BILL NUMBER: AB 1602	CHAPTERED
	BILL TEXT

	CHAPTER  655
	FILED WITH SECRETARY OF STATE  SEPTEMBER 30, 2010
	APPROVED BY GOVERNOR  SEPTEMBER 30, 2010
	PASSED THE SENATE  AUGUST 24, 2010
	PASSED THE ASSEMBLY  AUGUST 25, 2010
	AMENDED IN SENATE  AUGUST 20, 2010
	AMENDED IN SENATE  AUGUST 17, 2010
	AMENDED IN SENATE  AUGUST 2, 2010
	AMENDED IN SENATE  JUNE 24, 2010
	AMENDED IN ASSEMBLY  APRIL 15, 2010
	AMENDED IN ASSEMBLY  APRIL 8, 2010

INTRODUCED BY   Assembly Member John A. Perez
   (Principal coauthors: Assembly Members Bass and Monning)
   (Principal coauthors: Senators Alquist and Steinberg)

                        JANUARY 5, 2010

   An act to amend Sections 15438 and 15439 of, and to add Sections
100501, 100502, 100503, 100504, 100505, 100506, 100507, 100508,
100520, and 100521 to, the Government Code, to add Section 1366.6 to
the Health and Safety Code, and to add Section 10112.3 to the
Insurance Code, relating to health care coverage, and making an
appropriation therefor.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1602, John A. Perez. California Health Benefit Exchange.
    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. Existing law
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of its provisions a crime. Existing law also provides for
the regulation of health insurers by the Department of Insurance.
   Existing law, the federal Patient Protection and Affordable Care
Act (PPACA), requires each state to, by January 1, 2014, establish an
American Health Benefit Exchange that facilitates the purchase of
qualified health plans by qualified individuals and qualified small
employers, as specified, and meets certain other requirements.
   This bill would enact the California Patient Protection and
Affordable Care Act, and would, contingent on the enactment of SB
900, which would create the California Health Benefit Exchange (the
Exchange), specify the powers and duties of the board governing the
Exchange relative to determining eligibility for enrollment in the
Exchange and arranging for coverage under qualified health plans, and
would require the board to facilitate the purchase of qualified
health plans through the Exchange by qualified individuals and
qualified small employers by January 1, 2014. The bill would create
the California Health Trust Fund as a continuously appropriated fund
and would make the implementation of these provisions contingent on a
determination by the board that sufficient financial resources exist
or will exist in the fund, as specified. The bill would enact other
related provisions.
   The bill would impose various requirements on participating plans
and insurers and, commencing January 1, 2014, on nonparticipating
plans and insurers, as specified. Because a willful violation of
these requirements by a health care service plan would be a crime,
the bill would impose a state-mandated local program.
   Under existing law, the California Health Facilities Financing
Authority Act, the California Health Facilities Authority is
empowered to make loans under certain conditions from the
continuously appropriated California Health Facilities Financing
Authority Fund to nonprofit corporations or associations for
financing or refinancing the acquisition, construction, or remodeling
of health facilities.
   This bill would authorize the authority to provide a working
capital loan of up to $5 million to assist in the establishment and
operation of the California Health Benefit Exchange. The bill would
require that loans awarded under the bill be made from the California
Health Facilities Authority Fund and would require repayment of the
loan by a specified date. Because the bill would expand the purposes
for which a continuously appropriated fund may be used, it would make
an appropriation.
   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.
   Appropriation: 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 Care Act.
  SEC. 2.  It is the intent of the Legislature to enact the necessary
statutory changes to California law in order to establish an
American Health Benefit Exchange in California and its administrative
authority in a manner that is consistent with the federal Patient
Protection and Affordable Care Act (Public Law 111-148), as amended
by the federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152), hereafter the federal act. In doing so, it is
the intent of the Legislature to do all of the following:
   (a) Reduce the number of uninsured Californians by creating an
organized, transparent marketplace for Californians to purchase
affordable, quality health care coverage, to claim available federal
tax credits and cost-sharing subsidies, and to meet the personal
responsibility requirements imposed under the federal act.
   (b) Strengthen the health care delivery system.
   (c) Guarantee the availability and renewability of health care
coverage through the private health insurance market to qualified
individuals and qualified small employers.
   (d) Require that health care service plans and health insurers
issuing coverage in the individual and small employer markets compete
on the basis of price, quality, and service, and not on risk
selection.
   (e) Meet the requirements of the federal act and all applicable
federal guidance and regulations.
  SEC. 3.  Section 15438 of the Government Code is amended to read:
   15438.  The authority may do any of the following:
   (a) Adopt bylaws for the regulation of its affairs and the conduct
of its business.
   (b) Adopt an official seal.
   (c) Sue and be sued in its own name.
   (d) Receive and accept from any agency of the United States, any
agency of the state, or any municipality, county, or other political
subdivision thereof, or from any individual, association, or
corporation gifts, grants, or donations of moneys for achieving any
of the purposes of this chapter.
   (e) Engage the services of private consultants to render
professional and technical assistance and advice in carrying out the
purposes of this part.
   (f) Determine the location and character of any project to be
financed under this part, and to acquire, construct, enlarge,
remodel, renovate, alter, improve, furnish, equip, fund, finance,
own, maintain, manage, repair, operate, lease as lessee or lessor,
and regulate the same, to enter into contracts for any or all of
those purposes, to enter into contracts for the management and
operation of a project or other health facilities owned by the
authority, and to designate a participating health institution as its
agent to determine the location and character of a project
undertaken by that participating health institution under this
chapter and as the agent of the authority, to acquire, construct,
enlarge, remodel, renovate, alter, improve, furnish, equip, own,
maintain, manage, repair, operate, lease as lessee or lessor, and
regulate the same, and as the agent of the authority, to enter into
contracts for any or all of those purposes, including contracts for
the management and operation of that project or other health
facilities owned by the authority.
