California Legislature—2013–14 Regular Session

Assembly BillNo. 1180


Introduced by Assembly Member Pan

February 22, 2013


An act to amend Section 100503 of the Government Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

AB 1180, as introduced, Pan. California Health Benefit Exchange.

Existing law, the federal Patient Protection and Affordable Care Act (PPACA), requires each state to, by January 1, 2014, establish an American Health Benefit Exchange that makes available qualified health plans to qualified individuals and small employers. PPACA also authorizes the establishment of a basic health program under which a state may, if specified criteria are met, enter into contracts to offer one or more standard health plans providing a minimum level of essential health benefits to eligible individuals instead of offering those individuals coverage through an exchange. PPACA also establishes annual limits on deductibles for employer-sponsored plans and defines bronze, silver, gold, and platinum levels of coverage for the nongrandfathered individual and small group markets.

Existing law establishes the California Health Benefit Exchange (Exchange) to facilitate the purchase of qualified health plans through the Exchange by qualified individuals and qualified small employers by January 1, 2014. Existing law requires carriers participating in the Exchange that sell products outside the Exchange to offer, market, and sell all products made available to individuals and small employers through the Exchange to individuals and small employers purchasing coverage outside the Exchange. Existing law requires an individual or small group health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2014, to cover essential health benefits, as defined.

This bill would make technical, nonsubstantive changes to those provisions.

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

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

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SECTION 1.  

Section 100503 of the Government Code is
2amended to read:

3

100503.  

In addition to meeting the minimum requirements of
4Section 1311 of the federal act, the board shall do all of the
5following:

6(a) Determine the criteria and process for eligibility, enrollment,
7and disenrollment of enrollees and potential enrollees in the
8Exchange and coordinate that process with the state and local
9government entities administering other health care coverage
10programs, including the State Department of Health Care Services,
11the Managed Risk Medical Insurance Board, and California
12counties, in order to ensure consistent eligibility and enrollment
13processes and seamless transitions between coverage.

14(b) Develop processes to coordinate with the county entities
15that administer eligibility for the Medi-Cal program and the entity
16that determines eligibility for the Healthy Families Program,
17including, but not limited to, processes for case transfer, referral,
18and enrollment in the Exchange of individuals applying for
19assistance to those entities, if allowed or required by federal law.

20(c) Determine the minimum requirements a carrier must meet
21to be considered for participation in the Exchange, and the
22standards and criteria for selecting qualified health plans to be
23offered through the Exchange that are in the best interests of
24qualified individuals and qualified small employers. The board
25shall consistently and uniformly apply these requirements,
26standards, and criteria to all carriers. In the course of selectively
27contracting for health care coverage offered to qualified individuals
28and qualified small employers through the Exchange, the board
29shall seek to contract with carriers so as to provide health care
P3    1coverage choices that offer the optimal combination of choice,
2value, quality, and service.

3(d) Provide, in each region of the state, a choice of qualified
4health plans at each of the five levels of coverage contained in
5subdivisions (d) and (e) of Section 1302 of the federal act.

6(e) Require, as a condition of participation in the Exchange,
7carriers to fairly and affirmatively offer, market, and sell in the
8Exchange at least one product within each of the five levels of
9coverage contained in subdivisions (d) and (e) of Section 1302 of
10the federal act. The board may require carriers to offer additional
11products within each of those five levels of coverage. This
12subdivision shall not apply to a carrier that solely offers
13supplemental coverage in the Exchange under paragraph (10) of
14subdivision (a) of Section 100504.

15(f) (1) Require, as a condition of participation in the Exchange,
16carriers that sellbegin delete anyend delete products outside the Exchange to do both of
17the following:

18(A) Fairly and affirmatively offer, market, and sell all products
19made available to individuals in the Exchange to individuals
20purchasing coverage outside the Exchange.

21(B) Fairly and affirmatively offer, market, and sell all products
22made available to small employers in the Exchange to small
23employers purchasing coverage outside the Exchange.

24(2) For purposes of this subdivision, “product” does not include
25contracts entered into pursuant to Part 6.2 (commencing with
26Section 12693) of Division 2 of the Insurance Code between the
27Managed Risk Medical Insurance Board and carriers for enrolled
28Healthy Families beneficiaries or contracts entered into pursuant
29to Chapter 7 (commencing with Section 14000) of, or Chapter 8
30(commencing with Section 14200) of, Part 3 of Division 9 of the
31Welfare and Institutions Code between the State Department of
32Health Care Services and carriers for enrolled Medi-Cal
33beneficiaries.

34(g) Determine when an enrollee’s coverage commences and the
35extent and scope of coverage.

36(h) Provide for the processing of applications and the enrollment
37and disenrollment of enrollees.

38(i) Determine and approve cost-sharing provisions for qualified
39health plans.

P4    1(j) Establish uniform billing and payment policies for qualified
2health plans offered in the Exchange to ensure consistent
3enrollment and disenrollment activities for individuals enrolled in
4the Exchange.

5(k) Undertake activities necessary to market and publicize the
6availability of health care coverage and federal subsidies through
7the Exchange. The board shall also undertake outreach and
8enrollment activities that seek to assist enrollees and potential
9enrollees with enrolling and reenrolling in the Exchange in the
10least burdensome manner, including populations that may
11experience barriers to enrollment, such as the disabled and those
12with limited English language proficiency.

13(l) Select and set performance standards and compensation for
14navigators selected under subdivision (l) of Section 100502.

15(m) Employ necessary staff.

