BILL NUMBER: AB 1453 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 20, 2012
AMENDED IN ASSEMBLY APRIL 17, 2012
AMENDED IN ASSEMBLY MARCH 29, 2012
INTRODUCED BY Assembly Member Monning
JANUARY 5, 2012
An act to add Section 1367.005 to the Health and Safety
Code, and to add Section 10112.27 to the Insurance Code, relating to
health care coverage. An act to add Section 1367.005
to the Health and Safety Code, and to add Section 10112.27 to the
Insurance Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 1453, as amended, Monning. Essential health benefits.
Health care coverage: essential health benefits.
Commencing January 1, 2014, existing law, the federal Patient
Protection and Affordable Care Act (PPACA), requires a health
insurance issuer that offers coverage in the small group or
individual market to ensure that such coverage includes the essential
health benefits package, as defined. PPACA requires each state to,
by January 1, 2014, establish an American Health Benefit Exchange
that facilitates the purchase of qualified health plans by qualified
individuals and qualified small employers. PPACA defines a qualified
health plan as a plan that, among other requirements, provides an
essential health benefits package. Existing state law creates the
California Health Benefit Exchange (the Exchange) to facilitate the
purchase of qualified health plans by qualified individuals and
qualified small employers by January 1, 2014.
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 also provides for the
regulation of health insurers by the Department of Insurance.
Existing law requires health care service plan contracts and health
insurance policies to cover various benefits.
This bill would require an individual or small group health care
service plan contract or health insurance policy issued, amended, or
renewed on or after January 1, 2014, to cover essential health
benefits, which would be defined to include the health benefits
covered by particular benchmark plans. The bill would authorize a
plan or insurer to place scope and duration limits on those benefits,
except as specified, provided that the limits are not greater than
the limits imposed by the benchmark plans and would generally
prohibit a plan or insurer from making substitutions of the benefits
required to be covered. The bill would specify that these provisions
apply regardless of whether the contract or policy is offered inside
or outside the Exchange but would provide that they do not apply to
grandfathered plans or plans that cover only excepted benefits, as
specified. The bill would prohibit a health care service plan or
health insurer, when offering, selling, or marketing a plan contract
or policy, from indicating or implying that the contract or policy
covers essential health benefits unless the contract or policy covers
essential health benefits as provided in the bill. The bill would
enact other related provisions.
These provisions would only be implemented to the extent essential
health benefits are required pursuant to PPACA.
Because a willful violation of the bill's provisions 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.
Commencing January 1, 2014, existing law, the federal Patient
Protection and Affordable Care Act (PPACA), requires a health
insurance issuer that offers coverage in the small group or
individual market to ensure that such coverage includes the essential
health benefits package, as defined. PPACA requires each state to,
by January 1, 2014, establish an American Health Benefit Exchange
that facilitates the purchase of qualified health plans by qualified
individuals and qualified small employers. PPACA defines a qualified
health plan as a plan that, among other requirements, provides the
essential health benefits package. Existing state law creates the
California Health Benefit Exchange (the Exchange) to facilitate the
purchase of qualified health plans by qualified individuals and
qualified small employers by January 1, 2014.
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 also provides for the
regulation of health insurers by the Department of Insurance.
Existing law requires health care service plan contracts and health
insurance policies to cover various benefits.
This bill would require an individual or small group health care
service plan contract or health insurance policy issued, amended, or
renewed on or after January 1, 2014, to cover essential health
benefits, which would be defined to include the benefits and services
covered by particular plans. The bill would specify that this
provision applies regardless of whether the contract or policy is
offered inside or outside the Exchange but would provide that it does
not apply to grandfathered plans or plans that offer excepted
benefits, as specified. The bill would prohibit a health care service
plan or health insurer, when offering, issuing, selling, or
marketing a plan contract or policy, from indicating or implying that
the contract or policy covers essential health benefits unless the
contract or policy covers essential health benefits as provided in
the bill.
Because a willful violation of the bill's provisions 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. The Legislature hereby finds and
declares the following:
(a) Commencing January 1, 2014, the federal Patient Protection and
Affordable Care Act (PPACA) requires a health insurance issuer that
offers coverage to small employers or individuals, both inside and
outside of the California Health Benefit Exchange, with the exception
of grandfathered plans as defined under Section 1251 of PPACA, to
provide minimum coverage that includes essential health benefits, as
defined.
