BILL NUMBER: AB 1602	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Bass

                        JANUARY 5, 2010

   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
coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1602, as introduced, Bass. Health care coverage.
   (1) Existing law provides various programs to provide health care
coverage to persons with limited financial resources, including the
Medi-Cal program and the Healthy Families Program.
   This bill would enact the California Patient Protection and
Affordable Health Choices Act. It would create the California
Cooperative Health Insurance Purchasing Exchange (Cal-CHIPE) in state
government to be governed by an executive board appointed, in an
unspecified manner, by the Governor and the Legislature. The bill
would specify the powers and duties of the board relative to
determining eligibility for enrollment in Cal-CHIPE and arranging for
coverage with participating health, dental, and vision coverage. The
bill would create the California Health Trust Fund and enact other
related provisions. All of these provisions would become operative at
an unspecified date. The bill would also state the intent of the
Legislature to enact the necessary statutory changes relative to
federal health care reforms.
   (2) 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, and makes a
willful violation of that act a crime. Existing law also provides for
the regulation of health insurers by the Department of Insurance.
Existing law requires every health care service plan contract that
provides for termination of coverage of a dependent child upon the
attainment of the limiting age for dependent children to also provide
that attainment of the limiting age shall not terminate the coverage
of a child under certain conditions. Existing law establishes
similar requirements for group health insurance policies that provide
coverage of dependent children.
   This bill, at an unspecified date, would prohibit, with specified
exceptions, the limiting age from being less than 26 years of age for
dependent children covered by these health insurance plan contracts
and insurance policies. The bill would also authorize certain public
employees and annuitants to elect to provide coverage to their
dependents who would otherwise be ineligible for coverage by
contributing the premium for that coverage.
   Because a willful violation of these requirements with respect to
a health care service plan would be a crime, the bill would impose a
state-mandated local program.
   (3) 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.  This act shall be known and may be cited as the
California Patient Protection and Affordable Health Choices Act.
  SEC. 2.  It is the intent of the Legislature to enact the necessary
statutory changes provided for in and consistent with federal health
reform. In doing so, it in the intent of the Legislature to do all
of the following:
   (a) Ensure that all Californians have access to affordable,
comprehensive, quality health care.
   (b) Leverage available federal funds to the greatest extent
possible.
   (c) Strengthen the health care delivery system through (1)
enhanced access to effective primary and preventive services,
including management of chronic illnesses; (2) investment in training
the health care workforce; (3) promotion of cost-effective health
technologies; and (4) implementation of meaningful, systemwide cost
containment strategies.
   (d) Guarantee the availability and renewability of health coverage
through the private health insurance market to individuals.
   (e) 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.
   (f) 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.  (a) There is in state government the California
Cooperative Health Insurance Purchasing Exchange, which shall be
known as Cal-CHIPE. The exchange shall be governed by an executive
board consisting of ____ members. Of the members of the board, ____
shall be appointed by the Governor, ____ shall be appointed by the
Senate Committee on Rules, and ____ shall be appointed by the Speaker
of the Assembly.
   (b) The board shall be responsible for establishing Cal-CHIPE and
administering this section.
   (c) The board may do all of the following consistent with the
standards, regulations, and rules promulgated by the United States
Secretary of Health and Human Services:
   (1) Determine eligibility, enrollment, and disenrollment criteria
and processes for Cal-CHIPE.
   (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.

   (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.
   (6) Determine rates paid to participating health, dental, and
vision care plans.
   (7) Provide, or make available, coverage through participating
health plans in Cal-CHIPE.
   (8) Provide, or make available, coverage through participating
dental and vision care plans in Cal-CHIPE.
   (9) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.
   (10) Determine and approve the benefit designs and cost-sharing
provisions 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-CHIPE.
   (15) Adopt rules and regulations, as necessary.
   (16) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenues in the fund, and if
sufficient revenue is not available to pay estimated expenditures,
institute appropriate measures to ensure fiscal solvency.
   (17) Establish the criteria and procedures through which employers
direct employees' premium dollars, withheld under the terms of a
cafeteria plan pursuant to Section 4801 of the Unemployment Insurance
Code, to Cal-CHIPE to be credited against the employees' premium
obligations.
   (18) Share information obtained pursuant to this section with the
Employment Development Department solely for the purpose of the
administration and enforcement of this section.
   (19) Exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed by this
section.
   (d) This section shall become operative on ____ ____, ____.
   (e) The board shall provide health care coverage pursuant to this
section on and after _____ ____, ____.
  SEC. 4.  (a) The California Health Trust Fund is hereby created in
the State Treasury for the purpose of this section and Section 3 of
this act. 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 of the California Cooperative Health Insurance
Purchasing Exchange 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 and used for purposes consistent with
the fund.
   (d) The board, subject to federal approval and an appropriation
therefor, shall pay the nonfederal share of cost from the fund for
individuals eligible under that federal approval. Revenues in the
fund shall be used, upon appropriation, to the extent allowable under
federal law, as state matching funds for receipt of federal funds.
   (e) This section shall become operative on ____ ____, ____.
  SEC. 5.  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, under no circumstances
shall the limiting age be less than 26 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 26 years
of age. Employees or annuitants receiving benefits pursuant to the
Public Employees' Medical and Hospital Care Act may elect to provide
coverage to their dependents who are at least 23 years of age, but
are less than 26 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 26 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 26 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 26 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 26 years of age, provided
they contribute the premium for that coverage. The provision
requiring the limiting age to be up to 26 years of age shall not be
effective for employment contracts subject to collective bargaining
that are effective prior to ____ ____, ____. Any employment contract
subject to collective bargaining that is issued, amended, or renewed
after ____, ____ ____, shall be subject to the provisions of 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 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)).
   (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. 6.  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) Except as specified in this subdivision, under no
circumstances shall the limiting age be less than 26 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 26 years of age. Employees or annuitants receiving benefits
pursuant to the Public Employees' Medical and Hospital Care Act may
elect to provide coverage to their dependents who are at least 23
years of age, but are less than 26 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 26 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 26 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 26 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 26 years of age, provided they contribute the premium for
that coverage. The provision requiring the limiting age to be up to
26 years of age shall not be effective for employment contracts
subject to collective bargaining that are effective prior to ____
____, ____. Any employment contract subject to collective bargaining
that is issued, amended, or renewed after ____, ____, shall be
subject to the provisions of this section.  
   (e) 
    (f)  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.
  SEC. 7.  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.