BILL NUMBER: SB 615	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 18, 2012
	AMENDED IN SENATE  MAY 10, 2011
	AMENDED IN SENATE  APRIL 13, 2011

INTRODUCED BY   Senator Calderon

                        FEBRUARY 18, 2011

   An act to amend  Section 1359 of, and to add Section
1361.5 to, the Health and Safety Code, and to amend Section 1631.5
of, and to add Section 1749.87 to, the Insurance Code, relating to
health care coverage   Sections 742.20 and 742.40 of the
Insurance Code, relating to insurance  .


	LEGISLATIVE COUNSEL'S DIGEST


   SB 615, as amended, Calderon.  Health care service plans:
accident and health agents: licensure.   Multiple
employer welfare arrangements: benefits.  
   Existing law prohibits a self-funded or partially self-funded
multiple employer welfare arrangement (MEWA) from providing any
benefits for any resident of this state without obtaining a
certificate of compliance from the Insurance Commissioner. Existing
law imposes various eligibility requirements on a self-funded or
partially self-funded MEWA in order to obtain a certificate of
compliance, including, among other things, that it be a nonprofit
corporation, that it be established and maintained by a specified
association with at least 200 paid members, and that benefits be only
offered to association members.  
    Under existing law, a self-funded or partially self-funded MEWA
is limited to providing certain benefits that include, among other
things, medical, dental, and surgical benefits. Under existing law, a
MEWA is required to offer health care coverage benefits to any newly
eligible person and his or her dependents under terms and conditions
no less favorable than those offered to the MEWA employers' existing
employees and their dependents under specified circumstances. 

   This bill would, commencing January 1, 2014, prohibit a MEWA from
offering, issuing, selling, or renewing health care coverage benefits
unless the MEWA discloses whether the benefits constitute minimum
essential coverage, as defined under existing federal law. 

   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. A willful violation
of the act is a crime. The chief officer of the department is the
Director of the Department of Managed Health Care. Existing law
authorizes the director to require that solicitors and solicitor
firms, and principal persons engaged in the supervision of
solicitation for plans of solicitor firms, meet specified standards.
 
   This bill would change the director's authority as described above
to make it mandatory. On and after January 1, 2013, the bill would
also require solicitors and solicitor firms, and principal persons
engaged in the supervision of solicitation for health care service
plan contracts, specialized health care service plan contracts,
Medicare Advantage Plans under Medicare Part C, or Medicare
supplement contracts, to complete solicitor training that includes,
among other things, information relating to the act, the federal
Patient Protection and Affordable Care Act, and the California Health
Benefit Exchange. The bill would require the department to consult
with the Insurance Commissioner with respect to developing the
curriculum for the solicitor training.  
   Because a willful violation of the act constitutes a crime, the
bill would impose a state-mandated local program.  
   Existing law requires accident and health agent licensees to be
licensed by the Insurance Commissioner, subject to prelicensure
standards and continuing education requirements developed by the
curriculum board that consists of insurance industry representatives
and consumer groups. Existing law authorizes the Insurance
Commissioner to enforce those provisions.  
   This bill would require the curriculum board to make
recommendations to the commissioner to, among other things, instruct
accident and health licensees about the requirements of the federal
Patient Protection and Affordable Care Act and to include instruction
relating to the California Health Benefit Exchange. The bill would
require each course provider to submit its course content to the
commissioner for approval.  
   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
  no  . State-mandated local program:  yes
  no  .


