BILL NUMBER: SB 961 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 24, 2012
AMENDED IN ASSEMBLY AUGUST 20, 2012
AMENDED IN SENATE APRIL 9, 2012
INTRODUCED BY Senator Hernandez
(Principal coauthor: Assembly Member Monning)
JANUARY 10, 2012
An act to amend Sections 1363 and 1399.829 of, to amend
the heading of Article 11.7 (commencing with Section 1399.825) of
Chapter 2.2 of Division 2 of, to amend, renumber, and add Section
1389.1 of, to amend and repeal Sections 1389.5 and 1399.816 of, to
amend, repeal, and add Sections 1389.25, 1389.4, 1389.7, 1399.805,
and 1399.811 of, to add Section 1399.836 to, to add Article 11.8
(commencing with Section 1399.845) to Chapter 2.2 of Division 2 of,
and to repeal Article 11.7 (commencing with Section 1399.825) of
Chapter 2.2 of Division 2 of, the Health and Safety Code, and to
amend Sections 10291.5 and Section 10954 of, to
amend the heading of Chapter 9.7 (commencing with Section 10950) of
Part 2 of Division 2 of, to amend and repeal Sections
10119.1 and 10902.4 of, to amend, repeal, and add Sections 10113.9,
10113.95, 10119.2, 10901.3, and 10901.9 of, to add Section
10960.5 to, to add Chapter 9.9 (commencing with Section 10965) to
Part 2 of Division 2 of, and to repeal Chapter 9.7
(commencing with Section 10950) of Part 2 of Division 2
Section 10902.4 of, the Insurance Code, relating to health
care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 961, as amended, Hernandez. Health
Individual health care coverage.
(1) Existing
Existing federal law, the federal Patient Protection
and Affordable Care Act (PPACA) enacts various health care coverage
market reforms that take effect January 1, 2014. Among other things,
PPACA requires each health insurance issuer that offers health
insurance coverage in the individual or group market in a state to
accept every employer and individual in the state that applies for
that coverage and to renew that coverage at the option of the plan
sponsor or the individual. PPACA prohibits a group health plan and a
health insurance issuer offering group or individual health insurance
coverage from imposing any preexisting condition exclusion with
respect to that plan or coverage. PPACA allows the premium rate
charge by a health insurance issuer offering small group or
individual coverage to vary only by family composition, rating area,
age, and tobacco use, as specified, and prohibits discrimination
against individuals based on health status.
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
Existing law also provides for the
regulation of health insurers by the Insurance Commissioner
. Existing law requires plans and requires
insurers offering coverage in the individual market to offer coverage
for a child subject to specified requirements.
This bill would require a plan or health
insurer, on and after October 1, 2013, to offer, market, and
sell all of the plan's insurer's health
benefit plans that are sold in the individual market to all
individuals and dependents in each service area in which the
plan insurer provides or arranges for the
provision of health care services, with coverage effective on or
after January 1, 2014, as specified, but would require plans
and insurers to limit enrollment in individual health
benefit plans to specified open enrollment and special enrollment
periods. The bill would prohibit these health benefit plans from
imposing any preexisting condition upon any individual. Commencing
January 1, 2014, the bill would prohibit a plan or
health insurer from conditioning the issuance or offering
of individual health benefit plans on any health status-related
factor, as specified, and would authorize plans and
insurers to use only age, geographic region, and whether
the plan covers an individual or family for purposes of establishing
rates for individual health benefit plans, as specified. The bill
would require a health care service plan or health
insurer to issue a specified notice at least 60 days prior to the
renewal date of an individual grandfathered health plan to all
subscribers and policyholders of the plan. The bill would
enact other related provisions and make related conforming changes.
The bill would make certain of these provisions
inoperative if the corresponding provisions of PPACA are repealed and
would make other conforming changes. The bill would provide that it
shall become operative only if AB 1461 is also enacted.
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.
(2) PPACA requires health insurance issuers to provide a summary
of benefits and coverage explanation pursuant to specified standards
to applicants and enrollees or policyholders.
Existing law requires health care service plans to use disclosure
forms that contain specified information regarding the contracts or
policies issued by the plan or insurer, including the benefits and
coverage of the contract or policy, and the exceptions, reductions,
and limitations that apply to the contract or policy. Existing law
requires health care service plans that offer individual or small
group coverage to also provide a uniform health plan benefits and
coverage matrix containing the plan's major provisions, as specified.
This bill would authorize the Department of Managed Health Care,
until January 1, 2015, to waive or modify those requirements for
purposes of compliance with PPACA, as specified.
(3) Existing law requires a health care service plan or a health
insurer offering individual plan contracts or individual insurance
policies to fairly and affirmatively offer, market, and sell certain
individual contracts and policies to all federally eligible defined
individuals, as defined, in each service area in which the plan or
insurer provides or arranges for the provision of health care
services. Existing law prohibits the premium for those policies and
contracts from exceeding the premium paid by a subscriber of the
California Major Risk Medical Insurance Program who is of the same
age and resides in the same geographic region as the federally
eligible defined individual, as specified.
This bill would prohibit the premium for those policies and
contracts from exceeding the premium for a specified plan offered in
the individual market through the California Health Benefit Exchange
in the rating area in which the individual resides.
(4) 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 no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1363 of the Health and
Safety Code is amended to read:
1363. (a) The director shall require the use by each plan of
disclosure forms or materials containing information regarding the
benefits, services, and terms of the plan contract as the director
may require, so as to afford the public, subscribers, and enrollees
with a full and fair disclosure of the provisions of the plan in
readily understood language and in a clearly organized manner. The
director may require that the materials be presented in a reasonably
uniform manner so as to facilitate comparisons between plan contracts
of the same or other types of plans. Nothing contained in this
chapter shall preclude the director from permitting the disclosure
form to be included with the evidence of coverage or plan contract.
The disclosure form shall provide for at least the following
information, in concise and specific terms, relative to the plan,
together with additional information as may be required by the
director, in connection with the plan or plan contract:
(1) The principal benefits and coverage of the plan, including
coverage for acute care and subacute care.
(2) The exceptions, reductions, and limitations that apply to the
plan.
(3) The full premium cost of the plan.
(4) Any copayment, coinsurance, or deductible requirements that
may be incurred by the member or the member's family in obtaining
coverage under the plan.
(5) The terms under which the plan may be renewed by the plan
member, including any reservation by the plan of any right to change
premiums.
(6) A statement that the disclosure form is a summary only, and
that the plan contract itself should be consulted to determine
governing contractual provisions. The first page of the disclosure
form shall contain a notice that conforms with all of the following
conditions:
(A) (i) States that the evidence of coverage discloses the terms
and conditions of coverage.
(ii) States, with respect to individual plan contracts, small
group plan contracts, and any other group plan contracts for which
health care services are not negotiated, that the applicant has a
right to view the evidence of coverage prior to enrollment, and, if
the evidence of coverage is not combined with the disclosure form,
the notice shall specify where the evidence of coverage can be
obtained prior to enrollment.
(B) Includes a statement that the disclosure and the evidence of
coverage should be read completely and carefully and that individuals
with special health care needs should read carefully those sections
that apply to them.
(C) Includes the plan's telephone number or numbers that may be
used by an applicant to receive additional information about the
benefits of the plan or a statement where the telephone number or
numbers are located in the disclosure form.
(D) For individual contracts, and small group plan contracts as
defined in Article 3.1 (commencing with Section 1357), the disclosure
form shall state where the health plan benefits and coverage matrix
is located.
(E) Is printed in type no smaller than that used for the remainder
of the disclosure form and is displayed prominently on the page.
(7) A statement as to when benefits shall cease in the event of
nonpayment of the prepaid or periodic charge and the effect of
nonpayment upon an enrollee who is hospitalized or undergoing
treatment for an ongoing condition.
(8) To the extent that the plan permits a free choice of provider
to its subscribers and enrollees, the statement shall disclose the
nature and extent of choice permitted and the financial liability
that is, or may be, incurred by the subscriber, enrollee, or a third
party by reason of the exercise of that choice.
(9) A summary of the provisions required by subdivision (g) of
Section 1373, if applicable.
(10) If the plan utilizes arbitration to settle disputes, a
statement of that fact.
(11) A summary of, and a notice of the availability of, the
process the plan uses to authorize, modify, or deny health care
services under the benefits provided by the plan, pursuant to
Sections 1363.5 and 1367.01.
(12) A description of any limitations on the patient's choice of
primary care physician, specialty care physician, or nonphysician
health care practitioner, based on service area and limitations on
the patient's choice of acute care hospital care, subacute or
transitional inpatient care, or skilled nursing facility.
(13) General authorization requirements for referral by a primary
care physician to a specialty care physician or a nonphysician health
care practitioner.
(14) Conditions and procedures for disenrollment.
(15) A description as to how an enrollee may request continuity of
care as required by Section 1373.96 and request a second opinion
pursuant to Section 1383.15.
(16) Information concerning the right of an enrollee to request an
independent review in accordance with Article 5.55 (commencing with
Section 1374.30).
(17) A notice as required by Section 1364.5.
(b) (1) As of July 1, 1999, the director shall require each plan
offering a contract to an individual or small group to provide with
the disclosure form for individual and small group plan contracts a
uniform health plan benefits and coverage matrix containing the plan'
s major provisions in order to facilitate comparisons between plan
contracts. The uniform matrix shall include the following category
descriptions together with the corresponding copayments and
limitations in the following sequence:
(A) Deductibles.
(B) Lifetime maximums.
(C) Professional services.
(D) Outpatient services.
(E) Hospitalization services.
(F) Emergency health coverage.
(G) Ambulance services.
(H) Prescription drug coverage.
(I) Durable medical equipment.
(J) Mental health services.
(K) Chemical dependency services.
(L) Home health services.
(M) Other.
(2) The following statement shall be placed at the top of the
matrix in all capital letters in at least 10-point boldface type:
THIS MATRIX IS INTENDED TO BE USED TO HELP YOU COMPARE COVERAGE
BENEFITS AND IS A SUMMARY ONLY. THE EVIDENCE OF COVERAGE AND PLAN
CONTRACT SHOULD BE CONSULTED FOR A DETAILED DESCRIPTION OF COVERAGE
BENEFITS AND LIMITATIONS.
(c) Nothing in this section shall prevent a plan from using
appropriate footnotes or disclaimers to reasonably and fairly
describe coverage arrangements in order to clarify any part of the
matrix that may be unclear.
(d) All plans, solicitors, and representatives of a plan shall,
when presenting any plan contract for examination or sale to an
individual prospective plan member, provide the individual with a
properly completed disclosure form, as prescribed by the director
pursuant to this section for each plan so examined or sold.
(e) In the case of group contracts, the completed disclosure form
and evidence of coverage shall be presented to the contractholder
upon delivery of the completed health care service plan agreement.
(f) Group contractholders shall disseminate copies of the
completed disclosure form to all persons eligible to be a subscriber
under the group contract at the time those persons are offered the
plan. If the individual group members are offered a choice of plans,
separate disclosure forms shall be supplied for each plan available.
Each group contractholder shall also disseminate or cause to be
disseminated copies of the evidence of coverage to all applicants,
upon request, prior to enrollment and to all subscribers enrolled
under the group contract.
(g) In the case of conflicts between the group contract and the
evidence of coverage, the provisions of the evidence of coverage
shall be binding upon the plan notwithstanding any provisions in the
group contract that may be less favorable to subscribers or
enrollees.
(h) In addition to the other disclosures required by this section,
every health care service plan and any agent or employee of the plan
shall, when presenting a plan for examination or sale to any
individual purchaser or the representative of a group consisting of
25 or fewer individuals, disclose in writing the ratio of premium
costs to health services paid for plan contracts with individuals and
with groups of the same or similar size for the plan's preceding
fiscal year. A plan may report that information by geographic area,
provided the plan identifies the geographic area and reports
information applicable to that geographic area.
(i) Subdivision (b) shall not apply to any coverage provided by a
plan for the Medi-Cal program or the Medicare program pursuant to
Title XVIII and Title XIX of the Social Security Act.
(j) The department may waive or modify the requirements of this
section for the purpose of resolving duplication or conflict with
federal requirements for uniform benefit disclosure in effect
pursuant to Section 2715 of the federal Public Health Service Act and
the regulations adopted thereunder. The department shall implement
this subdivision in a manner that preserves disclosure requirements
of this section that exceed or are not in direct conflict with
federal requirements. The department shall consult and coordinate
with the Department of Insurance in implementing any regulations
pursuant to this subdivision in order to provide consumers with
comparable product information and uniform benefit summaries for all
health care coverage in this state, consistent with the intent of
federal law and this section. The department shall implement this
section through issuance of all-plan letters until January 1, 2015.
SEC. 2. Section 1389.1 of the Health and Safety
Code is amended and renumbered to read:
1389.11. (a) The director shall not approve any plan contract
unless the director finds that the application conforms to the
following requirements, as applicable:
(1) All applications for coverage, except that which is guaranteed
issue, which include health-related questions shall contain clear
and unambiguous questions designed to ascertain the health condition
or history of the applicant.
(2) The application questions related to an applicant's health in
applications described in paragraph (1) shall be based on medical
information that is reasonable and necessary for medical underwriting
purposes. The application shall include a prominently displayed
notice that shall read:
"California law prohibits an HIV test from being required or used
by health care service plans as a condition of obtaining coverage."
(3) All applications for coverage subject to Article 11.8
(commencing with Section 1399.845) shall comply with paragraph (2) of
subdivision (g) of Section 1399.849.
(b) Nothing in this section shall authorize the director to
establish or require a single or standard application form for
application questions.
SEC. 3. Section 1389.1 is added to the Health
and Safety Code, to read:
1389.1. (a) For purposes of this article, the following
definitions shall apply:
(1) "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 pursuant to that law.
(2) "Grandfathered health plan" has the same meaning as that term
is defined in Section 1251 of PPACA.
(b) This section shall become operative on November 1, 2013.
SEC. 4. Section 1389.25 of the Health and
Safety Code is amended to read:
1389.25. (a) (1) This section shall apply only to a full service
health care service plan offering health coverage in the individual
market in California and shall not apply to a specialized health care
service plan, a health care service plan contract in the Medi-Cal
program (Chapter 7 (commencing with Section 14000) of Part 3 of
Division 9 of the Welfare and Institutions Code), a health care
service plan conversion contract offered pursuant to Section 1373.6,
a health care service plan contract in the Healthy Families Program
(Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code), or a health care service plan contract offered to a
federally eligible defined individual under Article 4.6 (commencing
with Section 1366.35).