   (g) Acquire, directly or by and through a participating health
institution as its agent, by purchase solely from funds provided
under the authority of this part, or by gift or devise, and to sell,
by installment sale or otherwise, any lands, structures, real or
personal property, rights, rights-of-way, franchises, easements, and
other interests in lands, including lands lying under water and
riparian rights, that are located within the state that the authority
determines necessary or convenient for the acquisition,
construction, or financing of a health facility or the acquisition,
construction, financing, or operation of a project, upon the terms
and at the prices considered by the authority to be reasonable and
that can be agreed upon between the authority and the owner thereof,
and to take title thereto in the name of the authority or in the name
of a participating health institution as its agent.
   (h) Receive and accept from any source loans, contributions, or
grants for, or in aid of, the construction, financing, or refinancing
of a project or any portion of a project in money, property, labor,
or other things of value.
   (i) Make secured or unsecured loans to, or purchase secured or
unsecured loans of, any participating health institution in
connection with the financing of a project or working capital in
accordance with an agreement between the authority and the
participating health institution. However, no loan to finance a
project shall exceed the total cost of the project, as determined by
the participating health institution and approved by the authority.
Funds for secured loans may be provided from the California Health
Facilities Financing Fund pursuant to subdivision (b) of Section
15439 to small or rural health facilities pursuant to authority
guidelines.
   (j) Make secured or unsecured loans to, or purchase secured or
unsecured loans of, any participating health institution in
accordance with an agreement between the authority and the
participating health institution to refinance indebtedness incurred
by that participating health institution in connection with projects
undertaken or for health facilities acquired or for working capital.
Funds for secured loans may be provided from the California Health
Facilities Financing Fund pursuant to subdivision (b) of Section
15439 to small or rural health facilities pursuant to authority
guidelines.
   (k) Mortgage all or any portion of interest of the authority in a
project or other health facilities and the property on which that
project or other health facilities are located, whether owned or
thereafter acquired, including the granting of a security interest in
any property, tangible or intangible, and to assign or pledge all or
any portion of the interests of the authority in mortgages, deeds of
trust, indentures of mortgage or trust, or similar instruments,
notes, and security interests in property, tangible or intangible, of
participating health institutions to which the authority has made
loans, and the revenues therefrom, including payments or income from
any thereof owned or held by the authority, for the benefit of the
holders of bonds issued to finance the project or health facilities
or issued to refund or refinance outstanding indebtedness of
participating health institutions as permitted by this part.
   (  l  ) Lease to a participating health institution the
project being financed or other health facilities conveyed to the
authority in connection with that financing, upon the terms and
conditions the authority determines proper, charge and collect rents
therefor, terminate the lease upon the failure of the lessee to
comply with any of the obligations of the lease, and include in that
lease, if desired, provisions granting the lessee options to renew
the term of the lease for the period or periods and at the rent, as
determined by the authority, purchase any or all of the health
facilities or that upon payment of all of the indebtedness incurred
by the authority for the financing of that project or health
facilities or for refunding outstanding indebtedness of a
participating health institution, then the authority may convey any
or all of the project or the other health facilities to the lessee or
lessees thereof with or without consideration.
   (m) Charge and equitably apportion among participating health
institutions, the administrative costs and expenses incurred by the
authority in the exercise of the powers and duties conferred by this
part.
   (n) Obtain, or aid in obtaining, from any department or agency of
the United States or of the state, any private company, or any
insurance or guarantee as to, of, or for the payment or repayment of,
interest or principal, or both, or any part thereof, on any loan,
lease, or obligation, or any instrument evidencing or securing the
loan, lease, or obligation, made or entered into pursuant to this
part; and notwithstanding any other provisions of this part, to enter
into any agreement, contract, or any other instrument whatsoever
with respect to that insurance or guarantee, to accept payment in the
manner and form as provided therein in the event of default by a
participating health institution, and to assign that insurance or
guarantee as security for the authority's bonds.
   (o) Enter into any and all agreements or contracts, including
agreements for liquidity and credit enhancement, interest rate swaps
or hedges, execute any and all instruments, and do and perform any
and all acts or things necessary, convenient, or desirable for the
purposes of the authority or to carry out any power expressly granted
by this part.
   (p) Invest any moneys held in reserve or sinking funds or any
moneys not required for immediate use or disbursement, at the
discretion of the authority, in any obligations authorized by the
resolution authorizing the issuance of the bonds secured thereof or
authorized by law for the investment of trust funds in the custody of
the Treasurer.
   (q) Award grants to any eligible clinic pursuant to Section
15438.6.
   (r) Award grants to any eligible health facility pursuant to
Section 15438.7.
   (s) (1) Notwithstanding any other provision of law, provide a
working capital loan of up to five million dollars ($5,000,000) to
assist in the establishment and operation of the California Health
Benefit Exchange (Exchange) established under Section 100500. The
authority may require any information it deems necessary and prudent
prior to providing a loan to the Exchange and may require any term,
condition, security, or repayment provision it deems necessary in the
event the authority chooses to provide a loan. Under no
circumstances shall the authority be required to provide a loan to
the Exchange.
   (2) Prior to the authority providing a loan to the Exchange, a
majority of the board of the Exchange shall be appointed and shall
demonstrate, to the satisfaction of the authority, that the federal
planning and establishment grants made available to the Exchange by
the United States Secretary of Health and Human Services are
insufficient or will not be released in a timely manner to allow the
Exchange to meet the necessary requirements of the federal Patient
Protection and Affordable Care Act (Public Law 111-148).
