolling in the plan, including any postenrollment
or employer-imposed waiting or affiliation period.
However, if a person's employment has ended, the availability of
health coverage offered through employment or sponsored by an
employer has terminated, or an employer's contribution toward health
coverage has terminated, a plan shall credit the time the person was
covered under creditable coverage if the person becomes eligible for
health coverage offered through employment or sponsored by an
employer within 180 days, exclusive of any waiting or affiliation
period, and applies for coverage under the succeeding plan contract
within the applicable enrollment period.
(f) No plan shall exclude late enrollees from coverage for more
than 12 months from the date of the late enrollee's application for
coverage. No plan shall require any premium or other periodic charge
to be paid by or on behalf of a late enrollee during the period of
exclusion from coverage permitted by this subdivision.
(g) A health care service plan issuing group coverage may not
impose a preexisting condition exclusion upon the following:
(1) A newborn individual, who, as of the last day of the 30-day
period beginning with the date of birth, has applied for coverage
through the employer-sponsored plan.
(2) A child who is adopted or placed for adoption before
attaining 18 years of age and who, as of the last day of the 30-day
period beginning with the date of adoption or placement for adoption,
is covered under creditable coverage and applies for coverage
through the employer-sponsored plan. This provision shall not apply
if, for 63 continuous days, the child is not covered under any
creditable coverage.
(3) A condition relating to benefits for pregnancy or maternity
care.
(h) An individual's period of creditable coverage shall be
certified pursuant to subsection (e) of Section 2701 of Title XXVII
of the federal Public Health Services Act (42 U.S.C. Sec. 300gg(e)).
SEC. 3. Section 10198.6 of the Insurance Code is amended to read:
10198.6. For purposes of this article:
(a) "Health benefit plan" means any group or individual policy or
contract that provides medical, hospital, or surgical benefits. 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, 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.
(b) "Late enrollee" means an eligible employee or dependent who
has declined health coverage under a health benefit plan offered
through employment or sponsored by an 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 employer; provided that the initial enrollment
period shall be a period of at least 30 days. However, an eligible
employee or 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) The individual 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) The individual 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 benefit 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) The individual 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 a 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) The individual requests enrollment within 30 days after
termination of coverage, or cessation of employer contribution toward
coverage provided under another employer health benefit plan.
(2) The individual is employed by an employer that 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) The carrier cannot produce a written statement from the
employer stating that, prior to declining coverage, the individual or
the person through whom the individual was eligible to be covered as
a dependent was provided with, and signed acknowledgment of,
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).
(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 10116.5 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 of notification of this loss of coverage.
(c) "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.
(d) "Creditable coverage" means:
(1) Any individual or group policy, contract or program, that is
written or administered by a disability insurance company, 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 insurance,
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 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 subsection (c) of
Section 2701 of Title XXVII of the federal Public Health Services
Act (42 U.S.C. Sec. 300gg(c)).
(e) "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.
(f) "Waivered condition" means a contract provision that excludes
coverage for charges or expenses incurred during a specified
period of time for one or more specific, identified,
medical conditions.
SEC. 4. Section 10198.7 of the Insurance Code is amended to read:
10198.7. (a) No health benefit plan that covers three or more
persons and that is issued, renewed, or written by any insurer,
nonprofit hospital service plan, self-insured employee welfare
benefit plan, fraternal benefits society, or any other entity shall
exclude coverage for any individual on the basis of a preexisting
condition provision for a period greater than six months following
the individual's effective date of coverage, nor shall limit or
exclude coverage for a specific insured person by type of illness,
treatment, medical condition, or accident except for satisfaction of
a preexisting clause pursuant to this article. Preexisting condition
provisions contained in health benefit plans may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the six months immediately
preceding the effective date of coverage.
