BILL NUMBER: SB 838 AMENDED
BILL TEXT
AMENDED IN SENATE FEBRUARY 16, 2010
INTRODUCED BY Senator Strickland
( Coauthor: Assembly Member
Fletcher )
JANUARY 5, 2010
An act to amend Sections 1366.21, 1366.22, 1366.25, and 1366.27 of
the Health and Safety Code, and to amend Sections 10128.51,
10128.52, 10128.55, and 10128.57 of the Insurance Code, relating to
health care coverage, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 838, as amended, Strickland. Cal-COBRA: premium assistance.
Existing federal law, the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA), requires group health plans
providing coverage to employers of 20 or more employees to provide
former employees with continuation of benefits, as specified. The
federal American Recovery and Reinvestment Act of 2009 (ARRA)
provides up to 9 months of premium assistance under COBRA and
comparable state continuation coverage programs for certain eligible
individuals whose employment was involuntarily terminated between
September 1, 2008, and December 31, 2009, as specified. The federal
Department of Defense Appropriations Act, 2010 (DODA)
(DOD Act) extends that premium assistance for an
additional 6 months and also makes the assistance available to
certain eligible individuals who are whose
employment is involuntarily terminated between January 1, 2010,
and February 28, 2010. DODA The DOD Act
also gives an assistance-eligible individual who paid or failed
to pay the premium following exhaustion of the original 9 months of
assistance the ability to receive a reimbursement or credit or to
maintain coverage by retroactively paying the premium, as specified.
The DOD Act requires a plan administrator or other entity
involved to provide notices regarding these changes to certain
qualified beneficiaries within specified periods of time.
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 regulation of health
insurers by the Department of Insurance. The California Continuation
Benefits Replacement Act (Cal-COBRA) requires health care service
plans and health insurers providing group coverage to employers of 2
to 19 employees to offer continuation of that coverage for a
specified period of time to certain qualified beneficiaries, as
specified. Existing law requires Cal-COBRA plans and insurers to
provide notice of the availability of premium assistance under ARRA
to qualified beneficiaries who experience a qualifying event between
September 1, 2008, and December 31, 2009, as specified.
This bill would require those plans and insurers to also provide
notice of the availability of premium assistance to qualified
beneficiaries who experience a qualifying event between January 1,
2010, and February 28, 2010. The bill would additionally require
plans and insurers to notify those beneficiaries, and the
beneficiaries already receiving premium assistance, of the
availability of 6 additional months of assistance under DODA. With
respect to a qualified beneficiary eligible for that additional
premium assistance who failed to pay the applicable premium or
premiums following exhaustion of the original 9 months of assistance,
the bill would authorize the beneficiary to maintain coverage by
retroactively paying that premium or premiums, as specified. The bill
would require plans and insurers to notify those beneficiaries of
this retroactive payment option and to also notify beneficiaries who
pay the applicable premium or premiums following exhaustion of the
original 9 months of assistance of the availability of a
reimbursement or credit under DODA qualified
beneficiaries eligible for premium assistance of the extension of
premium assistance made available by the DOD Act consistent with the
notice requirements imposed under that act. The bill would authorize
the Department of Managed Health Care to designate model notices for
purposes of implementing federal premium assistance, as specified,
and would make other conforming changes .
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.
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 1366.21 of the Health and Safety Code is
amended to read:
1366.21. The definitions contained in this section govern the
construction of this article.
(a) "Continuation coverage" means extended coverage under the
group benefit plan in which an eligible employee or eligible
dependent is currently enrolled, or, in the case of a termination of
the group benefit plan or an employer open enrollment period,
extended coverage under the group benefit plan currently offered by
the employer.
(b) "Group benefit plan" means any health care service plan
contract provided pursuant to Article 3.1 (commencing with Section
1357) to an employer with 2 to 19 eligible employees, as defined in
Section 1357, as well as a specialized health care service plan
contract provided to an employer with 2 to 19 eligible employees, as
defined in Section 1357.
(c) (1) "Qualified beneficiary" means any individual who, on the
day before the qualifying event, is an enrollee in a group benefit
plan offered by a health care service plan pursuant to Article 3.1
(commencing with Section 1357) and has a qualifying event, as defined
in subdivision (d).
(2) "Qualified beneficiary eligible for premium assistance under
ARRA" means a qualified beneficiary, as defined in paragraph (1), who
(A) was or is eligible for continuation coverage as a result of the
involuntary termination of the covered employee's employment during
the period that begins with September 1, 2008, and ends with February
28, 2010, (B) elects continuation coverage, and (C) meets the
definition of "qualified beneficiary" set forth in paragraph (3) of
Section 1167 of Title 29 of the United States Code, as used in
subparagraph (E) of paragraph (10) of subdivision (a) of Section 3001
of ARRA or any subsequent rules or regulations issued pursuant to
that law.
(3) "ARRA" means Title III of Division B of the federal American
Recovery and Reinvestment Act of 2009.
(d) "Qualifying event" means any of the following events that, but
for the election of continuation coverage under this article, would
result in a loss of coverage under the group benefit plan to a
qualified beneficiary:
(1) The death of the covered employee.
(2) The termination of employment or reduction in hours of the
covered employee's employment, except that termination for gross
misconduct does not constitute a qualifying event.
(3) The divorce or legal separation of the covered employee from
the covered employee's spouse.
(4) The loss of dependent status by a dependent enrolled in the
group benefit plan.
(5) With respect to a covered dependent only, the covered employee'
s entitlement to benefits under Title XVIII of the United States
Social Security Act (Medicare).
(e) "Employer" means any employer that meets the definition of
"small employer" as set forth in Section 1357 and (1) employed 2 to
19 eligible employees on at least 50 percent of its working days
during the preceding calendar year, or, if the employer was not in
business during any part of the preceding calendar year, employed 2
to 19 eligible employees on at least 50 percent of its working days
during the preceding calendar quarter, (2) has contracted for health
care coverage through a group benefit plan offered by a health care
service plan, and (3) is not subject to Section 4980B of the United
States Internal Revenue Code or Chapter 18 of the Employee Retirement
Income Security Act, 29 U.S.C. Section 1161 et seq.
(f) "Core coverage" means coverage of basic health care services,
as defined in subdivision (b) of Section 1345, and other hospital,
medical, or surgical benefits provided by the group benefit plan that
a qualified beneficiary was receiving immediately prior to the
qualifying event, other than noncore coverage.
(g) "Noncore coverage" means coverage for vision and dental care.