(b) It is the intent of the Legislature to comply with federal law
and consistently implement the essential health benefits provisions
of PPACA and related federal guidance and regulations, by adopting
the uniform minimum essential benefits requirement in state-regulated
health care coverage regardless of whether the policy or contract is
regulated by the Department of Managed Health Care or the Department
of Insurance and regardless of whether the policy or contract is
offered to individuals or small employers inside or outside of the
California Health Benefit Exchange.
SEC. 2. Section 1367.005 is added to the
Health and Safety Code , to read:
1367.005. (a) An individual or small group health care service
plan contract issued, amended, or renewed on or after January 1,
2014, shall, at a minimum, include coverage for essential health
benefits. For purposes of this section, "essential health benefits"
means all of the following:
(1) (A) The health benefits covered by the Kaiser Foundation
Health Plan Small Group HMO 30 plan (federal health product
identification number 40513CA035) as this plan was offered during the
first quarter of 2012, including, but not limited to, all of the
following:
(i) The health benefits covered by the plan within the categories
identified in subsection (b) of Section 1302 of PPACA, including, but
not limited to, ambulatory patient services, emergency services,
hospitalization, maternity and newborn care, mental health and
substance use disorder services, including behavioral health
treatment, prescription drugs, rehabilitative and habilitative
services and devices, laboratory services, preventive and wellness
services and chronic disease management, and pediatric services,
including oral and vision care.
(ii) The health benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, including, but
not limited to, basic health care services required to be covered
pursuant to Section 1367, as defined in Section 1345 and in Section
1300.67 of Title 28 of the California Code of Regulations. These
benefits are required to be covered to the extent described in the
following sections: Sections 1367.002, 1367.06, and 1367.35
(preventive services for children); Section 1367.25 (prescription
drug coverage for contraceptives); Section 1367.45 (AIDS vaccine);
Section 1367.46 (HIV testing); Section 1367.51 (diabetes); Section
1367.54 (alpha feto protein testing); Section 1367.6 (breast cancer
screening); Section 1367.61 (prosthetics for laryngectomy); Section
1367.62 (maternity hospital stay); Section 1367.63 (reconstructive
surgery); Section 1367.635 (mastectomies); Section 1367.64 (prostate
cancer); Section 1367.65 (mammography); Section 1367.66 (cervical
cancer); Section 1367.665 (cancer screening tests); Section 1367.67
(osteoporosis); Section 1367.68 (surgical procedures for jaw bones);
Section 1367.71 (anesthesia for dental); Section 1367.9 (conditions
attributable to diethylstilbestrol); Section 1368.2 (hospice care);
Section 1370.6 (cancer clinical trials); Section 1371.5 (emergency
response ambulance or ambulance transport services); subdivision (b)
of Section 1373 (sterilization operations or procedures); Section
1373.4 (inpatient hospital and ambulatory maternity); Section 1374.56
(phenylketonuria); Section 1374.17 (organ transplants for HIV);
Section 1374.72 (mental health parity); and Section 1374.73
(autism/behavioral health treatment).
(iii) The health benefits covered by the plan that are not
otherwise required to be covered under this chapter, to the extent
required pursuant to Sections 1367.18, 1367.21, 1367.215, 1367.22,
1367.24, and 1367.25, and Section 1300.67.24 of Title 28 of the
California Code of Regulations, whether or not the health benefits
are specifically referenced in the plan contract.
(B) Coverage of mental health and substance use disorder services
pursuant to this paragraph, along with any scope and duration limits
imposed on the benefits, shall be in compliance with the Paul
Wellstone and Pete Domenici Mental Health Parity and Addiction Equity
Act of 2008 (Public Law 110-343), and all binding rules,
regulations, or guidance issued pursuant to Section 2726 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-26).
(2) With respect to habilitative services, in addition to any
habilitative services identified in paragraph (1), coverage shall
also be provided as required by binding federal rules, regulations,
and guidance issued pursuant to Section 1302(b) of PPACA.
Habilitative services shall be covered under the same terms and
conditions applied to rehabilitative services under the plan
contract.
(3) With respect to pediatric vision care, the same health
benefits for pediatric vision care covered under the Federal
Employees Dental and Vision Insurance Program vision plan with the
largest national enrollment as of the first quarter of 2012. The
pediatric vision care benefits covered pursuant to this paragraph
shall be in addition to, and shall not replace, any vision services
covered under the plan identified in paragraph (1).