(2) A local initiative, as defined in subdivision (v) of Section
53810 of Title 22 of the California Code of Regulations, that is
awarded a contract by the State Department of Health Care Services
pursuant to subdivision (b) of Section 53800 of Title 22 of the
California Code of Regulations, shall not be subject to this section
unless the plan offers coverage in the individual market to persons
not covered by Medi-Cal or the Healthy Families Program.
(b) (1) A health care service plan that declines to offer coverage
or denies enrollment for an individual or his or her dependents
applying for individual coverage or that offers individual coverage
at a rate that is higher than the standard rate, shall, at the time
of the denial or offer of coverage, provide the individual applicant
with the specific reason or reasons for the decision in writing in
clear, easily understandable language.
(2) No change in the premium rate or coverage for an individual
plan contract shall become effective unless the plan has delivered a
written notice of the change at least 60 days prior to the effective
date of the contract renewal or the date on which the rate or
coverage changes. A notice of an increase in the premium rate shall
include the reasons for the rate increase.
(3) The written notice required pursuant to paragraph (2) shall be
delivered to the individual contractholder at his or her last
address known to the plan, at least 60 days prior to the effective
date of the change. The notice shall state in italics and in 12-point
type the actual dollar amount of the premium rate increase and the
specific percentage by which the current premium will be increased.
The notice shall describe in plain, understandable English any
changes in the plan design or any changes in benefits, including a
reduction in benefits or changes to waivers, exclusions, or
conditions, and highlight this information by printing it in italics.
The notice shall specify in a minimum of 10-point bold typeface, the
reason for a premium rate change or a change to the plan design or
benefits.
(4) If a plan rejects an applicant or the dependents of an
applicant for coverage or offers individual coverage at a rate that
is higher than the standard rate, the plan shall inform the applicant
about the state's high-risk health insurance pool, the California
Major Risk Medical Insurance Program (MRMIP) (Part 6.5 (commencing
with Section 12700) of Division 2 of the Insurance Code), and the
federal temporary high risk pool established pursuant to Part 6.6
(commencing with Section 12739.5) of Division 2 of the Insurance
Code. The information provided to the applicant by the plan shall be
in accordance with standards developed by the department, in
consultation with the Managed Risk Medical Insurance Board, and shall
specifically include the toll-free telephone number and Internet Web
site address for MRMIP and the federal temporary high risk pool. The
requirement to notify applicants of the availability of MRMIP and
the federal temporary high risk pool shall not apply when a health
plan rejects an applicant for Medicare supplement coverage.
(c) A notice provided pursuant to this section is a private and
confidential communication and, at the time of application, the plan
shall give the individual applicant the opportunity to designate the
address for receipt of the written notice in order to protect the
confidentiality of any personal or privileged information.
(d) This section shall become inoperative on November 1, 2013,
and, as of January 1, 2014, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2014, deletes
or extends the dates on which it becomes inoperative and is
repealed.
SEC. 5. Section 1389.25 is added to the Health
and Safety Code, to read:
1389.25. (a) (1) This section shall apply only to a full service
health care service plan contract in the individual market in
California and shall not apply to a specialized health care service
plan contract, a health care service plan contract in the Medi-Cal
program (Chapter 7 (commencing with Section 14000) of Part 3 of
Division 9 of the Welfare and Institutions Code), a health care
service plan conversion contract offered pursuant to Section 1373.6,
a health care service plan contract in the Healthy Families Program
(Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code) or the Access for Infants and Mothers Program (Part
6.3 (commencing with Section 12695) of Division 2 of the Insurance
Code), a health care service plan contract offered under Part 6.4
(commencing with Section 12699.50) of Division 2 of the Insurance
Code, or a health care service plan contract offered to a federally
eligible defined individual under Article 4.6 (commencing with
Section 1366.35).
(2) A local initiative, as defined in subdivision (v) of Section
53810 of Title 22 of the California Code of Regulations, that is
awarded a contract by the State Department of Health Care Services
pursuant to subdivision (b) of Section 53800 of Title 22 of the
California Code of Regulations, shall not be subject to this section
unless the plan offers coverage in the individual market to persons
not covered by Medi-Cal or the Healthy Families Program.
(b) (1) No change in the premium rate or coverage for an
individual health care service plan contract shall become effective
unless the plan has delivered a written notice of the change at least
60 days prior to the effective date of the contract renewal or the
date on which the rate or coverage changes. A notice of an increase
in the premium rate shall include the reasons for the rate increase.
(2) The written notice required pursuant to paragraph (1) shall be
delivered to the individual contractholder at his or her last
address known to the plan, at least 60 days prior to the effective
date of the change. The notice shall state in italics and in 12-point
type the actual dollar amount of the premium rate increase and the
specific percentage by which the current premium will be increased.
The notice shall describe in plain, understandable English any
changes in the plan design or any changes in benefits, including a
reduction in benefits or changes to waivers, exclusions, or
conditions, and highlight this information by printing it in italics.
The notice shall specify in a minimum of 10-point bold typeface, the
reason for a premium rate change or a change to the plan design or
benefits. For individual grandfathered health plans, the notice shall
also inform the individual contractholder about the availability of
new coverage options and the potential for subsidized coverage in the
California Health Benefit Exchange. The notice shall direct persons
seeking more information to the California Health Benefit Exchange,
the Office of Patient Advocate, plan or policy representatives, and
insurance brokers or health navigators.
(c) (1) A health care service plan that declines to offer coverage
or denies enrollment for an individual or his or her dependents
applying for an individual grandfathered health plan or that offers
an individual grandfathered health plan at a rate that is higher than
the standard rate, shall, at the time of the denial or offer of
coverage, provide the individual applicant with the specific reason
or reasons for the decision in writing in clear, easily
understandable language.
(2) If a plan rejects the dependents of an applicant for an
individual grandfathered health plan or offers an individual
grandfathered health plan at a rate that is higher than the standard
rate, the plan shall inform the applicant about the new coverage
options and the potential for subsidized coverage in the California
Health Benefit Exchange. The plan shall direct persons seeking more
information to the California Health Benefit Exchange, the Office of
Patient Advocate, plan or policy representatives, and insurance
brokers or health navigators.
(d) A notice provided pursuant to this section is a private and
confidential communication and, at the time of application, the plan
shall give the individual applicant the opportunity to designate the
address for receipt of the written notice in order to protect the
confidentiality of any personal or privileged information.
(e) This section shall become operative on November 1, 2013.
SEC. 6. Section 1389.4 of the Health and Safety
Code is amended to read:
1389.4. (a) A full service health care service plan that issues,
renews, or amends individual health plan contracts shall be subject
to this section.
(b) A health care service plan subject to this section shall have
written policies, procedures, or underwriting guidelines establishing
the criteria and process whereby the plan makes its decision to
provide or to deny coverage to individuals applying for coverage and
sets the rate for that coverage. These guidelines, policies, or
procedures shall assure that the plan rating and underwriting
criteria comply with Sections 1365.5 and 1389.11 and all other
applicable provisions of state and federal law.
(c) On or before June 1, 2006, and annually thereafter, every
health care service plan shall file with the department a general
description of the criteria, policies, procedures, or guidelines the
plan uses for rating and underwriting decisions related to individual
health plan contracts, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage
or severely limit the plan products for which they would be eligible.
A plan may comply with this section by submitting to the department
underwriting materials or resource guides provided to plan solicitors
or solicitor firms, provided that those materials include the
information required to be submitted by this section.
(d) Commencing January 1, 2011, the director shall post on the
department's Internet Web site, in a manner accessible and
understandable to consumers, general, noncompany specific information
about rating and underwriting criteria and practices in the
individual market and information about the California Major Risk
Medical Insurance Program (Part 6.5 (commencing with Section 12700)
of Division 2 of the Insurance Code) and the federal temporary high
risk pool established pursuant to Part 6.6 (commencing with Section
12739.5) of Division 2 of the Insurance Code. The director shall
develop the information for the Internet Web site in consultation
with the Department of Insurance to enhance the consistency of
information provided to consumers. Information about individual
health coverage shall also include the following notification:
"Please
examine your options carefully before declining group coverage or
continuation coverage, such as COBRA, that may be available to you.
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."
(e) Nothing in this section shall authorize public disclosure of
company specific rating and underwriting criteria and practices
submitted to the director.
(f) This section shall not apply to a closed block of business, as
defined in Section 1367.15.
(g) This section shall become inoperative on November 1, 2013,
and, as of January 1, 2014, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2014, deletes
or extends the dates on which it becomes inoperative and is
repealed.
SEC. 7. Section 1389.4 is added to the Health
and Safety Code, to read:
1389.4. (a) A full service health care service plan that renews
individual grandfathered health plans shall be subject to this
section.
(b) A health care service plan subject to this section shall have
written policies, procedures, or underwriting guidelines establishing
the criteria and process whereby the plan makes its decision to
provide or to deny coverage to individuals applying for an individual
grandfathered health plan and sets the rate for that coverage. These
guidelines, policies, or procedures shall ensure that the plan
rating and underwriting criteria comply with Sections 1365.5 and
1389.11 and all other applicable provisions of state and federal law.
(c) On or before November 1, 2013, and annually thereafter, every
health care service plan shall file with the department a general
description of the criteria, policies, procedures, or guidelines the
plan uses for rating and underwriting decisions related to individual
grandfathered health plans, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage
or severely limit the plan products for which they would be eligible.
A plan may comply with this section by submitting to the department
underwriting materials or resource guides provided to plan solicitors
or solicitor firms, provided that those materials include the
information required to be submitted by this section.
(d) Nothing in this section shall authorize public disclosure of
company specific rating and underwriting criteria and practices
submitted to the director.
(e) This section shall not apply to a closed block of business, as
defined in Section 1367.15.
(f) This section shall become operative on November 1, 2013.
SEC. 8. Section 1389.5 of the Health and Safety
Code is amended to read:
1389.5. (a) This section shall apply to a health care service
plan that provides coverage under an individual plan contract that is
issued, amended, delivered, or renewed on or after January 1, 2007.
(b) At least once each year, the health care service plan shall
permit an individual who has been covered for at least 18 months
under an individual plan contract to transfer, without medical
underwriting, to any other individual plan contract offered by that
same health care service plan that provides equal or lesser benefits,
as determined by the plan.
"Without medical underwriting" means that the health care service
plan shall not decline to offer coverage to, or deny enrollment of,
the individual or impose any preexisting condition exclusion on the
individual who transfers to another individual plan contract pursuant
to this section.
(c) The plan shall establish, for the purposes of subdivision (b),
a ranking of the individual plan contracts it offers to individual
purchasers and post the ranking on its Internet Web site or make the
ranking available upon request. The plan shall update the ranking
whenever a new benefit design for individual purchasers is approved.
(d) The plan shall notify in writing all enrollees of the right to
transfer to another individual plan contract pursuant to this
section, at a minimum, when the plan changes the enrollee's premium
rate. Posting this information on the plan's Internet Web site shall
not constitute notice for purposes of this subdivision. The notice
shall adequately inform enrollees of the transfer rights provided
under this section, including information on the process to obtain
details about the individual plan contracts available to that
enrollee and advising that the enrollee may be unable to return to
his or her current individual plan contract if the enrollee transfers
to another individual plan contract.
(e) The requirements of this section shall not apply to the
following:
(1) A federally eligible defined individual, as defined in
subdivision (c) of Section 1399.801, who is enrolled in an individual
health benefit plan contract offered pursuant to Section 1366.35.
(2) An individual offered conversion coverage pursuant to Section
1373.6.
(3) Individual coverage under a specialized health care service
plan contract.
(4) An individual enrolled in the Medi-Cal program pursuant to
Chapter 7 (commencing with Section 14000) of Division 9 of Part 3 of
the Welfare and Institutions Code.
(5) An individual enrolled in the Access for Infants and Mothers
Program pursuant to Part 6.3 (commencing with Section 12695) of
Division 2 of the Insurance Code.
(6) An individual enrolled in the Healthy Families Program
pursuant to Part 6.2 (commencing with Section 12693) of Division 2 of
the Insurance Code.
(f) It is the intent of the Legislature that individuals shall
have more choice in their health coverage when health care service
plans guarantee the right of an individual to transfer to another
product based on the plan's own ranking system. The Legislature does
not intend for the department to review or verify the plan's ranking
for actuarial or other purposes.
(g) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 9. Section 1389.7 of the Health and Safety
Code is amended to read:
1389.7. (a) Every health care service plan that offers, issues,
or renews individual plan contracts shall offer to any individual,
who was covered under an individual plan contract that was rescinded,
a new individual plan contract, without medical underwriting, that
provides equal benefits. A health care service plan may also permit
an individual, who was covered under an individual plan contract that
was rescinded, to remain covered under that individual plan
contract, with a revised premium rate that reflects the number of
persons remaining on the plan contract.
(b) "Without medical underwriting" means that the health care
service plan shall not decline to offer coverage to, or deny
enrollment of, the individual or impose any preexisting condition
exclusion on the individual who is issued a new individual plan
contract or remains covered under an individual plan contract
pursuant to this section.
(c) If a new individual plan contract is issued, the plan may
revise the premium rate to reflect only the number of persons covered
on the new individual plan contract.
(d) Notwithstanding subdivision (a) and (b), if an individual was
subject to a preexisting condition provision or a waiting or an
affiliation period under the individual plan contract that was
rescinded, the health care service plan may apply the same
preexisting condition provision or waiting or affiliation period in
the new individual plan contract. The time period in the new
individual plan contract for the preexisting condition provision or
waiting or affiliation period shall not be longer than the one in the
individual plan contract that was rescinded and the health care
service plan shall credit any time that the individual was covered
under the rescinded individual plan contract.
(e) The plan shall notify in writing all enrollees of the right to
coverage under an individual plan contract pursuant to this section,
at a minimum, when the plan rescinds the individual plan contract.
The notice shall adequately inform enrollees of the right to coverage
provided under this section.
(f) The plan shall provide 60 days for enrollees to accept the
offered new individual plan contract and this contract shall be
effective as of the effective date of the original plan contract and
there shall be no lapse in coverage.
(g) This section shall not apply to any individual whose
information in the application for coverage and related
communications led to the rescission.
