BILL NUMBER: AB 29	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 24, 2009

INTRODUCED BY   Assembly Member Price
   (Coauthor: Assembly Member Swanson)

                        DECEMBER 1, 2008

   An act to amend Section 1373 of the Health and Safety Code, and to
amend Section 10277 of the Insurance Code, relating to health care.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 29, as amended, Price. Health care coverage.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), provides for the licensure and regulation of health
care service plans by the Department of Managed Health Care, and
makes a willful violation of the act a crime. Existing law also
provides for the regulation of health insurers by the Department of
Insurance. Existing law requires that every health care service plan
contract or group health insurance policy that provides for
termination of coverage of a dependent child upon attainment of the
limiting age for dependent children shall also provide that
attainment of the limiting age shall not terminate the coverage of a
child under certain conditions.
   This bill would prohibit, with  a  specified 
exceptions   exception  , the limiting age for
dependent children covered by these health care service plan
contracts and group health insurance policies from being less than 27
years of age.  This   The  bill would also
 authorize certain public employees an annuitants 
 provide that no employer is required to pay the cost of coverage
for dependents who are at least 23 years of age, but less than 27
years of age. The bill instead would authorize  subscribers and
insureds to elect to provide coverage to  their 
 those  dependents  who would otherwise be
ineligible for coverage  by contributing the premium for
that coverage.
   Because this bill would specify additional requirements under the
Knox-Keene Act, the willful violation of which would be a crime, this
bill would impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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

  SECTION 1.  Section 1373 of the Health and Safety Code is amended
to read:
   1373.  (a) A plan contract may not provide an exception for other
coverage if the other coverage is entitlement to Medi-Cal benefits
under Chapter 7 (commencing with Section 14000) or Chapter 8
(commencing with Section 14200) of Part 3 of Division 9 of the
Welfare and Institutions Code, or Medicaid benefits under Subchapter
19 (commencing with Section 1396) of Chapter 7 of Title 42 of the
United States Code.
   Each plan contract shall be interpreted not to provide an
exception for the Medi-Cal or Medicaid benefits.
   A plan contract shall not provide an exemption for enrollment
because of an applicant's entitlement to Medi-Cal benefits under
Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing
with Section 14200) of Part 3 of Division 9 of the Welfare and
Institutions Code, or Medicaid benefits under Subchapter 19
(commencing with Section 1396) of Chapter 7 of Title 42 of the United
States Code.
   A plan contract may not provide that the benefits payable
thereunder are subject to reduction if the individual insured has
entitlement to the Medi-Cal or Medicaid benefits.
   (b) A plan contract that provides coverage, whether by specific
benefit or by the effect of general wording, for sterilization
operations or procedures shall not impose any disclaimer, restriction
on, or limitation of, coverage relative to the covered individual's
reason for sterilization.
   As used in this section, "sterilization operations or procedures"
shall have the same meaning as that specified in Section 10120 of the
Insurance Code.
   (c) Every plan contract that provides coverage to the spouse or
dependents of the subscriber or spouse shall grant immediate accident
and sickness coverage, from and after the moment of birth, to each
newborn infant of any subscriber or spouse covered and to each minor
child placed for adoption from and after the date on which the
adoptive child's birth parent or other appropriate legal authority
signs a written document, including, but not limited to, a health
facility minor release report, a medical authorization form, or a
relinquishment form, granting the subscriber or spouse the right to
control health care for the adoptive child or, absent this written
document, on the date there exists evidence of the subscriber's or
spouse's right to control the health care of the child placed for
adoption. No plan may be entered into or amended if it contains any
disclaimer, waiver, or other limitation of coverage relative to the
coverage or insurability of newborn infants of, or children placed
for adoption with, a subscriber or spouse covered as required by this
subdivision.
   (d) (1) Every plan contract that provides that coverage of a
dependent child of a subscriber shall terminate upon attainment of
the limiting age for dependent children specified in the plan, shall
also provide that attainment of the limiting age shall not operate to
terminate the coverage of the child while the child is and continues
to meet both of the following criteria:
   (A) Incapable of self-sustaining employment by reason of a
physically or mentally disabling injury, illness, or condition.
   (B) Chiefly dependent upon the subscriber for support and
maintenance.
   (2) The plan shall notify the subscriber that the dependent child'
s coverage will terminate upon attainment of the limiting age unless
the subscriber submits proof of the criteria described in
subparagraphs (A) and (B) of paragraph (1) to the plan within 60 days
of the date of receipt of the notification. The plan shall send this
notification to the subscriber at least 90 days prior to the date
the child attains the limiting age. Upon receipt of a request by the
subscriber for continued coverage of the child and proof of the
criteria described in subparagraphs (A) and (B) of paragraph (1), the
plan shall determine whether the child meets that criteria before
the child attains the limiting age. If the plan fails to make the
determination by that date, it shall continue coverage of the child
pending its determination.