   (3) The Exchange shall repay a loan made under this subdivision no
later than June 30, 2016, and shall pay interest at the rate paid on
moneys in the Pooled Money Investment Account.
  SEC. 4.  Section 15439 of the Government Code is amended to read:
   15439.  (a) The California Health Facilities Authority Fund is
continued in existence in the State Treasury as the California Health
Facilities Financing Authority Fund. All money in the fund is hereby
continuously appropriated to the authority for carrying out the
purposes of this division. The authority may pledge any or all of the
moneys in the fund as security for payment of the principal of, and
interest on, any particular issuance of bonds issued pursuant to this
part, or any particular secured or unsecured loan made pursuant to
subdivision (i), (j), or (s) of Section 15438, or for a grant awarded
pursuant to subdivision (b) of Section 15438.7, and, for that
purpose or as necessary or convenient to the accomplishment of any
other purpose of the authority, may divide the fund into separate
accounts. All moneys accruing to the authority pursuant to this part
from whatever source shall be deposited in the fund.
   (b) Subject to the priorities that may be created by the pledge of
particular moneys in the fund to secure any issuance of bonds of the
authority, and subject further to the cost of loans provided by the
authority pursuant to subdivisions (i), (j), or (s) of Section 15438
and to the cost of grants provided by the authority pursuant to
Section 15438.7, and subject further to any reasonable costs which
may be incurred by the authority in administering the program
authorized by this division, all moneys in the fund derived from any
source shall be held in trust for the security and payment of bonds
of the authority and shall not be used or pledged for any other
purpose so long as the bonds are outstanding and unpaid. However,
nothing in this section shall limit the power of the authority to
make loans with the proceeds of bonds in accordance with the terms of
the resolution authorizing the same.
   (c) Pursuant to any agreements with the holders of particular
bonds pledging any particular assets, revenues, or moneys, the
authority may create separate accounts in the fund to manage assets,
revenues, or moneys in the manner set forth in the agreements.
   (d) The authority may, from time to time, direct the State
Treasurer to invest moneys in the fund that are not required for its
current needs, including proceeds from the sale of any bonds, in the
eligible securities specified in Section 16430 as the agency shall
designate. The authority may direct the State Treasurer to deposit
moneys in interest-bearing accounts in state or national banks or
other financial institutions having principal offices in this state.
The authority may alternatively require the transfer of moneys in the
fund to the Surplus Money Investment Fund for investment pursuant to
Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of
Division 4. All interest or other increment resulting from an
investment or deposit shall be deposited in the fund, notwithstanding
Section 16305.7. Moneys in the fund shall not be subject to transfer
to any other fund pursuant to any provision of Part 2 (commencing
with Section 16300) of Division 4, excepting the Surplus Money
Investment Fund.
   (e) All moneys accruing to the authority from whatever source
shall be deposited in the fund.
  SEC. 5.  Section 100501 is added to the Government Code, to read:
   100501.  For purposes of this title, the following definitions
shall apply:
   (a) "Board" means the board described in subdivision (a) of
Section 100500.
   (b) "Carrier" means either a private health insurer holding a
valid outstanding certificate of authority from the Insurance
Commissioner or a health care service plan, as defined under
subdivision (f) of Section 1345 of the Health and Safety Code,
licensed by the Department of Managed Health Care.
   (c) "Exchange" means the California Health Benefit Exchange
established by Section 100500.
   (d) "Federal act" means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the federal
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152), and any amendments to, or regulations or guidance issued
under, those acts.
   (e) "Fund" means the California Health Trust Fund established by
Section 100520.
   (f) "Health plan" and "qualified health plan" have the same
meanings as those terms are defined in Section 1301 of the federal
act.
   (g) "SHOP Program" means the Small Business Health Options Program
established by subdivision (m) of Section 100502.
   (h) "Supplemental coverage" means coverage through a specialized
health care service plan contract, as defined in subdivision (o) of
Section 1345 of the Health and Safety Code, or a specialized health
insurance policy, as defined in Section 106 of the Insurance Code.
  SEC. 6.  Section 100502 is added to the Government Code, to read:
   100502.  The board shall, at a minimum, do all of the following to
implement Section 1311 of the federal act:
   (a) Implement procedures for the certification, recertification,
and decertification, consistent with guidelines established by the
United States Secretary of Health and Human Services, of health plans
as qualified health plans. The board shall require health plans
seeking certification as qualified health plans to do all of the
following:
   (1) Submit a justification for any premium increase prior to
implementation of the increase. The plans shall prominently post that
information on their Internet Web sites. The board shall take this
information, and the information and the recommendations provided to
the board by the Department of Insurance or the Department of Managed
Health Care under paragraph (1) of subdivision (b) of Section 2794
of the federal Public Health Service Act, into consideration when
determining whether to make the health plan available through the
Exchange. The board shall take into account any excess of premium
growth outside the Exchange as compared to the rate of that growth
inside the Exchange, including information reported by the Department
of Insurance and the Department of Managed Health Care.
   (2) (A) Make available to the public and submit to the board, the
United States Secretary of Health and Human Services, and the
Insurance Commissioner or the Department of Managed Health Care, as
applicable, accurate and timely disclosure of the following
information:
   (i) Claims payment policies and practices.
   (ii) Periodic financial disclosures.
   (iii) Data on enrollment.
   (iv) Data on disenrollment.
   (v) Data on the number of claims that are denied.
   (vi) Data on rating practices.
   (vii) Information on cost sharing and payments with respect to any
out-of-network coverage.
   (viii) Information on enrollee and participant rights under Title
I of the federal act.
