Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 1180


Introduced by Assembly Member Pan

February 22, 2013


An act tobegin delete amend Section 100503 of the Government Codeend deletebegin insert repealend insertbegin insert and add Sections 1399.805 and 1399.811 of the Health and Safety Code, and to end insertbegin insertrepealend insertbegin insert and add Sections 10901.3 and 10901.9 of the Insurance Codeend insert, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

AB 1180, as amended, Pan. begin deleteCalifornia Health Benefit Exchange. end deletebegin insertHealth care coverage: HIPAA rates.end insert

begin insert

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 law also provides for the regulation of health insurers by the Insurance Commissioner. 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.

end insert
begin insert

This bill would instead 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. Because a willful violation of the bill’s requirements by a health care service plan would be a crime, the bill would impose a state-mandated local program.

end insert
begin insert

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.

end insert
begin insert

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

end insert
begin delete

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.

end delete
begin delete

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.

end delete
begin delete

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

end delete

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

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

P3    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 1399.805 of the end insertbegin insertHealth and Safety Codeend insert
2begin insert is repealed.end insert

begin delete
3

1399.805.  

(a)  (1)  After the federally eligible defined
4individual submits a completed application form for a plan contract,
5the plan shall, within 30 days, notify the individual of the
6individual’s actual premium charges for that plan contract, unless
7the plan has provided notice of the premium charge prior to the
8application being filed. In no case shall the premium charged for
9any health care service plan contract identified in subdivision (d)
10of Section 1366.35 exceed the following amounts:

11(A)  For health care service plan contracts that offer services
12through a preferred provider arrangement, the average premium
13paid by a subscriber of the Major Risk Medical Insurance Program
14who is of the same age and resides in the same geographic area as
15the federally eligible defined individual. However, for federally
16qualified individuals who are between the ages of 60 and 64,
17inclusive, the premium shall not exceed the average premium paid
18by a subscriber of the Major Risk Medical Insurance Program who
19is 59 years of age and resides in the same geographic area as the
20federally eligible defined individual.

21(B)  For health care service plan contracts identified in
22subdivision (d) of Section 1366.35 that do not offer services
23through a preferred provider arrangement, 170 percent of the
24standard premium charged to an individual who is of the same age
25and resides in the same geographic area as the federally eligible
26defined individual. However, for federally qualified individuals
27who are between the ages of 60 and 64, inclusive, the premium
28shall not exceed 170 percent of the standard premium charged to
29an individual who is 59 years of age and resides in the same
30geographic area as the federally eligible defined individual. The
31individual shall have 30 days in which to exercise the right to buy
32coverage at the quoted premium rates.

33(2)  A plan may adjust the premium based on family size, not
34to exceed the following amounts:

35(A)  For health care service plans that offer services through a
36preferred provider arrangement, the average of the Major Risk
37Medical Insurance Program rate for families of the same size that
P4    1reside in the same geographic area as the federally eligible defined
2individual.

3(B)  For health care service plans identified in subdivision (d)
4of Section 1366.35 that do not offer services through a preferred
5provider arrangement, 170 percent of the standard premium charged
6to a family that is of the same size and resides in the same
7geographic area as the federally eligible defined individual.

8(b)  When a federally eligible defined individual submits a
9premium payment, based on the quoted premium charges, and that
10payment is delivered or postmarked, whichever occurs earlier,
11within the first 15 days of the month, coverage shall begin no later
12than the first day of the following month. When that payment is
13neither delivered or postmarked until after the 15th day of a month,
14coverage shall become effective no later than the first day of the
15second month following delivery or postmark of the payment.