   (3) The plan may subsequently request information about a
dependent child whose coverage is continued beyond the limiting age
under this subdivision but not more frequently than annually after
the two-year period following the child's attainment of the limiting
age.
   (4) If the subscriber changes carriers to another plan or to a
health insurer, the new plan or insurer shall continue to provide
coverage for the dependent child. The new plan or insurer may request
information about the dependent child initially and not more
frequently than annually thereafter to determine if the child
continues to satisfy the criteria in subparagraphs (A) and (B) of
paragraph (1). The subscriber shall submit the information requested
by the new plan or insurer within 60 days of receiving the request.
   (5) Except as specified in this  section  
paragraph  , under no circumstances shall the limiting age be
less than 27 years of age. Nothing in this section shall require
employers  participating in the Public Employees' Medical and
Hospital Care Act  to pay the cost of coverage for
dependents who are at least 23 years of age, but less than 27 years
of age.  Employees or annuitants receiving benefits pursuant
to the Public Employees' Medical and Hospital Care Act  
Subscribers  may elect to provide coverage to their dependents
who are at least 23 years of age, but are less than 27 years of age,
provided they contribute the premium for that coverage. 
Nothing in this section shall require the University of California to
pay the cost of coverage for dependents who are at least 23 years of
age, but less than 27 years of age. Employees or annuitants of the
University of California may elect to provide coverage to their
dependents who are at least 23 years of age, but less than 27 years
of age, provided they contribute the premium for that coverage.
Nothing in this section shall require a city to pay the cost of
coverage for dependents who are at least 23 years of age, but less
than 27 years of age. Employees or annuitants of a city may elect to
provide coverage to their dependents who are at least 23 years of
age, but less than 27 years of age, provided they contribute the
premium for that coverage.  The provision requiring the
limiting age to be a minimum of 27 years of age shall not be
effective for employment contracts subject to collective bargaining
that are effective prior to January 1, 2010. Any employment contract
subject to collective bargaining that is issued, amended, or renewed
on or after January 1, 2010, shall be subject to this section.
   (e) A plan contract that provides coverage, whether by specific
benefit or by the effect of general wording, for both an employee and
one or more covered persons dependent upon the employee and provides
for an extension of the coverage for any period following a
termination of employment of the employee shall also provide that
this extension of coverage shall apply to dependents upon the same
terms and conditions precedent as applied to the covered employee,
for the same period of time, subject to payment of premiums, if any,
as required by the terms of the policy and subject to any applicable
collective bargaining agreement.
   (f) A group contract shall not discriminate against handicapped
persons or against groups containing handicapped persons. Nothing in
this subdivision shall preclude reasonable provisions in a plan
contract against liability for services or reimbursement of the
handicap condition or conditions relating thereto, as may be allowed
by rules of the director.
   (g) Every group contract shall set forth the terms and conditions
under which subscribers and enrollees may remain in the plan in the
event the group ceases to exist, the group contract is terminated
 or   ,  an individual subscriber leaves
the group, or the enrollees' eligibility status changes.
   (h) (1) A health care service plan or specialized health care
service plan may provide for coverage of, or for payment for,
professional mental health services, or vision care services, or for
the exclusion of these services. If the terms and conditions include
coverage for services provided in a general acute care hospital or an
acute psychiatric hospital as defined in Section 1250 and do not
restrict or modify the choice of providers, the coverage shall extend
to care provided by a psychiatric health facility as defined in
Section 1250.2 operating pursuant to licensure by the State
Department of Mental Health. A health care service plan that offers
outpatient mental health services but does not cover these services
in all of its group contracts shall communicate to prospective group
contractholders as to the availability of outpatient coverage for the
treatment of mental or nervous disorders.