   (ix) Other information as determined appropriate by the United
States Secretary of Health and Human Services.
   (B) The information required under subparagraph (A) shall be
provided in plain language, as defined in subparagraph (B) of
paragraph (3) of subdivision (e) of Section 1311 of the federal act.
   (3) Permit individuals to learn, in a timely manner upon the
request of the individual, the amount of cost sharing, including, but
not limited to, deductibles, copayments, and coinsurance, under the
individual's plan or coverage that the individual would be
responsible for paying with respect to the furnishing of a specific
item or service by a participating provider. At a minimum, this
information shall be made available to the individual through an
Internet Web site and through other means for individuals without
access to the Internet.
   (b) Provide for the operation of a toll-free telephone hotline to
respond to requests for assistance.
   (c) Maintain an Internet Web site through which enrollees and
prospective enrollees of qualified health plans may obtain
standardized comparative information on those plans.
   (d) Assign a rating to each qualified health plan offered through
the Exchange in accordance with the criteria developed by the United
States Secretary of Health and Human Services.
   (e) Utilize a standardized format for presenting health benefits
plan options in the Exchange, including the use of the uniform
outline of coverage established under Section 2715 of the federal
Public Health Service Act.
   (f) Inform individuals of eligibility requirements for the
Medi-Cal program, the Healthy Families Program, or any applicable
state or local public program and, if, through screening of the
application by the Exchange, the Exchange determines that an
individual is eligible for any such program, enroll that individual
in the program.
   (g) Establish and make available by electronic means a calculator
to determine the actual cost of coverage after the application of any
premium tax credit under Section 36B of the Internal Revenue Code of
1986 and any cost-sharing reduction under Section 1402 of the
federal act.
   (h) Grant a certification attesting that, for purposes of the
individual responsibility penalty under Section 5000A of the Internal
Revenue Code of 1986, an individual is exempt from the individual
requirement or from the penalty imposed by that section because of
either of the following:
   (1) There is no affordable qualified health plan available through
the Exchange or the individual's employer covering the individual.
   (2) The individual meets the requirements for any other exemption
from the individual responsibility requirement or penalty.
   (i) Transfer to the Secretary of the Treasury all of the
following:
   (1) A list of the individuals who are issued a certification under
subdivision (h), including the name and taxpayer identification
number of each individual.
   (2) The name and taxpayer identification number of each individual
who was an employee of an employer but who was determined to be
eligible for the premium tax credit under Section 36B of the Internal
Revenue Code of 1986 because of either of the following:
   (A) The employer did not provide minimum essential coverage.
   (B) The employer provided the minimum essential coverage but it
was determined under subparagraph (C) of paragraph (2) of subsection
(c) of Section 36B of the Internal Revenue Code of 1986 to either be
unaffordable to the employee or not provide the required minimum
actuarial value.
   (3) The name and taxpayer identification number of each individual
who notifies the Exchange under paragraph (4) of subsection (b) of
Section 1411 of the federal act that they have changed employers and
of each individual who ceases coverage under a qualified health plan
during a plan year and the effective date of that cessation.
   (j) Provide to each employer the name of each employee of the
employer described in paragraph (2) of subdivision (i) who ceases
coverage under a qualified health plan during a plan year and the
effective date of that cessation.
   (k) Perform duties required of, or delegated to, the Exchange by
the United States Secretary of Health and Human Services or the
Secretary of the Treasury related to determining eligibility for
premium tax credits, reduced cost sharing, or individual
responsibility exemptions.
   (l) Establish the navigator program in accordance with subdivision
(i) of Section 1311 of the federal act. Any entity chosen by the
Exchange as a navigator shall do all of the following:
   (1) Conduct public education activities to raise awareness of the
availability of qualified health plans.
   (2) Distribute fair and impartial information concerning
enrollment in qualified health plans, and the availability of premium
tax credits under Section 36B of the Internal Revenue Code of 1986
and cost-sharing reductions under Section 1402 of the federal act.
   (3) Facilitate enrollment in qualified health plans.
   (4) Provide referrals to any applicable office of health insurance
consumer assistance or health insurance ombudsman established under
Section 2793 of the federal Public Health Service Act, or any other
appropriate state agency or agencies, for any enrollee with a
grievance, complaint, or question regarding his or her health plan,
coverage, or a determination under that plan or coverage.
   (5) Provide information in a manner that is culturally and
linguistically appropriate to the needs of the population being
served by the Exchange.
   (m) Establish the Small Business Health Options Program, separate
from the activities of the board related to the individual market, to
assist qualified small employers in facilitating the enrollment of
their employees in qualified health plans offered through the
Exchange in the small employer market in a manner consistent with
paragraph (2) of subdivision (a) of Section 1312 of the federal act.
  SEC. 7.  Section 100503 is added to the Government Code, to read:
   100503.  In addition to meeting the minimum requirements of
Section 1311 of the federal act, the board shall do all of the
following:
   (a) Determine the criteria and process for eligibility,
enrollment, and disenrollment of enrollees and potential enrollees in
the Exchange and coordinate that process with the state and local
government entities administering other health care coverage
programs, including the State Department of Health Care Services, the
Managed Risk Medical Insurance Board, and California counties, in
order to ensure consistent eligibility and enrollment processes and
seamless transitions between coverage.
   (b) Develop processes to coordinate with the county entities that
administer eligibility for the Medi-Cal program and the entity that
determines eligibility for the Healthy Families Program, including,
but not limited to, processes for case transfer, referral, and
enrollment in the Exchange of individuals applying for assistance to
those entities, if allowed or required by federal law.
