BILL NUMBER: AB 792	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 21, 2012
	AMENDED IN SENATE  AUGUST 17, 2011
	AMENDED IN SENATE  JUNE 30, 2011
	AMENDED IN ASSEMBLY  MAY 27, 2011
	AMENDED IN ASSEMBLY  MAY 10, 2011
	AMENDED IN ASSEMBLY  APRIL 14, 2011

INTRODUCED BY   Assembly Member Bonilla
   (Coauthor: Assembly Member Huffman)

                        FEBRUARY 17, 2011

   An act to add Sections 2024.7 and 8613.7 to the Family Code, to
add Sections 1366.50 and 1366.51 to the Health and Safety Code, 
and  to add Sections 10786 and 10787 to the Insurance Code,
  and to amend Section 2800.2 of the Labor Code, 
relating to health care coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 792, as amended, Bonilla. Health care coverage: California
Health Benefit Exchange.
   Existing law, the federal Patient Protection and Affordable Care
Act, requires each state to, by January 1, 2014, establish an
American Health Benefit Exchange that makes available qualified
health plans to qualified individuals and small employers. Existing
state law establishes the California Health Benefit Exchange within
state government, specifies the powers and duties of the board
governing the Exchange relative to determining eligibility for
enrollment in the Exchange and arranging for coverage under qualified
health plans, and requires the board to facilitate the purchase of
qualified health plans through the Exchange by qualified individuals
and small employers by January 1, 2014.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the regulation of health care service plans by the
Department of Managed Health Care and makes a willful violation of
the act a crime. Existing law provides for the regulation of health
insurers by the Department of Insurance. Existing law imposes
specified requirements on health care service plans and health
insurers that provide medical and hospital coverage under an
employer-sponsored group plan for an employer, employee association,
or other entity subject to requirements under COBRA or Cal-COBRA, as
defined  , and imposes specified requirements on those
employers, employee associations, or other entities to notify its
current and former employees or members and dependents of
continuation coverage and conversion coverage options upon specified
events  . Existing law sets forth procedures related to a
petition for dissolution of marriage, nullity of marriage, or legal
separation, or a petition for adoption.
   This bill would  require the disclosure of information on
health care coverage through the California Health Benefit Exchange,
under specified circumstances, by health care service plans, health
insurers, employers, employee associations or other entities, or, on
and after January 1, 2013, by the court,   require a
court,  upon the filing of a petition for dissolution of
marriage, nullity of marriage,  or  legal separation
 , or adoption   on and after January 1, 2014,
to provide a specified notice   informing the petitioner and
respondent that they may be eligible for reduced-cost coverage
through the Exchange or no-cost coverage through Medi-Cal. The bill
would also require a court to provide such a notice to a petition for
adoption. The bill would require the notice to include information
regarding obtaining coverage through those programs and would require
the notice to be developed by the Exchange  . 
   Commencing January 1, 2014, this bill would require specified
health care service plans and health insurers to provide to
individuals who cease to be enrolled in individual coverage and to
individuals who lose coverage under an employer-sponsored group plan
a notice informing those individuals that they may be eligible for
reduced-cost coverage through the Exchange or no-cost coverage
through Medi-Cal. The bill would require the notice to include
information regarding obtaining coverage through those programs and
would require that the notice be developed by the Department of
Managed Health Care and the Department of Insurance.  
   On and after January 1, 2014, this bill would also require
specified health care service plans and health insurers to, upon the
failure of an enrollee or insured to renew his or her health
coverage, as specified, or upon termination of coverage under an
employer-sponsored group plan, transfer specified information to the
California Health Benefit Exchange for purposes of enrolling those
individuals in the Exchange. The bill would make the automatic
enrollment of those individuals in the Exchange subject to the plan
or insurer, or employer, employee association, or other entity,
obtaining the written consent of the individual at the time the
individual or employer-sponsored group plan contract or policy is
issued, amended, delivered, or renewed, as specified, or upon a
qualifying event, as defined. The bill would allow an individual
whose information has been transferred to the Exchange under those
provisions to discontinue his or her application for enrollment with
the Exchange, as specified. 
   Because a willful violation of the bill's provisions relative to
health care service plans would be a crime, the bill would impose a
state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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

