BILL NUMBER: SB 227	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 3, 2010
	AMENDED IN ASSEMBLY  JULY 13, 2009
	AMENDED IN SENATE  MAY 28, 2009
	AMENDED IN SENATE  APRIL 13, 2009

INTRODUCED BY   Senator Alquist
    (   Principal   coauthors:  
Assembly Members   Monning   and Villines 
 ) 

                        FEBRUARY 23, 2009

    An act to add Sections 1356.2, 1373.623, and 1373.63 to
the Health and Safety Code, and to amend Sections 12700, 12705,
12711, 12712, 12718, 12725, 12726, and 12739 of, to add Sections
1827.86, 10127.165, 10127.19, 12711.3, 12714.1, and 12738.5 to, to
add Chapter 9 (commencing with Section 12739.5) to Part 6.5 of
Division 2 of, and to repeal and add Sections 12723 and 12737 of, the
Insurance Code, relating to health care coverage, and making an
appropriation therefor.   An act to amend Sections
1389.25 and 1389.4 of the Health and Safety Code, and to amend
Sections 10113.9 and 10113.95 of, and to add and repeal Part 6.6
(commencing with Section 12739.5) of Division 2 of, the Insurance
Code, relating to health care coverage. 



	LEGISLATIVE COUNSEL'S DIGEST


   SB 227, as amended, Alquist. Health care  coverage.
  coverage: temporary high risk pool.  
   Existing law, the federal Patient Protection and Affordable Care
Act, requires the United States Secretary of Health and Human
Services to establish a temporary high risk health insurance pool
program to provide health insurance coverage for eligible individuals
until January 1, 2014. Existing law authorizes the secretary to
implement this program directly or through contracts with eligible
entities, including states, and requires that federal money made
available pursuant to these provisions be used to establish a
qualified high risk pool that meets certain requirements.  
   Existing law establishes the California Major Risk Medical
Insurance Program, which is administered by the Managed Risk Medical
Insurance Board (MRMIB), to provide major risk medical coverage to
persons who, among other things, have been rejected for coverage by
at least one private health plan.  
   This bill would require MRMIB to enter into an agreement with the
federal Department of Health and Human Services to administer a
qualified high risk pool to provide health coverage, until January 1,
2014, to specified individuals who have preexisting conditions,
consistent with the federal Patient Protection and Affordable Care
Act. The bill would repeal these provisions on January 1, 2020. 

   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 also provides for the
regulation of health insurers by the Department of Insurance.
Existing law requires a health care service plan or a health insurer
that rejects an applicant for individual coverage or offers
individual coverage at a rate higher than the standard rate to inform
the applicant about the California Major Risk Medical Insurance
Program.  
   This bill would also require the plan or insurer to inform the
applicant about the temporary high risk health insurance pool
established pursuant to the bill and would require that the
information be provided in accordance with standards developed by the
Department of Managed Health Care or the Department of Insurance, as
specified. Because a willful violation of this requirement by a
health care service plan would be a crime, the bill would impose a
state-mandated local program. The bill would also require the
Department of Managed Health Care and the Department of Insurance to
post information on their Internet Web sites about the temporary high
risk pool established pursuant to the bill.  
   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.  
   This bill would provide that it shall become operative only if AB
1887 of the 2009-10 Regular Session is also enacted and becomes
operative.  
   (1) Existing law establishes the California Major Risk Medical
Insurance Program (MRMIP) that is administered by the Managed Risk
Medical Insurance Board (MRMIB) to provide major risk medical
coverage to persons who, among other matters, have been rejected for
coverage by at least one private health plan. 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 also provides for the regulation of
health insurers by the Department of Insurance. Existing law requires
a health care service plan and a health insurer to continue to
provide coverage to certain individuals who were members of a pilot
program that ended on December 31, 2007, and requires MRMIB to make
payments from the Major Risk Medical Insurance Fund, a continuously
appropriated fund, to health care service plans and insurers for the
provision of health care services to those individuals. 