16(c)  During the first 30 days after the effective date of the plan
17contract, the individual shall have the option of changing coverage
18to a different plan contract offered by the same health care service
19plan. If the individual notified the plan of the change within the
20first 15 days of a month, coverage under the new plan contract
21shall become effective no later than the first day of the following
22month. If an enrolled individual notified the plan of the change
23after the 15th day of a month, coverage under the new plan contract
24shall become effective no later than the first day of the second
25month following notification.

end delete
26begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 1399.805 is added to the end insertbegin insertHealth and Safety
27Code
end insert
begin insert, to read:end insert

begin insert
28

begin insert1399.805.end insert  

(a) After the federally eligible defined individual
29submits a completed application form for a plan contract, the plan
30shall, within 30 days, notify the individual of the individual’s actual
31premium charges for that plan contract, unless the plan has
32provided notice of the premium charge prior to the application
33being filed. In no case shall the premium charged for any health
34care service plan contract identified in subdivision (d) of Section
351366.35 exceed the premium for the second lowest cost silver plan
36of the individual market in the rating area in which the individual
37resides which is offered through the California Health Benefit
38Exchange established under Title 22 (commencing with Section
39100500) of the Government Code, as described in Section
4036B(b)(3)(B) of Title 26 of the United States Code.

P5    1(b) When a federally eligible defined individual submits a
2premium payment, based on the quoted premium charges, and that
3payment is delivered or postmarked, whichever occurs earlier,
4within the first 15 days of the month, coverage shall begin no later
5than the first day of the following month. When that payment is
6neither delivered nor postmarked until after the 15th day of a
7month, coverage shall become effective no later than the first day
8of the second month following delivery or postmark of the payment.

9(c) During the first 30 days after the effective date of the plan
10contract, the individual shall have the option of changing coverage
11to a different plan contract offered by the same health care service
12plan. If the individual notified the plan of the change within the
13first 15 days of a month, coverage under the new plan contract
14shall become effective no later than the first day of the following
15month. If an enrolled individual notified the plan of the change
16after the 15th day of a month, coverage under the new plan
17contract shall become effective no later than the first day of the
18second month following notification.

end insert
19begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 1399.811 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
20repealed.end insert

begin delete
21

1399.811.  

Premiums for contracts offered, delivered, amended,
22or renewed by plans on or after January 1, 2001, shall be subject
23to the following requirements:

24(a) The premium for new business for a federally eligible defined
25individual shall not exceed the following amounts:

26(1) For health care service plan contracts identified in
27subdivision (d) of Section 1366.35 that offer services through a
28preferred provider arrangement, the average premium paid by a
29subscriber of the Major Risk Medical Insurance Program who is
30of the same age and resides in the same geographic area as the
31federally eligible defined individual. However, for federally
32qualified individuals who are between the ages of 60 to 64 years,
33inclusive, the premium shall not exceed the average premium paid
34by a subscriber of the Major Risk Medical Insurance Program who
35is 59 years of age and resides in the same geographic area as the
36federally eligible defined individual.

37(2) For health care service plan contracts identified in
38subdivision (d) of Section 1366.35 that do not offer services
39through a preferred provider arrangement, 170 percent of the
40standard premium charged to an individual who is of the same age
P6    1and resides in the same geographic area as the federally eligible
2defined individual. However, for federally qualified individuals
3who are between the ages of 60 to 64 years, inclusive, the premium
4shall not exceed 170 percent of the standard premium charged to
5an individual who is 59 years of age and resides in the same
6geographic area as the federally eligible defined individual.

7(b) The premium for in force business for a federally eligible
8defined individual shall not exceed the following amounts:

9(1) For health care service plan contracts identified in
10subdivision (d) of Section 1366.35 that offer services through a
11preferred provider arrangement, the average premium paid by a
12subscriber of the Major Risk Medical Insurance Program who is
13of the same age and resides in the same geographic area as the
14federally eligible defined individual. However, for federally
15qualified individuals who are between the ages of 60 and 64 years,
16inclusive, the premium shall not exceed the average premium paid
17by a subscriber of the Major Risk Medical Insurance Program who
18is 59 years of age and resides in the same geographic area as the
19federally eligible defined individual.

20(2) For health care service plan contracts identified in
21subdivision (d) of Section 1366.35 that do not offer services
22through a preferred provider arrangement, 170 percent of the
23standard premium charged to an individual who is of the same age
24and resides in the same geographic area as the federally eligible
25defined individual. However, for federally qualified individuals
26who are between the ages of 60 and 64 years, inclusive, the
27premium shall not exceed 170 percent of the standard premium
28charged to an individual who is 59 years of age and resides in the
29same geographic area as the federally eligible defined individual.
30The premium effective on January 1, 2001, shall apply to in force
31business at the earlier of either the time of renewal or July 1, 2001.