   (c) Determine the minimum requirements a carrier must meet to be
considered for participation in the Exchange, and the standards and
criteria for selecting qualified health plans to be offered through
the Exchange that are in the best interests of qualified individuals
and qualified small employers. The board shall consistently and
uniformly apply these requirements, standards, and criteria to all
carriers. In the course of selectively contracting for health care
coverage offered to qualified individuals and qualified small
employers through the Exchange, the board shall seek to contract with
carriers so as to provide health care coverage choices that offer
the optimal combination of choice, value, quality, and service.
   (d) Provide, in each region of the state, a choice of qualified
health plans at each of the five levels of coverage contained in
subdivisions (d) and (e) of Section 1302 of the federal act.
   (e) Require, as a condition of participation in the Exchange,
carriers to fairly and affirmatively offer, market, and sell in the
Exchange at least one product within each of the five levels of
coverage contained in subdivisions (d) and (e) of Section 1302 of the
federal act. The board may require carriers to offer additional
products within each of those five levels of coverage. This
subdivision shall not apply to a carrier that solely offers
supplemental coverage in the Exchange under paragraph (10) of
subdivision (a) of Section 100504.
   (f) (1) Require, as a condition of participation in the Exchange,
carriers that sell any products outside the Exchange to do both of
the following:
   (A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
   (B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small employers
purchasing coverage outside the Exchange.
   (2) For purposes of this subdivision, "product" does not include
contracts entered into pursuant to Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code between the Managed Risk
Medical Insurance Board and carriers
                   for enrolled Healthy Families beneficiaries or
contracts entered into pursuant to Chapter 7 (commencing with Section
14000) of, or Chapter 8 (commencing with Section 14200) of, Part 3
of Division 9 of the Welfare and Institutions Code between the State
Department of Health Care Services and carriers for enrolled Medi-Cal
beneficiaries.
   (g) Determine when an enrollee's coverage commences and the extent
and scope of coverage.
   (h) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.
   (i) Determine and approve cost-sharing provisions for qualified
health plans.
   (j) Establish uniform billing and payment policies for qualified
health plans offered in the Exchange to ensure consistent enrollment
and disenrollment activities for individuals enrolled in the
Exchange.
   (k) Undertake activities necessary to market and publicize the
availability of health care coverage and federal subsidies through
the Exchange. The board shall also undertake outreach and enrollment
activities that seek to assist enrollees and potential enrollees with
enrolling and reenrolling in the Exchange in the least burdensome
manner, including populations that may experience barriers to
enrollment, such as the disabled and those with limited English
language proficiency.
   (l) Select and set performance standards and compensation for
navigators selected under subdivision (l) of Section 100502.
   (m) Employ necessary staff.
   (1) The board shall hire a chief fiscal officer, a chief
operations officer, a director for the SHOP Exchange, a director of
Health Plan Contracting, a chief technology and information officer,
a general counsel, and other key executive positions, as determined
by the board, who shall be exempt from civil service.
   (2) (A) The board shall set the salaries for the exempt positions
described in paragraph (1) and subdivision (i) of Section 100500 in
amounts that are reasonably necessary to attract and retain
individuals of superior qualifications. The salaries shall be
published by the board in the board's annual budget. The board's
annual budget shall be posted on the Internet Web site of the
Exchange. To determine the compensation for these positions, the
board shall cause to be conducted, through the use of independent
outside advisors, salary surveys of both of the following:
   (i) Other state and federal health insurance exchanges that are
most comparable to the Exchange.
   (ii) Other relevant labor pools.
   (B) The salaries established by the board under subparagraph (A)
shall not exceed the highest comparable salary for a position of that
type, as determined by the surveys conducted pursuant to
subparagraph (A).
   (C) The Department of Personnel Administration shall review the
methodology used in the surveys conducted pursuant to subparagraph
(A).
   (3) The positions described in paragraph (1) and subdivision (i)
of Section 100500 shall not be subject to otherwise applicable
provisions of the Government Code or the Public Contract Code and,
for those purposes, the Exchange shall not be considered a state
agency or public entity.
   (n) Assess a charge on the qualified health plans offered by
carriers that is reasonable and necessary to support the development,
operations, and prudent cash management of the Exchange. This charge
shall not affect the requirement under Section 1301 of the federal
act that carriers charge the same premium rate for each qualified
health plan whether offered inside or outside the Exchange.
   (o) Authorize expenditures, as necessary, from the California
Health Trust Fund to pay program expenses to administer the Exchange.

   (p) Keep an accurate accounting of all activities, receipts, and
expenditures, and annually submit to the United States Secretary of
Health and Human Services a report concerning that accounting.
Commencing January 1, 2016, the board shall conduct an annual audit.
   (q) (1) Annually prepare a written report on the implementation
and performance of the Exchange functions during the preceding fiscal
year, including, at a minimum, the manner in which funds were
expended and the progress toward, and the achievement of, the
requirements of this title. This report shall be transmitted to the
Legislature and the Governor and shall be made available to the
public on the Internet Web site of the Exchange. A report made to the
Legislature pursuant to this subdivision shall be submitted pursuant
to Section 9795.
   (2) In addition to the report described in paragraph (1), the
board shall be responsive to requests for additional information from
the Legislature, including providing testimony and commenting on
proposed state legislation or policy issues. The Legislature finds
and declares that activities including, but not limited to,
responding to legislative or executive inquiries, tracking and
commenting on legislation and regulatory activities, and preparing
reports on the implementation of this title and the performance of
the Exchange, are necessary state requirements and are distinct from
the promotion of legislative or regulatory modifications referred to
in subdivision (d) of Section 100520.
   (r) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenue in the fund, and if
sufficient revenue is not available to pay estimated expenditures,
institute appropriate measures to ensure fiscal solvency.