   This bill would require a health care service plan and a health
insurer to elect either to accept for coverage at rates set by MRMIB
and under specified conditions persons eligible for MRMIP that have
been assigned to the plan or insurer by MRMIB regardless of health
status or previous health care claims experience, or alternatively to
pay a fee set by MRMIB based on its market share, as specified.
Because the fee would be deposited in the fund, the bill would make
an appropriation by increasing the amount of revenue in a
continuously appropriated fund. The bill would authorize MRMIB, with
the approval of the Department of Finance, to obtain loans from the
General Fund for expenses related to administration of the fund.
 
   The bill would require MRMIB to establish a voluntary reenrollment
program for persons enrolled in the former pilot program, would
implement benefit changes for MRMIP, and would establish limits on
MRMIP subscriber contribution amounts, as specified. The bill would
require MRMIB to appoint a panel to advise it on MRMIP, would
authorize MRMIB to apply for federal funding and take other actions,
as specified, and would require MRMIB to report to the Legislature on
or before July 1, 2012, as specified. The bill would enact other
related provisions. By imposing new requirements on health care
service plans, the willful violation of which would be a crime, the
bill would impose a state-mandated local program.  
   (2) Existing law requires specified amounts to be deposited in the
fund from the Cigarette and Tobacco Products Surtax Fund. 

   This bill would specify that any money in the fund attributable to
monetary penalties imposed under MRMIP shall not be continuously
appropriated.  
   The bill would, until January 1, 2012, exempt MRMIB, the
Department of Managed Health Care, and the Department of Insurance
from certain procedural requirements necessary to adopt rules and
regulations.  
   (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:  yes   no
 . Fiscal committee: yes. State-mandated local program: yes.


