BILL NUMBER: AB 1180 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 16, 2013
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member Pan
FEBRUARY 22, 2013
An act to repeal and add Sections 1399.805 and 1399.811
amend Sections 1373.621 and 1389.5 of, to add and
repeal Section 1363.08 of, to repeal Section 1399.816 of, and to
repeal , add, and repeal Section 1399.818 of ,
the Health and Safety Code, and to repeal and add
Sections 10901.3 and 10901.9 amend Sections 10116.5,
10119.1, 10127.14, 10127.18, and 12672 of, to repeal Section 10902.4
of, and to repeal, add, and repeal Section 10902.6 of ,
the Insurance Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 1180, as amended, Pan. Health care coverage: HIPAA
rates. federally eligible defined individuals:
conversion or continuation of coverage.
Existing
(1) 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.
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. make these provisions of
law applicable only to grandfathered individual health plan
contracts or insurance policies, as defined, previously issued to
federally eligible defined individuals, unless and until specified
provisions of the federal Patient Protection and Affordable Care Act
(PPACA) are amended or repealed, as specified.
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.
(2) Existing law requires a health care service plan or health
insurer to offer continuation or conversion of individual or group
coverage for a specified period of time and under certain
circumstances.
The bill would make those provisions inoperative, unless and until
specified provisions of PPACA are amended or repealed, as specified,
and would make conforming changes.
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 1363.08 is added to the
Health and Safety Code , to read:
1363.08. (a) Sections 1363.06 and 1363.07 shall be inoperative on
January 1, 2014.
(b) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-04), this section
shall become inoperative and shall be repealed on January 1 following
the date that it becomes inoperative.
(c) For purposes of this section, "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.
SEC. 2. Section 1373.621 of the Health
and Safety Code is amended to read:
1373.621. (a) Except for a specialized health care service plan,
every health care service plan contract that is issued, amended,
delivered, or renewed in this state on or after January 1, 1999, that
provides hospital, medical, or surgical expense coverage under an
employer-sponsored group plan for an employer subject to COBRA, as
defined in subdivision (e), or an employer group for which the plan
is required to offer Cal-COBRA coverage, as defined in subdivision
(f), including a carrier providing replacement coverage under Section
1399.63, shall further offer the former employee the opportunity to
continue benefits as required under subdivision (b), and shall
further offer the former spouse of an employee or former employee the
opportunity to continue benefits as required under subdivision (c).
(b) (1) In the event a former employee who worked for the employer
for at least five years prior to the date of termination of
employment and who is 60 years of age or older on the date employment
ends is entitled to and so elects to continue benefits under COBRA
or Cal-COBRA for himself or herself and for any spouse, the employee
or spouse may further continue benefits beyond the date coverage
under COBRA or Cal-COBRA ends, as set forth in paragraph (2). Except
as otherwise specified, continuation coverage shall be under the same
benefit terms and conditions as if the continuation coverage under
COBRA or Cal-COBRA had remained in force. For the employee or spouse,
continuation coverage following the end of COBRA or Cal-COBRA is
subject to payment of premiums to the health care service plan.
Individuals ineligible for COBRA or Cal-COBRA, or who are eligible
but have not elected or exhausted continuation coverage under federal
COBRA or Cal-COBRA, are not entitled to continuation coverage under
this section. Premiums for continuation coverage under this section
shall be billed by, and remitted to, the health care service plan in
accordance with subdivision (d). Failure to pay the requisite
premiums may result in termination of the continuation coverage in
accordance with the applicable provisions in the plan's group
subscriber agreement with the former employer.
(2) The employer shall notify the former employee or spouse or
both, or the former spouse of the employee or former employee, of the
availability of the continuation benefits under this section in
accordance with Section 2800.2 of the Labor Code. To continue health
care coverage pursuant to this section, the individual shall elect to
do so by notifying the plan in writing within 30 calendar days prior
to the date continuation coverage under COBRA or Cal-COBRA is
scheduled to end. Every health care service plan and specialized
health care service plan shall provide to the employer replacing a
health care service plan contract issued by the plan, or to the
employer's agent or broker representative, within 15 days of any
written request, information in possession of the plan reasonably
required to administer the requirements of Section 2800.2 of the
Labor Code.