(h) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 10. Section 1389.7 is added to the Health
and Safety Code, to read:
1389.7. (a) Every health care service plan that offers, issues,
or renews individual plan contracts shall offer to any individual,
who was covered under an individual plan contract that was rescinded,
a new individual plan contract that provides equal benefits. A
health care service plan may also permit an individual, who was
covered under an individual plan contract that was rescinded, to
remain covered under that individual plan contract, with a revised
premium rate that reflects the number of persons remaining on the
plan contract consistent with Section 1399.855.
(b) If a new individual plan contract is issued, the plan may
revise the premium rate to reflect only the number of persons covered
on the new individual plan contract consistent with Section
1399.855.
(c) The plan shall notify in writing all enrollees of the right to
coverage under an individual plan contract pursuant to this section,
at a minimum, when the plan rescinds the individual plan contract.
The notice shall adequately inform enrollees of the right to coverage
provided under this section.
(d) The plan shall provide 60 days for enrollees to accept the
offered new individual plan contract, and this contract shall be
effective as of the effective date of the original plan contract and
there shall be no lapse in coverage.
(e) This section shall not apply to any individual whose
information in the application for coverage and related
communications led to the rescission.
(f) This section shall apply notwithstanding subdivision (a) or
(d) of Section 1399.849.
(g) This section shall become operative on January 1, 2014.
SEC. 11. Section 1399.805 of the Health and
Safety Code is amended to read:
1399.805. (a) (1) After the federally eligible defined individual
submits a completed application form for a plan contract, the plan
shall, within 30 days, notify the individual of the individual's
actual premium charges for that plan contract, unless the plan has
provided notice of the premium charge prior to the application being
filed. In no case shall the premium charged for any health care
service plan contract identified in subdivision (d) of Section
1366.35 exceed the following amounts:
(A) For health care service plan contracts that offer services
through a preferred provider arrangement, the average premium paid by
a subscriber of the Major Risk Medical Insurance Program who is of
the same age and resides in the same geographic area as the federally
eligible defined individual. However, for federally qualified
individuals who are between the ages of 60 and 64, inclusive, the
premium shall not exceed the average premium paid by a subscriber of
the Major Risk Medical Insurance Program who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual.
(B) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 and 64, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual. The individual shall have 30
days in which to exercise the right to buy coverage at the quoted
premium rates.
(2) A plan may adjust the premium based on family size, not to
exceed the following amounts:
(A) For health care service plans that offer services through a
preferred provider arrangement, the average of the Major Risk Medical
Insurance Program rate for families of the same size that reside in
the same geographic area as the federally eligible defined
individual.
(B) For health care service plans identified in subdivision (d) of
Section 1366.35 that do not offer services through a preferred
provider arrangement, 170 percent of the standard premium charged to
a family that is of the same size and resides in the same geographic
area as the federally eligible defined individual.
(b) When a federally eligible defined individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage shall begin no later than the first
day of the following month. When that payment is neither delivered or
postmarked until after the 15th day of a month, coverage shall
become effective no later than the first day of the second month
following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the plan
contract, the individual shall have the option of changing coverage
to a different plan contract offered by the same health care service
plan. If the individual notified the plan of the change within the
first 15 days of a month, coverage under the new plan contract shall
become effective no later than the first day of the following month.
If an enrolled individual notified the plan of the change after the
15th day of a month, coverage under the new plan contract shall
become effective no later than the first day of the second month
following notification.
(d) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 12. Section 1399.805 is added to the
Health and Safety Code, to read:
1399.805. (a) After the federally eligible defined individual
submits a completed application form for a plan contract, the plan
shall, within 30 days, notify the individual of the individual's
actual premium charges for that plan contract, unless the plan has
provided notice of the premium charge prior to the application being
filed. In no case shall the premium charged for any health care
service plan contract identified in subdivision (d) of Section
1366.35 exceed the premium for the second lowest cost silver plan of
the individual market in the rating area in which the individual
resides which is offered through the California Health Benefit
Exchange established under Title 22 (commencing with Section 100500)
of the Government Code, as described in Section 36B(b)(3)(B) of Title
26 of the United States Code.
(b) When a federally eligible defined individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage shall begin no later than the first
day of the following month. When that payment is neither delivered
nor postmarked until after the 15th day of a month, coverage shall
become effective no later than the first day of the second month
following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the plan
contract, the individual shall have the option of changing coverage
to a different plan contract offered by the same health care service
plan. If the individual notified the plan of the change within the
first 15 days of a month, coverage under the new plan contract shall
become effective no later than the first day of the following month.
If an enrolled individual notified the plan of the change after the
15th day of a month, coverage under the new plan contract shall
become effective no later than the first day of the second month
following notification.
(d) This section shall become operative on January 1, 2014.
SEC. 13. Section 1399.811 of the Health and
Safety Code is amended to read:
1399.811. Premiums for contracts offered, delivered, amended, or
renewed by plans on or after January 1, 2001, shall be subject to the
following requirements:
(a) The premium for new business for a federally eligible defined
individual shall not exceed the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program who is of the
same age and resides in the same geographic area as the federally
eligible defined individual. However, for federally qualified
individuals who are between the ages of 60 to 64 years, inclusive,
the premium shall not exceed the average premium paid by a subscriber
of the Major Risk Medical Insurance Program who is 59 years of age
and resides in the same geographic area as the federally eligible
defined individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 to 64 years, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual.
(b) The premium for in force business for a federally eligible
defined individual shall not exceed the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program who is of the
same age and resides in the same geographic area as the federally
eligible defined individual. However, for federally qualified
individuals who are between the ages of 60 and 64 years, inclusive,
the premium shall not exceed the average premium paid by a subscriber
of the Major Risk Medical Insurance Program who is 59 years of age
and resides in the same geographic area as the federally eligible
defined individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 and 64 years, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual. The premium effective on
January 1, 2001, shall apply to in force business at the earlier of
either the time of renewal or July 1, 2001.
(c) The premium applied to a federally eligible defined individual
may not increase by more than the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average increase in the premiums
charged to a subscriber of the Major Risk Medical Insurance Program
who is of the same age and resides in the same geographic area as the
federally eligible defined individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, the increase in premiums charged
to a nonfederally qualified individual who is of the same age and
resides in the same geographic area as the federally defined eligible
individual. The premium for an eligible individual may not be
modified more frequently than every 12 months.
(3) For a contract that a plan has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(4) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 14. Section 1399.811 is added to the
Health and Safety Code, to read:
1399.811. (a) Premiums for contracts offered, delivered, amended,
or renewed by plans on or after January 1, 2014, shall be subject to
the following requirements:
(1) The premium for in force or new business for a federally
eligible defined individual shall not exceed the premium for the
second lowest cost silver plan of the individual market in the rating
area in which the individual resides which is offered through the
California Health Benefit Exchange established under Title 22
(commencing with Section 100500) of the Government Code, as described
in Section 36B(b)(3)(B) of Title 26 of the United States Code.
(2) For a contract that a plan has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(b) This section shall become operative on January 1, 2014.
SEC. 15. Section 1399.816 of the Health and
Safety Code is amended to read:
1399.816. (a) Carriers and health care service plans that offer
contracts to individuals may elect to establish a mechanism or
method to share in the financing of high-risk individuals. This
mechanism or method shall be established through a committee of all
carriers and health care service plans offering coverage to
individuals by July 1, 2002, and shall be implemented by January 1,
2003. If carriers and health care service plans wish to establish a
risk-sharing mechanism
but cannot agree on the terms and conditions of such an agreement,
the Managed Risk Medical Insurance Board shall develop a risk-sharing
mechanism or method by January 1, 2003, and it shall be implemented
by July 1, 2003.
(b) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 16. The heading of Article 11.7
(commencing with Section 1399.825) of Chapter 2.2 of Division 2 of
the Health and Safety Code is amended to read:
Article 11.7. Child Access to Health Care Coverage
SEC. 17. Section 1399.829 of the Health and
Safety Code is amended to read:
1399.829. (a) A health care service plan may use the following
characteristics of an eligible child for purposes of establishing the
rate of the plan contract for that child, where consistent with
federal regulations under PPACA: age, geographic region, and family
composition, plus the health care service plan contract selected by
the child or the responsible party for the child.
(b) From the effective date of this article to December 31, 2013,
inclusive, rates for a child applying for coverage shall be subject
to the following limitations:
(1) During any open enrollment period or for late enrollees, the
rate for any child due to health status shall not be more than two
times the standard risk rate for a child.
(2) The rate for a child shall be subject to a 20-percent
surcharge above the highest allowable rate on a child applying for
coverage who is not a late enrollee and who failed to maintain
coverage with any health care service plan or health insurer for the
90-day period prior to the date of the child's application. The
surcharge shall apply for the 12-month period following the effective
date of the child's coverage.
(3) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a health care service plan
may rate a child based on health status during any period other than
an open enrollment period if the child is not a late enrollee.
(4) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a health care service plan
may condition an offer or acceptance of coverage on any preexisting
condition or other health status-related factor for a period other
than an open enrollment period and for a child who is not a late
enrollee.
(c) For any individual health care service plan contract issued,
sold, or renewed prior to December 31, 2013, the health plan shall
provide to a child or responsible party for a child a notice that
states the following:
"Please consider your options carefully before failing to maintain
or renewing coverage for a child for whom you are responsible. If
you attempt to obtain new individual coverage for that child, the
premium for the same coverage may be higher than the premium you pay
now."
(d) A child who applied for coverage between September 23, 2010,
and the end of the initial open enrollment period shall be deemed to
have maintained coverage during that period.
(e) Health care service plans may require documentation from
applicants relating to their coverage history.
(f)
(1) On and after January 1, 2013, a health care service plan
shall provide a notice to all applicants for coverage under this
article and to all enrollees, or the responsible party for an
enrollee, renewing coverage under this article that contains the
following information:
(A) Information about the open enrollment period provided under
Section 1399.849.
(B) An explanation that obtaining coverage during the open
enrollment period described in Section 1399.849 will not affect the
effective dates of coverage for coverage purchased pursuant to this
article unless the applicant cancels that coverage.
(C) An explanation that coverage purchased pursuant to this
section shall be effective as required under subdivision (d) of
Section 1399.826 and that such coverage shall not prevent an
applicant from obtaining new coverage during the open enrollment
period described in Section 1399.849.
(2) The notice described in paragraph (1) shall be in plain
language and 14-point type.
(3) The department may adopt a model notice to be used by health
care service plans in order to comply with this subdivision. Use of
the model notice shall not require prior approval of the department.
Any model notice designated by the department for purposes of this
section shall not be 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).
SEC. 18. Section 1399.836 is added to the
Health and Safety Code, to read:
1399.836. This article shall remain in effect only until January
1, 2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 19. Article 11.8 (commencing with Section
1399.845) is added to Chapter 2.2 of Division 2 of the Health and
Safety Code, to read:
Article 11.8. Individual Access to Health Care Coverage
1399.845. For purposes of this article, the following definitions
shall apply:
(a) "Child" means a child described in Section 22775 of the
Government Code and subdivisions (n) to (p), inclusive, of Section
599.500 of Title 2 of the California Code of Regulations.
(b) "Dependent" means the spouse, domestic partner, or child of an
individual, subject to applicable terms of the health benefit plan.
(c) "Exchange" means the California Health Benefit Exchange
created by Section 100500 of the Government Code.
(d) "Grandfathered health plan" has the same meaning as that term
is defined in Section 1251 of PPACA.
(e) "Health benefit plan" means any individual or group policy of
health insurance as defined in Section 106 of the Insurance Code or
health care service plan contract that provides medical, hospital,
and surgical benefits. The term does not include a specialized health
insurance policy, as defined in Section 106 of the Insurance Code, a
specialized health care service plan contract, a health care service
plan conversion contract offered pursuant to Section 1373.6, a
health insurance conversion policy offered pursuant to Section
12682.1 of the Insurance Code, a health insurance policy or health
care service plan contract provided in the Medi-Cal program (Chapter
7 (commencing with Section 14000) of Part 3 of Division 9 of the
Welfare and Institutions Code), 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 program under Part 6.4 (commencing with Section 12699.50) of
Division 2 of the Insurance Code, a health care service plan contract
or health insurance policy offered to a federally eligible defined
individual under Article 4.6 (commencing with Section 1366.35) of
this code or Chapter 9.5 (commencing with Section 10900) of Part 2 of
Division 2 of the Insurance Code, or Medicare supplement coverage,
to the extent consistent with PPACA.
(f) "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 pursuant to that law.
(g) "Preexisting condition provision" means a contract provision
that excludes coverage for charges or expenses incurred during a
specified period following the enrollee's effective date of coverage,
as to a condition for which medical advice, diagnosis, care, or
treatment was recommended or received during a specified period
immediately preceding the effective date of coverage.
(h) "Qualified health plan" has the same meaning as that term is
defined in Section 1301 of PPACA.
(i) "Rating period" means the period for which premium rates
established by a plan are in effect.
1399.847. Every health care service plan offering individual
health benefit plans shall, in addition to complying with the
provisions of this chapter and rules adopted thereunder, comply with
the provisions of this article.
1399.849. (a) (1) On and after October 1, 2013, a plan shall
fairly and affirmatively offer, market, and sell all of the plan's
health benefit plans that are sold in the individual market to all
individuals and dependents in each service area in which the plan
provides or arranges for the provision of health care services. A
plan shall limit enrollment in individual health benefit plans to
open enrollment periods and special enrollment periods as provided in
subdivisions (c) and (d).
(2) A plan that offers qualified health plans through the Exchange
shall be deemed to be in compliance with paragraph (1) with respect
to an individual health benefit plan offered through the Exchange in
those geographic regions in which the plan offers health benefit
plans through the Exchange.
(3) A plan shall allow the subscriber of an individual health
benefit plan to add a dependent to the subscriber's plan at the
option of the subscriber, consistent with the open enrollment, annual
enrollment, and special enrollment period requirements in this
section.
(b) An individual health benefit plan issued, amended, or renewed
on or after January 1, 2014, shall not impose any preexisting
condition provision upon any individual.
(c) A plan shall provide an initial open enrollment period from
October 1, 2013, to March 31, 2014, inclusive, and annual enrollment
periods for plan years on or after January 1, 2015, from October 15
to December 7, inclusive, of the preceding calendar year.