   (s) Exercise all powers reasonably necessary to carry out and
comply with the duties, responsibilities, and requirements of this
act and the federal act.
   (t) Consult with stakeholders relevant to carrying out the
activities under this title, including, but not limited to, all of
the following:
   (1) Health care consumers who are enrolled in health plans.
   (2) Individuals and entities with experience in facilitating
enrollment in health plans.
   (3) Representatives of small businesses and self-employed
individuals.
   (4) The State Medi-Cal Director.
   (5) Advocates for enrolling hard-to-reach populations.
   (u) Facilitate the purchase of qualified health plans in the
Exchange by qualified individuals and qualified small employers no
later than January 1, 2014.
   (v) Report, or contract with an independent entity to report, to
the Legislature by December 1, 2018, on whether to adopt the option
in paragraph (3) of subdivision (c) of Section 1312 of the federal
act to merge the individual and small employer markets. In its
report, the board shall provide information, based on at least two
years of data from the Exchange, on the potential impact on rates
paid by individuals and by small employers in a merged individual and
small employer market, as compared to the rates paid by individuals
and small employers if a separate individual and small employer
market is maintained. A report made pursuant to this subdivision
shall be submitted pursuant to Section 9795.
   (w) With respect to the SHOP Program, collect premiums and
administer all other necessary and related tasks, including, but not
limited to, enrollment and plan payment, in order to make the
offering of employee plan choice as simple as possible for qualified
small employers.
   (x) Require carriers participating in the Exchange to immediately
notify the Exchange, under the terms and conditions established by
the board when an individual is or will be enrolled in or disenrolled
from any qualified health plan offered by the carrier.
   (y) Ensure that the Exchange provides oral interpretation services
in any language for individuals seeking coverage through the
Exchange and makes available a toll-free telephone number for the
hearing and speech impaired. The board shall ensure that written
information made available by the Exchange is presented in a plainly
worded, easily understandable format and made available in prevalent
languages.
  SEC. 8.  Section 100504 is added to the Government Code, to read:
   100504.  (a)  The board may do the following:
   (1) With respect to individual coverage made available in the
Exchange, collect premiums and assist in the administration of
subsidies.
   (2) Enter into contracts.
   (3) Sue and be sued.
   (4) Receive and accept gifts, grants, or donations of moneys from
any agency of the United States, any agency of the state, any
municipality, county, or other political subdivision of the state.
   (5) Receive and accept gifts, grants, or donations from
individuals, associations, private foundations, or corporations, in
compliance with the conflict of interest provisions to be adopted by
the board at a public meeting.
   (6) Adopt rules and regulations, as necessary. Until January 1,
2016, any necessary rules and regulations may be adopted as emergency
regulations in accordance with the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2). The adoption of these regulations shall be deemed to be
an emergency and necessary for the immediate preservation of the
public peace, health and safety, or general welfare.
   (7) Collaborate with the State Department of Health Care Services
and the Managed Risk Medical Insurance Board, to the extent possible,
to allow an individual the option to remain enrolled with his or her
carrier and provider network in the event the individual experiences
a loss of eligibility of premium tax credits and becomes eligible
for the Medi-Cal program or the Healthy Families Program, or loses
eligibility for the Medi-Cal program or the Healthy Families Program
and becomes eligible for premium tax credits through the Exchange.
   (8) Share information with relevant state departments, consistent
with the confidentiality provisions in Section 1411 of the federal
act, necessary for the administration of the Exchange.
   (9) Require carriers participating in the Exchange to make
available to the Exchange and regularly update an electronic
directory of contracting health care providers so that individuals
seeking coverage through the Exchange can search by health care
provider name to determine which health plans in the Exchange include
that health care provider in their network. The board may also
require a carrier to provide regularly updated information to the
Exchange as to whether a health care provider is accepting new
patients for a particular health plan. The Exchange may provide an
integrated and uniform consumer directory of health care providers
indicating which carriers the providers contract with and whether the
providers are currently accepting new patients. The Exchange may
also establish methods by which health care providers may transmit
relevant information directly to the Exchange, rather than through a
carrier.
   (10) Make available supplemental coverage for enrollees of the
Exchange to the extent permitted by the federal act, provided that no
General Fund money is used to pay the cost of that coverage. Any
supplemental coverage offered in the Exchange shall be subject to the
charge imposed under subdivision (n) of Section 100503.
   (b) The Exchange shall only collect information from individuals
or designees of individuals necessary to administer the Exchange and
consistent with the federal act.
   (c) The board shall have the authority to standardize products to
be offered through the Exchange.
  SEC. 9.  Section 100505 is added to the Government Code, to read:
   100505.  The board shall establish and use a competitive process
to select participating carriers and any other contractors under this
title. Any contract entered into pursuant to this title shall be
exempt from Chapter 2 (commencing with Section 10100) of Division 2
of the Public Contract Code, and shall be exempt from the review or
approval of any division of the Department of General Services.
  SEC. 10.  Section 100506 is added to the Government Code, to read:
   100506.  (a) The board shall establish an appeals process for
prospective and current enrollees of the Exchange that complies with
all requirements of the federal act concerning the role of a state
Exchange in facilitating federal appeals of Exchange-related
determinations. In no event shall the scope of those appeals be
construed to be broader than the requirements of the federal act.
Once the federal regulations concerning appeals have been issued in
final form by the United States Secretary of Health and Human
Services, the board may establish additional requirements related to
appeals, provided that the board determines, prior to adoption, that
any additional requirement results in no cost to the General Fund and
no increase in the charge imposed under subdivision (n) of Section
100503.