(3) The continuation coverage shall end automatically on the
earlier of (A) the date the individual reaches age 65, (B) the date
the individual is covered under any group health plan not maintained
by the employer or any other health plan, regardless of whether that
coverage is less valuable, (C) the date the individual becomes
entitled to Medicare under Title XVIII of the Social Security Act,
(D) for a spouse, five years from the date on which continuation
coverage under COBRA or Cal-COBRA was scheduled to end for the
spouse, or (E) the date on which the employer terminates its group
subscriber agreement with the health care service plan and ceases to
provide coverage for any active employees through that plan, in which
case the health care service plan shall notify the former employee
or spouse or both of the right to a conversion plan in accordance
with Section 1373.6.
(c) (1) If a former spouse of an employee or former employee was
covered as a qualified beneficiary under COBRA or Cal-COBRA, the
former spouse may further continue benefits beyond the date coverage
under COBRA or Cal-COBRA ends, as set forth in paragraph (2) of
subdivision (b). Except as otherwise specified in this section,
continuation coverage shall be under the same benefit terms and
conditions as if the continuation coverage under COBRA or Cal-COBRA
had remained in force. Continuation coverage following the end of
COBRA or Cal-COBRA is subject to payment of premiums to the health
care service plan. Premiums for continuation coverage under this
section shall be billed by, and remitted to, the health care service
plan in accordance with subdivision (d). Failure to pay the requisite
premiums may result in termination of the continuation coverage in
accordance with the applicable provisions in the plan's group
subscriber agreement with the employer or former employer.
(2) The continuation coverage for the former spouse shall end
automatically on the earlier of (A) the date the individual reaches
65 years of age, (B) the date the individual is covered under any
group health plan not maintained by the employer or any other health
plan, regardless of whether that coverage is less valuable, (C) the
date the individual becomes entitled to Medicare under Title XVIII of
the Social Security Act, (D) five years from the date on which
continuation coverage under COBRA or Cal-COBRA was scheduled to end
for the former spouse, or (E) the date on which the employer or
former employer terminates its group subscriber agreement with the
health care service plan and ceases to provide coverage for any
active employees through that plan , in which case the
health care service plan shall notify the former spouse of the right
to a conversion plan in accordance with Section 1373.6 .
(d) (1) If the premium charged to the employer for a specific
employee or dependent eligible under this section is adjusted for the
age of the specific employee, or eligible dependent, on other than a
composite basis, the rate for continuation coverage under this
section shall not exceed 102 percent of the premium charged by the
plan to the employer for an employee of the same age as the former
employee electing continuation coverage in the case of an individual
who was eligible for COBRA, and 110 percent in the case of an
individual who was eligible for Cal-COBRA. If the coverage continued
is that of a former spouse, the premium charged shall not exceed 102
percent of the premium charged by the plan to the employer for an
employee of the same age as the former spouse selecting continuation
coverage in the case of an individual who was eligible for COBRA, and
110 percent in the case of an individual who was eligible for
Cal-COBRA.
(2) If the premium charged to the employer for a specific employee
or dependent eligible under this section is not adjusted for age of
the specific employee, or eligible dependent, then the rate for
continuation coverage under this section shall not exceed 213 percent
of the applicable current group rate. For purposes of this section,
the "applicable current group rate" means the total premiums charged
by the health care service plan for coverage for the group, divided
by the relevant number of covered persons.
(3) However, in computing the premiums charged to the specific
employer group, the health care service plan shall not include
consideration of the specific medical care expenditures for
beneficiaries receiving continuation coverage pursuant to this
section.
(e) For purposes of this section, "COBRA" means Section 4980B of
Title 26 of the United States Code, Section 1161 et seq. of Title 29
of the United States Code, and Section 300bb of Title 42 of the
United States Code, as added by the Consolidated Omnibus Budget
Reconciliation Act of 1985 (Public Law 99-272), and as amended.
(f) For purposes of this section, "Cal-COBRA" means the
continuation coverage that must be offered pursuant to Article 4.5
(commencing with Section 1366.20), or Article 1.7 (commencing with
Section 10128.50) of Chapter 1 of Part 2 of Division 2 of the
Insurance Code.