32(c) The premium applied to a federally eligible defined
33individual may not increase by more than the following amounts:

34(1) For health care service plan contracts identified in
35subdivision (d) of Section 1366.35 that offer services through a
36preferred provider arrangement, the average increase in the
37premiums charged to a subscriber of the Major Risk Medical
38Insurance Program who is of the same age and resides in the same
39geographic area as the federally eligible defined individual.

P7    1(2) For health care service plan contracts identified in
2subdivision (d) of Section 1366.35 that do not offer services
3through a preferred provider arrangement, the increase in premiums
4charged to a nonfederally qualified individual who is of the same
5age and resides in the same geographic area as the federally defined
6eligible individual. The premium for an eligible individual may
7not be modified more frequently than every 12 months.

8(3) For a contract that a plan has discontinued offering, the
9premium applied to the first rating period of the new contract that
10the federally eligible defined individual elects to purchase shall
11be no greater than the premium applied in the prior rating period
12to the discontinued contract.

end delete
13begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 1399.811 is added to the end insertbegin insertHealth and Safety
14Code
end insert
begin insert, to read:end insert

begin insert
15

begin insert1399.811.end insert  

Premiums for contracts offered, delivered, amended,
16or renewed by plans on or after January 1, 2014, shall be subject
17to the following requirements:

18(a) The premium for in force or new business for a federally
19eligible defined individual shall not exceed the premium for the
20second lowest cost silver plan of the individual market in the rating
21area in which the individual resides which is offered through the
22California Health Benefit Exchange established under Title 22
23(commencing with Section 100500) of the Government Code, as
24described in Section 36B(b)(3)(B) of Title 26 of the United States
25Code.

26(b) For a contract that a plan has discontinued offering, the
27premium applied to the first rating period of the new contract that
28the federally eligible defined individual elects to purchase shall
29be no greater than the premium applied in the prior rating period
30to the discontinued contract.

end insert
31begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 10901.3 of the end insertbegin insertInsurance Codeend insertbegin insert is repealed.end insert

begin delete
32

10901.3.  

(a) (1) After the federally eligible defined individual
33submits a completed application form for a health benefit plan,
34the carrier shall, within 30 days, notify the individual of the
35individual’s actual premium charges for that health benefit plan
36design. In no case shall the premium charged for any health benefit
37plan identified in subdivision (d) of Section 10785 exceed the
38following amounts:

39(A) For health benefit plans that offer services through a
40preferred provider arrangement, the average premium paid by a
P8    1subscriber of the Major Risk Medical Insurance Program who is
2of the same age and resides in the same geographic area as the
3federally eligible defined individual. However, for federally
4qualified individuals who are between the ages of 60 and 64,
5inclusive, the premium shall not exceed the average premium paid
6by a subscriber of the Major Risk Medical Insurance Program who
7is 59 years of age and resides in the same geographic area as the
8federally eligible defined individual.

9(B) For health benefit plans identified in subdivision (d) of
10Section 10785 that do not offer services through a preferred
11provider arrangement, 170 percent of the standard premium charged
12to an individual who is of the same age and resides in the same
13geographic area as the federally eligible defined individual.
14However, for federally qualified individuals who are between the
15ages of 60 and 64, inclusive, the premium shall not exceed 170
16percent of the standard premium charged to an individual who is
1759 years of age and resides in the same geographic area as the
18federally eligible defined individual. The individual shall have 30
19days in which to exercise the right to buy coverage at the quoted
20premium rates.

21(2) A carrier may adjust the premium based on family size, not
22to exceed the following amounts:

23(A) For health benefit plans that offer services through a
24preferred provider arrangement, the average of the Major Risk
25Medical Insurance Program rate for families of the same size that
26reside in the same geographic area as the federally eligible defined
27individual.

28(B) For health benefit plans identified in subdivision (d) of
29Section 10785 that do not offer services through a preferred
30provider arrangement, 170 percent of the standard premium charged
31to a family that is of the same size and resides in the same
32geographic area as the federally eligible defined individual.

33(b) When a federally eligible defined individual submits a
34premium payment, based on the quoted premium charges, and that
35payment is delivered or postmarked, whichever occurs earlier,
36within the first 15 days of the month, coverage shall begin no later
37than the first day of the following month. When that payment is
38neither delivered or postmarked until after the 15th day of a month,
39coverage shall become effective no later than the first day of the
40second month following delivery or postmark of the payment.