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

   SECTION 1.    Section 1389.25 of the  
Health and Safety Code   is amended to read: 
   1389.25.  (a) (1) This section shall apply only to a full service
health care service plan offering health coverage in the individual
market in California and shall not apply to a specialized health care
service plan, a health care service plan contract in the Medi-Cal
program (Chapter 7 (commencing with Section 14000) of Part 3 of
Division 9 of the Welfare and Institutions Code), a health care
service plan conversion contract offered pursuant to Section 1373.6,
a health care service plan contract in the Healthy Families Program
(Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code), or a health care service plan contract offered to a
federally eligible defined individual under Article 4.6 (commencing
with Section 1366.35).
   (2) A local initiative, as defined in subdivision (v) of Section
53810 of Title 22 of the California Code of Regulations, that is
awarded a contract by the State Department of Health  Care 
Services pursuant to subdivision (b) of Section 53800 of Title 22 of
the California Code of Regulations, shall not be subject to this
section unless the plan offers coverage in the individual market to
persons not covered by Medi-Cal or the Healthy Families Program.
   (b) (1) A health care service plan that declines to offer coverage
or denies enrollment for an individual or his or her dependents
applying for individual coverage or that offers individual coverage
at a rate that is higher than the standard rate, shall provide the
individual applicant with the specific reason or reasons for the
decision in writing at the time of the denial or offer of coverage.
   (2)  No change in the premium rate or coverage for an individual
plan contract shall become effective unless the plan has delivered a
written notice of the change at least 30 days prior to the effective
date of the contract renewal or the date on which the rate or
coverage changes. A notice of an increase in the premium rate shall
include the reasons for the rate increase.
   (3) The written notice required pursuant to paragraph (2) shall be
delivered to the individual contractholder at his or her last
address known to the plan, at least 30 days prior to the effective
date of the change. The notice shall state in italics either the
actual dollar amount of the premium rate increase or the specific
percentage by which the current premium will be increased. The notice
shall describe in plain, understandable English any changes in the
plan design or any changes in benefits, including a reduction in
benefits or changes to waivers, exclusions, or conditions, and
highlight this information by printing it in italics. The notice
shall specify in a minimum of 10-point bold typeface, the reason for
a premium rate change or a change to the plan design or benefits.
   (4) If a plan rejects an applicant or the dependents of an
applicant for coverage or offers individual coverage at a rate that
is higher than the standard rate, the plan shall inform the applicant
about the state's high-risk health insurance pool, the California
Major Risk Medical Insurance Program  (MRMIP)  (Part 6.5
(commencing with Section 12700) of Division 2 of the Insurance Code)
 , and the   federal temporary high risk   pool
established pursuant to Part 6.6 (commencing with Section 12739.5)
of Division 2 of the Insurance Code  . The information provided
to the applicant by the plan shall  be in accordance with
standards developed by the department, in consultation with the
Managed Risk Medical Insurance Board, and shall  specifically
include the  program's  toll-free telephone number
and  its  Internet Web site address  for MRMIP
and the federal temporary high risk   pool  . The
requirement to notify applicants of the availability of  the
California Major Risk Medical Insurance Program   MRMIP
and the federal temporary high   risk pool  shall not
apply when a health plan rejects an applicant for Medicare supplement
coverage.
   (c) A notice provided pursuant to this section is a private and
confidential communication and  ,  at the time of
application, the plan shall give the individual applicant the
opportunity to designate the address for receipt of the written
notice in order to protect the confidentiality of any personal or
privileged information.
   SEC. 2.    Section 1389.4 of the   Health
and Safety Code   is amended to read: 
   1389.4.  (a) A full service health care service plan that issues,
renews, or amends individual health plan contracts shall be subject
to this section.
   (b) A health care service plan subject to this section shall have
written policies, procedures, or underwriting guidelines establishing
the criteria and process whereby the plan makes its decision to
provide or to deny coverage to individuals applying for coverage and
sets the rate for that coverage. These guidelines, policies, or
procedures shall assure that the plan rating and underwriting
criteria comply with Sections 1365.5 and 1389.1 and all other
applicable provisions of state and federal law.
   (c) On or before June 1, 2006, and annually thereafter, every
health care service plan shall file with the department a general
description of the criteria, policies, procedures, or guidelines the
plan uses for rating and underwriting decisions related to individual
health plan contracts, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage
or severely limit the plan products for which they would be eligible.
A plan may comply with this section by submitting to the department
underwriting materials or resource guides provided to plan solicitors
or solicitor firms, provided that those materials include the
information required to be submitted by this section.
   (d) Commencing  September 1, 2006,   January
1, 2011,  the director shall post on the department's 
Internet  Web site, in a manner accessible and understandable to
consumers, general, noncompany specific information about rating and
underwriting criteria and practices in the individual market and
information about the  California  Major Risk Medical
Insurance Program  (Part 6.5 (commencing with Section 12700) of
Division 2 of the Insurance Code) and the federal temporary high risk
pool established pursuant to Part 6.6 (commencing with Section
12739.5) of Division 2 of the Insurance Code  . The director