  SECTION 1.  Section 2024.7 is added to the Family Code, to read:
   2024.7.  On and after January 1,  2013,  
2014,  upon the filing of a petition for dissolution of
marriage, nullity of marriage, or legal separation, the court shall
provide to the petitioner and the respondent  the following
notice:   a notice informing him or her that he or she
may be eligible for reduced-cost coverage through the California
Health Benefit Exchange established under Title 22 (commencing with
Section 100500) of the   Government Code or no-cost coverage
through Medi-Cal. The notice shall include information on obtaining
coverage pursuant to those programs, and shall be developed by the
California Health Benefit Exchange. 

   "In March of 2010, the federal government passed national health
care reform. Because of this, effective January 1, 2014, you may
become eligible for reduced-cost comprehensive health care coverage
through the California Health Benefit Exchange. To learn more, visit
www.healthexchange.ca.gov or call 1-888-(insert telephone number)."


  SEC. 2.  Section 8613.7 is added to the Family Code, to read:
   8613.7.  On and after January 1,  2013, upon the filing of
a petition for adoption pursuant to this part,   2014,
 the court shall provide to  the petitioner the
following notice:   any petitioner for adoption pursuant
to this part a notice informing him or her that he or she may be
eligible for reduced-cost coverage through the California Health
Benefit Exchange established under Title 22 (commencing with Section
100500) of the   Government Code or no-cost coverage through
Medi-Cal. The notice shall include information on obtaining coverage
pursuant to those programs, and shall be developed by the California
Health Benefit Exchange. 

   "In March of 2010, the federal government passed national health
care reform. Because of this, effective January 1, 2014, you may
become eligible for reduced-cost comprehensive health care coverage
through the California Health Benefit Exchange. To learn more, visit
www.healthexchange.ca.gov or call 1-888-(insert telephone number)."


  SEC. 3.  Section 1366.50 is added to the Health and Safety Code, to
read:
   1366.50.  (a)  (1)    
Except for a specialized health care service plan, every health care
service plan contract that is issued, amended, delivered, or renewed
in this state on or after January 1, 2014,   On and
after January 1, 2014, a health care service plan  that provides
medical and hospital coverage under an employer-sponsored group plan
for an employer subject to COBRA, as defined in subdivision (e) of
Section 1373.621, or an employer group for which the plan is required
to offer Cal-COBRA coverage, as defined in subdivision (f) of
Section 1373.621,  including a carrier providing replacement
coverage under Section 1399.63,  shall, consistent with this
section and to the extent permitted under the federal Patient
Protection and Affordable Care Act (Public Law 111-148), 
transfer information to the Exchange in order to initiate an
application for enrollment for a qualified beneficiary upon a
qualifying event.   provide a notice to qualified
beneficiaries upon a qualifying event informing them that they may be
eligible for reduced-cost coverage through the California Health
Benefit Exchange established under Title 22   (commencing
with Section 100500) of the Government Code or no-cost coverage
through Medi-Cal. The notice shall include information on obtaining
coverage pursuant to those programs, shall be in no less than
12-point type, and shall be developed by the department, in
consultation with the Department of Insurance.  
   (2) Prior to the transfer of the information to the Exchange, the
health care service plan shall obtain the written consent of the
enrollee to provide the minimum necessary information to the
Exchange. If the individual does not provide his or her consent, the
health care service plan shall not transfer any information regarding
that individual to the Exchange. Consent may be obtained at the time
of the qualifying event.  
   (b) (1) The health care service plan shall provide to the
California Health Benefit Exchange information regarding the former
employee and any dependents covered under the group coverage. The
information provided shall include the name or names, most recent
address, and any other information that is in the possession of the
plan and that the Exchange may require in order to determine
eligibility, facilitate enrollment in coverage, and maximize
continuity of care, and shall be provided in a manner to be
prescribed by the Exchange. The information shall be provided in a
manner consistent with Section 1411 of the federal Patient Protection
and Affordable Care Act (Public Law 111-148) and consistent with
other state and federal medical privacy laws.  
   (2) The provision of this information shall initiate an
application for enrollment in coverage within the meaning of Section
100503 of the Government Code. Nothing in this section shall be
construed to alter the responsibility of the Exchange or other state
and local government entities with respect to the criteria and
process for eligibility and enrollment in the Exchange and other
public health care coverage programs.  
   (c) (1) On and after January 1, 2012, until December 31, 2013, the
health care service plan shall provide the following notification to
qualified beneficiaries upon a qualifying event: 