(4) With respect to pediatric oral care, the same health benefits
for pediatric oral care covered under the dental plan available to
subscribers of the Healthy Families Program in 2011-12, including the
provision of medically necessary orthodontic care provided pursuant
to the federal Children's Health Insurance Program Reauthorization
Act of 2009. The pediatric oral care benefits covered pursuant to
this paragraph shall be in addition to, and shall not replace, any
dental or orthodontic services covered under the plan identified in
paragraph (1).
(5) Except as otherwise provided in subdivision (p), any other
benefits required to be covered under this chapter.
(b) (1) Medically necessary health benefits described in this
section shall be covered subject to cost sharing approved by the
director and any limitations consistent with this section.
Limitations imposed on health benefits shall be no greater than the
limitations imposed by the corresponding plans identified in
subdivision (a).
(2) A plan may place scope and duration limits on health benefits
described in this section, other than basic health care services
described in clause (ii) of subparagraph (A) of paragraph (1) of
subdivision (a), provided that the scope and duration limits are no
greater than the scope and duration limits imposed on those benefits
by the corresponding plans identified in subdivision (a).
(c) Except as otherwise provided in subdivision (d), if it is
determined that a plan identified in subdivision (a), with respect to
benefits and services covered by a plan contract and any scope and
duration limits applied to those benefits and services pursuant to
the contract, is not fully in compliance with this chapter, the
identification of that plan pursuant to this section shall not be
construed to exempt the plan from full compliance with this chapter.
(d) Notwithstanding subdivision (c) or any other provision of this
section, the home health services benefits covered under the plan
identified in paragraph (1) of subdivision (a) shall be deemed to not
be in conflict with this chapter.
(e) Except as provided in subdivision (f), nothing in this section
shall be construed to permit a health care service plan to make
substitutions for the benefits required to be covered under this
section, regardless of whether those substitutions are actuarially
equivalent.
(f) To the extent permitted under Section 1302 of PPACA and any
binding rules, regulations, or guidance issued pursuant to that
section, and to the extent that substitution would not create an
obligation for the state to defray costs for any individual, a plan
may substitute its prescription drug formulary for the formulary
provided under the plan identified in subdivision (a) as long as the
formulary complies with the sections referenced in clauses (ii) and
(iii) of subparagraph (A) of paragraph (1) of subdivision (a) that
apply to prescription drugs.
(g) No health care service plan, or its agent, solicitor, or
representative, shall offer, market, represent, or sell any product,
contract, or discount arrangement as minimum coverage, or as
compliant with the essential health benefits requirement in federal
law, unless it meets all of the requirements of this section.
(h) This section shall apply regardless of whether the plan
contract is offered inside or outside the California Health Benefit
Exchange created by Section 100500 of the Government Code.
(i) A plan contract subject to this section shall comply with
Section 1367.001.
(j) A plan contract subject to this section shall comply with
state and federal statutory and regulatory requirements regarding
nondiscrimination, including, but not limited to, Section 1365.5.
(k) This section shall not be construed to prohibit a plan
contract from covering additional benefits, including, but not
limited to, spiritual care services that are tax deductible under
Section 213 of the Internal Revenue Code.
(l) Subdivision (a) shall not apply to any of the following:
(1) A specialized health care service plan contract.
(2) A Medicare supplement plan.
(3) A plan contract that qualifies as a grandfathered health plan
under Section 1251 of PPACA or any binding rules, regulations, or
guidance issued pursuant to that section.
(m) Nothing in this section shall be implemented in a manner that
is inconsistent with, or conflicts with, a requirement of PPACA.
(n) This section shall be implemented only to the extent essential
health benefits are required pursuant to PPACA.
(o) An essential health benefit is required to be provided under
this section only to the extent that federal law or policy does not
require the state to defray the costs of the benefit.
(p) A plan is not required to cover, under this section, changes
to health benefits that are the result of statutes enacted on or
after December 31, 2011.
(q) No later than February 1, 2013, the director shall, in
consultation with the Insurance Commissioner, develop and publish a
list of covered health benefits and limitations contained in the
plans subject to this section, to ensure consistency and uniformity
between health care service plan contracts and health insurance
policies. In developing the list, the director and commissioner shall
take into account federal statutes, rules, regulations, and guidance
applicable to essential health benefits as of that date. Development
and publication of the list is not 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).