(d) Subject to subdivision (e), commencing January 1, 2014, a plan
shall allow an individual to enroll in or change individual health
benefit plans as a result of the following triggering events:
(1) He or she or his or her dependent loses minimum essential
coverage. For purposes of this paragraph, both of the following
definitions shall apply:
(A) "Minimum essential coverage" has the same meaning as that term
is defined in subsection (f) of Section 5000A of the Internal
Revenue Code (26 U.S.C. Sec. 5000A).
(B) "Loss of minimum essential coverage" includes loss of that
coverage due to the circumstances described in Section 54.9801-6(a)
(3)(i) to (iii), inclusive, of Title 26 of the Code of Federal
Regulations. "Loss of minimum essential coverage" does not include
loss of that coverage due to the individual's failure to pay premiums
on a timely basis or situations allowing for a rescission, subject
to Section 1389.21.
(2) He or she gains a dependent or becomes a dependent through
marriage, birth, adoption, or placement for adoption.
(3) He or she becomes a resident of California.
(4) He or she is mandated to be covered pursuant to a valid state
or federal court order.
(5) He or she has been released from incarceration.
(6) His or her health benefit plan substantially violated a
material provision of the contract.
(7) He or she gains access to new health benefit plans as a result
of a permanent move.
(8) He or she was receiving services from a contracting provider
under another health benefit plan for one of the conditions described
in subdivision (c) of Section 1373.96 and that provider is
terminated.
(9) With respect to individual health benefit plans offered
through the Exchange, in addition to the triggering events listed in
this subdivision, the individual meets any of the requirements listed
in Section 155.420(d) of Title 45 of the Code of Federal
Regulations.
(e) With respect to individual health benefit plans offered
outside the Exchange, an individual shall have 63 days from the date
of a triggering event identified in subdivision (d) to apply for
coverage from a health care service plan subject to this section.
With respect to individual health benefit plans offered through the
Exchange, an individual shall have 63 days from the date of a
triggering event identified in subdivision (d)to select a plan
offered through the Exchange.
(f) (1) With respect to individual health benefit plans offered
outside the Exchange, after an individual submits a completed
application form for a plan, the health care service plan shall,
within 30 days, notify the individual of the individual's actual
premium charges for that plan established in accordance with Section
1399.855. The individual shall have 30 days in which to exercise the
right to buy coverage at the quoted premium charges.
(2) With respect to an individual health benefit plan offered
outside the Exchange for which an individual applies during the
initial open enrollment period described in subdivision (c), when the
subscriber submits a premium payment, based on the quoted premium
charges, and that payment is delivered or postmarked, whichever
occurs earlier, by December 15, 2013, coverage under the individual
health benefit plan shall become effective no later than January 1,
2014. When that payment is delivered or postmarked within the first
15 days of any subsequent month, coverage shall become effective no
later than the first day of the following month. When that payment is
delivered or postmarked between December 16, 2013, and December 31,
2013, inclusive, or after the 15th day of any subsequent month,
coverage shall become effective no later than the first day of the
second month following delivery or postmark of the payment.
(3) With respect to an individual health benefit plan offered
outside the Exchange for which an individual applies during the
annual open enrollment period described in subdivision (c), when the
individual submits a premium payment, based on the quoted premium
charges, and that payment is delivered or postmarked, whichever
occurs later, by December 15, coverage shall become effective as of
the following January 1. When that payment is delivered or postmarked
within the first 15 days of any subsequent month, coverage shall
become effective no later than the first day of the following month.
When that payment is delivered or postmarked between December 16 and
December 31, inclusive, or after the 15th day of any subsequent
month, coverage shall become effective no later than the first day of
the second month following delivery or postmark of the payment.
(4) With respect to an individual health benefit plan offered
outside the Exchange for which an individual applies during a special
enrollment period described in subdivision (d), the following
provisions shall apply:
(A) When the individual submits a premium payment, based on the
quoted premium charges, and that payment is delivered or postmarked,
whichever occurs earlier, within the first 15 days of the month,
coverage under the plan shall become effective no later than the
first day of the following month.
(B) When the premium payment is neither delivered nor postmarked
until after the 15th day of the month, coverage shall become
effective no later than the first day of the second month following
delivery or postmark of the payment.
(C) Notwithstanding subparagraph (A) or (B), in the case of a
birth, adoption, or placement for adoption, the coverage shall be
effective on the date of birth, adoption, or placement for adoption.
(D) Notwithstanding subparagraph (A) or (B), in the case of
marriage or in the case where a qualified individual loses minimum
essential coverage, the coverage effective date shall be the first
day of the following month.
(5) With respect to individual health benefit plans offered
through the Exchange, the effective date of coverage selected
pursuant to this section shall be the same as the applicable date
specified in Section 155.410 or 155.420 of Title 45 of the Code of
Federal Regulations.
(g) (1) On or after January 1, 2014, a health care service plan
shall not establish rules for eligibility, including continued
eligibility, of any individual to enroll under the terms of an
individual health benefit plan based on any of the following factors:
(A) Health status.
(B) Medical condition, including physical and mental illnesses.
(C) Claims experience.
(D) Receipt of health care.
(E) Medical history.
(F) Genetic information.
(G) Evidence of insurability, including conditions arising out of
acts of domestic violence.
(H) Disability.
(I) Any other health status-related factor as determined by any
federal regulations, rules, or guidance issued pursuant to Section
2705 of the federal Public Health Service Act.
(2) A health care service plan shall not require an individual
applicant or his or her dependent to fill out a health assessment or
medical questionnaire prior to enrollment under an individual health
benefit plan.
(h) A health care service plan offering coverage in the individual
market shall not reject the request of a subscriber during an open
enrollment period to include a dependent of the subscriber as a
dependent on an existing individual health benefit plan.
(i) This section shall not apply to an individual health benefit
plan that is a grandfathered health plan.
1399.851. (a) Commencing January 1, 2014, no health care service
plan or solicitor shall, directly or indirectly, engage in the
following activities:
(1) Encourage or direct an individual to refrain from filing an
application for individual coverage with a plan because of the health
status, claims experience, industry, occupation, or geographic
location, provided that the location is within the plan's approved
service area, of the individual.
(2) Encourage or direct an individual to seek individual coverage
from another plan or health insurer or the California Health Benefit
Exchange because of the health status, claims experience, industry,
occupation, or geographic location, provided that the location is
within the plan's approved service area, of the individual.
(b) Commencing January 1, 2014, a health care service plan shall
not, directly or indirectly, enter into any contract, agreement, or
arrangement with a solicitor that provides for or results in the
compensation paid to a solicitor for the sale of an individual health
benefit plan to be varied because of the health status, claims
experience, industry, occupation, or geographic location of the
individual. This subdivision does not apply to a compensation
arrangement that provides compensation to a solicitor on the basis of
percentage of premium, provided that the percentage shall not vary
because of the health status, claims experience, industry,
occupation, or geographic area of the individual.
1399.853. (a) All individual health benefit plans shall conform
to the requirements of Sections 1365, 1366.3, 1367.001, and 1373.6,
and any other requirements imposed by this chapter, and shall be
renewable at the option of the enrollee except as permitted to be
canceled, rescinded, or not renewed pursuant to Section 1365.
(b) Any plan that ceases to offer for sale new individual health
benefit plans pursuant to Section 1365 shall continue to be governed
by this article with respect to business conducted under this
article.
1399.855. (a) With respect to individual health benefit plans
issued, amended, or renewed on or after January 1, 2014, a health
care service plan may use only the following characteristics of an
individual, and any dependent thereof, for purposes of establishing
the rate of the individual health benefit plan covering the
individual and the eligible dependents thereof, along with the health
benefit plan selected by the individual:
(1) Age, as described in regulations adopted by the department in
conjunction with the Department of Insurance that do not prevent the
application of PPACA. Rates based on age shall be determined based on
the individual's birthday. A plan shall not use any age bands for
rating purposes that are inconsistent with the age bands established
by the United States Secretary of Health and Human Services pursuant
to Section 2701(a)(3) of the federal Public Health Service Act (42
U.S.C. Sec. 300gg (a)(3)).
(2) Geographic region. The geographic regions for purposes of
rating shall be the following:
(A) Region 1 shall consist of the Counties of Alpine, Del Norte,
Siskiyou, Modoc, Lassen, Shasta, Trinity, Humboldt, Tehama, Plumas,
Nevada, Sierra, Mendocino, Lake, Butte, Glenn, Sutter, Yuba, Colusa,
Amador, Calaveras, and Tuolumne.
(B) Region 2 shall consist of the Counties of Napa, Sonoma,
Solano, and Marin.
(C) Region 3 shall consist of the Counties of Sacramento, Placer,
El Dorado, and Yolo.
(D) Region 4 shall consist of the Counties of San Francisco,
Contra Costa, Alameda, Santa Clara, and San Mateo.
(E) Region 5 shall consist of the Counties of Santa Cruz,
Monterey, and San Benito.
(F) Region 6 shall consist of the Counties of San Joaquin,
Stanislaus, Merced, Mariposa, Madera, Fresno, Kings, and Tulare.
(G) Region 7 shall consist of the Counties of San Luis Obispo,
Santa Barbara, and Ventura.
(H) Region 8 shall consist of the Counties of Mono, Inyo, Kern,
and Imperial.
(I) Region 9 shall consist of the ZIP Codes in Los Angeles County
starting with 906 to 912, inclusive, 915, 917, 918, and 935.
(J) Region 10 shall consist of the ZIP Codes in Los Angeles County
other than those identified in subparagraph (I).
(K) Region 11 shall consist of the Counties of San Bernardino and
Riverside.
(L) Region 12 shall consist of the County of Orange.
(M) Region 13 shall consist of the County of San Diego.
(3) Whether the health benefit plan covers an individual or
family.
(b) The rate for a health benefit plan subject to this section
shall not vary by any factor not described in this section.
(c) The rating period for rates subject to this section shall be
from January 1 to December 31, inclusive.
(d) This section shall not apply to an individual health benefit
plan that is a grandfathered health plan.
1399.857. A health care service plan shall not be required to
offer an individual health benefit plan or accept applications for
the plan pursuant to this article in the case of any of the
following:
(a) To an individual who does not work or reside within the plan's
approved service areas.
(b) (1) Within a specific service area or portion of a service
area, if the plan reasonably anticipates and demonstrates to the
satisfaction of the director that it will not have sufficient health
care delivery resources to ensure that health care services will be
available and accessible to the individual because of its obligations
to existing enrollees.
(2) A health care service plan that cannot offer an individual
health benefit plan to individuals because it is lacking in
sufficient health care delivery resources within a service area or a
portion of a service area may not offer a health benefit plan in the
area in which the plan is not offering
coverage to individuals to new employer groups
until the plan notifies the director that it has the ability to
deliver services to individuals, and certifies to the director that
from the date of the notice it will enroll all individuals requesting
coverage in that area from the plan.
(3) Nothing in this article shall be construed to limit the
director's authority to develop and implement a plan of
rehabilitation for a health care service plan whose financial
viability or organizational and administrative capacity has become
impaired.
1399.859. The director may require a health care service plan to
discontinue the offering of individual health benefit plans or
acceptance of applications from any individual upon a determination
by the director that the plan does not have sufficient financial
viability or organizational and administrative capacity to ensure the
delivery of health care services to its enrollees. In determining
whether the conditions of this section have been met, the director
shall consider, but not be limited to, the plan's compliance with the
requirements of Section 1367, Article 6 (commencing with Section
1375.1), and the rules adopted under those provisions.
1399.860. (a) On or before October 1, 2013, and annually
thereafter, a health care service plan shall issue the following
notice to all subscribers enrolled in an individual health benefit
plan that is a grandfathered health plan:
Beginning on and after January 1, 2014, new improved health
insurance options are available in California. You currently have
health insurance that is exempt from many of the new requirements.
You have the option to remain in your current plan or switch to a new
plan. Under the new rules, a health insurance company cannot deny
your application based on any health conditions you may have. For
more information about your options, please contact the California
Health Benefit Exchange, the Office of Patient Advocate, your plan or
policy representative, an insurance broker, or a health care
navigator.
(b) A health care service plan shall include the notice described
in subdivision (a) in any marketing material of the individual
grandfathered health plan.
SEC. 20. Section 10113.9 of the Insurance Code
is amended to read:
10113.9. (a) This section shall not apply to short-term limited
duration health insurance, vision-only, dental-only, or
CHAMPUS-supplement insurance, or to hospital indemnity,
hospital-only, accident-only, or specified disease insurance that
does not pay benefits on a fixed benefit, cash payment only basis.
(b) (1) A health insurer that declines to offer coverage to or
denies enrollment for an individual or his or her dependents applying
for individual coverage or that offers individual coverage at a rate
that is higher than the standard rate shall, at the time of the
denial or offer of coverage, provide the applicant with the specific
reason or reasons for the decision in writing, in clear, easily
understandable language.
(2) No change in the premium rate or coverage for an individual
health insurance policy shall become effective unless the insurer has
delivered a written notice of the change at least 60 days prior to
the effective date of the policy renewal or the date on which the
rate or coverage changes. A notice of an increase in the premium rate
shall include the reasons for the rate increase.
(3) The written notice required pursuant to paragraph (2) shall be
delivered to the individual policyholder at his or her last address
known to the insurer, at least 60 days prior to the effective date of
the change. The notice shall state in italics and in 12-point type
the actual dollar amount of the premium increase and the specific
percentage by which the current premium will be increased. The notice
shall describe in plain, understandable English any changes in the
policy or any changes in benefits, including a reduction in benefits
or changes to waivers, exclusions, or conditions, and highlight this
information by printing it in italics. The notice shall specify in a
minimum of 10-point bold typeface, the reason for a premium rate
change or a change in coverage or benefits.
(4) If an insurer rejects an applicant or the dependents of an
applicant for coverage or offers individual coverage at a rate that
is higher than the standard rate, the insurer shall inform the
applicant about the state's high-risk health insurance pool, the
California Major Risk Medical Insurance Program (MRMIP) (Part 6.5
(commencing with Section 12700)), and the federal temporary high risk
pool established pursuant to Part 6.6 (commencing with Section
12739.5). The information provided to the applicant by the insurer
shall be in accordance with standards developed by the department, in
consultation with the Managed Risk Medical Insurance Board, and
shall specifically include the toll-free telephone number and
Internet Web site address for MRMIP and the federal temporary high
risk pool. The requirement to notify applicants of the availability
of MRMIP and the federal temporary high risk pool shall not apply
when a health plan rejects an applicant for Medicare supplement
coverage.