SEC. 2. Section 1366.22 of the Health and Safety Code is amended
to read:
1366.22. The continuation coverage requirements of this article
do not apply to the following individuals:
(a) Individuals who are entitled to Medicare benefits or become
entitled to Medicare benefits pursuant to Title XVIII of the United
States Social Security Act, as amended or superseded. Entitlement to
Medicare Part A only constitutes entitlement to benefits under
Medicare.
(b) Individuals who have other hospital, medical, or surgical
coverage or who are covered or become covered under another group
benefit plan, including a self-insured employee welfare benefit plan,
that provides coverage for individuals and that does not impose any
exclusion or limitation with respect to any preexisting condition of
the individual, other than a preexisting condition limitation or
exclusion that does not apply to or is satisfied by the qualified
beneficiary pursuant to Sections 1357 and 1357.06. A group conversion
option under any group benefit plan shall not be considered as an
arrangement under which an individual is or becomes covered.
(c) Individuals who are covered, become covered, or are eligible
for federal COBRA coverage pursuant to Section 4980B of the United
States Internal Revenue Code or Chapter 18 of the Employee Retirement
Income Security Act, 29 U.S.C. Section 1161 et seq.
(d) Individuals who are covered, become covered, or are eligible
for coverage pursuant to Chapter 6A of the Public Health Service Act,
42 U.S.C. Section 300bb-1 et seq.
(e) Qualified beneficiaries who fail to meet the requirements of
subdivision (b) of Section 1366.24 or subdivision (h) of Section
1366.25 regarding notification of a qualifying event or election of
continuation coverage within the specified time limits.
(f) Except as provided in paragraph (2) of subdivision
(j) of Section 1366.25 subparagraph (A) of paragraph
(16) of subdivision (a) of Section 3001 of ARRA , qualified
beneficiaries who fail to submit the correct premium amount required
by subdivision (b) of Section 1366.24 and Section 1366.26, in
accordance with the terms and conditions of the plan contract, or
fail to satisfy other terms and conditions of the plan contract.
SEC. 3. Section 1366.25 of the Health and Safety Code is amended
to read:
1366.25. (a) Every group contract between a health care service
plan and an employer subject to this article that is issued, amended,
or renewed on or after July 1, 1998, shall require the employer to
notify the plan, in writing, of any employee who has had a qualifying
event, as defined in paragraph (2) of subdivision (d) of Section
1366.21, within 30 days of the qualifying event. The group contract
shall also require the employer to notify the plan, in writing,
within 30 days of the date, when the employer becomes subject to
Section 4980B of the United States Internal Revenue Code or Chapter
18 of the Employee Retirement Income Security Act, 29 U.S.C. Sec.
1161 et seq.
(b) Every group contract between a plan and an employer subject to
this article that is issued, amended, or renewed on or after July 1,
1998, shall require the employer to notify qualified beneficiaries
currently receiving continuation coverage, whose continuation
coverage will terminate under one group benefit plan prior to the end
of the period the qualified beneficiary would have remained covered,
as specified in Section 1366.27, of the qualified beneficiary's
ability to continue coverage under a new group benefit plan for the
balance of the period the qualified beneficiary would have remained
covered under the prior group benefit plan. This notice shall be
provided either 30 days prior to the termination or when all enrolled
employees are notified, whichever is later.
Every health care service plan and specialized health care service
plan shall provide to the employer replacing a health care service
plan contract issued by the plan, or to the employer's agent or
broker representative, within 15 days of any written request,
information in possession of the plan reasonably required to
administer the notification requirements of this subdivision and
subdivision (c).
(c) Notwithstanding subdivision (a), the group contract between
the health care service plan and the employer shall require the
employer to notify the successor plan in writing of the qualified
beneficiaries currently receiving continuation coverage so that the
successor plan, or contracting employer or administrator, may provide
those qualified beneficiaries with the necessary premium
information, enrollment forms, and instructions consistent with the
disclosure required by subdivision (c) of Section 1366.24 and
subdivision (e) of this section to allow the qualified beneficiary to
continue coverage. This information shall be sent to all qualified
beneficiaries who are enrolled in the plan and those qualified
beneficiaries who have been notified, pursuant to Section 1366.24, of
their ability to continue their coverage and may still elect
coverage within the specified 60-day period. This information shall
be sent to the qualified beneficiary's last known address, as
provided to the employer by the health care service plan or
disability insurer currently providing continuation coverage to the
qualified beneficiary. The successor plan shall not be obligated to
provide this information to qualified beneficiaries if the employer
or prior plan or insurer fails to comply with this section.
(d) A health care service plan may contract with an employer, or
an administrator, to perform the administrative obligations of the
plan as required by this article, including required notifications
and collecting and forwarding premiums to the health care service
plan. Except for the requirements of subdivisions (a), (b), and (c),
this subdivision shall not be construed to permit a plan to require
an employer to perform the administrative obligations of the plan as
required by this article as a condition of the issuance or renewal of
coverage.
(e) Every health care service plan, or employer or administrator
that contracts to perform the notice and administrative services
pursuant to this section, shall, within 14 days of receiving a notice
of a qualifying event, provide to the qualified beneficiary the
necessary benefits information, premium information, enrollment
forms, and disclosures consistent with the notice requirements
contained in subdivisions (b) and (c) of Section 1366.24 to allow the
qualified beneficiary to formally elect continuation coverage. This
information shall be sent to the qualified beneficiary's last known
address.
(f) Every health care service plan, or employer or administrator
that contracts to perform the notice and administrative services
pursuant to this section, shall, during the 180-day period ending on
the date that continuation coverage is terminated pursuant to
paragraphs (1), (3), and (5) of subdivision (a) of Section 1366.27,
notify a qualified beneficiary who has elected continuation coverage
pursuant to this article of the date that his or her coverage will
terminate, and shall notify the qualified beneficiary of any
conversion coverage available to that qualified beneficiary. This
requirement shall not apply when the continuation coverage is
terminated because the group contract between the plan and the
employer is being terminated.
(g) (1) A health care service plan shall provide to a qualified
beneficiary who has a qualifying event between September 1, 2008, and
February 28, 2010, inclusive, a written notice containing
information on the availability of premium assistance under ARRA.
This notice shall be sent to the qualified beneficiary's last known
address. The notice shall include clear and easily understandable
language to inform the qualified beneficiary that changes in federal
law provide a new opportunity to elect continuation coverage with a
65-percent premium subsidy and shall include all of the following:
(A) The amount of the premium the person will pay. For qualified
beneficiaries who had a qualifying event between September 1, 2008,
and May 12, 2009, inclusive, if a health care service plan is unable
to provide the correct premium amount in the notice, the notice may
contain the last known premium amount and an opportunity for the
qualified beneficiary to request, through a toll-free telephone
number, the correct premium that would apply to the beneficiary.