(r) (1) Notwithstanding the Administrative Procedure Act (Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code), the department, until March 1, 2016, may
implement and administer this section through all-plan letters or
similar instruction from the department until regulations are
adopted.
(2) The department may adopt emergency regulations implementing
this section. The department may, on a one-time basis, readopt any
emergency regulation authorized by this section that is the same as,
or substantially equivalent to, an emergency regulation previously
adopted under this section.
(3) The initial adoption of emergency regulations implementing
this section and the readoption of emergency regulations authorized
by this subdivision shall be deemed an emergency and necessary for
the immediate preservation of the public peace, health, safety, or
general welfare. Initial emergency regulations and the readoption of
emergency regulations authorized by this section shall be exempt from
review by the Office of Administrative Law. The initial emergency
regulations and the readoption of emergency regulations authorized by
this section shall be submitted to the Office of Administrative Law
for filing with the Secretary of State and each shall remain in
effect for no more than 180 days, by which time final regulations may
be adopted.
(4) The director shall consult with the Insurance Commissioner to
ensure consistency and uniformity in the development of all-plan
letters and regulations.
(s) For purposes of this section, the following definitions shall
apply:
(1) "Habilitative services" means health care services and health
care devices that assist an individual in partially or fully
acquiring or improving skills and functioning and that are necessary
to address a health deficit or health condition, to the maximum
extent practical. These services address the skills and abilities
needed for functioning in interaction with an individual's
environment. Habilitation services do not include respite, day care,
recreational care, residential treatment, social services, custodial
care, or education services of any kind, including, but not limited
to, vocational training. Habilitative services shall be covered under
the same terms and conditions applied to rehabilitative services
under the plan contract.
(2) (A) "Health benefits," unless otherwise required to be defined
pursuant to binding federal rules, regulations, or guidance issued
pursuant to Section 1302(b) of PPACA, means health care items or
services for the diagnosis, cure, mitigation, treatment, or
prevention of illness, injury, disease, or a health condition,
including a mental health condition.
(B) "Health benefits" does not mean any cost-sharing requirements
or limitations such as copayments, coinsurance, or deductibles.
(3) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
any rules, regulations, or guidance issued thereunder.
(4) "Small group health care service plan contract" means a group
health care service plan contract issued to a small employer, as
defined in Section 1357.
SEC. 3. Section 10112.27 is added to the
Insurance Code , to read:
10112.27. (a) An individual or small group health insurance
policy marketed, offered, sold, issued, delivered, or renewed on or
after January 1, 2014, shall, at a minimum, include coverage for
essential health benefits. For purposes of this section, "essential
health benefits" means all of the following:
(1) (A) The health benefits covered by the Kaiser Foundation
Health Plan Small Group HMO 30 plan (federal health product
identification number 40513CA035) as this plan was offered during the
first quarter of 2012, including, but not limited to, all of the
following:
(i) The health benefits covered by the plan within the categories
identified in subsection (b) of Section 1302 of PPACA, including, but
not limited to, ambulatory patient services, emergency services,
hospitalization, maternity and newborn care, mental health and
substance use disorder services, including behavioral health
treatment, prescription drugs, rehabilitative and habilitative
services and devices, laboratory services, preventive and wellness
services and chronic disease management, and pediatric services,
including oral and vision care.