   (b) The board shall not be required to provide an appeal if the
subject of the appeal is within the jurisdiction of the Department of
Managed Health Care pursuant to 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 its implementing
regulations, or within the jurisdiction of the Department of
Insurance pursuant to the Insurance Code and its implementing
regulations.
  SEC. 11.  Section 100507 is added to the Government Code, to read:
   100507.  (a) Notwithstanding any other provision of law, the
Exchange shall not be subject to licensure or regulation by the
Department of Insurance or the Department of Managed Health Care.
   (b) Carriers that contract with the Exchange shall have a license
or certificate of authority from, and shall be in good standing with,
their respective regulatory agencies.
  SEC. 12.  Section 100508 is added to the Government Code, to read:
   100508.  (a) Records of the Exchange that reveal any of the
following shall be exempt from disclosure under the California Public
Records Act (Chapter 3.5 (commencing with Section 6250) of Division
7 of Title 1:
   (1) The deliberative processes, discussions, communications, or
any other portion of the negotiations with entities contracting or
seeking to contract with the Exchange, entities with which the
Exchange is considering a contract, or entities with which the
Exchange is considering or enters into any other arrangement under
which the Exchange provides, receives, or arranges services or
reimbursement.
   (2) 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.
   (b) (1) Except for the portion of a contract that contains the
rates of payment, contracts entered into pursuant to this title shall
be open to inspection one year after their effective dates.
   (2) If a contract entered into pursuant to this title is amended,
the amendment shall be open to inspection one year after the
effective date of the amendment.
  SEC. 13.  Section 100520 is added to the Government Code, to read:
   100520.  (a)  The California Health Trust Fund is hereby created
in the State Treasury for the purpose of this title. Notwithstanding
Section 13340, all moneys in the fund shall be continuously
appropriated without regard to fiscal year for the purposes of this
title. 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) Notwithstanding any other provision of law, moneys deposited
in the fund shall not be loaned to, or borrowed by, any other special
fund or the General Fund, or a county general fund or any other
county fund.
   (c) The board of the California Health Benefit Exchange shall
establish and maintain a prudent reserve in the fund.
   (d) The board or staff of the Exchange shall not utilize any funds
intended for the administrative and operational expenses of the
Exchange for staff retreats, promotional giveaways, excessive
executive compensation, or promotion of federal or state legislative
or regulatory modifications.
   (e) Notwithstanding Section 16305.7, 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.
   (f) Effective January 1, 2016, if at the end of any fiscal year,
the fund has unencumbered funds in an amount that equals or is more
than the board approved operating budget of the Exchange for the next
fiscal year, the board shall reduce the charges imposed under
subdivision (n) of Section 100503 during the following fiscal year in
an amount that will reduce any surplus funds of the Exchange to an
amount that is equal to the agency's operating budget for the next
fiscal year.
  SEC. 14.  Section 100521 is added to the Government Code, to read:
   100521.  (a) The board shall ensure that the establishment,
operation, and administrative functions of the Exchange do not exceed
the combination of federal funds, private donations, and other
non-General Fund moneys available for this purpose. No state General
Fund money shall be used for any purpose under this title without a
subsequent appropriation. No liability incurred by the Exchange or
any of its officers or employees may be satisfied using moneys from
the General Fund.
   (b) The implementation of the provisions of this title, other than
this section, Section 100500, and paragraphs (4) and (5) of
subdivision (a) of Section 100504, shall be contingent on a
determination by the board that sufficient financial resources exist
or will exist in the fund. The determination shall be based on at
least the following:
   (1) Financial projections identifying that sufficient resources
exist or will exist in the fund to implement the Exchange.
   (2) A comparison of the projected resources available to support
the Exchange and the projected costs of activities required by this
title
   (3) The financial projections demonstrate the sufficiency of
resources for at least the first two years of operation under this
title
   (c) The board shall provide notice to the Joint Legislative Budget
Committee and the Director of Finance that sufficient financial
resources exist in the fund to implement this title.
   (d) If the board determines that the level of resources in the
fund cannot support the actions and responsibilities described in
subdivision (a), it shall provide the Department of Finance and the
Joint Legislative Budget Committee a detailed report on the changes
to the functions, contracts, or staffing necessary to address the
fiscal deficiency along with any contingency plan should it be
impossible to operate the Exchange without the use of General Fund
moneys.
   (e) The board shall assess the impact of the Exchange's operations
and policies on other publicly funded health programs administered
by the state and the impact of publicly funded health programs
administered by the state on the Exchange's operations and policies.
This assessment shall include, at a minimum, an analysis of potential
cost shifts or cost increases in other programs that may be due to
Exchange policies or operations. The assessment shall be completed on
at least an annual basis and submitted to the Secretary of Health
and Human Services and the Director of Finance.
  SEC. 15.  Section 1366.6 is added to the Health and Safety Code, to
read:
   1366.6.  (a) For purposes of this section, the following
definitions shall apply:
   (1) "Exchange" means the California Health Benefit Exchange
established in Title 22 (commencing with Section 100500) of the
Government Code.
   (2) "Federal act" means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the federal
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152), and any amendments to, or regulations or guidance issued
under, those acts.
   (3) "Qualified health plan" has the same meaning as that term is
defined in Section 1301 of the federal act.
   (4) "Small employer" has the same meaning as that term is defined
in Section 1357.
   (b) Health care service plans participating in the Exchange shall
fairly and affirmatively offer, market, and sell in the Exchange at
least one product within each of the five levels of coverage
contained in subdivisions (d) and (e) of Section 1302 of the federal
act. The board established under Section 100500 of the Government
Code may require plans to sell additional products within each of
those levels of coverage. This subdivision shall not apply to a plan
that solely offers supplemental coverage in the Exchange under
paragraph (10) of subdivision (a) of Section 100504 of the Government
Code.