   "Please examine your options carefully before declining this
coverage. Until January 1, 2014, you should be aware that companies
selling individual health insurance to adults who are 19 years of age
or older typically require a review of your medical history that
could result in a higher premium or you could be denied coverage
entirely. Effective January 1, 2010, children under 19 years of age
cannot be denied individual coverage based on medical history, but
may pay a higher premium depending on medical history." 

   (2) On and after January 1, 2014, notification provided to
qualified beneficiaries upon a qualifying event shall also include
the following notification in 12-point type: 

   "In March of 2010, the federal government passed national health
care reform. Because of this, you may be eligible for reduced-cost
comprehensive health care coverage through the California Health
Benefit Exchange. Because you are losing your coverage from your
employer or the employer of a family member, an application will be
sent to the California Health Benefit Exchange to make it easier for
you to get health care coverage.  
   Eligibility for reduced-cost coverage through the California
Health Benefit Exchange or no-cost coverage through Medi-Cal is based
on your income. You will be contacted by the Exchange to complete
the application. You are not required to accept coverage from the
Exchange. To learn more, or to contact the Exchange, visit
www.healthexchange.ca.gov or call 1-888-(insert telephone number)."


   (3) A person for whom an application for enrollment in the
Exchange has been initiated by the transfer of information under this
section shall be given the opportunity to provide informed consent
to use the transferred information to commence eligibility
determination and complete enrollment as well as the opportunity to
correct any transferred information or provide additional information
before a final eligibility determination is made. If the individual
fails to consent or fails to respond to the opportunity to consent
within a reasonable period of time, that failure to consent or to
respond timely shall be construed as discontinuing the application.
 
   (b) The notice described in subdivision (a) may be incorporated
into existing COBRA or Cal-COBRA notices or other existing notices.
 
   (d) 
    (c)  For purposes of this section:
   (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 and who has a qualifying event.

   (2) "Qualifying event" means any of the following events that
would result in a loss of coverage under the group benefit plan to a
qualified beneficiary:
   (A) The death of the covered employee.
   (B) The termination of employment or reduction in hours of the
covered employee's employment.
   (C) The divorce or legal separation of the covered employee from
the covered employee's spouse.
   (D) The loss of dependent status by a dependent enrolled in the
group benefit plan.
   (E) With respect to a covered dependent only, the covered employee'
s entitlement to benefits under Title XVIII of the federal Social
Security Act. 
   (d) This section shall not apply with respect to a specialized
health care service plan contract or a plan contract consisting
solely of coverage of excepted benefits as described in Section 2722
of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21).

  SEC. 4.  Section 1366.51 is added to the Health and Safety Code, to
read: 
   1366.51.  (a) (1) On or after January 1, 2014, except for a
specialized health care service plan, every health care service plan
contract in the individual market shall, consistent with this
section, transfer information to the Exchange in order to initiate an
application for enrollment for an individual at such time as the
individual ceases to be enrolled in coverage.
   (2) On or after January 1, 2012, the health care service plan
shall obtain the written consent of the enrollee to provide the
minimum necessary information to the Exchange in the event that the
individual or dependent ceases to be enrolled in individual coverage.
If the individual does not provide his or her consent, the health
care service plan shall not transfer any information regarding that
individual to the Exchange. Consent may be obtained at the time of
the qualifying event.
   (b) (1) The health care service plan shall provide to the
California Health Benefit Exchange information regarding the former
covered individual and any dependents that chose not to renew
individual coverage. The information provided shall include the name
or names, most recent address, and any other information that is in
the possession of the plan and that the Exchange may require in order
to determine eligibility, facilitate enrollment in coverage, and
maximize continuity of care, and shall be provided in a manner to be
prescribed by the Exchange. The information shall be provided in a
manner consistent with Section 1411 of the federal Patient Protection
and Affordable Care Act (Public Law 111-148) and consistent with
other state and federal medical privacy laws.
   (2) The provision of this information shall initiate an
application for enrollment in coverage within the meaning of Section
100503 of the Government Code.
   (c) (1) 
    1366.51.    (a)    On and after
January 1, 2014,  the   a  health care
service plan  providing individual health care coverage 
shall provide  the following notification  to
individuals, dependents, or former dependents who cease to be
enrolled in individual  coverage in 12-point type: 
 coverage a notice informing them that they may be eligible for
reduced-cost coverage through the California Health Benefit Exchange
established under Title 22 (commencing with Section 100500) of the
Government Code or no-cost coverage through Medi-Cal. The notice
shall include information on obtaining coverage pursuant to those
programs, shall be in no less than 12-point type, and shall be
developed by the department, in consultation with the Department of
Insurance.  
   (b) The notice described in subdivision (a) may be incorporated
into or sent simultaneously with and in the same manner as existing
notices.  
   (c) This section shall not apply with respect to a specialized
health care service plan contract or a plan contract consisting
solely of coverage of excepted benefits as described in Section 2722
of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21).