(g) For the purposes of this section, "former spouse" means either
an individual who is divorced from an employee or former employee or
an individual who was married to an employee or former employee at
the time of the death of the employee or former employee.
(h) Every plan evidence of coverage that is issued, amended, or
renewed after July 1, 1999, shall contain a description of the
provisions and eligibility requirements for the continuation coverage
offered pursuant to this section.
(i) This section shall take effect on January 1, 1999.
(j)
(i) This section does not apply to any individual who
is not eligible for its continuation coverage prior to January 1,
2005.
SEC. 3. 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) (1) This section shall be inoperative on January 1, 2014.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-04), this section
shall become operative on the date of that repeal or amendment.
(3) For purposes of this subdivision, "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.
SEC. 4. Section 1399.816 of the Health
and Safety Code is repealed.
1399.816. 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. 5. Section 1399.818 of the Health
and Safety Code is repealed.
1399.818. This article shall apply to health care service plan
contracts offered, delivered, amended, or renewed on or after January
1, 2001.
SEC. 6. Section 1399.818 is added to the
Health and Safety Code , to read:
1399.818. (a) On and after January 1, 2014, this article and
Sections 1366.35 and 1373.6 shall apply only to grandfathered
individual health plan contracts previously issued to federally
eligible defined individuals.
(b) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-04), this section
shall become inoperative and shall be repealed on January 1 following
the date that it becomes inoperative.
(c) For purposes of this section, the following definitions apply:
(1) "Grandfathered health plan" has the same meaning as that term
is defined in Section 1251 of PPACA.
(2) "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.
SEC. 7. Section 10116.5 of the
Insurance Code is amended to read:
10116.5. (a) Every policy of disability insurance that is issued,
amended, delivered, or renewed in this state on or after January 1,
1999, that provides hospital, medical, or surgical expense coverage
under an employer-sponsored group plan for an employer subject to
COBRA, as defined in subdivision (e), or an employer group for which
the disability insurer is required to offer Cal-COBRA coverage, as
defined in subdivision (f), including a carrier providing replacement
coverage under Section 10128.3, shall further offer the former
employee the opportunity to continue benefits as required under
subdivision (b), and shall further offer the former spouse of an
employee or former employee the opportunity to continue benefits as
required under subdivision (c).
(b) (1) If a former employee worked for the employer for at least
five years prior to the date of termination of employment and is 60
years of age or older on the date employment ends is entitled to and
so elects to continue benefits under COBRA or Cal-COBRA for himself
or herself and for any spouse, the employee or spouse may further
continue benefits beyond the date coverage under COBRA or Cal-COBRA
ends, as set forth in paragraph (2). Except as otherwise specified in
this section, continuation coverage shall be under the same benefit
terms and conditions as if the continuation coverage under COBRA or
Cal-COBRA had remained in force. For the employee or spouse,
continuation coverage following the end of COBRA or Cal-COBRA is
subject to payment of premiums to the insurer. Individuals ineligible
for COBRA or Cal-COBRA or who are eligible but have not elected or
exhausted continuation coverage under federal COBRA or Cal-COBRA are
not entitled to continuation coverage under this section. Premiums
for continuation coverage under this section shall be billed by, and
remitted to, the insurer in accordance with subdivision (d). Failure
to pay the requisite premiums may result in termination of the
continuation coverage in accordance with the applicable provisions in
the insurer's group contract with the employer.
(2) The employer shall notify the former employee or spouse or
both, or the former spouse of the employee or former employee, of the
availability of the continuation benefits under this section in
accordance with Section 2800.2 of the Labor Code. To continue health
care coverage pursuant to this section, the individual shall elect to
do so by notifying the insurer in writing within 30 calendar days
prior to the date continuation coverage under COBRA or Cal-COBRA is
scheduled to end. Every disability insurer shall provide to the
employer replacing a group benefit plan policy issued by the insurer,
or to the employer's agent or broker representative, within 15 days
of any written request, information in possession of the insurer
reasonably required to administer the requirements of Section 2800.2
of the Labor Code.