   (2) No plan shall prohibit the member from selecting any
psychologist who is licensed pursuant to the Psychology Licensing Law
(Chapter 6.6 (commencing with Section 2900) of Division 2 of the
Business and Professions Code), any optometrist who is the holder of
a certificate issued pursuant to Chapter 7 (commencing with Section
3000) of Division 2 of the Business and Professions Code or, upon
referral by a physician and surgeon licensed pursuant to the Medical
Practice Act (Chapter 5 (commencing with Section 2000) of Division 2
of the Business and Professions Code), (A) any marriage and family
therapist who is the holder of a license under Section 4980.50 of the
Business and Professions Code, (B) any licensed clinical social
worker who is the holder of a license under Section 4996 of the
Business and Professions Code, (C) any registered nurse licensed
pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of
the Business and Professions Code, who possesses a master's degree
in psychiatric-mental health nursing and is listed as a
psychiatric-mental health nurse by the Board of Registered Nursing,
or (D) any advanced practice registered nurse certified as a clinical
nurse specialist pursuant to Article 9 (commencing with Section
2838) of Chapter 6 of Division 2 of the Business and Professions Code
who participates in expert clinical practice in the specialty of
psychiatric-mental health nursing, to perform the particular services
covered under the terms of the plan, and the certificate holder is
expressly authorized by law to perform these services.
   (3) Nothing in this section shall be construed to allow any
certificate holder or licensee enumerated in this section to perform
professional mental health services beyond his or her field or fields
of competence as established by his or her education, training ,
 and experience.
   (4) For the purposes of this section, "marriage and family
therapist" means a licensed marriage and family therapist who has
received specific instruction in assessment, diagnosis, prognosis,
and counseling, and psychotherapeutic treatment of premarital,
marriage, family, and child relationship dysfunctions that is
equivalent to the instruction required for licensure on January 1,
1981.
   (5) Nothing in this section shall be construed to allow a member
to select and obtain mental health or psychological or vision care
services from a certificate  holder  or licenseholder who is
not directly affiliated with or under contract to the health care
service plan or specialized health care service plan to which the
member belongs. All health care service plans and individual practice
associations that offer mental health benefits shall make reasonable
efforts to make available to their members the services of licensed
psychologists. However, a failure of a plan or association to comply
with the requirements of the preceding sentence shall not constitute
a misdemeanor.
   (6) As used in this subdivision, "individual practice association"
means an entity as defined in subsection (5) of Section 1307 of the
federal Public Health Service Act (42 U.S.C. Sec.  300e-1
(5))   300e-1(5))  .
   (7) Health care service plan coverage for professional mental
health services may include community residential treatment services
that are alternatives to inpatient care and that are directly
affiliated with the plan or to which enrollees are referred by
providers affiliated with the plan.
   (i) If the plan utilizes arbitration to settle disputes, the plan
contracts shall set forth the type of disputes subject to
arbitration, the process to be utilized, and how it is to be
initiated.
   (j) A plan contract that provides benefits that accrue after a
certain time of confinement in a health care facility shall specify
what constitutes a day of confinement or the number of consecutive
hours of confinement that are requisite to the commencement of
benefits.
   (k) If a plan provides coverage for a dependent child who is over
18 years of age and enrolled as a full-time student at a secondary or
postsecondary educational institution, the following shall apply:
   (1) Any break in the school calendar shall not disqualify the
dependent child from coverage.
   (2) If the dependent child takes a medical leave of absence, and
the nature of the dependent child's injury, illness, or condition
would render the dependent child incapable of self-sustaining
employment, the provisions of subdivision (d) shall apply if the
dependent child is chiefly dependent on the subscriber for support
and maintenance.
   (3) (A) If the dependent child takes a medical leave of absence
from school, but the nature of the dependent child's injury, illness,
or condition does not meet the requirements of paragraph (2), the
dependent child's coverage shall not terminate for a period not to
exceed 12 months or until the date on which the coverage is scheduled
to terminate pursuant to the terms and conditions of the plan,
whichever comes first. The period of coverage under this paragraph
shall commence on the first day of the medical leave of absence from
the school or on the date the physician determines the illness
prevented the dependent child from attending school, whichever comes
first. Any break in the school calendar shall not disqualify the
dependent child from coverage under this paragraph.
   (B) Documentation or certification of the medical necessity for a
leave of absence from school shall be submitted to the plan at least
30 days prior to the medical leave of absence from the school, if the
medical reason for the absence and the absence are foreseeable, or
30 days after the start date of the medical leave of absence from
school and shall be considered prima facie evidence of entitlement to
coverage under this paragraph.
   (4) This subdivision shall not apply to a specialized health care
service plan or to a Medicare supplement plan.
  SEC. 2.  Section 10277 of the Insurance Code is amended to read:
   10277.  (a) A group health insurance policy that provides that
coverage of a dependent child of an employee or other member of the
covered group shall terminate upon attainment of the limiting age for
dependent children specified in the policy, shall also provide that
attainment of the limiting age shall not operate to terminate the
coverage of the child while the child is and continues to meet both
of the following criteria:
   (1) Incapable of self-sustaining employment by reason of a
physically or mentally disabling injury, illness, or condition.