   "In March of 2010, the federal government passed national health
care reform. Because of this, you may be eligible for reduced-cost
comprehensive health care coverage through the California Health
Benefit Exchange. Because you are losing your coverage as an
individual, an application will be sent to the California Health
Benefit Exchange to make it easier for you to get health care
coverage.  
   Eligibility for reduced-cost coverage through the California
Health Benefit Exchange or no-cost coverage through Medi-Cal is based
on your income. You will be contacted by the Exchange to complete
the application. You are not required to accept coverage from the
Exchange. To learn more, or to contact the Exchange, visit
www.healthexchange.ca.gov or call 1-888-(insert telephone number)."


   (2) A person for whom an application for enrollment in the
Exchange has been initiated by the transfer of information under this
section shall be given the opportunity to provide informed consent
to use the transferred information to commence eligibility
determination and complete enrollment as well as the opportunity to
correct any transferred information or provide additional information
before a final eligibility determination is made. If the individual
fails to consent or fails to respond to the opportunity to consent
within a reasonable period of time, that failure to consent or to
respond timely shall be construed as discontinuing the application.
 
   (d) Effective July 1, 2013, until July 1, 2020, the health care
service plan shall provide to individuals, dependents, or former
dependents with coverage in the individual market the following
notification in 12-point type and prominently displayed in the
evidence of coverage: 

   "In March of 2010, the federal government passed national health
care reform. Because of this, as an individual buying your own health
insurance, in January 2014, you may become eligible for reduced-cost
comprehensive health care coverage through the California Health
Benefit Exchange. To learn more, please visit
www.healthexchange.ca.gov or call 1-888-(insert telephone number)."


  SEC. 5.  Section 10786 is added to the Insurance Code, to read:
   10786.  (a)  (1)    
Every health insurance policy that is issued, amended, delivered, or
renewed in this state on or after January 1, 2014,   On
and after January 1, 2014, a health insurer  that provides
medical and hospital coverage under an employer-sponsored group plan
for an employer subject to COBRA, as defined in subdivision (e) of
Section 10116.5, or an employer group for which the  plan
  insurer  is required to offer Cal-COBRA coverage,
as defined in subdivision (f) of Section 10116.5,  including
a carrier providing replacement coverage under Section 10128.3,
 shall, consistent with this section and to the extent
permitted under the federal Patient Protection and Affordable Care
Act (Public Law 111-148),  transfer information to the
Exchange in order to initiate an application for enrollment for a
qualified beneficiary upon a qualifying event   provide
a notice to qualified beneficiaries upon a qualifying event informing
them that they may be eligible for reduced-cost coverage through the
California Health Benefit Exchange established under  
Title 22 (commencing with Section 100500) of the Government Code or
no-cost coverage through Medi-Cal. The notice shall include
information on obtaining coverage pursuant to those programs, shall
be in no less than 12-point type, and shall be developed by the
department, in consultation with the Department of Managed Health
Care  . 
   (2) Prior to the transfer of the information to the Exchange, the
health insurer shall obtain the written consent of the insured to
provide the minimum necessary information to the Exchange. If the
individual does not provide his or her consent, the health insurer
shall not transfer any information regarding that individual to the
Exchange. Consent may be obtained at the time of the qualifying
event.  
   (b) (1) The health insurer shall provide to the California Health
Benefit Exchange information regarding the former employee and any
dependents covered under the group coverage. The information provided
shall include the name or names, most recent address, and any other
information that is in the possession of the insurer and that the
Exchange may require in order to determine eligibility, facilitate
enrollment in coverage, and maximize continuity of care, and shall be
provided in a manner to be prescribed by the Exchange. The
information shall be provided in a manner consistent with Section
1411 of the federal Patient Protection and Affordable Care Act
(Public Law 111-148) and consistent with other state and federal
medical privacy laws.  
   (2) The provision of this information shall initiate an
application for enrollment in coverage within the meaning of Section
100503 of the Government Code. Nothing in this section shall be
construed to alter the responsibility of the Exchange or other state
and local government entities with respect to the criteria and
process for eligibility and enrollment in the Exchange and other
public health care coverage programs.  
   (c) (1) On and after January 1, 2012, until December 31, 2013, the
health insurer shall provide the following notification to qualified
beneficiaries upon a qualifying event: 

