BILL NUMBER: SB 727	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 30, 2009

INTRODUCED BY   Senator Cox
    (   Coauthor:   Senator   Alquist
  ) 

                        FEBRUARY 27, 2009

   An act to add Section 1366.30 to the Health and Safety Code, and
to add Section 10128.60 to the Insurance Code, relating to health
care coverage, and declaring the urgency thereof, to take effect
immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 727, as amended, Cox. Cal-COBRA.
   Existing law provides for licensing and regulation of health care
service plans by the Department of Managed Health Care. Existing law
provides for regulation of health insurers by the Insurance
Commissioner. A willful violation of provisions governing health care
service plans is a crime. 
   Existing law requires health care service plans and health
insurers to offer continuation of group coverage for a specified
period of time to persons who become ineligible for group coverage,
otherwise known as COBRA or Cal-COBRA.  
   Existing law, the California Continuation Benefits Replacement Act
(Cal-COBRA), requires a health care service plan and health insurer
providing group coverage to employers of 2 to 19 eligible employees
to offer continuation of that coverage for a specified period of time
to certain qualified beneficiaries, as specified. 
   This bill would also require  that  health care service
 plans   plan  and health  insurers
  insurer  to offer continuation coverage 
if the person is covered by an employer group plan that is
terminated by the employer and   to a person covered
under the group benefit plan if  the employer  terminates
the plan and  does not provide a successor group benefit plan to
its employees  and the covered employee is an active employee at
the time the employer terminates the plan  . The bill would
require the offered coverage to be for not less than 18 months from
the termination date  , except as specified,  and to be
offered under the same terms  and   , 
conditions  ,   and rates  as the former group
plan, but subject to the rules governing  COBRA 
 Cal-COBRA  coverage, to the extent relevant  and
  ,  applicable  , and not in conflict with the
bill's provisions  . By modifying the requirements applicable
to health care service plans, the willful violation of which 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.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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

  SECTION 1.  Section 1366.30 is added to the Health and Safety Code,
to read:
   1366.30.   (a)    Notwithstanding any other
provision of this article, a health care service plan shall also
offer an enrollee continuation coverage if  the 
 all of the following requirements are met: 
    (1)     The  enrollee is covered
 by an employer group benefit plan   under a
group benefit plan, as defined in Section 1366.21,  that is
terminated by the  employer and the   employer.

    (2)     The  employer does not provide
a successor group benefit plan to its employees.  The
offered coverage  
   (3) The covered employee under the group benefit plan is an active
employee at the time the employer terminates the group benefit plan.

   (b)     The continuation coverage offered
pursuant to this section  shall be for not less than 18 months
from the  termination date   date the employer
terminates the group benefit plan, unless the covered employee's
employment is terminated for cause, in which case the continuation
coverage shall cease,  and shall be offered under the same terms
 and conditions  , conditions, and rates 
as the former group plan, but subject to the rules governing 
COBRA coverage   continuation coverage under this
article  to the extent those rules are relevant  and
applicable. "COBRA" has the meaning as defined in subdivision (b) of
Section 1366.29.   , applicable, and do not conflict
with the requirement to provide continuation coverage pursuant to
subdivision (a). 
  SEC. 2.  Section 10128.60 is added to the Insurance Code, to read:
   10128.60.   (a)    Notwithstanding any other
provision of this article, a health insurer shall also offer an
insured continuation coverage if  the   all of
the following requirements are met: 
    (1)     The  insured is covered
 by an employer group benefit plan   under a
group benefit plan, as defined in Section 10128.51,  that is
terminated by the  employer and the   employer.

    (2)     The  employer does not provide
a successor group benefit plan to its employees.  The
offered coverage  
   (3) The covered employee under the group benefit plan is an active
employee at the time the employer terminates the group benefit plan.

    (b)     The continuation coverage offered
pursuant to this section  shall be for not less than 18 months
from the  termination date   date the employer
terminates the group benefit plan, unless the covered employee's
employment is terminated for cause, in which case the continuation
coverage shall cease,  and shall be offered under the same terms
 and conditions   , conditions, and rates 
as the former group benefit plan, but subject to the rules governing
 COBRA coverage   continuation coverage under
this article  to the extent those rules are relevant 
and applicable. "COBRA" has the meaning as defined in subdivision (c)
of Section 10128.59.   , applicable, and do not
conflict with the requirement to provide continuation coverage
pursuant to subdivision (a). 
  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.
  SEC. 4.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to provide for the extension of health care coverage to
affected individuals as quickly as possible, it is necessary that
this act take effect immediately.