shall develop the information for the  Internet  Web site in
consultation with the Department of Insurance to enhance the
consistency of information provided to consumers. Information about
individual health coverage shall also include the following
notification:
   "Please examine your options carefully before declining group
coverage or continuation coverage, such as COBRA, that may be
available to you. You should be aware that companies selling
individual health insurance typically require a review of your
medical history that could result in a higher premium or you could be
denied coverage entirely."
   (e) Nothing in this section shall authorize public disclosure of
company specific rating and underwriting criteria and practices
submitted to the director.
   (f) This section shall not apply to a closed block of business, as
defined in Section 1367.15.
   SEC. 3.    Section 10113.9 of the  
Insurance Code   is amended to read: 
   10113.9.  (a) This section shall not apply to short-term limited
duration health insurance, vision-only, dental-only, or 
Champus-supplement   CHAMPUS-supplement  insurance,
or to hospital indemnity, hospital-only, accident-only, or specified
disease insurance that does not pay benefits on a fixed benefit,
cash payment only basis.
   (b) No change in the premium rate or coverage for an individual
health insurance policy shall become effective unless the insurer has
delivered a written notice of the change at least 30 days prior to
the effective date of the  contract   policy
 renewal or the date on which the rate or coverage changes. A
notice of an increase in the premium rate shall include the reasons
for the rate increase.
   (c) The written notice required pursuant to subdivision (b) shall
be delivered to the individual policyholder at his or her last
address known to the insurer, at least 30 days prior to the effective
date of the change. The notice shall state in italics either the
actual dollar amount of the premium increase or the specific
percentage by which the current premium will be increased. The notice
shall describe in plain, understandable English any changes in the
policy or any changes in benefits, including a reduction in benefits
or changes to waivers, exclusions, or conditions, and highlight this
information by printing it in italics. The notice shall specify in a
minimum of 10-point bold typeface, the reason for a premium rate
change or a change in coverage or benefits.
   (d) If an insurer rejects an applicant or the dependents of an
applicant for coverage or offers individual coverage at a rate that
is higher than the standard rate, the insurer shall inform the
applicant about the state's high-risk health insurance pool, the
California Major Risk Medical Insurance Program  (MRMIP) 
(Part 6.5 (commencing with Section  12700)  
12700)), and the federal temporary high risk   pool
established pursuant to Part 6.6 (commencing with Section 12739.5)
 . The information provided to the applicant by the insurer
shall  be in accordance with standards developed by the
department, in consultation with the Managed Risk Medical Insurance
Board, and shall  specifically include the  program's
 toll-free telephone number and  its 
Internet Web site address  for MRMIP and the federal temporary
high risk   pool  . The requirement to notify
applicants of the availability of  the California Major Risk
Medical Insurance Program   MRMIP and the federal
temporary high   risk   pool  shall not apply
when a health plan rejects an applicant for Medicare supplement
coverage.
   SEC. 4.    Section 10113.95 of the  
Insurance Code   is amended to read: 
   10113.95.  (a) A health insurer that issues, renews, or amends
individual health insurance policies shall be subject to this
section.
   (b) An insurer subject to this section shall have written
policies, procedures, or underwriting guidelines establishing the
criteria and process whereby the insurer makes its decision to
provide or to deny coverage to individuals applying for coverage and
sets the rate for that coverage. These guidelines, policies, or
procedures shall assure that the plan rating and underwriting
criteria comply with Sections 10140 and 10291.5 and all other
applicable provisions.
   (c) On or before June 1, 2006, and annually thereafter, every
insurer shall file with the commissioner a general description of the
criteria, policies, procedures, or guidelines that the insurer uses
for rating and underwriting decisions related to individual health
insurance policies, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage
or severely limit the health insurance products for which they would
be eligible. An insurer may comply with this section by submitting to
the department underwriting materials or resource guides provided to
agents and brokers, provided that those materials include the
information required to be submitted by this section.
   (d) Commencing  September 1, 2006,   January
1, 2011,  the commissioner shall post on the department's Web
site, in a manner accessible and understandable to consumers,
general, noncompany specific information about rating and
underwriting criteria and practices in the individual market and
information about the  California  Major Risk Medical
Insurance Program  (Part 6.5 (commencing with Section 12700) and
the federal temporary high risk pool established pursuant to Part 6.6
(commencing with Section 12739.5) of Division 2  . The
commissioner shall develop the information for the  Internet
 Web site in consultation with the Department of Managed Health
Care to enhance the consistency of information provided to consumers.
Information about individual health insurance shall also include the
following notification:
   "Please examine your options carefully before declining group
coverage or continuation coverage, such as COBRA, that may be
available to you. You should be aware that companies selling
individual health insurance typically require a review of your
medical history that could result in a higher premium or you could be
denied coverage entirely."
   (e) Nothing in this section shall authorize public disclosure of
company-specific rating and underwriting criteria and practices
submitted to the commissioner.
   (f) This section shall not apply to a closed block of business, as
defined in Section 10176.10.
   SEC. 5.    Part 6.6 (commencing with Section 12739.5)
is added to Division 2 of the   Insurance Code   ,
to read:  