   (2) Chiefly dependent upon the employee or member for support and
maintenance.
   (b) The insurer shall notify the employee or member that the
dependent child's coverage will terminate upon attainment of the
limiting age unless the employee or member submits proof of the
criteria described in paragraphs (1) and (2) of subdivision (a) to
the insurer within 60 days of the date of receipt of the
notification. The insurer shall send this notification to the
employee or member at least 90 days prior to the date the child
attains the limiting age. Upon receipt of a request by the employee
or member for continued coverage of the child and proof of the
criteria described in paragraphs (1) and (2) of subdivision (a), the
insurer shall determine whether the dependent child meets that
criteria before the child attains the limiting age. If the insurer
fails to make the determination by that date, it shall continue
coverage of the child pending its determination.
   (c) The insurer may subsequently request information about a
dependent child whose coverage is continued beyond the limiting age
under subdivision (a), but not more frequently than annually after
the two-year period following the child's attainment of the limiting
age.
   (d) If the employee or member changes carriers to another insurer
or to a health care service plan, the new insurer or plan shall
continue to provide coverage for the dependent child. The new plan or
insurer may request information about the dependent child initially
and not more frequently than annually thereafter to determine if the
child continues to satisfy the criteria in paragraphs (1) and (2) of
subdivision (a). The employee or member shall submit the information
requested by the new plan or insurer within 60 days of receiving the
request.
   (e) If a group health insurance policy provides coverage for a
dependent child who is over 18 years of age and enrolled as a
full-time student at a secondary or postsecondary educational
institution, the following shall apply:
   (1) Any break in the school calendar shall not disqualify the
dependent child from coverage.
   (2)  If the dependent child takes a medical leave of absence, and
the nature of the dependent child's injury, illness, or condition
would render the dependent child incapable of self-sustaining
employment, the provisions of subdivision (a) shall apply if the
dependent child is chiefly dependent on the policyholder for support
and maintenance.
   (3) (A) If the dependent child takes a medical leave of absence
from school, but the nature of the dependent child's injury, illness,
or condition does not meet the requirements of paragraph (2), the
dependent child's coverage shall not terminate for a period not to
exceed 12 months or until the date on which the coverage is scheduled
to terminate pursuant to the terms and conditions of the policy,
whichever comes first. The period of coverage under this paragraph
shall commence on the first day of the medical leave of absence from
the school or on the date the physician determines the illness
prevented the dependent child from attending school, whichever comes
first. Any break in the school calendar shall not disqualify the
dependent child from coverage under this paragraph.
   (B) Documentation or certification of the medical necessity for a
leave of absence from school shall be submitted to the insurer at
least 30 days prior to the medical leave of absence from the school,
if the medical reason for the absence and the absence are
foreseeable, or 30 days after the start date of the medical leave of
absence from school and shall be considered prima facie evidence of
entitlement to coverage under this paragraph.
   (4) This subdivision shall not apply to a policy of specialized
health insurance, Medicare supplement insurance, CHAMPUS-supplement
 ,  or TRICARE-supplement insurance policies, or to
hospital-only, accident-only, or specified disease insurance policies
that reimburse for hospital, medical, or surgical benefits.
   (f) Except as specified in this subdivision, under no
circumstances shall the limiting age under subdivision (a) be less
than 27 years of age. Nothing in this section shall require employers
 participating in the Public Employees' Medical and Hospital
Care Act  to pay the cost of coverage for dependents who
are at least 23 years of age, but less than 27 years of age.
Employees or  annuitants receiving benefits pursuant to the
Public Employees' Medical and Hospital Care Act  
members  may elect to provide coverage to their dependents who
are at least 23 years of age, but are less than 27 years of age,
provided they contribute the premium for that coverage. 
Nothing in this section shall require the University of California to
pay the cost of coverage for dependents who are at least 23 years of
age, but less than 27 years of age. Employees or annuitants of the
University of California may elect to provide coverage to their
dependents who are at least 23 years of age, but less than 27 years
of age, provided they contribute the premium for that coverage.
Nothing in this section shall require a city to pay the cost of
coverage for dependents who are at least 23 years of age, but less
than 27 years of age. Employees or annuitants of a city may elect to
provide coverage to their dependents who are at least 23 years of
age, but less than 27 years of age, provided they contribute the
premium for that coverage.  The provision requiring the
limiting age to be a minimum of 27 years of age shall not be
effective for employment contracts subject to collective bargaining
that are effective prior to January 1, 2010. Any employment contract
subject to collective bargaining that is issued, amended, or renewed
on or after January 1, 2010, shall be subject to the provisions of
this section.
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.