(ii) The health benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, including, but
not limited to, basic health care services required to be covered
pursuant to Section 1367, as defined in Section 1345 of the Health
and Safety Code, and in Section 1300.67 of Title 28 of the California
Code of Regulations. These benefits are required to be covered to
the extent described in the following sections of the Health and
Safety Code: Sections 1367.002, 1367.06, and 1367.35 (preventive
services for children); Section 1367.25 (prescription drug coverage
for contraceptives); Section 1367.45 (AIDS vaccine); Section 1367.46
(HIV testing); Section 1367.51 (diabetes); Section 1367.54 (alpha
feto protein testing); Section 1367.6 (breast cancer screening);
Section 1367.61 (prosthetics for laryngectomy); Section 1367.62
(maternity hospital stay); Section 1367.63 (reconstructive surgery);
Section 1367.635 (mastectomies); Section 1367.64 (prostate cancer);
Section 1367.65 (mammography); Section 1367.66 (cervical cancer);
Section 1367.665 (cancer screening tests); Section 1367.67
(osteoporosis); Section 1367.68 (surgical procedures for jaw bones);
Section 1367.71 (anesthesia for dental); Section 1367.9 (conditions
attributable to diethylstilbestrol); Section 1368.2 (hospice care);
Section 1370.6 (cancer clinical trials); Section 1371.5 (emergency
response ambulance or ambulance transport services); Subdivision (b)
of Section 1373 (sterilization operations or procedures); Section
1373.4 (inpatient hospital and ambulatory maternity); Section 1374.56
(phenylketonuria); Section 1374.17 (organ transplants for HIV);
Section 1374.72 (mental health parity); and Section 1374.73
(autism/behavioral health treatment).
(iii) The health benefits covered by the plan that are not
otherwise required to be covered under Chapter 2.2 (commencing with
Section 1340) of Division 2 of the Health and Safety Code, to the
extent otherwise required pursuant to Sections 1367.18, 1367.21,
1367.215, 1367.22, 1367.24, and 1367.25 of the Health and Safety
Code, and Section 1300.67.24 of Title 28 of the California Code of
Regulations, whether or not the health benefits are specifically
referenced in the health insurance policy.
(B) Coverage of mental health and substance use disorder services
pursuant to this paragraph, along with any scope and duration limits
imposed on the benefits, shall be in compliance with the Paul
Wellstone and Pete Domenici Mental Health Parity and Addiction Equity
Act of 2008 (Public Law 110-343), and all binding rules,
regulations, and guidance issued pursuant to Section 2726 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-26).
(2) With respect to habilitative services, in addition to any
habilitative services identified in paragraph (1), coverage shall
also be provided as required by binding federal rules, regulations,
or guidance issued pursuant to Section 1302(b) of PPACA. Habilitative
services shall be covered under the same terms and conditions
applied to rehabilitative services under the policy.
(3) With respect to pediatric vision care, the same health
benefits for pediatric vision care covered under the Federal
Employees Dental and Vision Insurance Program vision plan with the
largest national enrollment as of the first quarter of 2012. The
pediatric vision care services covered pursuant to this paragraph
shall be in addition to, and shall not replace, any vision services
covered under the plan identified in paragraph (1).
(4) With respect to pediatric oral care, the same health benefits
for pediatric oral care covered under the dental plan available to
subscribers of the Healthy Families Program in 2011-12, including the
provision of medically necessary orthodontic care provided pursuant
to the federal Children's Health Insurance Program Reauthorization
Act of 2009. The pediatric oral care benefits covered pursuant to
this paragraph shall be in addition to, and shall not replace, any
dental or orthodontic services covered under the plan identified in
paragraph (1).
(5) Except as otherwise provided in subdivision (p), any other
benefits required to be covered under this part.
(b) (1) Medically necessary health benefits described in this
section shall be covered subject to cost sharing approved by the
commissioner and any limitations consistent with this section.
Limitations imposed on health benefits shall be no greater than the
limitations imposed by the corresponding plans identified in
subdivision (a).
(2) A plan may place scope and duration limits on health benefits
described in this section, other than basic health care services
described in clause (ii) of subparagraph (A) of paragraph (1) of
subdivision (a), provided that the scope and duration limits are no
greater than the scope and duration limits imposed on those benefits
by the corresponding plans identified in subdivision (a).
(c) Except as otherwise provided in subdivision (d), if it is
determined that a plan identified in subdivision (a), with respect to
benefits and services covered by a policy and any scope and duration
limits applied to those benefits and services pursuant to the
policy, is not fully in compliance with this part, the identification
of that plan pursuant to this section shall not be construed to
exempt the plan from full compliance with this part.
(d) Notwithstanding subdivision (c) or any other provision of this
section, the home health services benefits covered under the plan
identified in paragraph (1) of subdivision (a) shall be deemed to not
be in conflict with this part.
(e) Except as provided in subdivision (f), nothing in this section
shall be construed to permit a health insurer to make substitutions
for the benefits required to be covered under this section,
regardless of whether those substitutions are actuarially equivalent.