(B) Enrollment forms and any other information required to be
included pursuant to subdivision (e) to allow the qualified
beneficiary to elect continuation coverage. This information shall
not be included in notices sent to qualified beneficiaries currently
enrolled in continuation coverage.
(C) A description of the option to enroll in different coverage as
provided in subparagraph (B) of paragraph (1) of subdivision (a) of
Section 3001 of ARRA. This description shall advise the qualified
beneficiary to contact the covered employee's former employer for
prior approval to choose this option.
(D) The eligibility requirements for premium assistance in the
amount of 65 percent of the premium under Section 3001 of ARRA.
(E) (i) The duration of
premium assistance available under ARRA.
(ii) With respect to a qualified beneficiary who experiences a
qualifying event on or after January 1, 2010, the notice shall
include information regarding the additional six months of premium
assistance made available by Section 1010 of the Department of
Defense Appropriations Act, 2010 (Public Law 111-118).
(F) A statement that a qualified beneficiary eligible for premium
assistance under ARRA may elect continuation coverage no later than
60 days of the date of the notice.
(G) A statement that a qualified beneficiary eligible for premium
assistance under ARRA who rejected or discontinued continuation
coverage prior to receiving the notice required by this subdivision
has the right to withdraw that rejection and elect continuation
coverage with the premium assistance.
(H) A statement that reads as follows:
"IF YOU ARE HAVING ANY DIFFICULTIES READING OR UNDERSTANDING THIS
NOTICE, PLEASE CONTACT [name of health plan] at [insert appropriate
telephone number]."
(2) With respect to qualified beneficiaries who had a qualifying
event between September 1, 2008, and May 12, 2009, inclusive, the
notice described in this subdivision shall be provided by the later
of May 26, 2009, or seven business days after the date the plan
receives notice of the qualifying event.
(3) With respect to qualified beneficiaries who had or have a
qualifying event between May 13, 2009, and December 31, 2009
February 28, 2010 , inclusive, the notice
described in this subdivision shall be provided within the period of
time specified in subdivision (e).
(4) With respect to qualified beneficiaries who had a qualifying
event between January 1, 2010, and the effective date of this
paragraph, inclusive, the notice described in this subdivision shall
be provided within the later of 14 calendar days of the effective
date of this paragraph or seven business days after the date the plan
receives notice of the qualifying event.
(5) With respect to qualified beneficiaries who had or have a
qualifying event between the effective date of this paragraph and
February 28, 2010, inclusive, the notice described in this
subdivision shall be provided within the time period specified in
subdivision (e).
(6) For purposes of compliance with the notice requirements of
this subdivision, the department may designate a model notice or
notices that may be used by health care service plans. Use of the
model notice or notices shall not require prior approval by the
department. Any model notice or notices designated by the department
for purposes of this subdivision shall not be subject to the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(7)
(4) Nothing in this section shall be construed to
require a health care service plan to provide the plan's evidence of
coverage as a part of the notice required by this subdivision, and
nothing in this section shall be construed to require a health care
service plan to amend its existing evidence of coverage to comply
with the changes made to this section by the enactment of Assembly
Bill 23 of the 2009-10 Regular Session or by the act amending this
section during the second year of the 2009-10 Regular Session.
(h) (1) Notwithstanding any other provision of law, a qualified
beneficiary eligible for premium assistance under ARRA may elect
continuation coverage no later than 60 days after the date of the
notice required by subdivision (g).
(2) For a qualified beneficiary who elects to continue coverage
pursuant to paragraph (1), the period beginning on the date of the
qualifying event and ending on the effective date of the continuation
coverage shall be disregarded for purposes of calculating a break in
coverage in determining whether a preexisting condition provision
applies under subdivision (c) of Section 1357.06 or subdivision (e)
of Section 1357.51.
(3) For a qualified beneficiary who had a qualifying event between
September 1, 2008, and February 16, 2009, inclusive, and who elects
continuation coverage pursuant to paragraph (1), the continuation
coverage shall commence on the first day of the month following the
election.
(4) For a qualified beneficiary who had a qualifying event between
February 17, 2009, and May 12, 2009, inclusive, and who elects
continuation coverage pursuant to paragraph (1), the effective date
of the continuation coverage shall be either of the following, at the
option of the beneficiary, provided that the beneficiary pays the
applicable premiums:
(A) The date of the qualifying event.
(B) The first day of the month following the election.
(i) With respect to a qualified beneficiary eligible for premium
assistance under ARRA as of the effective date of this subdivision, a
health care service plan shall provide the qualified beneficiary a
written notice including information regarding the amendments made to
ARRA by the Department of Defense Appropriations Act, 2010 (Public
Law 111-118). This notice shall be sent to the beneficiary's last
known address and shall be provided within 60 days of the effective
date of this subdivision. A plan shall not be required to send this
notice to a qualified beneficiary who receives a notice pursuant to
subdivision (j).
(j) (1) With respect to a qualified beneficiary eligible for
premium assistance under ARRA at any time prior to the effective date
of this subdivision who, during a period of coverage preceding or
immediately following the effective date of this subdivision, paid or
failed to pay the applicable premium or premiums for continuation
coverage following the expiration of the nine months of premium
assistance made available under Public Law 111-5, a health care
service plan shall provide the beneficiary with a notice informing
the beneficiary of the amendments made to ARRA by the Department of
Defense Appropriations Act, 2010 (Public Law 111-118). This notice
shall be sent to the beneficiary's last known address and shall be
provided within the later of 30 days of the effective date of this
subdivision or 30 days after the first premium payment is due
following exhaustion of the nine months of premium assistance under
Public Law 111-5. The notice shall include, but not be limited to,
all of the following information:
(A) The availability of an additional six months of premium
assistance under the Department of Defense Appropriations Act, 2010
(Public Law 111-118).
(B) The ability to make retroactive premium payments in order to
maintain continuation coverage or to receive a reimbursement or
credit for premium payments made after the expiration of the nine
months of premium assistance made available under Public Law 111-5.
(C) The retroactive premium payments the beneficiary is required
to pay in order to maintain continuation coverage or the
reimbursements or credits to which the beneficiary is entitled, as
applicable. If a health care service plan is unable to provide this
information in the notice, the notice shall identify a toll-free
telephone number for the beneficiary to call to acquire the
information.
(D) A statement that reads as follows:
"IF YOU ARE HAVING ANY DIFFICULTIES READING OR UNDERSTANDING THIS
NOTICE, PLEASE CONTACT [name of health plan] at [insert appropriate
telephone number]."