P9    1(c) During the first 30 days after the effective date of the health
2benefit plan, the individual shall have the option of changing
3coverage to a different health benefit plan design offered by the
4same carrier. If the individual notified the plan of the change within
5the first 15 days of a month, coverage under the new health benefit
6plan shall become effective no later than the first day of the
7following month. If an enrolled individual notified the carrier of
8the change after the 15th day of a month, coverage under the health
9benefit plan shall become effective no later than the first day of
10the second month following notification.

end delete
11begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 10901.3 is added to the end insertbegin insertInsurance Codeend insertbegin insert, to
12read:end insert

begin insert
13

begin insert10901.3.end insert  

(a) After the federally eligible defined individual
14submits a completed application form for a health benefit plan,
15the carrier shall, within 30 days, notify the individual of the
16individual’s actual premium charges for that health benefit plan
17design. In no case shall the premium charged for any health benefit
18plan identified in subdivision (d) of Section 10785 exceed the
19premium for the second lowest cost silver plan of the individual
20market in the rating area in which the individual resides which is
21offered through the California Health Benefit Exchange established
22under Title 22 (commencing with Section 100500) of the
23Government Code, as described in Section 36B(b)(3)(B) of Title
2426 of the United States Code.

25(b) When a federally eligible defined individual submits a
26premium payment, based on the quoted premium charges, and that
27payment is delivered or postmarked, whichever occurs earlier,
28within the first 15 days of the month, coverage shall begin no later
29than the first day of the following month. When that payment is
30neither delivered or postmarked until after the 15th day of a month,
31coverage shall become effective no later than the first day of the
32second month following delivery or postmark of the payment.

33(c) During the first 30 days after the effective date of the health
34benefit plan, the individual shall have the option of changing
35coverage to a different health benefit plan design offered by the
36same carrier. If the individual notified the plan of the change within
37the first 15 days of a month, coverage under the new health benefit
38plan shall become effective no later than the first day of the
39following month. If an enrolled individual notified the carrier of
40 the change after the 15th day of a month, coverage under the health
P10   1benefit plan shall become effective no later than the first day of
2the second month following notification.

end insert
3begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 10901.9 of the end insertbegin insertInsurance Codeend insertbegin insert is repealed.end insert

begin delete
4

10901.9.  

Commencing January 1, 2001, premiums for health
5benefit plans offered, delivered, amended, or renewed by carriers
6shall be subject to the following requirements:

7(a) The premium for new business for a federally eligible defined
8individual shall not exceed the following amounts:

9(1) For health benefit plans identified in subdivision (d) of
10Section 10785 that offer services through a preferred provider
11arrangement, the average premium paid by a subscriber of the
12Major Risk Medical Insurance Program who is of the same age
13and resides in the same geographic area as the federally eligible
14defined individual. However, for federally qualified individuals
15who are between the ages of 60 to 64, inclusive, the premium shall
16not exceed the average premium paid by a subscriber of the Major
17Risk Medical Insurance Program who is 59 years of age and resides
18in the same geographic area as the federally eligible defined
19individual.

20(2) For health benefit plans identified in subdivision (d) of
21Section 10785 that do not offer services through a preferred
22provider arrangement, 170 percent of the standard premium charged
23to an individual who is of the same age and resides in the same
24geographic area as the federally eligible defined individual.
25However, for federally qualified individuals who are between the
26ages of 60 to 64, inclusive, the premium shall not exceed 170
27percent of the standard premium charged to an individual who is
2859 years of age and resides in the same geographic area as the
29federally eligible defined individual.

30(b) The premium for in force business for a federally eligible
31defined individual shall not exceed the following amounts:

32(1) For health benefit plans identified in subdivision (d) of
33Section 10785 that offer services through a preferred provider
34arrangement, the average premium paid by a subscriber of the
35Major Risk Medical Insurance Program who is of the same age
36and resides in the same geographic area as the federally eligible
37defined individual. However, for federally qualified individuals
38who are between the ages of 60 and 64, inclusive, the premium
39shall not exceed the average premium paid by a subscriber of the
40Major Risk Medical Insurance Program who is 59 years of age
P11   1and resides in the same geographic area as the federally eligible
2defined individual.