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

   SECTION 1.    Section 742.20 of the  
Insurance Code   is amended to read: 
   742.20.  The Legislature finds and declares the following:
   (a) An alternative to insurance programs, health care maintenance
organizations, and panel provider organizations was established by
Congress in 1974 through the Employee Retirement Income Security Act
(ERISA). Among the various employee benefit programs established and
governed by ERISA are multiple employer welfare arrangements (MEWA),
which are subject as well to state regulatory and fiscal standards
not inconsistent with ERISA. MEWAs permit employer members of trade
associations to create trust funds for the purpose of offering and
providing health care benefits to their employees. MEWAs can be
created as fully insured or self-funded or partially self-funded
benefit programs.
   (b) The Legislature recognizes that some MEWAs provide an
alternative mechanism to traditional health insurance for small
employers. It is the intent of the Legislature to ensure the
financial integrity of those MEWA programs that are already in
existence by requiring self-funded or partially self-funded MEWAs to
obtain a certificate of compliance from the Department of Insurance.
In order for the Department of Insurance to grant a certificate of
compliance, the MEWA must adhere to standards set forth in this act
which are not inconsistent with the provisions of ERISA. Further, it
is the intent of the Legislature to provide the Department of
Insurance with the authority to levy monetary penalties and to revoke
certificates of compliance from MEWAs that violate the provisions of
this act. 
   (c) The federal Patient Protection and Affordable Care Act enacted
various health care coverage market reforms that become operative on
January 1, 2014. It is the intent of the Legislature to encourage
MEWAs regulated by this article to provide certain essential health
benefits to the extent not inconsistent with ERISA.  
   (c) 
    (d)  The Legislature has passed significant reforms in
the area of small group health insurance. This article, in no manner,
circumvents these reforms nor is it intended to be a precedent to do
so. Therefore, the small group reform legislation applies to MEWAs
to the extent it is not inconsistent with ERISA. 
   (d) 
    (e)  The provisions of this article are consistent with
and authorized by ERISA, which confers upon the states limited
authority to regulate MEWAs.
   SEC. 2.    Section 742.40 of the   Insurance
Code   is amended to read: 
   742.40.  (a) A multiple employer welfare arrangement shall offer
health care coverage benefits to any new eligible person and his or
her dependents under terms and conditions no less favorable to those
offered to their employers' existing employees and their dependents,
if the newly eligible person had health care benefit coverage with
either the same or a different multiple employer welfare arrangement
within 31 days. The new coverage shall comply with existing
eligibility rules of the multiple employer welfare arrangement.
   (b) A multiple employer welfare arrangement shall comply with the
requirements set forth in Sections 10198.7 and 10198.9. 
   (c) Notwithstanding any other provision of law, commencing January
1, 2014, a multiple employer welfare arrangement shall not offer,
issue, sell, or renew health care coverage benefits unless the
multiple employer welfare arrangement discloses in all marketing
material and solicitations whether the benefits constitute minimum
essential coverage as defined in Section 5000A(f) of Title 26 of the
Internal Revenue Code and any rules or regulations adopted
thereunder.  
  SECTION 1.    Section 1359 of the Health and
Safety Code is amended to read:
   1359.  (a) The director shall require that solicitors and
solicitor firms, and principal persons engaged in the supervision of
solicitation for plans of solicitor firms, meet reasonable and
appropriate standards with respect to training, experience, and other
qualifications consistent with Section 1361.5 and any additional
standards as the director finds necessary and appropriate in the
public interest or for the protection of subscribers, enrollees, and
plans. For such purposes, the director may do the following:
   (1) Appropriately classify such persons and individuals.
   (2) Specify that all or any portion of such standards shall be
applicable to any such class.
   (3) Require individuals in any such class to pass examinations
prescribed in accordance with such rules.
   (b) The director may prescribe by rule reasonable fees and charges
to defray the costs of carrying out this section, including, but not
limited to, fees for any examination administered by the director or
under his or her direction.  
  SEC. 2.    Section 1361.5 is added to the Health
and Safety Code, to read:
   1361.5.  (a) On and after January 1, 2013, solicitors and
solicitor firms, and principal persons engaged in the supervision of
solicitation for health care service plan contracts, specialized
health care service plan contracts, Medicare Advantage Plans under
Medicare Part C, or Medicare supplement contracts, shall complete
training as a solicitor consistent with this section.
   (b) The training for a solicitor shall include the following:
   (1) Knowledge of the Knox-Keene Health Care Service Plan Act of
1975 (commencing with Section 1340) and regulations implemented under
that act.
   (2) Knowledge of the federal Patient Protection and Affordable
Care Act (Public Law 111-148) and other relevant federal laws,
federal regulations, and guidance implemented under those laws.
   (3) Knowledge of all public coverage programs and the California
Health Benefit Exchange.
   (4) Ethics training.
   (c) In developing the curriculum for solicitor training, the
department shall consult with the Insurance Commissioner. The
training developed by the department shall be at least as extensive
as the training for an accident and health agent, as required by the
Insurance Commissioner.
   (d) The department shall determine whether the ethics training
provided to those licensed as an accident and health agent by the
Insurance Commissioner is sufficient and appropriate for a solicitor.
If the department so determines, then an individual licensed and in
good standing as an accident and health agent shall not be required
to complete the ethics training described in this section; however,
all other requirements pursuant to this section shall apply.
   (e) Nothing in this section shall be deemed to affect the current
operations of the Healthy Families Program (Part 6.2 (commencing with
Section 12693) of Division 2 of the Insurance Code), the Access for
Infants and Mothers Program (Part 6.3 (commencing with Section 12695)
of Division 2 of the Insurance Code), or the Medi-Cal program
(Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of
the Welfare and Institutions Code). Nothing in this section shall be
deemed to affect the operations of the California Health Benefit
Exchange established in Title 22 (commencing with Section 100500) of
the Government Code.
   (f) Nothing in this section shall apply to the requirements or
qualifications for navigators pursuant to subdivision (l) of Section
100502 of the Government Code.  
  SEC. 3.    Section 1631.5 of the Insurance Code is
amended to read:
   1631.5.  (a) Nothing in this article shall be deemed to affect the
current operations of the Healthy Families Program (Part 6.2
(commencing with Section 12693) of Division 2) or the Access for
Infants and Mothers Program (Part 6.3 (commencing with Section 12695)
of Division 2), or the Medi-Cal program (Chapter 7 (commencing with
Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code). Nothing in this article shall be deemed to affect
the operations of the California Health Benefit Exchange established
in Title 22 (commencing with Section 100500) of the Government Code.

   (b) Nothing in this article shall apply to the requirements or
qualifications for navigators pursuant to subdivision (l) of Section
100502 of the Government Code.  
  SEC. 4.    Section 1749.87 is added to the
Insurance Code, to read:
   1749.87.  (a) The curriculum board shall, in 2012, make
recommendations to the commissioner to instruct accident and health
agents about the requirements imposed by the federal Patient
Protection and Affordable Care Act (Public Law 111-148). This
instruction shall include instruction on all public coverage programs
and the California Health Benefit Exchange established in Title 22
(commencing with Section 100500) of the Government Code.
   (b) The curriculum board shall make recommendations to revise both
prelicensing education and continuing education.
   (c) Each provider of courses based upon this curriculum shall
submit its course content to the commissioner for approval. 

  SEC. 5.    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.