(2) Notwithstanding any other provision of law, a qualified
beneficiary described in paragraph (1) who, during a period of
coverage preceding or immediately following the effective date of
this subdivision, did not pay the applicable premium or premiums
following expiration of the nine months of premium assistance made
available under Public Law 111-5 may maintain that coverage by paying
the premium or premiums, after application of the premium
assistance, within the later of 60 days of the effective date of this
subdivision or 30 days after the date of the notice required under
paragraph (1).
(3) Nothing in this subdivision shall be construed to authorize an
individual to continue coverage beyond the 36 months authorized by
this article.
(i) A health care service plan shall provide a qualified
beneficiary eligible for premium assistance under ARRA written notice
of the extension of that premium assistance as required under
subparagraph (D) of paragraph (16) of subdivision (a) of Section 3001
of ARRA.
(j) For purposes of implementing federal premium assistance for
continuation coverage, the department may designate a model notice or
notices that may be used by health care service plans. Use of the
model notice or notices shall not require prior approval of the
department. Any model notice or notices designated by the department
for purposes of this subdivision shall not be subject to the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(k) Notwithstanding any other provision of law, a qualified
beneficiary eligible for premium assistance under ARRA may elect to
enroll in different coverage subject to the criteria provided under
subparagraph (B) of paragraph (1) of subdivision (a) of Section 3001
of ARRA.
(l) A qualified beneficiary enrolled in continuation coverage as
of February 17, 2009, who is eligible for premium assistance under
ARRA may request application of the premium assistance as of March 1,
2009, or later, consistent with ARRA.
(m) A health care service plan that receives an election notice
from a qualified beneficiary eligible for premium assistance under
ARRA, pursuant to subdivision (h), shall be considered a person
entitled to reimbursement, as defined in Section 6432(b)(3) of the
Internal Revenue Code, as amended by paragraph (12) of subdivision
(a) of Section 3001 of ARRA.
(n) (1) For purposes of compliance with ARRA, in the absence of
guidance from, or if specifically required for state-only
continuation coverage by, the United States Department of Labor, the
Internal Revenue Service, or the Centers for Medicare and Medicaid
Services, a health care service plan may request verification of the
involuntary termination of a covered employee's employment from the
covered employee's former employer or the qualified beneficiary
seeking premium assistance under ARRA.
(2) A health care service plan that requests verification pursuant
to paragraph (1) directly from a covered employee's former employer
shall do so by providing a written notice to the employer. This
written notice shall be sent by mail or facsimile to the covered
employee's former employer within seven business days from the date
the plan receives the qualified beneficiary's election notice
pursuant to subdivision (h). Within 10 calendar days of receipt of
written notice required by this paragraph, the former employer shall
furnish to the health care service plan written verification as to
whether the covered employee's employment was involuntarily
terminated.
(3) A qualified beneficiary requesting premium assistance under
ARRA may furnish to the health care service plan a written document
or other information from the covered employee's former employer
indicating that the covered employee's employment was involuntarily
terminated. This document or information shall be deemed sufficient
by the health care service plan to establish that the covered
employee's employment was involuntarily terminated for purposes of
ARRA, unless the plan makes a reasonable and timely determination
that the documents or information provided by the qualified
beneficiary are legally insufficient to establish involuntary
termination of employment.
(4) If a health care service plan requests verification pursuant
to this subdivision and cannot verify involuntary termination of
employment within 14 business days from the date the employer
receives the verification request or from the date the plan receives
documentation or other information from the qualified beneficiary
pursuant to paragraph (3), the health care service plan shall either
provide continuation coverage with the federal premium assistance to
the qualified beneficiary or send the qualified beneficiary a denial
letter which shall include notice of his or her right to appeal that
determination pursuant to ARRA.
(5) No person shall intentionally delay verification of
involuntary termination of employment under this subdivision.
(o) The provision of information and forms related to the premium
assistance available pursuant to ARRA to individuals by a health care
service plan prior to May 12, 2009, or between December 19, 2009,
and the effective date of the act amending this section during the
second year of the 2009-10 Regular Session, shall not be considered a
violation of this chapter provided that
the plan complies with all of the requirements of this
article.
SEC. 4. Section 1366.27 of the Health and Safety Code is amended
to read:
1366.27. (a) The continuation coverage provided pursuant to this
article shall terminate at the first to occur of the following:
(1) In the case of a qualified beneficiary who is eligible for
continuation coverage pursuant to paragraph (2) of subdivision (d) of
Section 1366.21, the date 36 months after the date the qualified
beneficiary's benefits under the contract would otherwise have
terminated because of a qualifying event.
(2) Except as provided in subdivision (j) of Section
1366.25 subparagraph (A) of paragraph (16) of
subdivision (a) of Section 3001 of ARRA , the end of the period
for which premium payments were made, if the qualified beneficiary
ceases to make payments or fails to make timely payments of a
required premium, in accordance with the terms and conditions of the
plan contract. In the case of nonpayment of premiums, reinstatement
shall be governed by the terms and conditions of the plan contract
and by subparagraph (A) of paragraph (16) of subdivision (a) of
Section 3001 of ARRA, if applicable .
(3) In the case of a qualified beneficiary who is eligible for
continuation coverage pursuant to paragraph (1), (3), (4), or (5) of
subdivision (d) of Section 1366.21, the date 36 months after the date
the qualified beneficiary's benefits under the contract would
otherwise have terminated by reason of a qualifying event.
(4) The requirements of this article no longer apply to the
qualified beneficiary pursuant to the provisions of Section 1366.22.
(5) In the case of a qualified beneficiary who is eligible for
continuation coverage pursuant to paragraph (2) of subdivision (d) of
Section 1366.21, and determined, under Title II or Title XVI of the
Social Security Act, to be disabled at any time during the first 60
days of continuation coverage, and the spouse or dependent who has
elected coverage pursuant to this article, the date 36 months after
the date the qualified beneficiary's benefits under the contract
would otherwise have terminated because of a qualifying event. The
qualified beneficiary shall notify the plan, or the employer or
administrator that contracts to perform administrative services, of
the social security determination within 60 days of the date of the
determination letter and prior to the end of the original 36-month
continuation coverage period in order to be eligible for coverage
pursuant to this subdivision. If the qualified beneficiary is no
longer disabled under Title II or Title XVI of the Social Security
Act, the benefits provided in this paragraph shall terminate on the
later of the date provided by paragraph (1), or the month that begins
more than 31 days after the date of the final determination under
Title II or Title XVI of the United States Social Security Act that
the qualified beneficiary is no longer disabled. A qualified
beneficiary eligible for 36 months of continuation coverage as a
result of a disability shall notify the plan, or the employer or
administrator that contracts to perform the notice and administrative
services, within 30 days of a determination that the qualified
beneficiary is no longer disabled.
