BILL NUMBER: AB 2110	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 12, 2010
	AMENDED IN ASSEMBLY  APRIL 13, 2010

INTRODUCED BY   Assembly Member De La Torre

                        FEBRUARY 18, 2010

   An act to  add Section 10355 to   amend Sec
  tion 1371.8 of the Health and Safety Code, and to amend
Section 796.04 of  the Insurance Code, relating to health care
coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2110, as amended, De La Torre. Health  insurance:
  care coverage:  premium payments: grace periods.
   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 the act a crime. Existing  law provides for
the regulation of disability insurers by the Department of Insurance
and requires disability insurance policies to include a provision
setting forth a grace period for making premium payments. Under
existing law,  the   that  grace period
must equal no less than 7 days for weekly premium policies, no less
than 10 days for monthly premium policies, and no less than 31 days
for all other policies. Existing law prohibits the Insurance
Commissioner from approving a policy for issuance or delivery, and
authorizes the commissioner to withdraw approval of the policy, if it
fails to meet these requirements.
   This bill would require  individual health care service plan
contracts and individual  health insurance policies issued,
amended, or renewed on or after January 1, 2011, to provide a grace
period of 50 days  for the payment of premiums  and would
 make an enrollee or insured who fails to pay the premium during
that period liable for any medical costs incurred during the period,
except as specified. The bill would  require  plans and
 insurers to provide  specified  notice of this grace
period upon issuance, amendment, or renewal of  a 
 an individual contract or  policy. 
   Because a willful violation of the bill's requirements with
respect to health care service plans would be a crime, 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. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program:  no
  yes  .


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

   SECTION 1.    Section 1371.8 of the   Health
and Safety Code   is amended to read: 
   1371.8.   (a)    A health care service plan that
authorizes a specific type of treatment by a provider shall not
rescind or modify this authorization after the provider renders the
health care service in good faith and pursuant to the authorization
for any reason, including, but not limited to, the plan's subsequent
rescission, cancellation, or modification of the enrollee's or
subscriber's contract or the plan's subsequent determination that it
did not make an accurate determination of the enrollee's or
subscriber's eligibility. This  section  
subdivision  shall not be construed to expand or alter the
benefits available to the enrollee or subscriber under a plan. The
Legislature finds and declares that by adopting the amendments made
to this section by Assembly Bill 1324 of the 2007-08 Regular Session
it does not intend to instruct a court as to whether or not the
amendments are existing law. 
   (b) An individual health care service plan contract issued,
amended, or renewed on or after January 1, 2011, shall provide a
grace period of 50 days for the payment of each premium falling due
after the first premium, during which grace period the contract shall
continue in force. Except as provided in subdivision (a), if the
enrollee fails to pay the premium owed during the grace period, he or
she shall be fully liable for any medical costs incurred during that
period.  
   (c) Upon issuance, amendment, or renewal of an individual health
care service plan contract on or after January 1, 2011, the plan
shall provide a notice to the enrollee of the grace period described
in subdivision (b). The notice shall state the following: 



   "The premium for your health care coverage is due and payable on
[insert specified day] of each month. You will be liable for any
medical costs incurred after the premium is due unless your treatment
was authorized prior to the due date of the premium or you pay the
full amount owed within 50 days after the date when your premium is
due. Effective January 1, 2014, federal law will require you to
maintain health care coverage. Please consider carefully before
failing to maintain coverage." 



   (d) Nothing in this section shall limit the right of a health care
service plan to recover unpaid premiums from an enrollee consistent
with state and federal law. 
   SEC. 2.    Section 796.04 of the  Insurance
Code   is amended to read: 
   796.04.   (a)    A health insurer that provides
coverage for hospital, medical, or surgical expenses that authorizes
a specific type of treatment for services covered under a
policyholder's contract or plan by a provider shall not rescind or
modify this authorization after the provider renders the health care
service in good faith and pursuant to the authorization for any
reason, including, but not limited to, the insurer's subsequent
rescission, cancellation, or modification of the insured's or
policyholder's contract or the insurer's subsequent determination
that it did not make an accurate determination of the insured's
eligibility. This  section   subdivision 
shall not be construed to expand or alter the benefits available or
the terms and conditions of the contract as may be agreed upon
between a policyholder, certificate holder, or trust, and the
insurer. The Legislature finds and declares that by adopting the
amendments made to this section by Assembly Bill 1324 of the 2007-08
Regular Session it does not intend to instruct a court as to whether
or not the amendments are existing law. 
   (b) Notwithstanding paragraph (12) of subdivision (b) of Section
10291.5 or Section 10350.3, an individual health insurance policy
issued, amended, or renewed on or after January 1, 2011, shall
provide a grace period of 50 days for the payment of each premium
falling due after the first premium, during which grace period the
policy shall continue in force. Except as provided in subdivision
(a), if the insured fails to pay the premium owed during the grace
period, he or she shall be fully liable for any medical costs
incurred during that period.
   (c) Upon issuance, amendment, or renewal of an individual health
insurance policy on or after January 1, 2011, the insurer shall
provide a notice to the insured of the grace period described in
subdivision (b). The notice shall state the following:

   "The premium for your health insurance is due and payable on
[insert specified day] of each month. You will be liable for any
medical costs incurred after the premium is due unless your treatment
was authorized prior to the due date of the premium or you pay the
full amount owed within 50 days after the date when your premium is
due. Effective January 1, 2014, federal law will require you to
maintain health care coverage. Please consider carefully before
failing to maintain coverage."

   (d) Nothing in this section shall limit the right of a health
insurer to recover unpaid premiums from an insured consistent with
state and federal law. 
   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.  
  SECTION 1.    Section 10355 is added to the
Insurance Code, to read:
   10355.  (a) For purposes of this section, "health insurance" has
the same meaning set forth in subdivision (b) of Section 106.
   (b) Notwithstanding paragraph (12) of subdivision (b) of Section
10291.5 or Section 10350.3, a health insurance policy issued,
amended, or renewed on or after January 1, 2011, shall provide a
grace period of 50 days for the payment of each premium falling due
after the first premium, during which grace period the policy shall
continue in force.
   (c) Upon issuance, amendment, or renewal of a health insurance
policy on or after January 1, 2011, the insurer shall provide a
notice to the insured of the grace period described in subdivision
(b).
   (d) Nothing in this section shall limit the right of a health
insurer to recover unpaid premiums from an insured consistent with
state and federal law.