(3) The continuation coverage shall end automatically on the
earlier of (A) the date the individual reaches age 65, (B) the date
the individual is covered under any group health plan not maintained
by the employer or any other insurer or health care service plan,
regardless of whether that coverage is less valuable, (C) the date
the individual becomes entitled to Medicare under Title XVIII of the
Social Security Act, (D) for a spouse, five years from the date on
which continuation coverage under COBRA or Cal-COBRA was scheduled to
end for the spouse, or (E) the date on which the employer terminates
its group contract with the insurer and ceases to provide coverage
for any active employees through that insurer, in which case the
insurer shall notify the former employee or spouse, or both, of the
right to a conversion policy.
(c) (1) If a former spouse of an employee or former employee was
covered as a qualified beneficiary under COBRA or Cal-COBRA, the
former spouse may further continue benefits beyond the date coverage
under COBRA or Cal-COBRA ends, as set forth in paragraph (2) of
subdivision (b). Except as otherwise specified in this section,
continuation coverage shall be under the same benefit terms and
conditions as if the continuation coverage under COBRA or Cal-COBRA
had remained in force. Continuation coverage following the end of
COBRA or Cal-COBRA is subject to payment of premiums to the insurer.
Premiums for continuation coverage under this section shall be billed
by, and remitted to, the insurer in accordance with subdivision (d).
Failure to pay the requisite premiums may result in termination of
the continuation coverage in accordance with the applicable
provisions in the insurer's group contract with the employer or
former employer.
(2) The continuation coverage for the former spouse shall end
automatically on the earlier of (A) the date the individual reaches
65 years of age, (B) the date the individual is covered under any
group health plan not maintained by the employer or any other health
care service plan or insurer, regardless of whether that coverage is
less valuable, (C) the date the individual becomes entitled to
Medicare under Title XVIII of the Social Security Act, (D) five years
from the date on which continuation coverage under COBRA or
Cal-COBRA was scheduled to end for the former spouse, or (E) the date
on which the employer or former employer terminates its group
contract with the insurer and ceases to provide coverage for any
active employees through that insurer , in which case the
insurer shall notify the former spouse of the right to a conversion
policy .
(d) (1) If the premium charged to the employer for a specific
employee or dependent eligible under this section is adjusted for the
age of the specific employee, or eligible dependent, on other than a
composite basis, the rate for continuation coverage under this
section shall not exceed 102 percent of the premium charged by the
insurer to the employer for an employee of the same age as the former
employee electing continuation coverage in the case of an individual
who was eligible for COBRA, and 110 percent in the case of an
individual who was eligible for Cal-COBRA. If the coverage continued
is that of a former spouse, the premium charged shall not exceed 102
percent of the premium charged by the plan to the employer for an
employee of the same age as the former spouse selecting continuation
coverage in the case of an individual who was eligible for COBRA, and
110 percent in the case of an individual who was eligible for
Cal-COBRA.
(2) If the premium charged to the employer for a specific employee
or dependent eligible under this section is not adjusted for age of
the specific employee, or eligible dependent, then the rate for
continuation coverage under this section shall not exceed 213 percent
of the applicable current group rate. For purposes of this section,
the "applicable current group rate" means the total premiums charged
by the insurer for coverage for the group, divided by the relevant
number of covered persons.
(3) However, in computing the premiums charged to the specific
employer group, the insurer shall not include consideration of the
specific medical care expenditures for beneficiaries receiving
continuation coverage pursuant to this section.
(e) For purposes of this section, "COBRA" means Section 4980B of
Title 26, Section 1161 and following of Title 29, and Section 300bb
of Title 42 of the United States Code, as added by the Consolidated
Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272), and as
amended.
(f) For purposes of this section, "Cal-COBRA" means the
continuation coverage that must be offered pursuant to Article 1.7
(commencing with Section 10128.50), or Article 4.5 (commencing with
Section 1366.20) of Chapter 2.2 of Division 2 of the Health and
Safety Code.
(g) For the purposes of this section, "former spouse" means either
an individual who is divorced from an employee or former employee or
an individual who was married to an employee or former employee at
the time of the death of the employee or former employee.
(h) Every group benefit plan evidence of coverage that is issued,
amended, or renewed after January 1, 1999, shall contain a
description of the provisions and eligibility requirements for the
continuation coverage offered pursuant to this section.
(i) This section shall take effect on January 1, 1999.