      PART 6.6.  QUALIFIED HIGH RISK POOLS


   12739.5.  It is the intent of the Legislature to implement Section
1101 of the federal Patient Protection and Affordable Care Act
(Public Law 111-148) in California to establish a temporary high risk
pool so that access to health coverage for individuals with
preexisting medical conditions can be effectively and promptly
provided by the Managed Risk Medical Insurance Board.
   12739.50.  For the purposes of this part, the following terms have
the following meanings:
   (a) "Applicant" means an individual who applies for high risk
medical coverage through the program.
   (b) "Board" means the Managed Risk Medical Insurance Board.
   (c) "Federal temporary high risk pool" is the temporary high risk
health insurance pool program established pursuant to Section 1101 of
the federal Patient Protection and Affordable Care Act (Public Law
111-148).
   (d) "Fund" means the Federal Temporary High Risk Health Insurance
Fund, established in Section 12739.71, from which the board may
authorize expenditures to pay for all of the following:
   (1) Covered, medically necessary services that exceed subscribers'
contributions.
   (2) Administration of the program.
   (3) Marketing and outreach.
   (e) "High risk medical coverage" or "coverage" means payment for
medically necessary services provided by institutional and
professional providers through the program.
   (f) "Participating health plan" means a private 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, that
contracts with the program to provide or administer high risk medical
coverage to program subscribers.
   (g) "Plan rates" means the total monthly amount charged by a
participating health plan to provide or administer high risk medical
coverage.
   (h) "Program" means the California Federal Temporary Health High
Risk Pool through which the board operates the federal temporary high
risk pool in California.
   (i) "Subscriber" means an eligible individual, as defined in
subsection (d) of Section 1101 of the federal Patient Protection and
Affordable Care Act (Public Law 111-148), who is enrolled in the
program, and includes a member of a federally recognized California
Indian tribe.
   (j) "Subscriber contribution" means the premium for high risk
medical coverage paid by the subscriber or, if authorized by the
federal government, paid on behalf of the subscriber by a federally
recognized California Indian tribal government. If a federally
recognized California Indian tribal government makes a contribution
on behalf of a member of the tribe, the tribal government shall
ensure that the subscriber is made aware of all the health coverage
options, including participating health plans, available in the
county where the member resides.
   12739.51.  The California Federal Temporary Health High Risk Pool
is hereby created in the California Health and Human Services Agency.
The program shall be managed by the board.
   12739.52.  The board shall have the authority to do all of the
following, consistent with Section 1101 of the federal Patient
Protection and Affordable Care Act (Public Law 111-148):
   (a) Enter into an agreement with the federal Department of Health
and Human Services to administer the federal temporary high risk pool
as provided in Section 12739.53.
   (b) Determine eligibility criteria and enrollment and
disenrollment criteria and processes, including processes for waiting
lists, enrollment limits, disenrollments, and any other limits on
enrollment needed to maintain program expenditures within available
federal funds.
   (c) Determine the participation requirements of applicants,
subscribers, and participating health plans, third-party
administrators, and other contractors.
   (d) Determine when subscribers' coverage begins and ends.
   (e) Provide for the processing of applications and the enrollment
of subscribers.
   (f) Determine the high risk medical coverage to be provided to
subscribers, including the scope of benefits and subscriber cost
sharing.
   (g) Establish subscriber contributions and plan rates.
   (h) (1) Provide high risk medical coverage for subscribers through
contracts with participating health plans or third party
administrators to provide or administer the coverage. A contract
between the board and a participating health plan may provide that
the contracting health plan assumes full or partial risk for the cost
of covered health services or that the contracting health plan
undertakes to provide only administrative services for the state's
self-insured high risk medical coverage. A contract between the board
and a third-party administrator may provide that the third-party
administrator undertakes to provide only administrative services for
the state's self-insured high risk medical coverage. The board may
provide or purchase stop-loss coverage under which the program and
participating health plans or stop-loss insurers share the risk for
health plan expenses that exceed plan rates.
   (2) Nothing in paragraph (1) shall be construed to alter the
rights of a participating health plan under existing law if the board
is unable to continue payment to the plan in accordance with the
terms of the plan's contract with the board.
   (i) Authorize expenditures from the fund to pay program expenses
that exceed subscriber contributions.
   (j) Contract for administration of the program or any portion of
the program with any public agency, including any agency of state
government, or with any private entity.
   (k) If, and to the extent, permitted by federal law and by the
federal Department of Health and Human Services, align program
administration with the administration of the Major Risk Medical
Insurance Program established pursuant to Part 6.5 (commencing with
Section 12700) to ensure coordination and administrative efficiency.
   (l) Sue and be sued.
   (m) Employ necessary staff.
   (n) Refer potential violations of state and federal law by
participating health plans and other entities and persons to the
appropriate regulatory agencies.
   (o) Subject to the approval of the Department of Finance, obtain
loans from the General Fund for all necessary and reasonable expenses
related to the administration of the fund and the program. The board
shall repay principal and interest, using the pooled money
investment account rate of interest, to the General Fund no later
than July 1, 2014.
   (p) (1) Issue rules and regulations to carry out the purposes of
this part. The adoption and readoption of regulations to implement
this part shall be deemed to be an emergency that calls for immediate
action to avoid serious harm to the public peace, health, safety, or
general welfare for purposes of Sections 11346.1 and 11349.6 of the
Government Code, and the board is hereby exempted from the
requirement that the board describe facts showing the need for
immediate action and from review by the Office of Administrative Law.