(c) A notice provided pursuant to this section is a private and
confidential communication and, at the time of application, the
insurer shall give the applicant the opportunity to designate the
address for receipt of the written notice in order to protect the
confidentiality of any personal or privileged information.
(d) This section shall become inoperative on November 1, 2013,
and, as of January 1, 2014, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2014, deletes
or extends the dates on which it becomes inoperative and is
repealed.
SEC. 21. Section 10113.9 is added to the
Insurance Code, to read:
10113.9. (a) This section shall not apply to short-term limited
duration health insurance, vision-only, dental-only, or
CHAMPUS-supplement insurance, or to hospital indemnity,
hospital-only, accident-only, or specified disease insurance that
does not pay benefits on a fixed benefit, cash payment only basis.
(b) (1) No change in the premium rate or coverage for an
individual health insurance policy shall become effective unless the
insurer has delivered a written notice of the change at least 60 days
prior to the effective date of the plan renewal or the date on which
the rate or coverage changes. A notice of an increase in the premium
rate shall include the reasons for the rate increase.
(2) The written notice required pursuant to paragraph (1) shall be
delivered to the individual policyholder at his or her last address
known to the insurer, at least 60 days prior to the effective date of
the change. The notice shall state in italics and in 12-point type
the actual dollar amount of the premium increase and the specific
percentage by which the current premium will be increased. The notice
shall describe in plain, understandable English any changes in the
policy or any changes in benefits, including a reduction in benefits
or changes to waivers, exclusions, or conditions, and highlight this
information by printing it in italics. The notice shall specify in a
minimum of 10-point bold typeface, the reason for a premium rate
change or a change in coverage or benefits. For individual
grandfathered health plans, the notice shall also inform the
individual contractholder about the availability of coverage through
the California Health Benefit Exchange established under Title 22
(commencing with Section 100500) of the Government Code and shall
include the toll-free telephone number and Internet Web site for the
California Health Benefit Exchange.
(c) (1) A health insurer that declines to offer coverage to or
denies enrollment for an individual or his or her dependents applying
for an individual grandfathered health plan or that offers an
individual grandfathered health plan at a rate that is higher than
the standard rate shall, at the time of the denial or offer of
coverage, provide the applicant with the specific reason or reasons
for the decision in writing, in clear, easily understandable
language.
(2) If a health insurer rejects an applicant or the dependents of
an applicant for an individual grandfathered health plan or offers an
individual grandfathered health plan at a rate that is higher than
the standard rate, the insurer shall inform the applicant about the
California Health Benefit Exchange established under Title 22
(commencing with Section 100500) of the Government Code. The
information provided to the applicant by the insurer shall include
the toll-free telephone number and Internet Web site for the
California Health Benefit Exchange.
(d) A notice provided pursuant to this section is a private and
confidential communication and, at the time of application, the
insurer shall give the applicant the opportunity to designate the
address for receipt of the written notice in order to protect the
confidentiality of any personal or privileged information.
(e) For purposes of this section, the following definitions shall
apply:
(1) "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 pursuant to that law.
(2) "Grandfathered health plan" has the same meaning as that term
is defined in Section 1251 of PPACA.
(f) This section shall become operative on November 1, 2013.
SEC. 22. Section 10113.95 of the Insurance Code
is amended to read:
10113.95. (a) A health insurer that issues, renews, or amends
individual health insurance policies shall be subject to this
section.
(b) An insurer subject to this section shall have written
policies, procedures, or underwriting guidelines establishing the
criteria and process whereby the insurer makes its decision to
provide or to deny coverage to individuals applying for coverage and
sets the rate for that coverage. These guidelines, policies, or
procedures shall ensure that the plan rating and underwriting
criteria comply with Sections 10140 and 10291.5 and all other
applicable provisions.
(c) On or before June 1, 2006, and annually thereafter, every
insurer shall file with the commissioner a general description of the
criteria, policies, procedures, or guidelines that the insurer uses
for rating and underwriting decisions related to individual health
insurance policies, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage
or severely limit the health insurance products for which individuals
applying for coverage would be eligible. An insurer may comply with
this section by submitting to the department underwriting materials
or resource guides provided to agents and brokers, provided that
those materials include the information required to be submitted by
this section.
(d) Commencing January 1, 2011, the commissioner shall post on the
department's Internet Web site, in a manner accessible and
understandable to consumers, general, noncompany specific information
about rating and underwriting criteria and practices in the
individual market and information about the California Major Risk
Medical Insurance Program (Part 6.5 (commencing with Section 12700))
and the federal temporary high risk pool established pursuant to Part
6.6 (commencing with Section 12739.5). The commissioner shall
develop the information for the Internet Web site in consultation
with the Department of Managed Health Care to enhance the consistency
of information provided to consumers. Information about individual
health insurance shall also include the following notification:
"Please examine your options carefully before declining group
coverage or continuation coverage, such as COBRA, that may be
available to you. 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."
(e) Nothing in this section shall authorize public disclosure of
company-specific rating and underwriting criteria and practices
submitted to the commissioner.
(f) This section shall not apply to a closed block of business, as
defined in Section 10176.10.
(g) This section shall become inoperative on November 1, 2013,
and, as of January 1, 2014, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2014, deletes
or extends the dates on which it becomes inoperative and is
repealed.
SEC. 23. Section 10113.95 is added to the
Insurance Code, to read:
10113.95. (a) A health insurer that renews individual
grandfathered health plans shall be subject to this section.
(b) An insurer subject to this section shall have written
policies, procedures, or underwriting guidelines establishing the
criteria and process whereby the insurer makes its decision to
provide or to deny coverage to individuals applying for an individual
grandfathered health plan and sets the rate for that coverage. These
guidelines, policies, or procedures shall ensure that the plan
rating and underwriting criteria comply with Sections 10140 and
10291.5 and all other applicable provisions.
(c) On or before November 1, 2013, and annually thereafter, every
insurer shall file with the commissioner a general description of the
criteria, policies, procedures, or guidelines that the insurer uses
for rating and underwriting decisions related to individual
grandfathered health plans, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage
or severely limit the health insurance products for which individuals
applying for coverage would be eligible. An insurer may comply with
this section by submitting to the department underwriting materials
or resource guides provided to agents and brokers, provided that
those materials include the information required to be submitted by
this section.
(d) Nothing in this section shall authorize public disclosure of
company-specific rating and underwriting criteria and practices
submitted to the commissioner.
(e) This section shall not apply to a closed block of business, as
defined in Section 10176.10.
(f) For purposes of this section, the following definitions shall
apply:
(1) "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 pursuant to that law.
(2) "Grandfathered health plan" has the same meaning as that term
is defined in Section 1251 of PPACA.
(g) This section shall become operative on November 1, 2013.
SEC. 24. Section 10119.1 of the Insurance Code
is amended to read:
10119.1. (a) This section shall apply to a health insurer that
covers hospital, medical, or surgical expenses under an individual
health benefit plan, as defined in subdivision (a) of Section
10198.6, that is issued, amended, renewed, or delivered on or after
January 1, 2007.
(b) At least once each year, a health insurer shall permit an
individual who has been covered for at least 18 months under an
individual health benefit plan to transfer, without medical
underwriting, to any other individual health benefit plan offered by
that same health insurer that provides equal or lesser benefits as
determined by the insurer.
"Without medical underwriting" means that the health insurer shall
not decline to offer coverage to, or deny enrollment of, the
individual or impose any preexisting condition exclusion on the
individual who transfers to another individual health benefit plan
pursuant to this section.
(c) The insurer shall establish, for the purposes of subdivision
(b), a ranking of the individual health benefit plans it offers to
individual purchasers and post the ranking on its Internet Web site
or make the ranking available upon request. The insurer shall update
the ranking whenever a new benefit design for individual purchasers
is approved.
(d) The insurer shall notify in writing all insureds of the right
to transfer to another individual health benefit plan pursuant to
this section, at a minimum, when the insurer changes the insured's
premium rate. Posting this information on the insurer's Internet Web
site shall not constitute notice for purposes of this subdivision.
The notice shall adequately inform insureds of the transfer rights
provided under this section including information on the process to
obtain details about the individual health benefit plans available to
that insured and advising that the insured may be unable to return
to his or her current individual health benefit plan if the insured
transfers to another individual health benefit plan.
(e) The requirements of this section shall not apply to the
following:
(1) A federally eligible defined individual, as defined in
subdivision (e) of Section 10900, who purchases individual coverage
pursuant to Section 10785.
(2) An individual offered conversion coverage pursuant to Sections
12672 and 12682.1.
(3) An individual enrolled in the Medi-Cal program pursuant to
Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of
the Welfare and Institutions Code.
(4) An individual enrolled in the Access for Infants and Mothers
Program, pursuant to Part 6.3 (commencing with Section 12695).
(5) An individual enrolled in the Healthy Families Program
pursuant to Part 6.2 (commencing with Section 12693).
(f) It is the intent of the Legislature that individuals shall
have more choice in their health care coverage when health insurers
guarantee the right of an individual to transfer to another product
based on the insurer's own ranking system. The Legislature does not
intend for the department to review or verify the insurer's ranking
for actuarial or other purposes.
(g) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 25. Section 10119.2 of the Insurance Code
is amended to read:
10119.2. (a) Every health insurer that offers, issues, or renews
health insurance under an individual health benefit plan, as defined
in subdivision (a) of Section 10198.6, shall offer to any individual,
who was covered under an individual health benefit plan that was
rescinded, a new individual health benefit plan without medical
underwriting that provides equal benefits. A health insurer may also
permit an individual, who was covered under an individual health
benefit plan that was rescinded, to remain covered under that
individual health benefit plan, with a revised premium rate that
reflects the number of persons remaining on the health benefit plan.
(b) "Without medical underwriting" means that the health insurer
shall not decline to offer coverage to, or deny enrollment of, the
individual or impose any preexisting condition exclusion on the
individual who is issued a new individual health benefit plan or
remains covered under an individual health benefit plan pursuant to
this section.
(c) If a new individual health benefit plan is issued, the insurer
may revise the premium rate to reflect only the number of persons
covered under the new individual health benefit plan.
(d) Notwithstanding subdivision (a) and (b), if an individual was
subject to a preexisting condition provision or a waiting or
affiliation period under the individual health benefit plan that was
rescinded, the health insurer may apply the same preexisting
condition provision or waiting or affiliation period in the new
individual health benefit plan. The time period in the new individual
health benefit plan for the preexisting condition provision or
waiting or affiliation period shall not be longer than the one in the
individual health benefit plan that was rescinded and the health
insurer shall credit any time that the individual was covered under
the rescinded individual health benefit plan.
(e) The insurer shall notify in writing all insureds of the right
to coverage under an individual health benefit plan pursuant to this
section, at a minimum, when the insurer rescinds the individual
health benefit plan. The notice shall adequately inform insureds of
the right to coverage provided under this section.
(f) The insurer shall provide 60 days for insureds to accept the
offered new individual health benefit plan and this plan shall be
effective as of the effective date of the original individual health
benefit plan and there shall be no lapse in coverage.
(g) This section shall not apply to any individual whose
information in the application for coverage and related
communications led to the rescission.
(h) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 26. Section 10119.2 is added to the
Insurance Code, to read:
10119.2. (a) Every health insurer that offers, issues, or renews
health insurance under an individual health benefit plan, as defined
in subdivision (a) of Section 10198.6, shall offer to any individual,
who was covered under an individual health benefit plan that was
rescinded, a new individual health benefit plan. A health insurer may
also permit an individual, who was covered under an individual
health benefit plan that was rescinded, to remain covered under that
individual health benefit plan, with a revised premium rate that
reflects the number of persons remaining on the health benefit plan
consistent with Section 10965.9.
(b) If a new individual health benefit plan is issued, the insurer
may revise the premium rate to reflect only the number of persons
covered under the new individual health benefit plan consistent with
Section 10965.9.
(c) The insurer shall notify in writing all insureds of the right
to coverage under an individual health benefit plan pursuant to this
section, at a minimum, when the insurer rescinds the individual
health benefit plan. The notice shall adequately inform insureds of
the right to coverage provided under this section.
(d) The insurer shall provide 60 days for insureds to accept the
offered new individual health benefit plan and this plan shall be
effective as of the effective date of the original individual health
benefit plan and there shall be no lapse in coverage.
(e) This section shall not apply to any individual whose
information in the application for coverage and related
communications led to the rescission.
(f) This section shall apply notwithstanding subdivision (a) or
(d) of Section 10965.3.
(g) This section shall become operative on January 1, 2014.
SEC. 27. Section 10291.5 of the Insurance Code
is amended to read:
10291.5. (a) The purpose of this section is to achieve both of
the following:
(1) Prevent, in respect to disability insurance, fraud, unfair
trade practices, and insurance economically unsound to the insured.
(2) Assure that the language of all insurance policies can be
readily understood and interpreted.
(b) The commissioner shall not approve any disability policy for
insurance or delivery in this state in any of the following
circumstances:
(1) If the commissioner finds that it contains any provision, or
has any label, description of its contents, title, heading, backing,
or other indication of its provisions which is unintelligible,
uncertain, ambiguous, or abstruse, or likely to mislead a person to
whom the policy is offered, delivered or issued.
(2) If it contains any provision for payment at a rate, or in an
amount (other than the product of rate times the periods for which
payments are promised) for loss caused by particular event or events
(as distinguished from character of physical injury or illness of the
insured) more than triple the lowest rate, or amount, promised in
the policy for the same loss caused by any other event or events
(loss caused by sickness, loss caused by accident, and different
degrees of disability each being considered, for the purpose of this
paragraph, a different loss); or if it contains any provision for
payment for any confining loss of time at a rate more than six times
the least rate payable for any partial loss of time or more than
twice the least rate payable for any nonconfining total loss of time;
or if it contains any provision for payment for any nonconfining
total loss of time at a rate more than three times the least rate
payable for any partial loss of time.