(f) To the extent permitted under Section 1302 of PPACA and any
binding rules, regulations, or guidance issued pursuant to that
section, and to the extent that substitution would not create an
obligation for the state to defray costs for any individual, an
insurer may substitute its prescription drug formulary for the
formulary provided under the plan identified in subdivision (a) as
long as the formulary complies with the sections referenced in
clauses (ii) and (iii) of subparagraph (A) of paragraph (1) of
subdivision (a) that apply to prescription drugs.
(g) No health insurer, or its agent, producer, or representative,
shall offer, market, represent, or sell any product, policy, or
discount arrangement as minimum coverage, or as compliant with the
essential health benefits requirement in federal law, unless it meets
all of the requirements of this section.
(h) This section shall apply regardless of whether the policy is
offered inside or outside the California Health Benefit Exchange
created by Section 100500 of the Government Code.
(i) A health insurance policy subject to this section shall comply
with Section 10112.1.
(j) A health insurance policy subject to this section shall comply
with state and federal statutory and regulatory requirements
regarding nondiscrimination, including, but not limited to, Section
10140.
(k) This section shall not be construed to prohibit a policy from
covering additional benefits, including, but not limited to,
spiritual care services that are tax deductible under Section 213 of
the Internal Revenue Code.
(l) Subdivision (a) shall not apply to any of the following:
(1) A policy consisting solely of coverage of excepted benefits as
described in Sections 2722 and 2791 of the
federal Public Health Service Act (42 U.S.C. Sec.
300gg-21; 42 U.S.C. Sec. 300gg-91).
(2) A policy that qualifies as a grandfathered health plan under
Section 1251 of PPACA or any binding rules, regulation, or guidance
issued pursuant to that section.
(m) Nothing in this section shall be implemented in a manner that
is inconsistent with, or conflicts with, a requirement of PPACA.
(n) This section shall be implemented only to the extent essential
health benefits are required pursuant to PPACA.
(o) An essential health benefit is required to be provided under
this section only to the extent that federal law or policy does not
require the state to defray the costs of the benefit.
(p) An insurer is not required to cover, under this section,
changes to health benefits that are the result of statutes enacted on
or after December 31, 2011.
(q) No later than February 1, 2013, the commissioner shall, in
consultation with the Director of the Department of Managed Health
Care, develop and publish a list of covered health benefits and
limitations contained in the health insurance policies subject to
this section, to ensure consistency and uniformity between health
insurance policies and health care service plan contracts. In
developing the list, the commissioner and director shall take into
account federal statutes, rules, regulations, and guidance applicable
to essential health benefits as of that date. Development and
publication of the list is not 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).
(r) (1) Notwithstanding the Administrative Procedure Act (Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code), the commissioner, until March 1, 2016, may
implement and administer this section through insurer letters or
similar instruction from the commissioner until regulations are
adopted.
(2) The commissioner may adopt emergency regulations implementing
this section. The commissioner may, on a one-time basis, readopt any
emergency regulation authorized by this section that is the same as,
or substantially equivalent to, an emergency regulation previously
adopted under this section.
(3) The initial adoption of emergency regulations implementing
this section and the readoption of emergency regulations authorized
by this subdivision shall be deemed an emergency and necessary for
the immediate preservation of the public peace, health, safety, or
general welfare. Initial emergency regulations and the readoption of
emergency regulations authorized by this section shall be exempt from
review by the Office of Administrative Law. The initial emergency
regulations and the readoption of emergency regulations authorized by
this section shall be submitted to the Office of Administrative Law
for filing with the Secretary of State and each shall remain in
effect for no more than 180 days, by which time final regulations may
be adopted.
(4) The commissioner shall consult with the Director of the
Department of Managed Health Care to ensure consistency and
uniformity in the development of insurer letters and regulations.
(s) Nothing in this section shall impose on health insurance
policies the cost sharing or network limitations of the plans
identified in subdivision (a) except to the extent otherwise required
to comply with provisions of this code, including this section, and
as otherwise applicable to all health insurance policies offered to
individuals and small groups.
(t) For purposes of this section, the following definitions shall
apply:
(1) "Habilitative services" means health care services and health
care devices that assist an individual in partially or fully
acquiring or improving skills and functioning and that are necessary
to address a health deficit or health condition, to the maximum
extent practical. These services address the skills and abilities
needed for functioning in interaction with an individual's
environment. Habilitation services do not include respite, day care,
recreational care, residential treatment, social services, custodial
care, or education services of any kind, including, but not limited
to, vocational training. Habilitative services shall be covered under
the same terms and conditions applied to rehabilitative services
under the policy.
