BILL NUMBER: AB 1334	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 5, 2011

INTRODUCED BY   Assembly Member Feuer

                        FEBRUARY 18, 2011

   An act to add Section 1366.5 to the Health and Safety Code, and to
add Section 10112.58 to the Insurance Code, relating to health care
coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1334, as amended, Feuer. Health care coverage.
   Existing law, the federal Patient Protection and Affordable Care
Act, on and after January 1, 2014, requires a health insurance issuer
offering health insurance coverage in the individual or group market
to accept every employer and individual in the state that applies
for that coverage, as specified, and requires issuers in the
individual and small group markets to ensure that the coverage
includes a specified essential benefits package. The act requires an
essential health benefits package to provide coverage in one of 5
levels based on actuarial value, as specified.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law provides for the
regulation of health insurers by the Department of Insurance.
   Existing law imposes various requirements with respect to
individual contracts and policies issued by health care service plans
and health insurers.
   This bill would require plans and insurers to  ,
commencing July 1, 2012,  categorize all products offered in
the individual market into 5 tiers according to actuarial value, as
specified, and would require plans and insurers to disclose this
value and other information in certain disclosure forms.  These
requirements would become operative 30 days after the issuance of
federal guidance on minimum essential benefits. 
   Because a willful violation of the bill's requirements with
respect 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 1366.5 is added to the Health and Safety Code,
to read: 
   1366.5.  (a) Effective July 1, 2012, a health care service plan
shall categorize all products offered or renewed in the individual
market in accordance with this section.


   (b) 
    1366.5.    (a)    From July 1, 2012,
to December 31, 2013, inclusive,  for  each product offered
or renewed in the individual market  , a health care service plan
 shall disclose whether or not it offers minimum essential
benefits, as defined in the federal Patient Protection and 
Afordable   Affordable  Care Act (Public Law
111-148) and whether or not it offers an actuarial value of at least
70 percent. 
   (c) 
    (b)   On and after January 1, 2014,  a health care
service plan shall categorize  each product offered or renewed
in the individual market  shall be categorized  on
the basis of actuarial value into one of the following tiers:
   (1) Bronze level for products with an actuarial value equal to 60
percent.
   (2) Silver level for products with an actuarial value equal to 70
percent.
   (3) Gold level for products with an actuarial value equal to 80
percent.
   (4) Platinum level for products with an actuarial value equal to
90 percent.
   (5) Catastrophic coverage for products with an actuarial value
less than 60 percent. 
   (d) 
    (c)  In categorizing the actuarial value of products for
purposes of subdivision (c), a health care service plan may have a
de minimis variation from the actuarial values set forth in that
subdivision. 
   (e) 
    (d)  On and after January 1, 2014, an actuarial value
shall be calculated using the method contained in subdivision (d) of
Section 1302 of the federal Patient Protection and Affordable Care
Act and the regulations adopted thereunder. 
   (f) 
    (e)  A plan shall use a qualified actuary to certify the
accuracy of its calculations under this section. 
   (g) 
    (f)  (1) The department may review the categorization of
any product under this section for accuracy, including, but not
limited to, the methodology used by the plan to establish an
actuarial value.
   (2) The department may require the submission of any information
needed to categorize products pursuant to this section. 
   (h) 
    (g)  As part of the disclosure form required by Section
1363 for an individual plan contract, a health care service plan
shall include the actuarial value of the particular product reflected
in the contract, as determined under this section, along with an
explanation of the actuarial value in easily understood language
expressed as a percentage of expenses paid by the plan versus out of
pocket. In addition, the disclosure shall include an estimate of the
annual out-of-pocket expenses of an individual in average health who
is enrolled in the product, and the total annual cost (the sum of the
premium plus out-of-pocket costs) of an individual of average health
who is enrolled in the product. The disclosure shall also state that
an individual's share of cost may be more or less depending on his
or her age, illness, or health condition. The disclosure shall also
include the following statement:
   "Please examine the other features of this product carefully,
including prescription drug coverage, exclusion of specific
conditions, and other costs such as copayments and deductibles."