(3) If it contains any provision for payment for disability caused
by particular event or events (as distinguished from character of
physical injury or illness of the insured) payable for a term more
than twice the least term of payment provided by the policy for the
same degree of disability caused by any other event or events; or if
it contains any benefit for total nonconfining disability payable for
lifetime or for more than 12 months and any benefit for partial
disability, unless the benefit for partial disability is payable for
at least three months; or if it contains any benefit for total
confining disability payable for lifetime or for more than 12 months,
unless it also contains benefit for total nonconfining disability
caused by the same event or events payable for at least three months,
and, if it also contains any benefit for partial disability, unless
the benefit for partial disability is payable for at least three
months. The provisions of this paragraph shall apply separately to
accident benefits and to sickness benefits.
(4) If it contains provision or provisions which would have the
effect, upon any termination of the policy, of reducing or ending the
liability as the insurer would have, but for the termination, for
loss of time resulting from accident occurring while the policy is in
force or for loss of time commencing while the policy is in force
and resulting from sickness contracted while the policy is in force
or for other losses resulting from accident occurring or sickness
contracted while the policy is in force, and also contains provision
or provisions reserving to the insurer the right to cancel or refuse
to renew the policy, unless it also contains other provision or
provisions the effect of which is that termination of the policy as
the result of the exercise by the insurer of any such right shall not
reduce or end the liability in respect to the hereinafter specified
losses as the insurer would have had under the policy, including its
other limitations, conditions, reductions, and restrictions, had the
policy not been so terminated.
The specified losses referred to in the preceding paragraph are:
(i) Loss of time which commences while the policy is in force and
results from sickness contracted while the policy is in force.
(ii) Loss of time which commences within 20 days following and
results from accident occurring while the policy is in force.
(iii) Losses which result from accident occurring or sickness
contracted while the policy is in force and arise out of the care or
treatment of illness or injury and which occur within 90 days from
the termination of the policy or during a period of continuous
compensable loss or losses which period commences prior to the end of
such 90 days.
(iv) Losses other than those specified in clause (i), (ii), or
(iii) of this paragraph which result from accident occurring or
sickness contracted while the policy is in force and which losses
occur within 90 days following the accident or the contraction of the
sickness.
(5) If by any caption, label, title, or description of contents
the policy states, implies, or infers without reasonable
qualification that it provides loss of time indemnity for lifetime,
or for any period of more than two years, if the loss of time
indemnity is made payable only when house confined or only under
special contingencies not applicable to other total loss of time
indemnity.
(6) If it contains any benefit for total confining disability
payable only upon condition that the confinement be of an abnormally
restricted nature unless the caption of the part containing any such
benefit is accurately descriptive of the nature of the confinement
required and unless, if the policy has a description of contents,
label, or title, at least one of them contain reference to the nature
of the confinement required.
(7) (A) If, irrespective of the premium charged therefor, any
benefit of the policy is, or the benefits of the policy as a whole
are, not sufficient to be of real economic value to the insured.
(B) In determining whether benefits are of real economic value to
the insured, the commissioner shall not differentiate between
insureds of the same or similar economic or occupational classes and
shall give due consideration to all of the following:
(i) The right of insurers to exercise sound underwriting judgment
in the selection and amounts of risks.
(ii) Amount of benefit, length of time of benefit, nature or
extent of benefit, or any combination of those factors.
(iii) The relative value in purchasing power of the benefit or
benefits.
(iv) Differences in insurance issued on an industrial or other
special basis.
(C) To be of real economic value, it shall not be necessary that
any benefit or benefits cover the full amount of any loss which might
be suffered by reason of the occurrence of any hazard or event
insured against.
(8) If it substitutes a specified indemnity upon the occurrence of
accidental death for any benefit of the policy, other than a
specified indemnity for dismemberment, which would accrue prior to
the time of that death or if it contains any provision which has the
effect, other than at the election of the insured exercisable within
not less than 20 days in the case of benefits specifically limited to
the loss by removal of one or more fingers or one or more toes or
within not less than 90 days in all other cases, of doing any of the
following:
(A) Of substituting, upon the occurrence of the loss of both
hands, both feet, one hand and one foot, the sight of both eyes or
the sight of one eye and the loss of one hand or one foot, some
specified indemnity for any or all benefits under the policy unless
the indemnity so specified is equal to or greater than the total of
the benefit or benefits for which such specified indemnity is
substituted and which, assuming in all cases that the insured would
continue to live, could possibly accrue within four years from the
date of such dismemberment under all other provisions of the policy
applicable to the particular event or events (as distinguished from
character of physical injury or illness) causing the dismemberment.
(B) Of substituting, upon the occurrence of any other
dismemberment some specified indemnity for any or all benefits under
the policy unless the indemnity so specified is equal to or greater
than one-fourth of the total of the benefit or benefits for which the
specified indemnity is substituted and which, assuming in all cases
that the insured would continue to live, could possibly accrue within
four years from the date of the dismemberment under all other
provisions of the policy applicable to the particular event or events
(as distinguished from character of physical injury or illness)
causing the dismemberment.
(C) Of substituting a specified indemnity upon the occurrence of
any dismemberment for any benefit of the policy which would accrue
prior to the time of dismemberment.
As used in this section, loss of a hand shall be severance at or
above the wrist joint, loss of a foot shall be severance at or above
the ankle joint, loss of an eye shall be the irrecoverable loss of
the entire sight thereof, loss of a finger shall mean at least one
entire phalanx thereof and loss of a toe the entire toe.
(9) If it contains provision, other than as provided in Section
10369.3, reducing any original benefit more than 50 percent on
account of age of the insured.
(10) If the insuring clause or clauses contain no reference to the
exceptions, limitations, and reductions (if any) or no specific
reference to, or brief statement of, each abnormally restrictive
exception, limitation, or reduction.
(11) If it contains benefit or benefits for loss or losses from
specified diseases only unless:
(A) All of the diseases so specified in each provision granting
the benefits fall within some general classification based upon the
following:
(i) The part or system of the human body principally subject to
all such diseases.
(ii) The similarity in nature or cause of such diseases.
(iii) In case of diseases of an unusually serious nature and
protracted course of treatment, the common characteristics of all
such diseases with respect to severity of affliction and cost of
treatment.
(B) The policy is entitled and each provision granting the
benefits is separately captioned in clearly understandable words so
as to accurately describe the classification of diseases covered and
expressly point out, when that is the case, that not all diseases of
the classification are covered.
(12) If it does not contain provision for a grace period of at
least the number of days specified below for the payment of each
premium falling due after the first premium, during which grace
period the policy shall continue in force provided, that the grace
period to be included in the policy shall be not less than seven days
for policies providing for weekly payment of premium, not less than
10 days for policies providing for monthly payment of premium and not
less than 31 days for all other policies.
(13) If it fails to conform in any respect with any law of this
state.
(c) The commissioner shall not approve any disability policy
covering hospital, medical, or surgical expenses unless the
commissioner finds that the application conforms to the following
requirements, as applicable:
(1) All applications for disability insurance covering hospital,
medical, or surgical expenses, except that which is guaranteed issue,
which include questions relating to medical conditions, shall
contain clear and unambiguous questions designed to ascertain the
health condition or history of the applicant.
(2) The application questions designed to ascertain the health
condition or history of the applicant in applications subject to
paragraph (1) shall be based on medical information that is
reasonable and necessary for medical underwriting purposes. The
application shall include a prominently displayed notice that states:
"California law prohibits an HIV test from being required or used
by health insurance companies as a condition of obtaining health
insurance coverage."
(3) All applications for coverage subject to Chapter 9.9
(commencing with Section 10965) shall comply with paragraph (2) of
subdivision (g) of Section 10965.3.
(d) Nothing in this section authorizes the commissioner to
establish or require a single or standard application form for
application questions.
(e) The commissioner may, from time to time as conditions warrant,
after notice and hearing, promulgate such reasonable rules and
regulations, and amendments and additions thereto, as are necessary
or convenient, to establish, in advance of the submission of
policies, the standard or standards conforming to subdivision (b), by
which he or she shall disapprove or withdraw approval of any
disability policy.
In promulgating any such rule or regulation the commissioner shall
give consideration to the criteria herein established and to the
desirability of approving for use in policies in this state uniform
provisions, nationwide or otherwise, and is hereby granted the
authority to consult with insurance authorities of any other state
and their representatives individually or by way of convention or
committee, to seek agreement upon those provisions.
Any such rule or regulation shall be promulgated in accordance
with the procedure provided in Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(f) The commissioner may withdraw approval of filing of any policy
or other document or matter required to be approved by the
commissioner, or filed with him or her, by this chapter when the
commissioner would be authorized to disapprove or refuse filing of
the same if originally submitted at the time of the action of
withdrawal.
Any such withdrawal shall be in writing and shall specify reasons.
An insurer adversely affected by any such withdrawal may, within a
period of 30 days following mailing or delivery of the writing
containing the withdrawal, by written request secure a hearing to
determine whether the withdrawal should be annulled, modified, or
confirmed. Unless, at any time, it is mutually agreed to the
contrary, a hearing shall be granted and commenced within 30 days
following filing of the request and shall proceed with reasonable
dispatch to determination. Unless the commissioner in writing in the
withdrawal, or subsequent thereto, grants an extension, any such
withdrawal shall, in the absence of any such request, be effective,
prospectively and not retroactively, on the 91st day following the
mailing or delivery of the withdrawal, and, if request for the
hearing is filed, on the 91st day following mailing or delivery of
written notice of the commissioner's determination.
(g) No proceeding under this section is subject to Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code.
(h) Except as provided in subdivision (k), any action taken by the
commissioner under this section is subject to review by the courts
of this state and proceedings on review shall be in accordance with
the Code of Civil Procedure.
Notwithstanding any other provision of law to the contrary,
petition for any such review may be filed at any time before the
effective date of the action taken by the commissioner. No action of
the commissioner shall become effective before the expiration of 20
days after written notice and a copy thereof are mailed or delivered
to the person adversely affected, and any action so submitted for
review shall not become effective for a further period of 15 days
after the filing of the petition in court. The court may stay the
effectiveness thereof for a longer period.
(i) This section shall be liberally construed to effectuate the
purpose and intentions herein stated; but shall not be construed to
grant the commissioner power to fix or regulate rates for disability
insurance or prescribe a standard form of disability policy, except
that the commissioner shall prescribe a standard supplementary
disclosure form for presentation with all disability insurance
policies, pursuant to Section 10603.
(j) This section shall be effective on and after July 1, 1950, as
to all policies thereafter submitted and on and after January 1,
1951, the commissioner may withdraw approval pursuant to subdivision
(d) of any policy thereafter issued or delivered in this state
irrespective of when its form may have been submitted or approved,
and prior to those dates the provisions of law in effect on January
1, 1949, shall apply to those policies.
(k) Any such policy issued by an insurer to an insured on a form
approved by the commissioner, and in accordance with the conditions,
if any, contained in the approval, at a time when that approval is
outstanding shall, as between the insurer and the insured, or any
person claiming under the policy, be conclusively presumed to comply
with, and conform to, this section.
SEC. 28. Section 10901.3 of the Insurance Code
is amended to read:
10901.3. (a) (1) After the federally eligible defined individual
submits a completed application form for a health benefit plan, the
carrier shall, within 30 days, notify the individual of the
individual's actual premium charges for that health benefit plan
design. In no case shall the premium charged for any health benefit
plan identified in subdivision (d) of Section 10785 exceed the
following amounts:
(A) For health benefit plans that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program who is of the
same age and resides in the same geographic area as the federally
eligible defined individual. However, for federally qualified
individuals who are between the ages of 60 and 64, inclusive, the
premium shall not exceed the average premium paid by a subscriber of
the Major Risk Medical Insurance Program who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual.
(B) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 and
64, inclusive, the premium shall not exceed 170 percent of the
standard premium charged to an individual who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual. The individual shall have 30 days in which to exercise
the right to buy coverage at the quoted premium rates.
(2) A carrier may adjust the premium based on family size, not to
exceed the following amounts:
(A) For health benefit plans that offer services through a
preferred provider arrangement, the average of the Major Risk Medical
Insurance Program rate for families of the same size that reside in
the same geographic area as the federally eligible defined
individual.
(B) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to a family
that is of the same size and resides in the same geographic area as
the federally eligible defined individual.
(b) When a federally eligible defined individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage shall begin no later than the first
day of the following month. When that payment is neither delivered or
postmarked until after the 15th day of a month, coverage shall
become effective no later than the first day of the second month
following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the
health benefit plan, the individual shall have the option of changing
coverage to a different health benefit plan design offered by the
same carrier. If the individual notified the plan of the change
within the first 15 days of a month, coverage under the new health
benefit plan shall become effective no later than the first day of
the following month. If an enrolled individual notified the carrier
of the change after the 15th day of a month, coverage under the
health benefit plan shall become effective no later than the first
day of the second month following notification.
(d) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 29. Section 10901.3 is added to the
Insurance Code, to read:
10901.3. (a) After the federally eligible defined individual
submits a completed application form for a health benefit plan, the
carrier shall, within 30 days, notify the individual of the
individual's actual premium charges for that health benefit plan
design. In no case shall the premium charged for any health benefit
plan identified in subdivision (d) of Section 10785 exceed the
premium for the second lowest cost silver plan of the individual
market in the rating area in which the individual resides which is
offered through the California Health Benefit Exchange established
under Title 22 (commencing with Section 100500) of the Government
Code, as described in Section 36B(b)(3)(B) of Title 26 of the United
States Code.
(b) When a federally eligible defined individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage shall begin no later than the first
day of the following month. When that payment is neither delivered or
postmarked until after the 15th day of a month, coverage shall
become effective no later than the first day of the second month
following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the
health benefit plan, the individual shall have the option of changing
coverage to a different health benefit plan design offered by the
same carrier. If the individual notified the plan of the change
within the first 15 days of a month, coverage under the new health
benefit plan shall become effective no later than the first day of
the following month. If an enrolled individual notified the carrier
of the change after the 15th day of a month, coverage under the
health benefit plan shall become effective no later than the first
day of the second month following notification.
(d) This section shall become operative on January 1, 2014.
SEC. 30. Section 10901.9 of the Insurance Code
is amended to read:
10901.9. Commencing January 1, 2001, premiums for health benefit
plans offered, delivered, amended, or renewed by carriers shall be
subject to the following
requirements:
(a) The premium for new business for a federally eligible defined
individual shall not exceed the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average premium paid by a subscriber of the Major
Risk Medical Insurance Program who is of the same age and resides in
the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 to 64, inclusive, the premium shall not exceed
the average premium paid by a subscriber of the Major Risk Medical
Insurance Program who is 59 years of age and resides in the same
geographic area as the federally eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 to 64,
inclusive, the premium shall not exceed 170 percent of the standard
premium charged to an individual who is 59 years of age and resides
in the same geographic area as the federally eligible defined
individual.