3(2) For health benefit plans identified in subdivision (d) of
4Section 10785 that do not offer services through a preferred
5provider arrangement, 170 percent of the standard premium charged
6to an individual who is of the same age and resides in the same
7geographic area as the federally eligible defined individual.
8However, for federally qualified individuals who are between the
9ages of 60 and 64, inclusive, the premium shall not exceed 170
10percent of the standard premium charged to an individual who is
1159 years of age and resides in the same geographic area as the
12federally eligible defined individual. The premium effective on
13January 1, 2001, shall apply to in force business at the earlier of
14either the time of renewal or July 1, 2001.

15(c) The premium applied to a federally eligible defined
16individual may not increase by more than the following amounts:

17(1) For health benefit plans identified in subdivision (d) of
18Section 10785 that offer services through a preferred provider
19arrangement, the average increase in the premiums charged to a
20subscriber of the Major Risk Medical Insurance Program who is
21of the same age and resides in the same geographic area as the
22federally eligible defined individual.

23(2) For health benefit plans identified in subdivision (d) of
24Section 10785 that do not offer services through a preferred
25provider arrangement, the increase in premiums charged to a
26nonfederally qualified individual who is of the same age and resides
27in the same geographic area as the federally defined eligible
28individual. The premium for an eligible individual may not be
29modified more frequently than every 12 months.

30(2) For a contract that a carrier has discontinued offering, the
31premium applied to the first rating period of the new contract that
32the federally eligible defined individual elects to purchase shall
33be no greater than the premium applied in the prior rating period
34to the discontinued contract.

end delete
35begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 10901.9 is added to the end insertbegin insertInsurance Codeend insertbegin insert, to
36read:end insert

begin insert
37

begin insert10901.9.end insert  

Commencing on January 1, 2014, premiums for health
38benefit plans offered, delivered, amended, or renewed by carriers
39shall be subject to the following requirements:

P12   1(a) The premium for in force or new business for a federally
2eligible defined individual shall not exceed the premium for the
3second lowest cost silver plan of the individual market in the rating
4area in which the individual resides which is offered through the
5California Health Benefit Exchange established under Title 22
6(commencing with Section 100500) of the Government Code, as
7described in Section 36B(b)(3)(B) of Title 26 of the United States
8Code.

9(b) For a contract that a carrier has discontinued offering, the
10premium applied to the first rating period of the new contract that
11the federally eligible defined individual elects to purchase shall
12be no greater than the premium applied in the prior rating period
13to the discontinued contract.

end insert
14begin insert

begin insertSEC. 9.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
15Section 6 of Article XIII B of the California Constitution because
16the only costs that may be incurred by a local agency or school
17district will be incurred because this act creates a new crime or
18infraction, eliminates a crime or infraction, or changes the penalty
19for a crime or infraction, within the meaning of Section 17556 of
20the Government Code, or changes the definition of a crime within
21the meaning of Section 6 of Article XIII B of the California
22Constitution.

end insert
begin delete
23

SECTION 1.  

Section 100503 of the Government Code is
24amended to read:

25

100503.  

In addition to meeting the minimum requirements of
26Section 1311 of the federal act, the board shall do all of the
27following:

28(a) Determine the criteria and process for eligibility, enrollment,
29and disenrollment of enrollees and potential enrollees in the
30Exchange and coordinate that process with the state and local
31government entities administering other health care coverage
32programs, including the State Department of Health Care Services,
33the Managed Risk Medical Insurance Board, and California
34counties, in order to ensure consistent eligibility and enrollment
35processes and seamless transitions between coverage.

36(b) Develop processes to coordinate with the county entities
37that administer eligibility for the Medi-Cal program and the entity
38that determines eligibility for the Healthy Families Program,
39including, but not limited to, processes for case transfer, referral,
P13   1and enrollment in the Exchange of individuals applying for
2assistance to those entities, if allowed or required by federal law.