(6) In the case of a qualified beneficiary who is initially
eligible for and elects continuation coverage pursuant to paragraph
(2) of subdivision (d) of Section 1366.21, but who has another
qualifying event, as described in paragraph (1), (3), (4), or (5) of
subdivision (d) of Section 1366.21, within 36 months of the date of
the first qualifying event, and the qualified beneficiary has
notified the plan, or the employer or administrator under contract to
provide administrative services, of the second qualifying event
within 60 days of the date of the second qualifying event, the date
36 months after the date of the first qualifying event.
(7) The employer, or any successor employer or purchaser of the
employer, ceases to provide any group benefit plan to his or her
employees.
(8) The qualified beneficiary moves out of the plan's service area
or the qualified beneficiary commits fraud or deception in the use
of plan services.
(b) If the group contract between the plan and the employer is
terminated prior to the date the qualified beneficiary's continuation
coverage would terminate pursuant to this section, coverage under
the prior plan shall terminate and the qualified beneficiary may
elect continuation coverage under the subsequent group benefit plan,
if any, pursuant to the requirements of subdivision (b) of Section
1366.23 and subdivision (c) of Section 1366.24.
(c) The amendments made to this section by Assembly Bill 1401 of
the 2001-02 Regular Session shall apply to individuals who begin
receiving continuation coverage under this article on or after
January 1, 2003.
SEC. 5. Section 10128.51 of the Insurance Code is amended to read:
10128.51. (a) "Continuation coverage" means extended coverage
under the group benefit plan under which an eligible employee or
eligible dependent is currently covered, or, in the case of a
termination of the group benefit plan or an employer open enrollment
period, extended coverage under the group benefit plan currently
offered by the employer.
(b) "Group benefit plan" has the same meaning as "health benefit
plan" defined in Section 10700, including group policies of
vision-only and dental-only coverage, provided pursuant to Chapter 8
(commencing with Section 10700) to an employer with 2 to 19 eligible
employees, as defined in Section 10700.
(c) (1) "Qualified beneficiary" means any individual who, on the
day before the qualifying event, is covered under a group benefit
plan offered by a disability insurer pursuant to Article 1
(commencing with Section 10700) of Chapter 8, and has a qualifying
event, as defined in subdivision (d).
(2) "Qualified beneficiary eligible for premium assistance under
Title III of Division B of the American Recovery and Reinvestment Act
of 2009 (Public Law 111-5)" means a qualified beneficiary, as
defined in paragraph (1), who (A) was or is eligible for continuation
coverage as a result of the involuntary termination of the covered
employee's employment during the period that begins with September 1,
2008, and ends with February 28, 2010, (B) elects continuation
coverage, and (C) meets the definition of "qualified beneficiary" set
forth in paragraph (3) of Section 1167 of Title 29 of the United
States Code, as used in subparagraph (E) of paragraph (10) of
subdivision (a) of Section 3001 of ARRA or any subsequent rules or
regulations issued pursuant to that law.
(3) "ARRA" means Title III of Division B of the federal American
Recovery and Reinvestment Act of 2009.
(d) "Qualifying event" means any of the following events that, but
for the election of continuation coverage under this article, would
result in a loss of coverage under the group benefit plan to a
qualified beneficiary:
(1) The death of the covered employee.
(2) The termination of employment or reduction in hours of the
covered employee's employment, except that termination for gross
misconduct does not constitute a qualifying event.
(3) The divorce or legal separation of the covered employee from
the covered employee's spouse.
(4) The loss of dependent status by a dependent enrolled in the
group benefit plan.
(5) With respect to a covered dependent only, the covered employee'
s entitlement to benefits under Title XVIII of the United States
Social Security Act (Medicare).
(e) "Employer" means any employer that meets the definition of
"small employer" as set forth in Section 10700 and (1) employed 2 to
19 eligible employees on at least 50 percent of its working days
during the preceding calendar year, or, if the employer was not in
business during any part of the preceding calendar year, employed 2
to 19 eligible employees on at least 50 percent of its working days
during the preceding calendar quarter, (2) has contracted for health
care coverage through a group benefit plan offered by a disability
insurer, and (3) is not subject to Section 4980B of the United States
Internal Revenue Code or Chapter 18 of the Employee Retirement
Income Security Act, 29 U.S.C. Section 1161 et seq.
(f) "Core coverage" means coverage for hospital, medical, or
surgical benefits provided under the group benefit plan that a
qualified beneficiary was receiving immediately prior to the
qualifying event, other than noncore coverage.
(g) "Noncore coverage" means coverage for vision and dental care.
SEC. 6. Section 10128.52 of the Insurance Code is amended to read:
10128.52. The continuation coverage requirements of this article
do not apply to the following individuals:
(a) Individuals who are entitled to Medicare benefits or become
entitled to Medicare benefits pursuant to Title XVIII of the United
States Social Security Act, as amended or superseded. Entitlement to
Medicare Part A only constitutes entitlement to benefits under
Medicare.
(b) Individuals who have other hospital, medical, or surgical
coverage, or who are covered or become covered under another group
benefit plan, including a self-insured employee welfare benefit plan,
that provides coverage for individuals and that does not impose any
exclusion or limitation with respect to any preexisting condition of
the individual, other than a preexisting condition limitation or
exclusion that does not apply to or is satisfied by the qualified
beneficiary pursuant to Sections 10198.6 and 10198.7. A group
conversion option under any group benefit plan shall not be
considered as an arrangement under which an individual is or becomes
covered.
(c) Individuals who are covered, become covered, or are eligible
for federal COBRA coverage pursuant to Section 4980B of the United
States Internal Revenue Code or Chapter 18 of the Employee Retirement
Income Security Act, 29 U.S.C. Section 1161 et seq.
(d) Individuals who are covered, become covered, or are eligible
for coverage pursuant to Chapter 6A of the Public Health Service Act,
42 U.S.C. Section 300bb-1 et seq.
(e) Qualified beneficiaries who fail to meet the requirements of
subdivision (b) of Section 10128.54 or subdivision (h) of Section
10128.55 regarding notification of a qualifying event or election of
continuation coverage within the specified time limits.