(b) The premium for in force business for a federally eligible
defined individual shall not exceed the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average premium paid by a subscriber of the Major
Risk Medical Insurance Program who is of the same age and resides in
the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 and 64, inclusive, the premium shall not
exceed the average premium paid by a subscriber of the Major Risk
Medical Insurance Program who is 59 years of age and resides in the
same geographic area as the federally eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 and
64, inclusive, the premium shall not exceed 170 percent of the
standard premium charged to an individual who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual. The premium effective on January 1, 2001, shall apply to
in force business at the earlier of either the time of renewal or
July 1, 2001.
(c) The premium applied to a federally eligible defined individual
may not increase by more than the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average increase in the premiums charged to a
subscriber of the Major Risk Medical Insurance Program who is of the
same age and resides in the same geographic area as the federally
eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, the increase in premiums charged to a nonfederally
qualified individual who is of the same age and resides in the same
geographic area as the federally defined eligible individual. The
premium for an eligible individual may not be modified more
frequently than every 12 months.
(3) For a contract that a carrier has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(d) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 31. Section 10901.9 is added to the
Insurance Code, to read:
10901.9. (a) Commencing January 1, 2014, premiums for health
benefit plans offered, delivered, amended, or renewed by carriers
shall be subject to the following requirements:
(1) The premium for in force or new business for a federally
eligible defined individual shall not exceed the premium for the
second lowest cost silver plan of the individual market in the rating
area in which the individual resides which is offered through the
California Health Benefit Exchange established under Title 22
(commencing with Section 100500) of the Government Code, as described
in Section 36B(b)(3)(B) of Title 26 of the United States Code.
(2) For a contract that a carrier has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(b) This section shall become operative on January 1, 2014.
SEC. 32. Section 10902.4 of the Insurance Code
is amended to read:
10902.4. (a) Carriers and health care service plans that offer
contracts to individuals may elect to establish a mechanism or method
to share in the financing of high-risk individuals. This mechanism
or method shall be established through a committee of all carriers
and health care service plans offering coverage to individuals by
July 1, 2002, and shall be implemented by January 1, 2003. If
carriers and health care service plans wish to establish a
risk-sharing mechanism but cannot agree on the terms and conditions
of such an agreement, the Managed Risk Medical Insurance Board shall
develop a risk-sharing mechanism or method by January 1, 2003, and it
shall be implemented by July 1, 2003.
(b) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SECTION 1. Section 10902.4 of the
Insurance Code is repealed.
10902.4. Carriers and health care service plans that offer
contracts to individuals may elect to establish a mechanism or method
to share in the financing of high-risk individuals. This mechanism
or method shall be established through a committee of all carriers
and health care service plans offering coverage to individuals by
July 1, 2002, and shall be implemented by January 1, 2003. If
carriers and health care service plans wish to establish a
risk-sharing mechanism but cannot agree on the terms and conditions
of such an agreement, the Managed Risk Medical Insurance Board shall
develop a risk-sharing mechanism or method by January 1, 2003, and it
shall be implemented by July 1, 2003.
SEC. 33. SEC. 2. The heading of
Chapter 9.7 (commencing with Section 10950) of Part 2 of Division 2
of the Insurance Code is amended to read:
CHAPTER 9.7. CHILD ACCESS TO HEALTH INSURANCE
SEC. 34. SEC. 3. Section 10954 of
the Insurance Code is amended to read:
10954. (a) A carrier may use the following characteristics of an
eligible child for purposes of establishing the rate of the health
benefit plan for that child, where consistent with federal
regulations under PPACA: age, geographic region, and family
composition, plus the health benefit plan selected by the child or
the responsible party for a child.
(b) From the effective date of this chapter to December 31, 2013,
inclusive, rates for a child applying for coverage shall be subject
to the following limitations:
(1) During any open enrollment period or for late enrollees, the
rate for any child due to health status shall not be more than two
times the standard risk rate for a child.
(2) The rate for a child shall be subject to a 20-percent
surcharge above the highest allowable rate on a child applying for
coverage who is not a late enrollee and who failed to maintain
coverage with any carrier or health care service plan for the 90-day
period prior to the date of the child's application. The surcharge
shall apply for the 12-month period following the effective date of
the child's coverage.
(3) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a carrier may rate a child
based on health status during any period other than an open
enrollment period if the child is not a late enrollee.
(4) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a carrier may condition an
offer or acceptance of coverage on any preexisting condition or other
health status-related factor for a period other than an open
enrollment period and for a child who is not a late enrollee.
(c) For any individual health benefit plan issued, sold, or
renewed prior to December 31, 2013, the carrier shall provide to a
child or responsible party for a child a notice that states the
following:
"Please consider your options carefully before failing to maintain
or renewing coverage for a child for whom you are responsible. If
you attempt to obtain new individual coverage for that child, the
premium for the same coverage may be higher than the premium you pay
now."
(d) A child who applied for coverage between September 23, 2010,
and the end of the initial enrollment period shall be deemed to have
maintained coverage during that period.
(e) Effective January 1, 2014, except for individual grandfathered
health plan coverage, the rate for any child shall be identical to
the standard risk rate.
(e)
(f) Carriers may shall not
require documentation from applicants relating to their
coverage history.
(f)
(g) (1) On and after January 1, 2013, and until
January 1, 2014, a carrier shall provide a notice to all
applicants for coverage under this chapter and to all insureds, or
the responsible party for an insured, renewing coverage under this
chapter that contains the following information:
(A) Information about the open enrollment period provided under
Section 10965.3.
(B) An explanation that obtaining coverage during the open
enrollment period described in Section 10965.3 will not affect the
effective dates of coverage for coverage purchased pursuant to this
chapter unless the applicant cancels that coverage.
(C) An explanation that coverage purchased pursuant to this
section shall be effective as required under subdivision (d) of
Section 10951 and that such coverage shall not prevent an applicant
from obtaining new coverage during the open enrollment period
described in Section 10965.3.
(D) Information about the Medi-Cal program and the Healthy
Families Program and about subsidies available through the California
Health Benefit Exchange.
(2) The notice described in paragraph (1) shall be in plain
language and 14-point type.
(g)
(3) The department may adopt a model notice to be used
by carriers in order to comply with this subdivision and shall
consult with the Department of Managed Health Care in
adopting that model notice . Use of the model notice shall not
require prior approval of the department. Any model notice designated
by the department for purposes of this section shall not be 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).
SEC. 35. Section 10961 is added to the Insurance
Code, to read:
10961. This chapter shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 4. Section 10960.5 is added to the
Insurance Code , to read:
10960.5. Commencing January 1, 2014, in the event of a conflict
between the provisions of this chapter and the provisions of Chapter
9.9 (commencing with Section 10965), the provisions of Chapter 9.9
(commencing with Section 10965) shall prevail, except where
subdivision (j) of Section 10965.3 or subdivision (e) of Section
10965.9 makes any of the provisions of Chapter 9.9 (commencing with
Section 10965) inoperative, in which case the provisions of this
chapter and the operative provisions of Chapter 9.9 (commencing with
Section 10965) shall be harmonized to the extent permitted by federal
law.
SEC. 36. SEC. 5. Chapter 9.9
(commencing with Section 10965) is added to Part 2 of Division 2 of
the Insurance Code, to read:
CHAPTER 9.9. INDIVIDUAL ACCESS TO HEALTH INSURANCE
10965. For purposes of this chapter, the following definitions
shall apply:
(a) "Child" means a child described in Section 22775 of the
Government Code and subdivisions (n) to (p), inclusive, of Section
599.500 of Title 2 of the California Code of Regulations.
(b) "Dependent" means the spouse or registered domestic
partner, or child , of an individual, subject to
applicable terms of the health benefit plan.
(c) "Exchange" means the California Health Benefit Exchange
created by Section 100500 of the Government Code.
(d) "Grandfathered health plan" has the same meaning as that term
is defined in Section 1251 of PPACA.
(e) "Health benefit plan" means any individual or group policy of
health insurance, as defined in Section 106 , or health care
service plan contract that provides medical, hospital, and surgical
benefits . The term does not include a health insurance
policy consisting solely of coverage of that
provides 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), subject to Section 10965.01,
a specialized health care service plan contract, as defined
in Section 1345 of the Health and Safety Code, a health care service
plan conversion contract offered pursuant to Section 1373.6 of the
Health and Safety Code, a health insurance conversion
policy offered pursuant to Section 12682.1, a health insurance policy
or health care service plan contract provided in
the Medi-Cal program (Chapter 7 (commencing with Section 14000) of
Part 3 of Division 9 of the Welfare and Institutions Code), the
Healthy Families Program (Part 6.2 (commencing with Section 12693) of
Division 2), the Access for Infants and Mothers Program (Part 6.3
(commencing with Section 12695) of Division 2), or the program under
Part 6.4 (commencing with Section 12699.50) of Division 2, or
a health care service plan contract or
health insurance policy offered to a federally eligible defined
individual under Article 4.6 (commencing with Section
1366.35) of Chapter 2.2 of Division 2 of the Health and Safety Code
or Chapter 9.5 (commencing with Section 10900), or Medicare
supplement coverage, Chapter 8.5
(commencing with Section 10785), to the extent consistent with
PPACA.
(f) "Policy year" has the meaning set forth in Section 144.103 of
Title 45 of the Code of Federal Regulations.
(f)
(g) "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 pursuant to
that law.
(g)
(h) "Preexisting condition provision" means a policy
provision that excludes coverage for charges or expenses incurred
during a specified period following the insured's effective date of
coverage, as to a condition for which medical advice, diagnosis,
care, or treatment was recommended or received during a specified
period immediately preceding the effective date of coverage.
(h)
(i) "Qualified health plan" has the same meaning as
that term is defined in Section 1301 of PPACA.
(i)
(j) "Rating period" means the period for which premium
rates established by an insurer are in effect.
(k) "Registered domestic partner" means a person who has
established a domestic partnership as described in Section 297 of the
Family Code.
10965.01. (a) For purposes of this chapter, "health benefit plan"
does not include policies or certificates of specified disease or
hospital confinement indemnity provided that the carrier offering
those policies or certificates complies with the following:
(1) The carrier files, on or before March 1 of each year, a
certification with the commissioner that contains the statement and
information described in paragraph (2).
(2) The certification required in paragraph (1) shall contain the
following:
(A) A statement from the carrier certifying that policies or
certificates described in this section (i) are being offered and
marketed as supplemental health insurance and not as a substitute for
coverage that provides essential health benefits as defined by the
state pursuant to Section 1302 of PPACA, and (ii) the disclosure
forms as described in Section 10603 contains the following statement
prominently on the first page:
"This is a supplement to health insurance. It is not a substitute
for essential health benefits or minimum essential coverage as
defined in PPACA. Commencing January 1, 2014, you may be
subject to a federal tax if you do not obtain minimum essential
coverage." federal law."
(B) A summary description of each policy or certificate described
in this section, including the average annual premium rates, or range
of premium rates in cases where premiums vary by age, gender, or
other factors, charged for the policies and certificates in this
state.
(3) In the case of a policy or certificate that is described in
this section and that is offered for the first time in this state on
or after January 1, 2013, the carrier files with the commissioner the
information and statement required in paragraph (2) at least 30 days
prior to the date such a policy or certificate is issued or
delivered in this state.
(b) As used in this section, "policies or certificates of
specified disease" and "policies or certificates of hospital
confinement indemnity" mean policies or certificates of insurance
sold to an insured to supplement other health insurance coverage as
specified in this section.
10965.1. Every health insurer offering individual health benefit
plans shall, in addition to complying with the provisions of this
part and rules adopted thereunder, comply with the provisions of this
chapter.
10965.3. (a) (1) On and after October 1, 2013, a health insurer
shall fairly and affirmatively offer, market, and sell all of the
insurer's health benefit plans that are sold in the individual market
for policy years on or after January 1, 2014, to all
individuals and dependents in each service area in which the insurer
provides or arranges for the provision of health care services. An
insurer shall limit enrollment in individual health benefit plans to
open enrollment periods and special enrollment periods as provided in
subdivisions (c) and (d).
(2) A health insurer that offers qualified health plans through
the Exchange shall be deemed to be in compliance with paragraph (1)
with respect to an individual health benefit plan offered through the
Exchange in those geographic regions in which the insurer offers
health benefit plans through the Exchange.
(3) A health insurer shall allow the policyholder of an individual
health benefit plan to add a dependent to the policyholder's health
benefit plan at the option of the policyholder, consistent with the
open enrollment, annual enrollment, and special enrollment period
requirements in this section.
(4) A health insurer offering coverage in the individual market
shall not reject the request of a policyholder during an open
enrollment period to include a dependent of the policyholder as a
dependent on an existing individual health benefit plan.
(b) An individual health benefit plan issued, amended, or renewed
shall not impose any preexisting condition provision upon any
individual.
(c) A health insurer shall provide an initial open enrollment
period from October 1, 2013, to March 31, 2014, inclusive, and annual
enrollment periods for plan years on or after January 1, 2015, from
October 15 to December 7, inclusive, of the preceding calendar year.
(d) (1) Subject to subdivision (e),
commencing January 1, 2014, a health insurer shall allow an
individual to enroll in or change individual health benefit plans
offered outside the Exchange as a result of the following
triggering events:
(1)
(A) He or she or his or her dependent loses minimum
essential coverage. For purposes of this paragraph, both of the
following definitions shall apply:
(A)
(i) "Minimum essential coverage" has the same meaning
as that term is defined in subsection (f) of Section 5000A of the
Internal Revenue Code (26 U.S.C. Sec. 5000A).
(B)
(ii) "Loss of minimum essential coverage" includes loss
of that coverage due to the circumstances described in Section
54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the Code of
Federal Regulations. "Loss of minimum essential coverage" does not
include loss of that coverage due to the individual's failure to pay
premiums on a timely basis or situations allowing for a rescission,
subject to Section 10384.17.
(2)
(B) He or she gains a dependent or becomes a dependent
through marriage, birth, adoption, or placement for adoption
.
(3) He or she becomes a California resident.
(4)
(C) He or she is mandated to be covered pursuant to a
valid state or federal court order.