   "Please examine your options carefully before declining this
coverage. Until January 1, 2014, you should be aware that companies
selling individual health insurance to adults who are 19 years of age
or older typically require a review of your medical history that
could result in a higher premium or you could be denied coverage
entirely. Effective January 1, 2010, children under 19 years of age
cannot be denied individual coverage based on medical history, but
may pay a higher premium depending on medical history." 

   (2) On and after January 1, 2014, the health insurer shall provide
the following notification to qualified beneficiaries upon a
qualifying event in 12-point type: 

   "In March of 2010, the federal government passed national health
care reform. Because of this, you may be eligible for reduced-cost
comprehensive health care coverage through the California Health
Benefit Exchange. Because you are losing your coverage from your
employer or the employer of a family member, an application will be
sent to the California Health Benefit Exchange to make it easier for
you to get health care coverage.  
   Eligibility for reduced-cost coverage through the California
Health Benefit Exchange or no-cost coverage through Medi-Cal is based
on your income. You will be contacted by the Exchange to complete
the application. You are not required to accept coverage from the
Exchange. To learn more, or to contact the Exchange, visit
www.healthexchange.ca.gov or call 1-888-(insert telephone number)."


   (3) A person for whom an application for enrollment in the
Exchange has been initiated by the transfer of information under this
section shall be given the opportunity to provide informed consent
to use the transferred information to commence eligibility
determination and complete enrollment as well as the opportunity to
correct any transferred information or provide additional information
before a final eligibility determination is made. If the individual
fails to consent or fails to respond to the opportunity to consent
within a reasonable period of time, that failure to consent or to
respond timely shall be construed as discontinuing the application.
 
   (b) The notice described in subdivision (a) may be incorporated
into existing COBRA or Cal-COBRA notices or other existing notices.
 
   (d) 
    (c)  For purposes of this section:
   (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 insurer and who has a qualifying event.
   (2) "Qualifying event" means any of the following events that
would result in a loss of coverage under the group benefit plan to a
qualified beneficiary:
   (A) The death of the covered employee.
   (B) The termination of employment or reduction in hours of the
covered employee's employment.
   (C) The divorce or legal separation of the covered employee from
the covered employee's spouse.
   (D) The loss of dependent status by a dependent enrolled in the
group benefit plan.
   (E) With respect to a covered dependent only, the covered employee'
s entitlement to benefits under Title XVIII of the federal Social
Security Act. 
   (d) This section shall not apply with respect to a specialized
health insurance policy or a health insurance policy consisting
solely of coverage of excepted benefits as described in Section 2722
of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21).

