BILL NUMBER: AB 1759	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 23, 2010
	PASSED THE ASSEMBLY  AUGUST 25, 2010
	AMENDED IN SENATE  AUGUST 18, 2010
	AMENDED IN SENATE  AUGUST 2, 2010
	AMENDED IN SENATE  JUNE 24, 2010
	AMENDED IN ASSEMBLY  APRIL 20, 2010
	AMENDED IN ASSEMBLY  MARCH 9, 2010

INTRODUCED BY   Assembly Member Blumenfield
   (Coauthors: Assembly Members Huffman and Yamada)
   (Coauthor: Senator Pavley)

                        FEBRUARY 8, 2010

   An act to amend Section 1374.20 of the Health and Safety Code, and
to amend Section 10199.48 of the Insurance Code, relating to health
care coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1759, Blumenfield. Health care coverage: premium rates.
   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 its provisions a crime. Existing law
provides for the regulation of health insurers by the Department of
Insurance. Existing law prohibits a health care service plan or a
health insurer from changing its premium rates or applicable
copayments or coinsurances or deductibles for group health care
service plan contracts or group health insurance policies during
specified time periods; however, changes to the premium rates or
applicable copayments or coinsurances or deductibles are allowed
when, among other things, the change is authorized or required in the
group contract.
   This bill would require a health care service plan or health
insurer that includes a provision in a group contract or policy that
authorizes or requires a change in premium rates, copayments,
coinsurances, or deductibles, to provide an additional disclosure
that describes the circumstances under which a change may occur and
that provides defined terms and examples of those circumstances, to
be signed by the group contractholder or group policyholder and
provided to the subscribers or insureds, as specified. Because a
willful violation of those provisions would be a crime under the
Knox-Keene Act, the 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.



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

  SECTION 1.  Section 1374.20 of the Health and Safety Code is
amended to read:
   1374.20.  (a) No group health care service plan shall change the
premium rates or applicable copayments or coinsurances or deductibles
for the length of the contract, except as specified in subdivision
(b), during any of the following time periods:
   (1) After the group contractholder has delivered written notice of
acceptance of the contract.
   (2) After the start of the employer's annual open enrollment
period.
   (3) After the receipt of payment of the premium for the first
month of coverage in accordance with the contract effective date.
   (b) Changes to the premium rates or applicable copayments or
coinsurances or deductibles of a contract shall, subject to the plan
meeting the requirements of this article, be allowed in any of the
following circumstances:
   (1) When authorized or required in the group contract. If a
provision authorizing or requiring that change is to be included in a
group contract, other than for contracts issued to a small employer
and subject to the disclosure requirements of Section 1357.14, the
health care service plan shall provide, at the point of sale, a
separate disclosure to the subscribers, which the group
contractholder shall sign before that provision can be entered into
as part of the contract. The health care service plan may make the
contract contingent upon the group contractholder's signature of the
separate disclosure. The separate disclosure shall explain the
circumstances under which a change in premium rates or applicable
copayments, coinsurances, or deductibles in a contract may occur, and
shall include defined terms and specific examples of those
circumstances.
   (2) When the contract was agreed to under a preliminary agreement
that states that it is subject to execution of a definitive
agreement.
   (3) When the plan and contractholder mutually agree in writing.
  SEC. 2.  Section 10199.48 of the Insurance Code is amended to read:

   10199.48.  (a) No health insurer shall, with regard to a group
contract, change the premium rates or applicable copayments or
coinsurances or deductibles for the length of the contract, except as
specified in subdivision (b), during any of the following time
periods:
   (1) After the group policyholder or group contractholder has
delivered written notice of acceptance of the contract or policy.
   (2) After the start of the employer's annual open enrollment
period.
   (3) After the receipt of payment of the premium for the first
month of coverage in accordance with the contract or policy effective
date.
   (b) Changes to the premium rates or applicable copayments or
coinsurances or deductibles of a contract or policy shall, subject to
the insurer meeting the requirements of this chapter, be allowed in
any of the following circumstances:
   (1) When authorized or required in the group contract or policy.
If a provision authorizing or requiring that change is to be included
in a group contract or policy, other than for contracts or policies
issued to a small employer and subject to the disclosure requirements
of Article 2 (commencing with Section 10702) of Chapter 8, the
health insurer shall provide, at the point of sale, a separate
disclosure to the insureds, which the group contractholder or group
policyholder shall sign before that provision can be entered into as
part of the contract or policy. The health insurer may make the
contract or policy contingent upon the group contractholder's or
group policyholder's signature of the separate disclosure. The
separate disclosure shall explain the circumstances under which a
change in premium rates or applicable copayments, coinsurances, or
deductibles in a contract or policy may occur, and shall include
defined terms and specific examples of those circumstances.
   (2) When the contract or policy was agreed to under a preliminary
agreement that states that it is subject to execution of a definitive
agreement.
   (3) When the insurer and the policyholder or contractholder
mutually agree in writing.
  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.