(2) (A) "Health benefits," unless otherwise required to be defined
pursuant to binding federal rules, regulations, or guidance issued
pursuant to Section 1302(b) of PPACA, means health care items or
services for the diagnosis, cure, mitigation, treatment, or
prevention of illness, injury, disease, or a health condition,
including a mental health condition.
(B) "Health benefits" does not mean any cost-sharing requirements
or limitations such as copayments, coinsurance, or deductibles.
(3) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
any rules, regulations, or guidance issued thereunder.
(4) "Small group health insurance policy" means a group health
care service insurance policy issued to a small employer, as defined
in Section 10700.
SEC. 4. 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.
SECTION 1. The Legislature hereby finds and
declares the following:
(a) Commencing January 1, 2014, the federal Patient Protection and
Affordable Care Act (PPACA) requires a health insurance issuer that
offers coverage to small employers or individuals, both inside and
outside of an American Health Benefit Exchange, with the exception of
grandfathered plans, to provide minimum coverage that includes
essential health benefits, as defined.
(b) It is the intent of the Legislature to comply with federal law
and consistently implement the essential health benefits provisions
of PPACA and related federal guidance and regulations, by adopting
the uniform minimum essential benefits requirement in state-regulated
health care coverage regardless of whether the policy or contract is
regulated by the Department of Managed Health Care or the Department
of Insurance and regardless of whether the policy or contract is
offered to individuals or small employers inside or outside of the
California Health Benefit Exchange.
SEC. 2. Section 1367.005 is added to the Health
and Safety Code, to read:
1367.005. (a) An individual or small group health care service
plan contract issued, amended, or renewed on or after January 1,
2014, shall, at a minimum, include coverage for essential health
benefits. For purposes of this section, "essential health benefits"
means all of the following:
(1) (A) The benefits and services covered by the Kaiser Small
Group HMO plan contract (product number 40513CA035) as this contract
was offered during the first quarter of 2012, including, but not
limited to, all of the following:
(i) The items and services covered by the plan contract within the
categories identified in subsection (b) of Section 1302 of PPACA,
including, but not limited to, ambulatory patient services, emergency
services, hospitalization, maternity and newborn care, mental health
and substance use disorder services, including behavioral health
treatment, prescription drugs, rehabilitative and habilitative
services and devices, laboratory services, preventive and wellness
services and chronic disease management, and pediatric vision care.
(ii) Mandated benefits pursuant to statutes enacted before
December 31, 2011.
(B) The services and benefits described in this paragraph shall be
covered to the extent they are medically necessary. Scope and
duration limits imposed on the services and benefits described in
this paragraph shall be no greater than the scope and duration limits
imposed on those services and benefits by the plan contract
identified in subparagraph (A).
(2) With respect to habilitative services, in addition to any
habilitative services identified in paragraph (1), the same services
as the plan contract covers for rehabilitative services. Habilitative
services shall be covered under the same terms and conditions
applied to rehabilitative services under the plan contract.
(3) With respect to pediatric oral care and pediatric vision care,
the same services and benefits for pediatric oral care and pediatric
vision care covered under the Federal Employees Dental and Vision
Insurance Program dental plan and vision plan with the largest
national enrollment as of the first quarter of 2012. Scope and
duration limits imposed on the services and benefits described in
this paragraph shall be no greater than the scope and duration
limitations imposed on those benefits by the Federal Employees Dental
and Vision Insurance Program dental plan and vision plan with the
largest national enrollment as of the first quarter of 2012.
(4) Any other benefits required to be covered under this chapter.
(b) When offering, issuing, selling, or marketing a health care
service plan contract, a health care service plan shall not indicate
or imply that the plan contract covers essential health benefits
unless the plan contract covers essential health benefits as defined
in this section.
(c) This section shall apply regardless of whether the plan
contract is offered inside or outside the California Health Benefit
Exchange created by Section 100500 of the Government Code.
(d) A plan contract subject to this section shall also comply with
Section 1367.001.
(e) This section shall not be construed to prohibit a plan
contract from covering additional benefits, including, but not
limited to, spiritual care services that are tax deductible under
Section 213 of the Internal Revenue Code.