   (c) (1) Health care service plans participating in the Exchange
that sell any products outside the Exchange shall do both of the
following:
   (A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
   (B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small employers
purchasing coverage outside the Exchange.
   (2) For purposes of this subdivision, "product" does not include
contracts entered into pursuant to Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code between the Managed Risk
Medical Insurance Board and health care service plans for enrolled
Healthy Families beneficiaries or to contracts entered into pursuant
to Chapter 7 (commencing with Section 14000) of, or Chapter 8
(commencing with Section 14200) of, Part 3 of Division 9 of the
Welfare and Institutions Code between the State Department of Health
Care Services and health care service plans for enrolled Medi-Cal
beneficiaries.
   (d) Commencing January 1, 2014, a health care service plan shall,
with respect to plan contracts that cover hospital, medical, or
surgical benefits, only sell the five levels of coverage contained in
subdivisions (d) and (e) of Section 1302 of the federal act, except
that a health care service plan that does not participate in the
Exchange shall, with respect to plan contracts that cover hospital,
medical, or surgical benefits, only sell the four levels of coverage
contained in subdivision (d) of Section 1302 of the federal act.
   (e) Commencing January 1, 2014, a health care service plan that
does not participate in the Exchange shall, with respect to plan
contracts that cover hospital, medical, or surgical benefits, offer
at least one standardized product that has been designated by the
Exchange in each of the four levels of coverage contained in
subdivision (d) of Section 1302 of the federal act. This subdivision
shall only apply if the board of the Exchange exercises its authority
under subdivision (c) of Section 100504 of the Government Code.
Nothing in this subdivision shall require a plan that does not
participate in the Exchange to offer standardized products in the
small employer market if the plan only sells products in the
individual market. Nothing in this subdivision shall require a plan
that does not participate in the Exchange to offer standardized
products in the individual market if the plan only sells products in
the small employer market. This subdivision shall not be construed to
prohibit the plan from offering other products provided that it
complies with subdivision (d).
  SEC. 16.  Section 10112.3 is added to the Insurance Code, to read:
   10112.3.  (a) For purposes of this section, the following
definitions shall apply:
   (1) "Exchange" means the California Health Benefit Exchange
established in Title 22 (commencing with Section 100500) of the
Government Code.
   (2) "Federal act" means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the federal
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152), and any amendments to, or regulations or guidance issued
under, those acts.
   (3) "Qualified health plan" has the same as that term is defined
in Section 1301 of the federal act.
   (4) "Small employer" has the same meaning as that term is defined
in Section 10700.
   (b) Health insurers participating in the Exchange shall fairly and
affirmatively offer, market, and sell in the Exchange at least one
product within each of the five levels of coverage contained in
subdivisions (d) and (e) of Section 1302 of the federal act. The
board established under Section 100500 of the Government Code may
require insurers to sell additional products within each of those
levels of coverage. This subdivision shall not apply to an insurer
that solely offers supplemental coverage in the Exchange under
paragraph (10) of subdivision (a) of Section 100504 of the Government
Code.
   (c) (1) Health insurers participating in the Exchange that sell
any products outside the Exchange shall do both of the following:
   (A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
   (B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small employers
purchasing coverage outside the Exchange.
   (2) For purposes of this subdivision, "product" does not include
contracts entered into pursuant to Part 6.2 (commencing with Section
12693) of Division 2 between the Managed Risk Medical Insurance Board
and health insurers for enrolled Healthy Families beneficiaries or
to contracts entered into pursuant to Chapter 7 (commencing with
Section 14000) of, or Chapter 8 (commencing with Section 14200) of,
Part 3 of Division 9 of the Welfare and Institutions Code between the
State Department of Health Care Services and health insurers for
enrolled Medi-Cal beneficiaries.
   (d) Commencing January 1, 2014, a health insurer, with respect to
policies that cover hospital, medical, or surgical benefits, may only
sell the five levels of coverage contained in subdivisions (d) and
(e) of Section 1302 of the federal act, except that a health insurer
that does not participate in the Exchange may, with respect to
policies that cover hospital, medical, or surgical benefits only sell
the four levels of coverage contained in subdivision (d) of Section
1302 of the federal act.
   (e) Commencing January 1, 2014, a health insurer that does not
participate in the Exchange shall, with respect to policies that
cover hospital, medical, or surgical expenses, offer at least one
standardized product that has been designated by the Exchange in each
of the four levels of coverage contained in subdivision (d) of
Section 1302 of the federal act. This subdivision shall only apply if
the board of the Exchange exercises its authority under subdivision
(c) of Section 100504 of the Government Code. Nothing in this
subdivision shall require an insurer that does not participate in the
Exchange to offer
standardized products in the small employer market if the insurer
only sells products in the individual market. Nothing in this
subdivision shall require an insurer that does not participate in the
Exchange to offer standardized products in the individual market if
the insurer only sells products in the small employer market. This
subdivision shall not be construed to prohibit the insurer from
offering other products provided that it complies with subdivision
(d).
  SEC. 17.  The Legislature finds and declares that Section 12 of
this act, which adds Section 100508 to the Government Code, imposes 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 ensure that the California Health Benefit Exchange is
not constrained in exercising its fiduciary powers and obligations to
negotiate on behalf of the public as it implements federal health
care reform pursuant to the federal Patient Protection and Affordable
Care Act (Public Law 111-148), the limitations on the public's right
of access imposed by Section 12 of this act are necessary.
  SEC. 18.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
  SEC. 15.  This act shall become operative only if Senate Bill 900
of the 2009-10 Regular Session is also enacted and becomes operative.