BILL NUMBER: SB 1379 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Strickland
FEBRUARY 19, 2010
An act to amend Section 1357.03 of the Health and Safety Code,
relating to health care service plans.
LEGISLATIVE COUNSEL'S DIGEST
SB 1379, as introduced, Strickland. Health care service plans.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for licensure and regulation of health care service plans
by the Department of Managed Health Care. Existing law, among other
things, requires a health care service plan to fairly and
affirmatively offer, market, and sell to all small employers all of
the plan's contracts that are sold to small employers in the same
service area.
This bill would make a technical, nonsubstantive change to these
provisions.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1357.03 of the Health and Safety Code is
amended to read:
1357.03. (a) Upon On and after the
effective date of this article, a plan shall fairly and affirmatively
offer, market, and sell all of the plan's health care service plan
contracts that are sold to small employers or to associations that
include small employers to all small employers in each service area
in which the plan provides or arranges for the provision of health
care services. A plan contracting to participate in the voluntary
purchasing pool for small employers provided for under Article 4
(commencing with Section 10730) of Chapter 8 of Part 2 of Division 2
of the Insurance Code shall be deemed in compliance with this
requirement for a contract offered through the voluntary purchasing
pool established under Article 4 (commencing with Section 10730) of
Chapter 8 of Part 2 of Division 2 of the Insurance Code in those
geographic regions in which plans participate in the pool, if the
contract is offered exclusively through the pool. Each plan shall
make available to each small employer all small employer health care
service plan contracts that the plan offers and sells to small
employers or to associations that include small employers in this
state. No plan or solicitor shall induce or otherwise encourage a
small employer to separate or otherwise exclude an eligible employee
from a health care service plan contract that is provided in
connection with the employee's employment or membership in a
guaranteed association.
(b) Every plan shall file with the director the reasonable
employee participation requirements and employer contribution
requirements that will be applied in offering its plan contracts.
Participation requirements shall be applied uniformly among all small
employer groups, except that a plan may vary application of minimum
employee participation requirements by the size of the small employer
group and whether the employer contributes 100 percent of the
eligible employee's premium. Employer contribution requirements shall
not vary by employer size. A health care service plan shall not
establish a participation requirement that (1) requires a person who
meets the definition of a dependent in subdivision (a) of Section
1357 to enroll as a dependent if he or she is otherwise eligible for
coverage and wishes to enroll as an eligible employee and (2) allows
a plan to reject an otherwise eligible small employer because of the
number of persons that waive coverage due to coverage through another
employer. Members of an association eligible for health coverage
under subdivision (o) of Section 1357, but not electing any health
coverage through the association, shall not be counted as eligible
employees for purposes of determining whether the guaranteed
association meets a plan's reasonable participation standards.
(c) The plan shall not reject an application from a small employer
for a health care service plan contract if all of the following are
met:
(1) The small employer, as defined by paragraph (1) of subdivision
( l ) of Section 1357, offers health benefits to 100
percent of its eligible employees, as defined by paragraph (1) of
subdivision (b) of Section 1357. Employees who waive coverage on the
grounds that they have other group coverage shall not be counted as
eligible employees.
(2) The small employer agrees to make the required premium
payments.
(3) The small employer agrees to inform the small employers'
employees of the availability of coverage and the provision that
those not electing coverage must wait one year to obtain coverage
through the group if they later decide they would like to have
coverage.
(4) The employees and their dependents who are to be covered by
the plan contract work or reside in the service area in which the
plan provides or otherwise arranges for the provision of health care
services.
(d) No plan or solicitor shall, directly or indirectly, engage in
the following activities:
(1) Encourage or direct small employers to refrain from filing an
application for coverage with a plan because of the health status,
claims experience, industry, occupation of the small employer, or
geographic location provided that it is within the plan's approved
service area.
(2) Encourage or direct small employers to seek coverage from
another plan or the voluntary purchasing pool established under
Article 4 (commencing with Section 10730) of Chapter 8 of Part 2 of
Division 2 of the Insurance Code because of the health status, claims
experience, industry, occupation of the small employer, or
geographic location provided that it is within the plan's approved
service area.
(e) A plan shall not, directly or indirectly, enter into any
contract, agreement, or arrangement with a solicitor that provides
for or results in the compensation paid to a solicitor for the sale
of a health care service plan contract to be varied because of the
health status, claims experience, industry, occupation, or geographic
location of the small employer. This subdivision does not apply to a
compensation arrangement that provides compensation to a solicitor
on the basis of percentage of premium, provided that the percentage
shall not vary because of the health status, claims experience,
industry, occupation, or geographic area of the small employer.
(f) A policy or contract that covers two or more employees shall
not establish rules for eligibility, including continued eligibility,
of an individual, or dependent of an individual, to enroll under the
terms of the plan based on any of the following health
status-related factors:
(1) Health status.
(2) Medical condition, including physical and mental illnesses.
(3) Claims experience.
(4) Receipt of health care.
(5) Medical history.
(6) Genetic information.
(7) Evidence of insurability, including conditions arising out of
acts of domestic violence.
(8) Disability.
(g) A plan shall comply with the requirements of Section 1374.3.