(f) Except as provided in paragraph (2) of subdivision
(j) of Section 10128.55 subparagraph (A) of paragraph
(16) of subdivision (a) of Section 3001 of ARRA , qualified
beneficiaries who fail to submit the correct premium amount required
by subdivision (b) of Section 10128.55 and Section 10128.57, in
accordance with the terms and conditions of the policy or contract,
or fail to satisfy other terms and conditions of the policy or
contract.
SEC. 7. Section 10128.55 of the Insurance Code is amended to read:
10128.55. (a) Every group benefit plan contract between a
disability insurer and an employer subject to this article that is
issued, amended, or renewed on or after July 1, 1998, shall require
the employer to notify the insurer in writing of any employee who has
had a qualifying event, as defined in paragraph (2) of subdivision
(d) of Section 10128.51, within 30 days of the qualifying event. The
group contract shall also require the employer to notify the insurer,
in writing, within 30 days of the date when the employer becomes
subject to Section 4980B of the United States Internal Revenue Code
or Chapter 18 of the Employee Retirement Income Security Act, 29
U.S.C. Sec. 1161 et seq.
(b) Every group benefit plan contract between a disability insurer
and an employer subject to this article that is issued, amended, or
renewed after July 1, 1998, shall require the employer to notify
qualified beneficiaries currently receiving continuation coverage,
whose continuation coverage will terminate under one group benefit
plan prior to the end of the period the qualified beneficiary would
have remained covered, as specified in Section 10128.57, of the
qualified beneficiary's ability to continue coverage under a new
group benefit plan for the balance of the period the qualified
beneficiary would have remained covered under the prior group benefit
plan. This notice shall be provided either 30 days prior to the
termination or when all enrolled employees are notified, whichever is
later.
Every disability insurer shall provide to the employer replacing a
group benefit plan policy issued by the insurer, or to the employer'
s agent or broker representative, within 15 days of any written
request, information in possession of the insurer reasonably required
to administer the notification requirements of this subdivision and
subdivision (c).
(c) Notwithstanding subdivision (a), the group benefit plan
contract between the insurer and the employer shall require the
employer to notify the successor plan in writing of the qualified
beneficiaries currently receiving continuation coverage so that the
successor plan, or contracting employer or administrator, may provide
those qualified beneficiaries with the necessary premium
information, enrollment forms, and instructions consistent with the
disclosure required by subdivision (c) of Section 10128.54 and
subdivision (e) of this section to allow the qualified beneficiary to
continue coverage. This information shall be sent to all qualified
beneficiaries who are enrolled in the group benefit plan and those
qualified beneficiaries who have been notified, pursuant to Section
10128.54 of their ability to continue their coverage and may still
elect coverage within the specified 60-day period. This information
shall be sent to the qualified beneficiary's last known address, as
provided to the employer by the health care service plan or,
disability insurer currently providing continuation coverage to the
qualified beneficiary. The successor insurer shall not be obligated
to provide this information to qualified beneficiaries if the
employer or prior insurer or health care service plan fails to comply
with this section.
(d) A disability insurer may contract with an employer, or an
administrator, to perform the administrative obligations of the plan
as required by this article, including required notifications and
collecting and forwarding premiums to the insurer. Except for the
requirements of subdivisions (a), (b), and (c), this subdivision
shall not be construed to permit an insurer to require an employer to
perform the administrative obligations of the insurer as required by
this article as a condition of the issuance or renewal of coverage.
(e) Every insurer, or employer or administrator that contracts to
perform the notice and administrative services pursuant to this
section, shall, within 14 days of receiving a notice of a qualifying
event, provide to the qualified beneficiary the necessary premium
information, enrollment forms, and disclosures consistent with the
notice requirements contained in subdivisions (b) and (c) of Section
10128.54 to allow the qualified beneficiary to formally elect
continuation coverage. This information shall be sent to the
qualified beneficiary's last known address.
(f) Every insurer, or employer or administrator that contracts to
perform the notice and administrative services pursuant to this
section, shall, during the 180-day period ending on the date that
continuation coverage is terminated pursuant to paragraphs (1), (3),
and (5) of subdivision (a) of Section 10128.57, notify a qualified
beneficiary who has elected continuation coverage pursuant to this
article of the date that his or her coverage will terminate, and
shall notify the qualified beneficiary of any conversion coverage
available to that qualified beneficiary. This requirement shall not
apply when the continuation coverage is terminated because the group
contract between the insurer and the employer is being terminated.
(g) (1) An insurer shall provide to a qualified beneficiary who
has a qualifying event between September 1, 2008, and February 28,
2010, inclusive, a written notice containing information on the
availability of premium assistance under ARRA. This notice shall be
sent to the qualified beneficiary's last known address. The notice
shall include clear and easily understandable language to inform the
qualified beneficiary that changes in federal law provide a new
opportunity to elect continuation coverage with a 65-percent premium
subsidy and shall include all of the following:
(A) The amount of the premium the person will pay. For qualified
beneficiaries who had a qualifying event between September 1, 2008,
and May 12, 2009, inclusive, if an insurer is unable to provide the
correct premium amount in the notice, the notice may contain the last
known premium amount and an opportunity for the qualified
beneficiary to request, through a toll-free telephone number, the
correct premium that would apply to the beneficiary.
(B) Enrollment forms and any other information required to be
included pursuant to subdivision (e) to allow the qualified
beneficiary to elect continuation coverage. This information shall
not be included in notices sent to qualified beneficiaries currently
enrolled in continuation coverage.
(C) A description of the option to enroll in different coverage as
provided in subparagraph (B) of paragraph (1) of subdivision (a) of
Section 3001 of ARRA. This description shall advise the qualified
beneficiary to contact the covered employee's former employer for
prior approval to choose this option.
(D) The eligibility requirements for premium assistance in the
amount of 65 percent of the premium under Section 3001 of ARRA.
(E) (i) The duration of
premium assistance available under ARRA.
(ii) With respect to a qualified beneficiary who experiences a
qualifying event on or after January 1, 2010, the notice shall
include information regarding the additional six months of premium
assistance made available by Section 1010 of the Department of
Defense Appropriations Act, 2010 (Public Law 111-118).
(F) A statement that a qualified beneficiary eligible for premium
assistance under ARRA may elect continuation coverage no later than
60 days of the date of the notice.
(G) A statement that a qualified beneficiary eligible for premium
assistance under ARRA who rejected or discontinued continuation
coverage prior to receiving the notice required by this subdivision
has the right to withdraw that rejection and elect continuation
coverage with the premium assistance.
(H) A statement that reads as follows:
"IF YOU ARE HAVING ANY DIFFICULTIES READING OR UNDERSTANDING THIS
NOTICE, PLEASE CONTACT [name of insurer] at [insert appropriate
telephone number]."