3(c) Determine the minimum requirements a carrier must meet
4to be considered for participation in the Exchange, and the
5standards and criteria for selecting qualified health plans to be
6offered through the Exchange that are in the best interests of
7qualified individuals and qualified small employers. The board
8shall consistently and uniformly apply these requirements,
9standards, and criteria to all carriers. In the course of selectively
10contracting for health care coverage offered to qualified individuals
11and qualified small employers through the Exchange, the board
12shall seek to contract with carriers so as to provide health care
13coverage choices that offer the optimal combination of choice,
14value, quality, and service.

15(d) Provide, in each region of the state, a choice of qualified
16health plans at each of the five levels of coverage contained in
17subdivisions (d) and (e) of Section 1302 of the federal act.

18(e) Require, as a condition of participation in the Exchange,
19carriers to fairly and affirmatively offer, market, and sell in the
20Exchange at least one product within each of the five levels of
21coverage contained in subdivisions (d) and (e) of Section 1302 of
22the federal act. The board may require carriers to offer additional
23products within each of those five levels of coverage. This
24subdivision shall not apply to a carrier that solely offers
25supplemental coverage in the Exchange under paragraph (10) of
26subdivision (a) of Section 100504.

27(f) (1) Require, as a condition of participation in the Exchange,
28carriers that sell products outside the Exchange to do both of the
29following:

30(A) Fairly and affirmatively offer, market, and sell all products
31made available to individuals in the Exchange to individuals
32purchasing coverage outside the Exchange.

33(B) Fairly and affirmatively offer, market, and sell all products
34made available to small employers in the Exchange to small
35employers purchasing coverage outside the Exchange.

36(2) For purposes of this subdivision, “product” does not include
37contracts entered into pursuant to Part 6.2 (commencing with
38Section 12693) of Division 2 of the Insurance Code between the
39Managed Risk Medical Insurance Board and carriers for enrolled
40Healthy Families beneficiaries or contracts entered into pursuant
P14   1to Chapter 7 (commencing with Section 14000) of, or Chapter 8
2(commencing with Section 14200) of, Part 3 of Division 9 of the
3Welfare and Institutions Code between the State Department of
4Health Care Services and carriers for enrolled Medi-Cal
5beneficiaries.

6(g) Determine when an enrollee’s coverage commences and the
7extent and scope of coverage.

8(h) Provide for the processing of applications and the enrollment
9and disenrollment of enrollees.

10(i) Determine and approve cost-sharing provisions for qualified
11health plans.

12(j) Establish uniform billing and payment policies for qualified
13health plans offered in the Exchange to ensure consistent
14enrollment and disenrollment activities for individuals enrolled in
15the Exchange.

16(k) Undertake activities necessary to market and publicize the
17availability of health care coverage and federal subsidies through
18the Exchange. The board shall also undertake outreach and
19enrollment activities that seek to assist enrollees and potential
20enrollees with enrolling and reenrolling in the Exchange in the
21least burdensome manner, including populations that may
22experience barriers to enrollment, such as the disabled and those
23with limited English language proficiency.

24(l) Select and set performance standards and compensation for
25navigators selected under subdivision (l) of Section 100502.

26(m) Employ necessary staff.

27(1) The board shall hire a chief fiscal officer, a chief operations
28officer, a director for the SHOP Exchange, a director of Health
29Plan Contracting, a chief technology and information officer, a
30general counsel, and other key executive positions, as determined
31by the board, who shall be exempt from civil service.

32(2) (A) The board shall set the salaries for the exempt positions
33described in paragraph (1) and subdivision (i) of Section 100500
34in amounts that are reasonably necessary to attract and retain
35individuals of superior qualifications. The salaries shall be
36published by the board in the board’s annual budget. The board’s
37annual budget shall be posted on the Internet Web site of the
38Exchange. To determine the compensation for these positions, the
39board shall cause to be conducted, through the use of independent
40outside advisors, salary surveys of both of the following:

P15   1(i) Other state and federal health insurance exchanges that are
2most comparable to the Exchange.

3(ii) Other relevant labor pools.

4(B) The salaries established by the board under subparagraph
5(A) shall not exceed the highest comparable salary for a position
6of that type, as determined by the surveys conducted pursuant to
7subparagraph (A).

8(C) The Department of Human Resources shall review the
9methodology used in the surveys conducted pursuant to
10subparagraph (A).