16(1) The board shall hire a chief fiscal officer, a chief operations
17officer, a director for the SHOP Exchange, a director of Health
18Plan Contracting, a chief technology and information officer, a
19general counsel, and other key executive positions, as determined
20by the board, who shall be exempt from civil service.

21(2) (A) The board shall set the salaries for the exempt positions
22described in paragraph (1) and subdivision (i) of Section 100500
23in amounts that are reasonably necessary to attract and retain
24individuals of superior qualifications. The salaries shall be
25published by the board in the board’s annual budget. The board’s
26annual budget shall be posted on the Internet Web site of the
27Exchange. To determine the compensation for these positions, the
28board shall cause to be conducted, through the use of independent
29outside advisors, salary surveys of both of the following:

30(i) Other state and federal health insurance exchanges that are
31most comparable to the Exchange.

32(ii) Other relevant labor pools.

33(B) The salaries established by the board under subparagraph
34(A) shall not exceed the highest comparable salary for a position
35of that type, as determined by the surveys conducted pursuant to
36subparagraph (A).

37(C) The Department of Human Resources shall review the
38methodology used in the surveys conducted pursuant to
39subparagraph (A).

P5    1(3) The positions described in paragraph (1) and subdivision (i)
2of Section 100500 shall not be subject to otherwise applicable
3provisions of the Government Code or the Public Contract Code
4and, for those purposes, the Exchange shall not be considered a
5state agency or public entity.

6(n) Assess a charge on the qualified health plans offered by
7carriers that is reasonable and necessary to support the
8development, operations, and prudent cash management of the
9Exchange. This charge shall not affect the requirement under
10Section 1301 of the federal act that carriers charge the same
11premium rate for each qualified health plan whether offered inside
12or outside the Exchange.

13(o) Authorize expenditures, as necessary, from the California
14Health Trust Fund to pay program expenses to administer the
15Exchange.

16(p) Keep an accurate accounting of all activities, receipts, and
17expenditures, and annually submit to the United States Secretary
18of Health and Human Services a report concerning that accounting.
19Commencing January 1, 2016, the board shall conduct an annual
20audit.

21(q) (1) Annually prepare a written report on the implementation
22and performance of the Exchange functions during the preceding
23fiscal year, including, at a minimum, the manner in which funds
24were expended and the progress toward, and the achievement of,
25the requirements of this title. This report shall be transmitted to
26the Legislature and the Governor and shall be made available to
27the public on the Internet Web site of the Exchange. A report made
28to the Legislature pursuant to this subdivision shall be submitted
29pursuant to Section 9795.

30(2) In addition to the report described in paragraph (1), the board
31shall be responsive to requests for additional information from the
32Legislature, including providing testimony and commenting on
33proposed state legislation or policy issues. The Legislature finds
34and declares that activities including, but not limited to, responding
35to legislative or executive inquiries, tracking and commenting on
36 legislation and regulatory activities, and preparing reports on the
37implementation of this title and the performance of the Exchange,
38are necessary state requirements and are distinct from the
39promotion of legislative or regulatory modifications referred to in
40subdivision (d) of Section 100520.

P6    1(r) Maintain enrollment and expenditures to ensure that
2expenditures do not exceed the amount of revenue in the fund, and
3if sufficient revenue is not available to pay estimated expenditures,
4institute appropriate measures to ensure fiscal solvency.

5(s) Exercise all powers reasonably necessary to carry out and
6comply with the duties, responsibilities, and requirements of this
7act and the federal act.

8(t) Consult with stakeholders relevant to carrying out the
9activities under this title, including, but not limited to, all of the
10following:

11(1) Health care consumers who are enrolled in health plans.

12(2) Individuals and entities with experience in facilitating
13enrollment in health plans.

14(3) Representatives of small businesses and self-employed
15individuals.

16(4) The State Medi-Cal Director.

17(5) Advocates for enrolling hard-to-reach populations.

18(u) Facilitate the purchase of qualified health plans in the
19Exchange by qualified individuals and qualified small employers
20no later than January 1, 2014.

21(v) Report, or contract with an independent entity to report, to
22the Legislature by December 1, 2018, on whether to adopt the
23option in paragraph (3) of subdivision (c) of Section 1312 of the
24federal act to merge the individual and small employer markets.
25In its report, the board shall provide information, based on at least
26two years of data from the Exchange, on the potential impact on
27rates paid by individuals and by small employers in a merged
28individual and small employer market, as compared to the rates
29paid by individuals and small employers if a separate individual
30and small employer market is maintained. A report made pursuant
31to this subdivision shall be submitted pursuant to Section 9795.

32(w) With respect to the SHOP Program, collect premiums and
33administer all other necessary and related tasks, including, but not
34limited to, enrollment and plan payment, in order to make the
35offering of employee plan choice as simple as possible for qualified
36small employers.

37(x) Require carriers participating in the Exchange to immediately
38notify the Exchange, under the terms and conditions established
39by thebegin delete boardend deletebegin insert board,end insert when an individual is or will be enrolled in
P7    1or disenrolled frombegin delete anyend deletebegin insert aend insert qualified health plan offered by the
2carrier.

3(y) Ensure that the Exchange provides oral interpretation
4services in any language for individuals seeking coverage through
5the Exchange and makes available a toll-free telephone number
6for the hearing and speech impaired. The board shall ensure that
7written information made available by the Exchange is presented
8in a plainly worded, easily understandable format and made
9available in prevalent languages.



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