   (2) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the board
shall, without taking any regulatory action, initially implement this
section pursuant to the agreement with the federal Department of
Health and Human Services described in subdivision (a) of Section
12739.53. Thereafter, the board shall adopt any necessary regulations
in accordance with the requirements of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code and with paragraph (1) of this subdivision.
   (q) Exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed upon the
board under this part, including the powers and responsibilities
necessary to enter into an agreement with, and comply with the
requirements of, the federal Department of Health and Human Services
as described in subdivision (a) of Section 12739.53.
   12739.53.  (a) The board shall, consistent with Section 1101 of
the federal Patient Protection and Affordable Care Act (Public Law
111-148) and State and federal law and contingent on the agreement of
the federal Department of Health and Human Services and receipt of
sufficient federal funding, enter into an agreement with the federal
Department of Health and Human Services to administer the federal
temporary high risk pool in California.
   (b) If the federal Department of Health and Human Services and the
state enter into an agreement to administer the federal temporary
high risk pool, the board shall do all of the following:
   (1) Administer the program pursuant to that agreement.
   (2) Begin providing coverage in the program on the date
established pursuant to the agreement with the federal Department of
Health and Human Services.
   (3) Establish the scope and content of high risk medical coverage.

   (4) Determine reasonable minimum standards for participating
health plans, third-party administrators, and other contractors.
   (5) Determine the time, manner, method, and procedures for
withdrawing program approval from a plan, third-party administrator,
or other contractor, or limiting enrollment of subscribers in a plan.