  SEC. 6.  Section 10787 is added to the Insurance Code, to read:

   10787.  (a) (1) On or after January 1, 2014, every health
insurance policy in the individual market shall, consistent with this
section, transfer information to the Exchange in order to initiate
an application for enrollment for the individual at such time as the
individual ceases to be enrolled in coverage.
   (2) On or after January 1, 2012, the health insurer shall obtain
the written consent of the insured to provide the minimum necessary
information to the Exchange in the event that the individual or
dependent ceases to be enrolled in individual coverage. If the
individual does not provide his or her consent, the health insurer
shall not transfer any information regarding that individual to the
Exchange. Consent may be obtained at the time of the qualifying
event.
   (b) (1) The health insurer shall provide to the California Health
Benefit Exchange information regarding the former covered individual
and any dependents that chose not to renew individual coverage. The
information provided shall include the name or names, most recent
address, and any other information that is in the possession of the
insurer and that the Exchange may require in order to determine
eligibility, facilitate enrollment in coverage, and maximize
continuity of care, and shall be provided in a manner to be
prescribed by the Exchange. The information shall be provided in a
manner consistent with Section 1411 of the federal Patient Protection
and Affordable Care Act (Public Law 111-148) and consistent with
other state and federal medical privacy laws.
   (2) The provision of this information shall initiate an
application for enrollment in coverage within the meaning of Section
100503 of the Government Code.
   (c) (1) 
    10787.    (a) On and after January 1, 2014,
 the   a  health insurer  providing
individual health care coverage  shall provide  the
following notification  to individuals, dependents, or
former dependents who cease to be enrolled in individual 
coverage in 12-point type:   coverage a notice informing
them that they may be eligible for reduced-cost coverage through the
California Health Benefit Exchange established under Title 22
(commencing with Section 100500) of the Government Code or no-cost
coverage through Medi-Cal. The notice shall include information on
obtaining coverage pursuant to those programs, shall be in no less
than 12-point type, and shall be developed by the department, in
consultation with the Departme  nt of Managed Health Care.
 
   (b) The notice described in subdivision (a) may be incorporated
into or sent simultaneously with and in the same manner as existing
notices.  
   (c) This section shall not apply with respect to a specialized
health insurance policy or a health insurance policy consisting
solely of coverage of excepted benefits as described in Section 2722
of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21).

                                            
   "In March of 2010, the federal government passed national health
care reform. Because of this, you may be eligible for reduced-cost
comprehensive health care coverage through the California Health
Benefit Exchange. Because you are losing your coverage as an
individual, an application will be sent to the California Health
Benefit Exchange to make it easier for you to get health care
coverage.  
   Eligibility for reduced-cost coverage through the California
Health Benefit Exchange or no-cost coverage through Medi-Cal is based
on your income. You will be contacted by the Exchange to complete
the application. You are not required to accept coverage from the
Exchange. To learn more, or to contact the Exchange, visit
www.healthexchange.ca.gov or call 1-888-(insert telephone number)."


   (2) A person for whom an application for enrollment in the
Exchange has been initiated by the transfer of information under this
section shall be given the opportunity to provide informed consent
to use the transferred information to commence eligibility
determination and complete enrollment as well as the opportunity to
correct any transferred information or provide additional information
before a final eligibility determination is made. If the individual
fails to consent or fails to respond to the opportunity to consent
within a reasonable period of time, that failure to consent or to
respond timely shall be construed as discontinuing the application.
 
   (d) Effective July 1, 2013, until July 1, 2020, the health insurer
shall provide the following notification to individuals, dependents,
or former dependents with coverage in the individual market, the
following notification in 12-point type and prominently displayed in
the evidence of coverage: 

   "In March of 2010, the federal government passed national health
care reform. Because of this, as an individual buying your own health
insurance, in January 2014, you may become eligible for reduced-cost
comprehensive health care coverage through the California Health
Benefit Exchange. To learn more, please visit
www.healthexchange.ca.gov or call 1-888-(insert telephone number)."


