Amended in Assembly April 9, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 314

Introduced by Assembly Member Pan

February 12, 2013

An act to begin delete amend Section 1367.001 of end delete begin insert add Section 1367.004 to end insert the Health and Safety Code, begin delete and to amend Section 10112.1 of the Insurance Code, end delete relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

AB 314, as amended, Pan. Health care coverage: begin delete self-funded end delete student plans and policies.

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 prohibits a health insurance issuer issuing health insurance coverage from establishing lifetime limits or unreasonable annual limits on the dollar value of benefits for any participant or beneficiary, as specified.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. That act does not apply to a plan directly operated by a bona fide public or private institution of higher learning that directly provides health care services only to its students, faculty, staff, administration, and their respective dependents. begin delete Existing law also provides for the regulation of health insurers by the Department of Insurance. end delete

Existing law requires every health care service plan begin delete or health insurer end delete that issues, sells, renews, or offers contracts or policies for health care coverage in this state to comply, to the extent required by federal law, with the requirements of the above-described provision of PPACA and any rules or regulations issued under that provision.

This bill would begin delete additionally impose those requirements, to the extent required by federal law, on end delete begin insert prohibit end insert a plan directly operated by a bona fide public or private begin delete institution of higher learning end delete begin insert college or university end insert that directly provides health care services only to its students, faculty, staff, administration, and their respective dependents begin delete or a health insurance policy directly offered by such an institution only to those persons end delete begin insert from establishing an annual limit or a lifetime limit on the dollar value of benefits for any participant or beneficiary end insert . Because a willful violation of these requirements with respect to those plans would be a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1367.004 is added to the end insert begin insert Health and
Safety Code end insert begin insert , to read: end insert

begin insert

begin insert 1367.004. end insert   

(a) Notwithstanding Section 1343, a plan directly
operated by a public or private college or university that directly
provides health care services only to its students, faculty, staff,
administration, and their respective dependents shall not establish
any of the following:

(1) A lifetime limit on the dollar value of benefits for any
participant or beneficiary.

(2) An annual limit on the dollar value of benefits for any
participant or beneficiary.

(b) This section does not establish any other requirements under
this chapter upon a plan described in subdivision (a).

end insert

begin delete

SECTION 1.  

Section 1367.001 of the Health and Safety Code
is amended to read:

1367.001.  

(a) To the extent required by federal law, every
health care service plan that issues, sells, renews, or offers contracts
for health care coverage in this state shall comply with the
requirements of Section 2711 of the federal Public Health Service
Act (42 U.S.C. Sec. 300gg-11) and any rules or regulations issued
under that section, in addition to any state laws or regulations that
do not prevent the application of those requirements.

(b) Notwithstanding Section 1343, this section shall apply to a
plan directly operated by a bona fide public or private institution
of higher learning that directly provides health care services only
to its students, faculty, staff, administration, and their respective
dependents.

(c) Nothing in this section shall be construed to apply to a health
care service plan contract or insurance policy issued, sold, renewed,
or offered for health care services or coverage 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), the California Major Risk
Medical Insurance Program (Part 6.5 (commencing with Section
12700) of Division 2 of the Insurance Code), or the Federal
Temporary High Risk Insurance Pool (Part 6.6 (commencing with
Section 12739.5) of Division 2 of the Insurance Code), to the extent
consistent with the federal Patient Protection and Affordable Care
Act (Public Law 111-148).

SEC. 2.  

Section 10112.1 of the Insurance Code is amended to
read:

10112.1.  

(a) To the extent required by federal law, every health
insurer that issues, sells, renews, or offers policies for health care
coverage in this state shall comply with the requirements of Section
2711 of the federal Public Health Service Act (42 U.S.C. Sec.
300gg-11) and any rules or regulations issued under that section,
in addition to any state laws or regulations that do not prevent the
application of those requirements.

(b) Notwithstanding any other law, this section shall apply to a
health insurance policy directly offered by a bona fide public or
private institution of higher learning only to its students, faculty,
staff, administration, and their respective dependents.

(c) Nothing in this section shall be construed to apply to a health
care service plan contract or insurance policy issued, sold, renewed,
or offered for health care services or coverage 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)), the Access for Infants and Mothers Program (Part 6.3
(commencing with Section 12695)), the California Major Risk
Medical Insurance Program (Part 6.5 (commencing with Section
12700)), or the Federal Temporary High Risk Insurance Pool (Part
6.6 (commencing with Section 12739.5)), to the extent consistent
with the federal Patient Protection and Affordable Care Act (Public
Law 111-148).

end delete

begin delete SEC. 3. end delete
begin insert SEC. 2. end insert   

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.