   (6) Research and assess the needs of persons without adequate
health coverage and promote means of ensuring the availability of
adequate health care services.
   (7) Administer the program to ensure the following:
   (A) That the program subsidy amount does not exceed amounts
transferred to the fund pursuant to this part.
   (B) That the aggregate amount spent for high risk medical coverage
and program administration does not exceed the federal funds
available to the state for this purpose and that no state funds are
spent for the purposes of this part.
   (8) Maintain enrollment and expenditures to ensure that
expenditures do not exceed amounts available in the fund and that no
state funds are spent for purposes of this part. If sufficient funds
are not available to cover the estimated cost of program
expenditures, the board shall institute appropriate measures to limit
enrollment.
   (9) In adopting benefit and eligibility standards, be guided by
the needs and welfare of persons unable to secure adequate health
coverage for themselves and their dependents and by prevailing
practices among private health plans.
   (10) As required by the federal Department of Health and Human
Services, implement procedures to provide for the transition of
subscribers into qualified health plans offered through an exchange
or exchanges to be established pursuant to the federal Patient
Protection and Affordable Care Act (Public Law 111-148).
   (11) Post on the board's Internet Web site the monthly progress
reports submitted to the federal Department of Health and Human
Services. In addition, the board shall provide notice of any
anticipated waiting lists or disenrollments due to insufficient
funding to the public, by making that notice available as part of its
board meetings, and concurrently to the Legislature.
   (12) Develop and implement a plan for marketing and outreach.
   (c) There shall not be any liability in a private capacity on the
part of the board or any member of the board, or any officer or
employee of the board for or on account of any act performed or
obligation entered into in an official capacity, when done in good
faith, without intent to defraud, and in connection with the
administration, management, or conduct of this part or affairs
related to                                            this part.
   12739.54.  (a) Plan rates for high risk medical benefits approved
for the program shall not be excessive, inadequate, or unfairly
discriminatory, but shall be adequate to pay anticipated costs of
claims or services and administration.
   (b) As a condition of reimbursement, participating health plans or
third party administrators shall submit claims to the board within
18 months following the date of service. The board may vary the time
limit established in this subdivision if necessary to administer the
reimbursement or reconciliation processes established by the board or
to meet the requirements of the state's agreement with the federal
Department of Health and Human Services described in subdivision (a)
of Section 12739.53.
   12739.55.  The program may place a lien on compensation or
benefits recovered or recoverable by a subscriber from any party or
parties responsible for the compensation or benefits for which
benefits have been provided pursuant to this part.
   12739.56.  Except as provided in Article 3.5 (commencing with
Section 14124.70) of Chapter 7 of Part 3 of Division 9 of the Welfare
and Institutions Code, benefits received under this part are in
excess of, and secondary to, any other form of health benefits
coverage.
   12739.57.  The board shall provide coverage pursuant to this part
through participating health plans or through provider networks using
a third-party administrator and may contract for the processing of
applications, the enrollment of subscribers, and all activities
necessary to administer the program. Any contract entered into
pursuant to this part shall be exempt from any provision of law
relating to competitive bidding, and shall be exempt from the review
or approval of any division of the Department of General Services.
The board shall not be required to specify the amounts encumbered for
each contract but may allocate funds to each contract based on
projected and actual subscriber enrollments in a total amount not to
exceed revenue available for the program.
   12739.58.  A transfer of enrollment from one participating health
plan to another may be made by a subscriber at times and under
conditions as may be prescribed by regulations of the program.
   12739.59.  (a) Program decisions concerning an applicant's or
subscriber's eligibility or eligibility date may be appealed to the
board, according to procedures to be established by the board.
   (b) Coverage determinations may be appealed to the board,
according to procedures established by the board. If permitted by the
federal Department of Health and Human Services, the board shall not
be required to provide an appeal concerning a coverage determination
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.
   (c) Hearings shall be conducted according to the requirements of
the federal Department of Health and Human Services and, insofar as
practicable and not inconsistent with those requirements, pursuant to
the provisions of Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code.
   12739.60.  Upon enrollment as a subscriber in the program, the
subscriber shall be responsible for payment of the subscriber
contribution.
   12739.61.  The board shall cease to provide coverage through the
program on January 1, 2014, and at that time shall cease to operate
the program except as required to complete payments to, or payment
reconciliations with, participating health plans or other
contractors, process appeals, or conduct other necessary transition
activities, including, but not limited to, transition of subscribers
into an exchange or exchanges established pursuant to the federal
Patient Protection and Affordable Care Act (Public Law 111-148).
   12739.62.  This part shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date. 
   SEC. 6.    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. 7.    This act shall become operative only if
Assembly Bill 1887 of the 2009-10 Regular Session is also enacted and
becomes operative.  All matter omitted in this version of the
bill appears in the bill as amended in the Assembly, July 13, 2009.
(JR11)