(5)
(D) He or she has been released from incarceration.
(6)
(E) His or her health benefit plan substantially
violated a material provision of the policy
(7)
(F) He or she gains access to new health benefit plans
as a result of a permanent move.
(8)
(G) He or she was receiving services from a contracting
provider under another health benefit plan , as defined in
Section 10965 or Section 1399.845 of the Health and Safety Code,
for one of the conditions described in subdivision (a) of
Section 10133.56 and that provider is terminated.
(9) With respect to
(2) Subject to subdivision (e),
commencing January 1, 2014, a health insurer shall allow an
individual to enroll in or change individual health benefit
plans offered through the Exchange , in addition to the
triggering events listed in this subdivision, the individual meets
any of the requirements as a result of the triggering
events listed in Section 155.420(d) of Title 45 of the Code of
Federal Regulations. To the extent permitted by federal law, any
triggering event described in paragraph (1) that is not listed in
Section 155.420(d)(1) to (8), inclusive, of Title 45 of the Code of
Federal Regulations shall be considered an exceptional circumstance
under Section 155.420(d)(9) of Title 45 of the Code of Federal
Regulations.
(e) With respect to individual health benefit plans offered
outside the Exchange, an individual shall have 63
60 days from the date of a triggering event identified in
subdivision (d) to apply for coverage from a health benefit plan
subject to this section. With respect to individual health benefit
plans offered through the Exchange, an individual shall have
63 60 days from the date of a triggering event
identified in subdivision (d) to select a plan offered through the
Exchange.
(f) (1) With respect to
individual health benefit plans offered outside the Exchange, after
an individual submits a completed application form for a plan, the
insurer shall, within 30 days, notify the individual of the
individual's actual premium charges for that plan established in
accordance with Section 10965.9. The individual shall have 30 days in
which to exercise the right to buy coverage at the quoted premium
charges.
(2)
(g) (1) With respect to an
individual health benefit plan offered outside the Exchange for which
an individual applies during the initial open enrollment period
described in subdivision (c), when the individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, by December 15,
2013, coverage under the individual health benefit plan shall become
effective no later than January 1, 2014 . When that
payment is delivered or postmarked within the first 15 days of any
subsequent month, coverage shall become effective no later than the
first day of the following month. When that payment is delivered or
postmarked between December 16, 2013, and December 31, 2013,
inclusive, or after the 15th day of any subsequent month, coverage
shall become effective no later than the first
day of the second month following delivery or
postmark of the payment.
(3)
(2) With respect to an individual health benefit plan
offered outside the Exchange for which an individual applies during
the annual open enrollment period described in subdivision (c), when
the individual submits a premium payment, based on the quoted premium
charges, and that payment is delivered or postmarked, whichever
occurs later, by December 15, coverage shall become effective as of
the following January 1. When that payment is delivered or postmarked
within the first 15 days of any subsequent month, coverage shall
become effective no later than the first day of the following month.
When that payment is delivered or postmarked between December 16 and
December 31, inclusive, or after the 15th day of any subsequent
month, coverage shall become effective no later than the first day of
the second month following delivery or postmark of the payment.
(4)
(3) With respect to an individual health benefit plan
offered outside the Exchange for which an individual applies during a
special enrollment period described in subdivision (d), the
following provisions shall apply:
(A) When the individual submits a premium payment, based on the
quoted premium charges, and that payment is delivered or postmarked,
whichever occurs earlier, within the first 15 days of the month,
coverage under the plan shall become effective no later than the
first day of the following month.
(B) When the premium payment is neither delivered nor postmarked
until after the 15th day of the month, coverage shall become
effective no later than the first day of the second month following
delivery or postmark of the payment.
(C) Notwithstanding subparagraph (A) or (B), in the case of a
birth, adoption, or placement for adoption, the coverage shall be
effective on the date of birth, adoption, or placement for adoption.
(D) Notwithstanding subparagraph (A) or (B), in the case of
marriage or becoming a registered domestic partner or in
the case where a qualified individual loses minimum essential
coverage, the coverage effective date shall be the first day of the
following month.
(5)
(4) With respect to individual health benefit plans
offered through the Exchange, the effective date of coverage selected
pursuant to this section shall be the same as the applicable date
specified in Section 155.410 or 155.420 of Title 45 of the Code of
Federal Regulations.
(g)
(h) (1) On or after January 1, 2014, a health insurer
shall not establish rules for eligibility, including continued
eligibility, of any individual to enroll under the terms of an
individual health benefit plan based on any of the following factors:
(A) Health status.
(B) Medical condition, including physical and mental illnesses.
(C) Claims experience.
(D) Receipt of health care.
(E) Medical history.
(F) Genetic information.
(G) Evidence of insurability, including conditions arising out of
acts of domestic violence.
(H) Disability.
(I) Any other health status-related factor as determined by any
federal regulations, rules, or guidance issued pursuant to Section
2705 of the federal Public Health Service Act.
(2) A Notwithstanding subdivision (c) of
Section 10291.5, a health insurer shall not require an
individual applicant or his or her dependent to fill out a health
assessment or medical questionnaire prior to enrollment under an
individual health benefit plan. A health insurer shall not
acquire or request information that relates to a health
status-related factor from the applicant or his or her
dependent or any other source prior to enrollment of the individual.
(h) A health insurer offering coverage in the individual market
shall not reject the request of a policyholder during an open
enrollment period to include a dependent of the policyholder as a
dependent on an existing individual health benefit plan.
(i) This section shall not apply to an individual health benefit
plan that is a grandfathered health plan.
(j) The following provisions of this section shall become
inoperative if Section 2702 of the federal Public Health Service Act
(42 U.S.C. Sec. 300gg-1), as added by Section 1201 of PPACA, is
repealed:
(1) Subdivision (a).
(2) Subdivisions (c), (d), (e), and (g), except as they relate to
health benefit plans offered through the Exchange.
10965.5. (a) Commencing January 1, 2014, no health insurer or
agent or broker shall, directly or indirectly, engage in the
following activities:
(1) Encourage or direct an individual to refrain from filing an
application for individual coverage with an insurer because of the
health status, claims experience, industry, occupation, or geographic
location, provided that the location is within the insurer's
approved service area, of the individual.
(2) Encourage or direct an individual to seek individual coverage
from another health care service plan or health insurer or the
California Health Benefit Exchange because of the health status,
claims experience, industry, occupation, or geographic location,
provided that the location is within the insurer's approved service
area, of the individual.
(b) Commencing January 1, 2014, a health insurer shall not,
directly or indirectly, enter into any contract, agreement, or
arrangement with a broker or agent that provides for or results in
the compensation paid to a broker or agent for the sale of an
individual health benefit plan to be varied because of the health
status, claims experience, industry, occupation, or geographic
location of the individual. This subdivision does not apply to a
compensation arrangement that provides compensation to a broker or
agent on the basis of percentage of premium, provided that the
percentage shall not vary because of the health status, claims
experience, industry, occupation, or geographic area of the
individual.
(c) This section shall be enforced in the same manner as Section
790.03, including through Sections 790.05 and 790.035.
10965.7. (a) All individual health benefit plans shall conform to
the requirements of Sections 10112.1, 10127.18, 10273.4,
10273.6, and 12682.1, and any other requirements
imposed by this code, and shall be renewable at the option of the
insured except as permitted to be canceled, rescinded, or not renewed
pursuant to Section 10273.4. 10273.6.
(b) Any insurer that ceases to offer for sale new individual
health benefit plans pursuant to Section 10273.4
10273.6 shall continue to be governed by this chapter with
respect to business conducted under this chapter.
10965.9. (a) With respect to individual health benefit plans
issued, amended, or renewed on or after January 1, 2014, a health
insurer may use only the following characteristics of an individual,
and any dependent thereof, for purposes of establishing the rate of
the individual health benefit plan covering the individual and the
eligible dependents thereof, along with the health benefit plan
selected by the individual:
(1) Age, as described in regulations adopted by the
department in conjunction with the Department of Managed Health Care
that do not prevent the application of PPACA pursuant
to the age bands established by the United States Secretary of Health
and Human Services pursuant to Section 2701(a)(3) of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg(a)(3)) . Rates
based on age shall be determined based on the individual's birthday
and shall not vary by more than three to one for adults .
A plan shall not use any age bands for rating purposes that
are inconsistent with the age bands established by the United States
Secretary of Health and Human Services pursuant to Section 2701(a)(3)
of the federal Public Health Service Act (42 U.S.C. Sec. 300gg(a)
(3)).
(2) (A) Geographic region. The geographic
regions for purposes of rating shall be the following:
(A)
(i) Region 1 shall consist of the Counties of Alpine,
Del Norte, Siskiyou, Modoc, Lassen, Shasta, Trinity, Humboldt,
Tehama, Plumas, Nevada, Sierra, Mendocino, Lake, Butte, Glenn,
Sutter, Yuba, Colusa, Amador, Calaveras, and Tuolumne.
(B)
(ii) Region 2 shall consist of the Counties of Napa,
Sonoma, Solano, and Marin.
(C)
(iii) Region 3 shall consist of the Counties of
Sacramento, Placer, El Dorado, and Yolo.
(D) Region 4 shall consist of the Counties of San Francisco,
Contra Costa, Alameda, Santa Clara, and San Mateo.
(iv) Region 4 shall consist of the County of San Francisco.
(v) Region 5 shall consist of the County of Contra Costa.
(vi) Region 6 shall consist of the County of Alameda.
(vii) Region 7 shall consist of the County of Santa Clara.
(viii) Region 8 shall consist of the County of San Mateo.
(E)
(ix) Region 5 9 shall
consist of the Counties of Santa Cruz, Monterey, and San Benito.
(F)
(x) Region 6 10 shall
consist of the Counties of San Joaquin, Stanislaus, Merced, Mariposa,
Madera, Fresno, Kings, and Tulare.
(xi) Region 11 shall consist of the Counties of Madera, Fresno,
and Kings.
(G)
(xii) Region 7 12 shall
consist of the Counties of San Luis Obispo, Santa Barbara, and
Ventura.
(H)
(xiii) Region 8 13 shall
consist of the Counties of Mono, Inyo, Kern, and
Imperial.
(xiv) Region 14 shall consist of the County of Kern.
(I)
(xv) Region 9 15 shall
consist of the ZIP Codes in Los Angeles County starting with 906 to
912, inclusive, 915, 917, 918, and 935.
(J)
(xvi) Region 10 16 shall
consist of the ZIP Codes in Los Angeles County other than those
identified in subparagraph (I) clause (xv)
.
(K)
(xvii) Region 11 17 shall
consist of the Counties of San Bernardino and Riverside.
(L)
(xviii) Region 12 18
shall consist of the County of Orange.
(M)
(xix) Region 13 19 shall
consist of the County of San Diego.
(B) No later than June 1, 2017, the department, in collaboration
with the Exchange and the Department of Managed Heath Care, shall
review the geographic rating regions specified in this paragraph and
the impacts of those regions on the health care coverage market in
California, and make a report to the appropriate policy committees of
the Legislature.
(3) Whether the health benefit plan covers an individual or family
, as described in PPACA .
(b) The rate for a health benefit plan subject to this section
shall not vary by any factor not described in this section.
(c) The rating period for rates subject to this section shall be
from January 1 to December 31, inclusive.
(d) This section shall not apply to an individual health benefit
plan that is a grandfathered health plan.
(e) This section shall become inoperative if Section 2701 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg), as added by
Section 1201 of PPACA, is repealed.
10965.11. A health insurer shall not be required to offer an
individual health benefit plan or accept applications for the plan
pursuant to this chapter in the case of any of the following:
(a) To an individual who does not work or reside within the
insurer's approved service areas.
(b) (1) Within a specific service area or portion of a service
area, if the insurer reasonably anticipates and demonstrates to the
satisfaction of the commissioner that it will not have sufficient
health care delivery resources to ensure that health care services
will be available and accessible to the individual because of its
obligations to existing insureds.
(2) A health insurer that cannot offer an individual health
benefit plan to individuals because it is lacking in sufficient
health care delivery resources within a service area or a portion of
a service area may not offer a health benefit plan in the area in
which the insurer is not offering coverage to individuals to new
employer groups until the insurer notifies the commissioner that it
has the ability to deliver services to individuals, and certifies to
the commissioner that from the date of the notice it will enroll all
individuals requesting coverage in that area from the insurer.
(3) Nothing in this chapter shall be construed to limit the
commissioner's authority to develop and implement a plan of
rehabilitation for a health insurer whose financial viability or
organizational and administrative capacity has become impaired.
10965.13. The commissioner may require a health insurer to
discontinue the offering of individual health benefit plans or
acceptance of applications from any individual upon a determination
by the commissioner that the insurer does not have sufficient
financial viability or organizational and administrative capacity to
ensure the delivery of health care services to its insureds. In
determining whether the conditions of this section have been met, the
commissioner shall consider, but not be limited to, the insurer's
compliance with the requirements of this part and the rules adopted
under those provisions.
10965.14. (a) On or before October 1, 2013, and annually
thereafter, a health insurer shall issue the following notice to all
policyholders enrolled in an individual health benefit plan that is a
grandfathered health plan:
Beginning on and after January 1, 2014, new
New improved health insurance options are available in
California. You currently have health insurance that is exempt from
many of the new requirements. For instance, your policy may not
include certain consumer protections that apply to other policies,
such as the requirement for the provision of preventive health
services without any cost sharing and the prohibition against
increasing your rates based on your health status. You have the
option to remain in your current plan policy
or switch to a new plan policy .
Under the new rules, a health insurance company cannot deny your
application based on any health conditions you may have. For more
information about your options, please contact the California Health
Benefit Exchange, the Office of Patient Advocate, your plan
or policy representative, an insurance broker, or a health
care navigator.
(b) A health insurer shall include the notice described in
subdivision (a) in any marketing renewal
material of the individual grandfathered health plan and
in any application for dependent coverage under the individual
grandfathered health plan .
10965.15. Except as otherwise provided in this chapter, this
chapter shall be implemented to the extent that it meets or exceeds
the requirements set forth in 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 pursuant to
that law.
SEC. 37. This act shall be implemented to the
extent consistent with or more stringent than 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
pursuant to that law.
SEC. 6. This act shall become operative only if
Assembly Bill 1461 of the 2011-12 Regular Session is also enacted and
becomes operative.
SEC. 38. 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.