(2) With respect to qualified beneficiaries who had a qualifying
event between September 1, 2008, and May 12, 2009, inclusive, the
notice described in this subdivision shall be provided by the later
of May 26, 2009, or seven business days after the date the insurer
receives notice of the qualifying event.
(3) With respect to qualified beneficiaries who had or have a
qualifying event between May 13, 2009, and December 31, 2009
February 28, 2010 , inclusive, the notice
described in this subdivision shall be provided within the period of
time specified in subdivision (e).
(4) With respect to qualified beneficiaries who had a
qualifying event between January 1, 2010, and the effective date of
this paragraph, inclusive, the notice described in this subdivision
shall be provided within the later of 14 calendar days of the
effective date of this paragraph or seven business days after the
date the insurer receives notice of the qualifying event.
(5) With respect to qualified beneficiaries who had or
have a qualifying event between the effective date of this paragraph
and February 28, 2010, inclusive, the notice described in this
subdivision shall be provided within the time period specified in
subdivision (e).
(6)
(4) Nothing in this section shall be construed to
require an insurer to provide the insurer's evidence of coverage as a
part of the notice required by this subdivision, and nothing in this
section shall be construed to require an insurer to amend its
existing evidence of coverage to comply with the changes made to this
section by the enactment of Assembly Bill 23 of the 2009-10 Regular
Session or by the act amending this section during the second year of
the 2009-10 Regular Session.
(h) (1) Notwithstanding any other provision of law, a qualified
beneficiary eligible for premium assistance under ARRA may elect
continuation coverage no later than 60 days after the date of the
notice required by subdivision (g).
(2) For a qualified beneficiary who elects to continue coverage
pursuant to paragraph (1), the period beginning on the date of the
qualifying event and ending on the effective date of the continuation
coverage shall be disregarded for purposes of calculating a break in
coverage in determining whether a preexisting condition provision
applies under subdivision (e) of Section 10198.7 or subdivision (c)
of Section 10708.
(3) For a qualified beneficiary who had a qualifying event between
September 1, 2008, and February 16, 2009, inclusive, and who elects
continuation coverage pursuant to paragraph (1), the continuation
coverage shall commence on the first day of the month following the
election.
(4) For a qualified beneficiary who had a qualifying event between
February 17, 2009, and May 12, 2009, inclusive, and who elects
continuation coverage pursuant to paragraph (1), the effective date
of the continuation coverage shall be either of the following, at the
option of the beneficiary, provided that the beneficiary pays the
applicable premiums:
(A) The date of the qualifying event.
(B) The first day of the month following the election.
(i) With respect to a qualified beneficiary eligible for premium
assistance under ARRA as of the effective date of this subdivision,
an insurer shall provide the qualified beneficiary a written notice
including information regarding the amendments made to ARRA by the
Department of Defense Appropriations Act, 2010 (Public Law 111-118).
This notice shall be sent to the beneficiary's last known address and
shall be provided within 60 days of the effective date of this
subdivision. An insurer shall not be required to send this notice to
a qualified beneficiary who receives a notice pursuant to subdivision
(j).
(j) (1) With respect to a qualified beneficiary eligible for
premium assistance under ARRA at any time prior to the effective date
of this subdivision who, during a period of coverage preceding or
immediately following the effective date of this subdivision, paid or
failed to pay the applicable premium or premiums for continuation
coverage following the expiration of the nine months of premium
assistance made available under Public Law 111-5, an insurer shall
provide the beneficiary with a notice informing the beneficiary of
the amendments made to ARRA by the Department of Defense
Appropriations Act, 2010 (Public Law 111-118). This notice shall be
sent to the beneficiary's last known address and shall be provided
within the later of 30 days of the effective date of this subdivision
or 30 days after the first premium payment is due following
exhaustion of the nine months of premium assistance under Public Law
111-5. The notice shall include, but not be limited to, all of the
following information:
(A) The availability of an additional six months of premium
assistance under the Department of Defense Appropriations Act, 2010
(Public Law 111-118).
(B) The ability to make retroactive premium payments in order to
maintain continuation coverage or to receive a reimbursement or
credit for premium payments made after the expiration of the nine
months of premium assistance made available under Public Law 111-5.
(C) The retroactive premium payments the beneficiary is required
to pay in order to maintain continuation coverage or the
reimbursements or credits to which the beneficiary is entitled, as
applicable. If an insurer is unable to provide this information in
the notice, the notice shall identify a toll-free telephone number
for the beneficiary to call to acquire the information.
(D) A statement that reads as follows:
"IF YOU ARE HAVING ANY DIFFICULTIES READING OR UNDERSTANDING THIS
NOTICE, PLEASE CONTACT [name of insurer] at [insert appropriate
telephone number]."
(2) Notwithstanding any other provision of law, a qualified
beneficiary described in paragraph (1) who, during a period of
coverage preceding or immediately following the effective date of
this subdivision, did not pay the applicable premium or premiums
following expiration of the nine months of premium assistance made
available under Public Law 111-5 may maintain continuation coverage
pursuant to this article by paying the premium or premiums, after
application of the premium assistance, within the later of 60 days of
the effective date of this subdivision or 30 days after the date of
the notice required under paragraph (1).
(3) Nothing in this subdivision shall be construed to authorize an
individual to continue coverage beyond the 36 months authorized by
this article.
(i) An insurer shall provide a qualified beneficiary eligible for
premium assistance under ARRA written notice of the extension of that
premium assistance as required under subparagraph (D) of paragraph
(16) of subdivision (a) of Section 3001 of ARRA.
(k)
(j) Notwithstanding any other provision of law, a
qualified beneficiary eligible for premium assistance under ARRA may
elect to enroll in different coverage subject to the criteria
provided under subparagraph (B) of paragraph (1) of subdivision (a)
of Section 3001 of ARRA.
(l)
(k) A qualified beneficiary enrolled in continuation
coverage as of February 17, 2009, who is eligible for premium
assistance under ARRA may request
application of the premium assistance as of March 1, 2009, or
later, consistent with ARRA.
(m)
(l) An insurer that receives an election notice from a
qualified beneficiary eligible for premium assistance under ARRA,
pursuant to subdivision (h), shall be considered a person entitled to
reimbursement, as defined in Section 6432(b)(3) of the Internal
Revenue Code, as amended by paragraph (12) of subdivision (a) of
Section 3001 of ARRA.