  SEC. 7.    Section 2800.2 of the Labor Code is
amended to read:
   2800.2.  (a) Any employer, employee association, or other entity
otherwise providing hospital, surgical, or major medical benefits to
its employees or members is solely responsible for notification of
its employees or members of the conversion coverage made available
pursuant to Part 6.1 (commencing with Section 12670) of Division 2 of
the Insurance Code or Section 1373.6 of the Health and Safety Code.
At the time that the health care service plan contract or health
insurance policy is issued, amended, delivered, or renewed on or
after January 1, 2012, the employer, employee association, or other
entity shall obtain the written consent of the enrollee or insured to
provide the minimum necessary information to the Exchange in the
event that the individual or dependent ceases to be enrolled in
coverage under this section. If the individual does not provide his
or her consent, the employer, employee association, or other entity
shall not transfer any information regarding that individual to the
Exchange.
   (1) The employer, employee association, or other entity otherwise
providing hospital, surgical, or major medical benefits to its
employees or members shall provide to the California Health Benefit
Exchange information regarding the former employee and any dependents
covered under the group coverage. The information provided shall
include the name or names, most recent address, and any other
information that is in the possession of the employer, employee
association, or other entity and that the Exchange may require in a
manner to be prescribed by the Exchange. The information shall be
provided in a manner consistent with Section 1411 of the federal
Patient Protection and Affordable Care Act (Public Law 111-148) and
consistent with other state and federal medical privacy laws.
   (2) The provision of this information shall initiate an
application for enrollment in coverage within the meaning of Section
100503 of the Government Code.
   (b) Any employer, employee association, or other entity, whether
private or public, that provides hospital, medical, or surgical
expense coverage that a former employee may continue under Section
4980B of Title 26 of the United States Code, Section 1161 et seq. of
Title 29 of the United States Code, or Section 300bb of Title 42 of
the United States Code, as added by the Consolidated Omnibus Budget
Reconciliation Act of 1985 (Public Law 99-272), and as may be later
amended (hereafter "COBRA"), shall, in conjunction with the
notification required by COBRA that COBRA continuation coverage will
cease and conversion coverage is available, and as a part of the
notification required by subdivision (a), also notify the former
employee, spouse, or former spouse of the availability of the
continuation coverage under Section 1373.621 of the Health and Safety
Code and Sections 10116.5 and 11512.03 of the Insurance Code.
   (c) (1) On or after July 1, 2006, until January 1, 2012,
notification provided to employees, members, former employees,
spouses, or former spouses under subdivisions (a) and (b) shall also
include the following notification:

   "Please examine your options carefully before declining this
coverage. 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."

   (2) On and after January 1, 2012, until December 31, 2013, the
employer, employee association, or other entity shall provide the
following notification to employees, members, former employees,
spouses, or former spouses under subdivisions (a) and (b):

   "Please examine your options carefully before declining this
coverage. In March of 2010, the federal government enacted national
health care reform. Until January 1, 2014, you should be aware that
companies selling individual health insurance to adults who are 19
years of age or older typically require a review of your medical
history that could result in a higher premium or you could be denied
coverage entirely. Effective January 1, 2010, children under 19 years
of age cannot be denied individual coverage based on medical history
but may pay a higher premium depending on medical history."

   (3) On and after January 1, 2014, the employer, employee
association, or other entity shall provide the following notification
to employees, members, former employees, spouses, or former spouses
under subdivisions (a) and (b):

   "In March of 2010, the federal government passed national health
care reform. Because of this, you may be eligible for reduced-cost
comprehensive health care coverage through the California Health
Benefit Exchange. Because you are losing your coverage from your
employer or from the employer of a family member, an application will
be sent to the California Health Benefit Exchange to make it easier
for you to get health care coverage.
   Eligibility for low-cost coverage through the California Health
Benefit Exchange or no-cost coverage through Medi-Cal is based on
your income. You will be contacted by the Exchange to complete the
application. You are not required to accept coverage from the
Exchange. To learn more, or to contact the Exchange, visit
www.healthexchange.ca.gov or call 1-888-(insert telephone number)."

   (d) A person for whom an application for enrollment in the
Exchange has been initiated by the transfer of information under this
section shall be given the opportunity to provide informed consent
to use the transferred information to commence eligibility
determination and complete enrollment as well as the opportunity to
correct any transferred information or provide additional information
before a final eligibility determination is made. If the individual
fails to consent or fails to respond to the opportunity to consent
within a reasonable period of time, that failure to consent or to
respond timely shall be construed as discontinuing the application.

   SEC. 8.   SEC. 7.   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.