   (i) 
    (h)  This section shall not apply to Medicare supplement
contracts or to specialized health care service plan contracts.

   (j) 
    (i)  For purposes of this section, "qualified actuary"
means an actuary who is a member of the American Academy of
Actuaries, who is qualified to perform such work, and who meets the
Qualification Standards for Actuaries Issuing Statements of Actuarial
Opinion in the United States as promulgated by the American Academy
of Actuaries. 
   (j) This section shall become operative 30 days after initial
federal guidance on minimum essential benefits is issued. 
  SEC. 2.  Section 10112.58 is added to the Insurance Code, to read:

   10112.58.  (a) Effective July 1, 2012, a health insurer shall
categorize all products offered or renewed in the individual market
in accordance with this section.


   (b) 
    10112.58.    (a)    From July 1, 2012,
to December 31, 2013, inclusive,  for  each product offered
or renewed in the individual market  , a health insurer 
shall disclose whether or not it offers minimum essential benefits,
as defined in the federal Patient Protection and  Afordable
  Affordable  Care Act (Public Law 111-148) and
whether or not it offers an actuarial value of at least 70 percent.

   (c) 
    (b)  On and after January 1, 2014,  a health insurer
shall categorize  each product offered or renewed in the
individual market  shall be categorized  on the
basis of actuarial value into one of the following tiers:
   (1) Bronze level for products with an actuarial value equal to 60
percent.
   (2) Silver level for products with an actuarial value equal to 70
percent.
   (3) Gold level for products with an actuarial value equal to 80
percent.
   (4) Platinum level for products with an actuarial value equal to
90 percent.
   (5) Catastrophic coverage for products with an actuarial value
less than 60 percent. 
   (d) 
    (c)  In categorizing the actuarial value of products for
purposes of subdivision (c), a health insurer may have a de minimis
variation from the actuarial values set forth in that subdivision.

   (e) 
    (d)  On and after January 1, 2014, an actuarial value
shall be calculated using the method contained in subdivision (d) of
Section 1302 of the federal Patient Protection and Affordable Care
Act and the regulations adopted thereunder. 
   (f) 
    (e)  An insurer shall use a qualified actuary to certify
the accuracy of its calculations under this section. 
   (g) 
    (f)  (1) The department may review the categorization of
any product under this section for accuracy, including, but not
limited to, the methodology used by the insurer to establish an
actuarial value.
   (2) The department may require the submission of any information
needed to categorize products pursuant to this section. 
   (h) 
    (g)  As part of the disclosure form required by Section
10603 for an individual health insurance policy, a health insurer
shall include the actuarial value of the particular product reflected
in the policy, as determined under this section, along with an
explanation of the actuarial value in easily understood language
expressed as a percentage of expenses paid by insurance versus out of
pocket. In addition, the disclosure shall include an estimate of the
annual out-of-pocket expenses of an individual in average health who
is enrolled in the product, and the total annual cost (the sum of
the premium plus out-of-pocket costs) of an individual of average
health who is enrolled in the product. The disclosure shall also
state that an individual's share of cost may be more or less
depending on his or her age, illness, or health condition. The
disclosure shall also include the following statement:
   "Please examine the other features of this product carefully,
including prescription drug coverage, exclusion of specific
conditions, and other costs such as copayments and deductibles."

   (i) 
    (h)  This section shall not apply to Medicare
supplement, CHAMPUS-supplement, specified disease, TRICARE
supplement, or accident-only insurance policies, to specialized
health insurance policies, or to insurance policies excluded from the
definition of "health insurance" under subdivision (b) of Section
106. 
   (j) 
   (i)  For purposes of this section, "qualified actuary"
means an actuary who is a member of the American Academy of
Actuaries, who is qualified to perform such work, and who meets the
Qualification Standards for Actuaries Issuing Statements of Actuarial
Opinion in the United States as promulgated by the American Academy
of Actuaries. 
   (j) This section shall become operative 30 days after initial
federal guidance on minimum essential benefits is issued. 
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.