(b) No health benefit plan that covers one or two individuals and
that is issued, renewed, or written by any insurer, self-insured
employee welfare benefit plan, fraternal benefits society, or any
other entity shall exclude coverage on the basis of a preexisting
condition provision for a period greater than 12 months following the
individual's effective date of coverage, nor shall limit or exclude
coverage for a specific insured person by type of illness, treatment,
medical condition, or accident, except for satisfaction of a
preexisting condition clause pursuant to this article. Preexisting
condition provisions contained in health benefit plans may relate
only to conditions for which medical advice, diagnosis, care, or
treatment, including use of prescription drugs, was recommended or
received from a licensed health practitioner during the 12 months
immediately preceding the effective date of coverage.
(c) A carrier that does not utilize a preexisting condition
provision may impose a waiting or affiliation period not to exceed 60
days, before the coverage issued subject to this article shall
become effective. During the waiting or affiliation period, the
carrier is not required to provide health care services and no
premium shall be charged to the subscriber or enrollee.
(d) A carrier that does not utilize a preexisting
condition provision in Notwithstanding subdivision
(b), a health plans benefit plan
that cover covers one or two
individuals may impose , instead of including
a preexisting condition provision, include a contract
provision excluding coverage for waivered conditions for any
length of time . No carrier may exclude coverage on
the basis of a waivered condition for a period greater than 12 months
following the individual's effective date of coverage. A
waivered condition provision contained in health benefit plans may
relate only to conditions for which medical advice, diagnosis, care,
or treatment, including use of prescription drugs, was recommended or
received from a licensed health practitioner during the 12
months 10 years immediately preceding the
effective date of coverage.
(e) In determining whether a preexisting condition provision
, a waivered condition provision, or a waiting or
affiliation period applies to any person, all health benefit plans
shall credit the time the person was covered under creditable
coverage, provided the person becomes eligible for coverage under the
succeeding health benefit plan within 62 days of termination of
prior coverage, exclusive of any waiting or affiliation period, and
applies for coverage under the succeeding plan within the applicable
enrollment period. A health
benefit plan shall also credit any time an eligible employee must
wait before enrolling in the health benefit plan, including any
affiliation or employer-imposed waiting period. However, if a person'
s employment has ended, the availability of health coverage offered
through employment or sponsored by an employer has terminated or, an
employer's contribution toward health coverage has terminated, a
carrier shall credit the time the person was covered under creditable
coverage if the person becomes eligible for health coverage offered
through employment or sponsored by an employer within 180 days,
exclusive of any waiting or affiliation period, and applies for
coverage under the succeeding plan within the applicable enrollment
period.
(f) No health benefit plan that covers three or more persons and
that is issued, renewed, or written by any insurer, nonprofit
hospital service plan, self-insured employee welfare benefit plan,
fraternal benefits society, or any other entity may exclude late
enrollees from coverage for more than 12 months from the date of the
late enrollee's application for coverage. No insurer, nonprofit
hospital service plan, self-insured employee welfare benefit plan,
fraternal benefits society, or any other entity shall require any
premium or other periodic charge to be paid by or on behalf of a late
enrollee during the period of exclusion from coverage permitted by
this subdivision.
(g) An individual's period of creditable coverage shall be
certified pursuant to subdivision (e) of Section 2701 of Title XXVII
of the federal Public Health Services Act, 42 U.S.C. Sec. 300gg(e).
(h) A group health benefit plan may not impose a preexisting
condition exclusion to any of the following:
(1) To a newborn individual, who, as of the last day of the 30-day
period beginning with the date of birth, applied for coverage
through the employer-sponsored plan.
(2) To a child who is adopted or placed for adoption before
attaining 18 years of age and who, as of the last day of the 30-day
period beginning with the date of adoption or placement for adoption,
is covered under creditable coverage and applies for coverage
through the employer-sponsored plan. This provision shall not apply
if, for 63 continuous days, the child is not covered under any
creditable coverage.
(3) To a condition relating to benefits for pregnancy or maternity
care.
(i) Any entity providing aggregate or specific stop loss coverage
or any other assumption of risk with reference to a health benefit
plan shall provide that the plan meets all requirements of this
article concerning waiting periods, preexisting condition provisions,
and late enrollees.