(f) Subdivision (a) shall not apply to any of the following:
(1) A plan contract that provides excepted benefits as described
in Section 2722 of the federal Public Health Service Act (42 U.S.C.
Sec. 300gg-21).
(2) A plan contract that qualifies as a grandfathered health plan
under Section 1251 of PPACA.
(g) This section shall be implemented only to the extent that
federal law or policy does not require the state to defray the costs
of benefits included within the definition of essential health
benefits under this section.
(h) For purposes of this section, the following definitions shall
apply:
(1) "Habilitative services" means health care services that help a
person keep, learn, or improve skills and functioning for daily
living.
(2) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
any rules, regulations, or guidance issued thereunder.
(3) "Small group health care service plan contract" means a group
health care service plan contract issued to a small employer, as
defined in Section 1357.
SEC. 3. Section 10112.27 is added to the
Insurance Code, to read:
10112.27. (a) An individual or small group health insurance
policy issued, amended, or renewed on or after January 1, 2014,
shall, at a minimum, include coverage for essential health benefits.
For purposes of this section, "essential health benefits" means all
of the following:
(1) (A) The benefits and services covered by the Kaiser Small
Group HMO plan contract (product number 40513CA035) as this contract
was offered during the first quarter of 2012, including, but not
limited to, all of the following:
(i) The items and services covered by the plan contract within the
categories identified in subsection (b) of Section 1302 of PPACA,
including, but not limited to, ambulatory patient services, emergency
services, hospitalization, maternity and newborn care, mental health
and substance use disorder services, including behavioral health
treatment, prescription drugs, rehabilitative and habilitative
services and devices, laboratory services, preventive and wellness
services and chronic disease management, and pediatric vision care.
(ii) Mandated benefits pursuant to statutes enacted before
December 31, 2011.
(B) The services and benefits described in this paragraph shall be
covered to the extent they are medically necessary. Scope and
duration limits imposed on the services and benefits described in
this paragraph shall be no greater than the scope and duration limits
imposed on those services and benefits by the health care service
plan contract identified in subparagraph (A).
(2) With respect to habilitative services, in addition to any
habilitative services identified in paragraph (1), the same services
as the policy covers for rehabilitative services. Habilitative
services shall be covered under the same terms and conditions applied
to rehabilitative services under the policy.
(3) With respect to pediatric oral care and pediatric vision care,
the same services and benefits for pediatric oral care and pediatric
vision care covered under the Federal Employees Dental and Vision
Insurance Program dental plan and vision plan with the largest
national enrollment as of the first quarter of 2012. Scope and
duration limits imposed on the services and benefits described in
this paragraph shall be no greater than the scope and duration
limitations imposed on those benefits by the Federal Employees Dental
and Vision Insurance Program dental plan and vision plan with the
largest national enrollment as of the first quarter of 2012.
(4) Any other benefits required to be covered under this part.
(b) When offering, issuing, selling, or marketing a health
insurance policy, a health insurer shall not indicate or imply that
the policy covers essential health benefits unless the policy covers
essential health benefits as defined in this section.
(c) This section shall apply regardless of whether the policy is
offered inside or outside the California Health Benefit Exchange
created by Section 100500 of the Government Code.
(d) A health insurance policy subject to this section shall also
comply with Section 10112.1.
(e) This section shall not be construed to prohibit a policy from
covering additional benefits, including, but not limited to,
spiritual care services that are tax deductible under Section 213 of
the Internal Revenue Code.
(f) Subdivision (a) shall not apply to any of the following:
(1) A policy that provides excepted benefits as described in
Section 2722 of the federal Public Health Service Act (42 U.S.C. Sec.
300gg-21).
(2) A health insurance policy that qualifies as a grandfathered
health plan under Section 1251 of PPACA.
(g) This section shall be implemented only to the extent that
federal law or policy does not require the state to defray the costs
of benefits included within the definition of essential health
benefits under this section.
(h) For purposes of this section, the following definitions shall
apply:
(1) "Habilitative services" means health care services that help a
person keep, learn, or improve skills and functioning for daily
living.
(2) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
any rules, regulations, or guidance issued thereunder.
(3) "Small group health insurance policy" means a group health
insurance policy issued to a small employer, as defined in Section
10700.
SEC. 4. 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.