(n)
(m) (1) For purposes of compliance with ARRA, in the
absence of guidance from, or if specifically required for state-only
continuation coverage by, the United States Department of Labor, the
Internal Revenue Service, or the Centers for Medicare and Medicaid
Services, an insurer may request verification of the involuntary
termination of a covered employee's employment from the covered
employee's former employer or the qualified beneficiary seeking
premium assistance under ARRA.
(2) An insurer that requests verification pursuant to paragraph
(1) directly from a covered employee's former employer shall do so by
providing a written notice to the employer. This written notice
shall be sent by mail or facsimile to the covered employee's former
employer within seven business days from the date the insurer
receives the qualified beneficiary's election notice pursuant to
subdivision (h). Within 10 calendar days of receipt of written notice
required by this paragraph, the former employer shall furnish to the
insurer written verification as to whether the covered employee's
employment was involuntarily terminated.
(3) A qualified beneficiary requesting premium assistance under
ARRA may furnish to the insurer a written document or other
information from the covered employee's former employer indicating
that the covered employee's employment was involuntarily terminated.
This document or information shall be deemed sufficient by the
insurer to establish that the covered employee's employment was
involuntarily terminated for purposes of ARRA, unless the insurer
makes a reasonable and timely determination that the documents or
information provided by the qualified beneficiary are legally
insufficient to establish involuntary termination of employment.
(4) If an insurer requests verification pursuant to this
subdivision and cannot verify involuntary termination of employment
within 14 business days from the date the employer receives the
verification request or from the date the insurer receives
documentation or other information from the qualified beneficiary
pursuant to paragraph (3), the insurer shall either provide
continuation coverage with the federal premium assistance to the
qualified beneficiary or send the qualified beneficiary a denial
letter which shall include notice of his or her right to appeal that
determination pursuant to ARRA.
(5) No person shall intentionally delay verification of
involuntary termination of employment under this subdivision.
SEC. 8. Section 10128.57 of the Insurance Code is amended to read:
10128.57. (a) The continuation coverage provided pursuant to this
article shall terminate at the first to occur of the following:
(1) In the case of a qualified beneficiary who is eligible for
continuation coverage pursuant to paragraph (2) of subdivision (d) of
Section 10128.51, the date 36 months after the date the qualified
beneficiary's benefits under the contract would otherwise have
terminated because of a qualifying event.
(2) Except as provided in paragraph (2) of subdivision
(j) of Section 10128.55 subparagraph (A) of paragraph
(16) of subdivision (a) of Section 3001 of ARRA ,
the end of the period for which premium payments were made, if the
qualified beneficiary ceases to make payments or fails to make timely
payments of a required premium, in accordance with the terms and
conditions of the policy or contract. In the case of nonpayment of
premiums, reinstatement shall be governed by the terms and conditions
of the plan contract policy or contract and
by subparagraph (A) of paragraph (16) of subdivision (a) of Section
3001 of ARRA, if applicable .
(3) In the case of a qualified beneficiary who is eligible to
continuation coverage pursuant to paragraph (1), (3), (4), or (5) of
subdivision (d) of Section 10116.51, the date 36 months after the
date the qualified beneficiary's benefits under the contract would
otherwise have terminated by reason of a qualifying event.
(4) The requirements of this article no longer apply to the
qualified beneficiary pursuant to the provisions of Section 10128.52.
(5) In the case of a qualified beneficiary who is eligible for
continuation coverage pursuant to paragraph (2) of subdivision (d) of
Section 10128.51, and determined, under Title II or Title XVI of the
Social Security Act, to be disabled any time during the first 60
days of continuation coverage, and the spouse or dependent who has
elected coverage pursuant to this article, the date 36 months after
the date the qualified beneficiary's benefits under the contract
would otherwise have terminated because of a qualifying event. The
qualified beneficiary shall notify the insurer, or the employer or
administrator that contracts to perform administrative services, of
the social security determination within 60 days of the date of the
determination letter and prior to the end of the original 36-month
continuation coverage period in order to be eligible for coverage
pursuant to this subdivision. If the qualified beneficiary is no
longer disabled under Title II or Title XVI of the Social Security
Act, the benefits provided in this paragraph shall terminate on the
later of the date provided by paragraph (1), or the month that begins
more than 31 days after the date of the final determination under
Title II or Title XVI of the United States Social Security Act that
the qualified beneficiary is no longer disabled. A qualified
beneficiary eligible for 36 months of continuation coverage as a
result of a disability shall notify the insurer, or the employer or
administrator that contracts to perform the notice and administrative
services, within 30 days of a determination that the qualified
beneficiary is no longer disabled.
(6) In the case of a qualified beneficiary who is initially
eligible for and elects continuation coverage pursuant to paragraph
(2) of subdivision (d) of Section 10128.51, but who has another
qualifying event, as described in paragraph (1), (3), (4), or (5) of
subdivision (d) of Section 10128.51, within 36 months of the date of
the first qualifying event, and has notified the insurer, or employer
or administrator under contract to provide administrative services,
of the second qualifying event within 60 days of the date of the
second qualifying event, the date 36 months after the date of the
first qualifying event.
(7) The employer, or any successor employer or purchaser of the
employer, ceases to provide any group benefit plan to his or her
employees.
(8) The qualified beneficiary moves out of the insurer's service
area, or the qualified beneficiary commits fraud or deception in the
use of benefits.
(b) If the group benefits contracts between the insurer and the
employer is terminated prior to the date the qualified beneficiary's
continuation coverage would terminate pursuant to this section,
coverage under the prior plan shall terminate and the qualified
beneficiary may elect continuation coverage under the subsequent
group benefit plan, if any, pursuant to the requirements of
subdivision (b) of Section 10128.53 and subdivision (c) of Section
10128.54.
(c) The amendments made to this section by Assembly Bill 1401 of
the 2001-02 Regular Session shall apply to individuals who begin
receiving continuation coverage under this article on or after
January 1, 2003.
SEC. 9. It is the intent of the Legislature to enact legislation
that would implement federal legislation, such as Section 3302 of
Chapter 3 of Title III of the Jobs for Main Street Act, 2010 (HR
2847), that is enacted and that makes changes to the premium
assistance made available under the federal American Recovery and
Reinvestment Act of 2009.
SEC. 10. 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. 11. 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 make federal funds available at the earliest possible
time to address the state's pressing need for federally subsidized
health care coverage premiums for individuals who have lost group
health care coverage due to a qualifying event and may be eligible
for state continuation coverage under Cal-COBRA and in order to help
carry out the powers of the Department of Insurance and the
Department of Managed Health Care to protect the interests of the
public and carry out the intent of the Legislature to encourage the
availability of health care coverage to the public without gaps in
coverage when possible, it is necessary that this act take effect
immediately.