AB 1018,
as amended, Conway. begin deleteHealth care service plans: transfers to different individual plans. end deletebegin insertIncome taxes: deduction: medical expenses.end insert
The Personal Income Tax Law defines gross income as all income from whatever source derived, unless specifically excluded.
end insertbegin insertThis bill would exclude from gross income $____ for qualified expenses, as defined, for specified medical expenses, as provided.
end insertbegin insertThis bill would take effect immediately as a tax levy.
end insertExisting law, the Knox-Keene Health Care Service Plan Act of 1975 (the Knox-Keene Act), provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law requires a health care service plan to permit an individual who has been covered for at least 18 months under an individual plan contract to transfer, without medical underwriting, as defined, to another individual plan contract offered by the same health care service plan, that provides equal or lesser benefits.
end deleteThis bill would make technical, nonsubstantive changes to these provisions.
end deleteVote: majority.
Appropriation: no.
Fiscal committee: begin deleteno end deletebegin insertyesend insert.
State-mandated local program: no.
The people of the State of California do enact as follows:
begin insertSection 17131.11 is added to the end insertbegin insertRevenue and
2Taxation Codeend insertbegin insert, to read:end insert
(a) For each taxable year beginning on or after
4January 1, 2013, gross income shall not include ____ dollars
5($____) of qualified expenses.
6(b) For purposes of this section, “qualified expenses” means
7expenses paid during the taxable year, not compensated for by
8insurance or otherwise, for medical care of the taxpayer, the
9taxpayer’s spouse or registered domestic partner, or a dependent,
10for any of the following:
11(1) Medical care, as defined by Section 213 of the Internal
12Revenue Code, relating to medical, dental, etc., expenses.
13(2) Preventative care, as that term is used in Section
14223(c)(2)(C) of the Internal
Revenue Code, relating to high
15deductible health plan.
16(3) Care provided for an elderly dependent within the taxpayer’s
17home or at a day facility.
18(c) The exclusion from gross income under this section shall be
19in addition to any deduction for qualified expenses that is allowed
20under Section 17201, relating to a deduction for unreimbursed
21expenses paid for medical care.
This act provides for a tax levy within the meaning of
23Article IV of the Constitution and shall go into immediate effect.
Section 1389.5 of the Health and Safety Code is
25amended to read:
(a) This section shall apply to a health care service
27plan that provides coverage under an individual plan contract that
28is issued, amended, delivered, or renewed on or after January 1,
292007.
30(b) At least once each year, the health care service plan shall
31permit an individual who has been covered for at least 18 months
32under an individual plan contract to transfer, without medical
33underwriting, to any other individual plan contract offered by that
34same health care service plan that provides equal or lesser benefits,
35as determined by the plan.
P3 1“Without medical underwriting” means that the health care
2service plan shall not decline to offer coverage to, or deny
3enrollment of, the
individual or impose a preexisting condition
4exclusion on the individual who transfers to another individual
5plan contract pursuant to this section.
6(c) The plan shall establish, for the purposes of subdivision (b),
7a ranking of the individual plan contracts it offers to individual
8purchasers and either post the ranking on its Internet Web site or
9make the ranking available upon request. The plan shall update
10the ranking whenever a new benefit design for individual
11purchasers is approved.
12(d) The plan shall notify in writing all enrollees of the right to
13transfer to another
individual plan contract pursuant to this section,
14at a minimum, when the plan changes the enrollee’s premium rate.
15Posting this information on the plan’s Internet Web site shall not
16constitute notice for purposes of this subdivision. The notice shall
17adequately inform enrollees of the transfer rights provided under
18this section, including information on the process to obtain details
19about the individual plan contracts available to that enrollee and
20advising that the enrollee may be unable to return to his or her
21current individual plan contract if the enrollee transfers to another
22individual plan contract.
23(e) The requirements of this section shall not apply to the
24following:
25(1) A federally eligible defined individual, as defined in
26subdivision (c) of Section 1399.801, who is enrolled in an
27individual health benefit plan contract offered pursuant to Section
281366.35.
29(2) An individual offered conversion coverage pursuant to
30Section 1373.6.
31(3) Individual coverage under a specialized health care service
32plan contract.
33(4) An individual enrolled in the Medi-Cal program pursuant
34to Chapter 7 (commencing with Section 14000) of Division 9 of
35Part 3 of the Welfare and Institutions Code.
36(5) An individual enrolled in the Access for Infants and Mothers
37Program pursuant to Part 6.3 (commencing with Section 12695)
38of Division 2 of the Insurance Code.
P4 1(6) An individual enrolled in the Healthy Families Program
2pursuant to Part 6.2 (commencing with Section 12693) of Division
32 of the Insurance Code.
4(f) It is the intent of the Legislature that individuals have more
5choice in their health coverage when health care service plans
6guarantee the right of an individual to transfer to another product
7based on the plan’s own ranking system. The Legislature does not
8intend for the department to review or verify the plan’s ranking
9for actuarial or other purposes.
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