11(3) The positions described in paragraph (1) and subdivision (i)
12of Section 100500 shall not be subject to otherwise applicable
13provisions of the Government Code or the Public Contract Code
14and, for those purposes, the Exchange shall not be considered a
15state agency or public entity.

16(n) Assess a charge on the qualified health plans offered by
17carriers that is reasonable and necessary to support the
18development, operations, and prudent cash management of the
19Exchange. This charge shall not affect the requirement under
20Section 1301 of the federal act that carriers charge the same
21premium rate for each qualified health plan whether offered inside
22or outside the Exchange.

23(o) Authorize expenditures, as necessary, from the California
24Health Trust Fund to pay program expenses to administer the
25Exchange.

26(p) Keep an accurate accounting of all activities, receipts, and
27expenditures, and annually submit to the United States Secretary
28of Health and Human Services a report concerning that accounting.
29Commencing January 1, 2016, the board shall conduct an annual
30audit.

31(q) (1) Annually prepare a written report on the implementation
32and performance of the Exchange functions during the preceding
33fiscal year, including, at a minimum, the manner in which funds
34were expended and the progress toward, and the achievement of,
35the requirements of this title. This report shall be transmitted to
36the Legislature and the Governor and shall be made available to
37the public on the Internet Web site of the Exchange. A report made
38to the Legislature pursuant to this subdivision shall be submitted
39pursuant to Section 9795.

P16   1(2) In addition to the report described in paragraph (1), the board
2shall be responsive to requests for additional information from the
3Legislature, including providing testimony and commenting on
4proposed state legislation or policy issues. The Legislature finds
5and declares that activities including, but not limited to, responding
6to legislative or executive inquiries, tracking and commenting on
7 legislation and regulatory activities, and preparing reports on the
8implementation of this title and the performance of the Exchange,
9are necessary state requirements and are distinct from the
10promotion of legislative or regulatory modifications referred to in
11subdivision (d) of Section 100520.

12(r) Maintain enrollment and expenditures to ensure that
13expenditures do not exceed the amount of revenue in the fund, and
14if sufficient revenue is not available to pay estimated expenditures,
15institute appropriate measures to ensure fiscal solvency.

16(s) Exercise all powers reasonably necessary to carry out and
17comply with the duties, responsibilities, and requirements of this
18act and the federal act.

19(t) Consult with stakeholders relevant to carrying out the
20activities under this title, including, but not limited to, all of the
21following:

22(1) Health care consumers who are enrolled in health plans.

23(2) Individuals and entities with experience in facilitating
24enrollment in health plans.

25(3) Representatives of small businesses and self-employed
26individuals.

27(4) The State Medi-Cal Director.

28(5) Advocates for enrolling hard-to-reach populations.

29(u) Facilitate the purchase of qualified health plans in the
30Exchange by qualified individuals and qualified small employers
31no later than January 1, 2014.

32(v) Report, or contract with an independent entity to report, to
33the Legislature by December 1, 2018, on whether to adopt the
34option in paragraph (3) of subdivision (c) of Section 1312 of the
35federal act to merge the individual and small employer markets.
36In its report, the board shall provide information, based on at least
37two years of data from the Exchange, on the potential impact on
38rates paid by individuals and by small employers in a merged
39individual and small employer market, as compared to the rates
40paid by individuals and small employers if a separate individual
P17   1and small employer market is maintained. A report made pursuant
2to this subdivision shall be submitted pursuant to Section 9795.

3(w) With respect to the SHOP Program, collect premiums and
4administer all other necessary and related tasks, including, but not
5limited to, enrollment and plan payment, in order to make the
6offering of employee plan choice as simple as possible for qualified
7small employers.

8(x) Require carriers participating in the Exchange to immediately
9notify the Exchange, under the terms and conditions established
10by the board, when an individual is or will be enrolled in or
11disenrolled from a qualified health plan offered by the carrier.

12(y) Ensure that the Exchange provides oral interpretation
13services in any language for individuals seeking coverage through
14the Exchange and makes available a toll-free telephone number
15for the hearing and speech impaired. The board shall ensure that
16written information made available by the Exchange is presented
17in a plainly worded, easily understandable format and made
18available in prevalent languages.

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