BILL NUMBER: AB 1453	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 28, 2012
	PASSED THE ASSEMBLY  AUGUST 29, 2012
	AMENDED IN SENATE  AUGUST 23, 2012
	AMENDED IN SENATE  AUGUST 20, 2012
	AMENDED IN ASSEMBLY  APRIL 17, 2012
	AMENDED IN ASSEMBLY  MARCH 29, 2012

INTRODUCED BY   Assembly Member Monning
   (Principal coauthor: Senator Hernandez)
   (Coauthor: Assembly Member Eng)

                        JANUARY 5, 2012

   An act to add Section 1367.005 to the Health and Safety Code,
relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1453, Monning. 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 requires health care
service plan contracts to cover various benefits.
   This bill would require an individual or small group health care
service plan contract 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 prohibit treatment limits imposed on these benefits
from exceeding the corresponding limits imposed by the benchmark
plans and would generally prohibit a plan from making substitutions
of the benefits required to be covered. The bill would specify that
these provisions apply regardless of whether the contract is offered
inside or outside the Exchange but would provide that they do not
apply to grandfathered plans, specialized plans, or Medicare
supplement plans, as specified. The bill would prohibit a health care
service plan from issuing, delivering, renewing, offering, selling,
or marketing a plan contract as compliant with the federal essential
health benefits requirement satisfies the bill's requirements. The
bill would authorize the Department of Managed Health Care to adopt
emergency regulations implementing these provisions until March 1,
2016, and would enact other related provisions.
   These provisions would only be implemented to the extent essential
health benefits are required pursuant to PPACA. The bill would
provide that it shall become operative only if SB 951 is also
enacted.
   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.


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 pursuant to PPACA and as outlined in this section. For
purposes of this section, "essential health benefits" means all of
the following:
   (1) Health benefits within the categories identified in Section
1302(b) of PPACA: 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.
   (2) (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, as follows, regardless of whether the
benefits are specifically referenced in the evidence of coverage or
plan contract for that plan:
   (i) Medically necessary basic health care services, as defined in
subdivision (b) of Section 1345 and in Section 1300.67 of Title 28 of
the California Code of Regulations.
   (ii) The health benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, as 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) Any other benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, as described
in those statutes.
   (iv) 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.
   (v) Any other health benefits covered by the plan that are not
otherwise required to be covered under this chapter.
   (B) Where there are any conflicts or omissions in the plan
identified in subparagraph (A) as compared with the requirements for
health benefits under this chapter that were enacted prior to
December 31, 2011, the requirements of this chapter shall be
controlling, except as otherwise specified in this section.
   (C) Notwithstanding subparagraph (B) or any other provision of
this section, the home health services benefits covered under the
plan identified in subparagraph (A) shall be deemed to not be in
conflict with this chapter.
   (D) For purposes of this section, the Paul Wellstone and Pete
Domenici Mental Health Parity and Addiction Equity Act of 2008
(Public Law 110-343) shall apply to a contract subject to this
section. 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 rules,
regulations, or guidance issued pursuant to Section 2726 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-26).
   (3) With respect to habilitative services, in addition to any
habilitative services identified in paragraph (2), coverage shall
also be provided as required by 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.
   (4) 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 (2).
   (5) 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 (2).
   (b) Treatment limitations imposed on health benefits described in
this section shall be no greater than the treatment limitations
imposed by the corresponding plans identified in subdivision (a),
subject to the requirements set forth in paragraph (2) of subdivision
(a).
   (c) Except as provided in subdivision (d), 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.
   (d) To the extent permitted under Section 1302 of PPACA and any
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 coverage for
prescription drugs complies with the sections referenced in clauses
(ii) and (iv) of subparagraph (A) of paragraph (2) of subdivision (a)
that apply to prescription drugs.
   (e) No health care service plan, or its agent, solicitor, or
representative, shall issue, deliver, renew, offer, market,
represent, or sell any product, contract, or discount arrangement as
compliant with the essential health benefits requirement in federal
law, unless it meets all of the requirements of this section.
   (f) 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.
   (g) Nothing in this section shall be construed to exempt a plan or
a plan contract from meeting other applicable requirements of law.
   (h) 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.
   (i) 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 rules, regulations, or guidance
issued pursuant to that section.
   (j) Nothing in this section shall be implemented in a manner that
conflicts with a requirement of PPACA.
   (k) This section shall be implemented only to the extent essential
health benefits are required pursuant to PPACA.
   (l) An essential health benefit is required to be provided under
this section only to the extent that federal law does not require the
state to defray the costs of the benefit.
   (m) Nothing in this section shall obligate the state to incur
costs for the coverage of benefits that are not essential health
benefits as defined in this section.
   (n) 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.
   (o) (1) 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.
   (2) 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. 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.
   (3) The director shall consult with the Insurance Commissioner to
ensure consistency and uniformity in the development of regulations
under this subdivision.
   (4) This subdivision shall become inoperative on March 1, 2016.
   (p) For purposes of this section, the following definitions shall
apply:
   (1) "Habilitative services" means medically necessary 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 condition, to the maximum
extent practical. These services address the skills and abilities
needed for functioning in interaction with an individual's
environment. Examples of health care services that are not
habilitative services include, but are not limited to, respite care,
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 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 behavioral
health condition.
   (B) "Health benefits" does not mean any cost-sharing requirements
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.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
  SEC. 4.  This act shall become operative only if Senate Bill 951 of
the 2011-12 Regular Session is also enacted.