(j)
(i) This section does not apply to any individual who
is not eligible for its continuation coverage prior to January 1,
2005.
SEC. 8. 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) (1) This section shall be inoperative on January 1, 2014.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2794 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-04), this section
shall become operative on the date of that repeal or amendment.
(3) For purposes of this subdivision, "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.
SEC. 9. Section 10127.14 of the
Insurance Code is amended to read:
10127.14. (a) The department and the Department of Managed Health
Care shall compile information required by this section and Section
1363.06 of the Health and Safety Code into two comparative benefit
matrices. The first matrix shall compare benefit packages offered
pursuant to Section 1373.62 of the Health and Safety Code and Section
10127.15. The second matrix shall compare benefit packages offered
pursuant to Sections 1366.35, 1373.6, and 1399.804 of the Health and
Safety Code and Sections 10785, 10901.2, and 12682.1.
(b) The comparative benefit matrix shall include:
(1) Benefit information submitted by health care service plans
pursuant to Section 1363.06 of the Health and Safety Code and by
health insurers pursuant to subdivision (d).
(2) The following statements in at least 12-point type at the top
of the matrix:
(A) "This benefit summary is intended to help you compare coverage
and benefits and is a summary only. For a more detailed description
of coverage, benefits, and limitations, please contact the health
care service plan or health insurer."
(B) "The comparative benefit summary is updated annually, or more
often if necessary to be accurate."
(C) "The most current version of this comparative benefit summary
is available on (address of the plan's or insurer's site)."
This subparagraph applies only to those health insurers that
maintain an Internet Web site.
(3) The telephone number or numbers that may be used by an
applicant to contact either the department or the Department of
Managed Health Care, as appropriate, for further assistance.
(c) The department and the Department of Managed Health Care shall
jointly prepare two standardized templates for use by health care
service plans and health insurers in submitting the information
required pursuant to subdivision (d) of Section 1363.06 and
subdivision (d). The templates shall be exempt from the provisions of
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code.
(d) Health insurers shall submit the following to the department
by January 31, 2003, and annually thereafter:
(1) A summary explanation of the following for each product
described in subdivision (a):
(A) Eligibility requirements.
(B) The full premium cost of each benefit package in the service
area in which the individual and eligible dependents work or reside.
(C) When and under what circumstances benefits cease.
(D) The terms under which coverage may be renewed.
(E) Other coverage that may be available if benefits under the
described benefit package cease.
(F) The circumstances under which choice in the selection of
physicians and providers is permitted.
(G) Lifetime and annual maximums.
(H) Deductibles.
(2) A summary explanation of the following coverages, together
with the corresponding copayments and limitations, for each product
described in subdivision (a):
(A) Professional services.
(B) Outpatient services.
(C) Hospitalization services.
(D) Emergency health coverage.
(E) Ambulance services.
(F) Prescription drug coverage.
(G) Durable medical equipment.
(H) Mental health services.
(I) Residential treatment.
(J) Chemical dependency services.
(K) Home health services.
(L) Custodial care and skilled nursing facilities.
(3) The telephone number or numbers that may be used by an
applicant to access a health insurer customer service representative
and to request additional information about the insurance policy.
(4) Any other information specified by the department in the
template.
(e) Each health insurer shall provide the department with updates
to the information required by subdivision (d) at least annually, or
more often if necessary to maintain the accuracy of the information.
(f) The department and the Department of Managed Health Care shall
make the comparative benefit matrices available on their respective
Internet Web sites and to the health care service plans and health
insurers for dissemination as required by Section 1373.6 of the
Health and Safety Code and Section 12682.1, after confirming the
accuracy of the description of the matrices with the health insurers
and health care service plans.
(g) As used in this section, "benefit matrix" shall have the same
meaning as benefit summary.
(h) This section shall not apply to accident-only, specified
disease, hospital indemnity, CHAMPUS supplement, long-term care,
Medicare supplement, dental-only, or vision-only insurance policies.
(i) (1) This section shall be inoperative on January 1, 2014.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2794 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-04), this section
shall become operative on the date of that repeal or amendment.
(3) For purposes of this subdivision, "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.
SEC. 10. Section 10127.18 of the
Insurance Code is amended to read:
10127.18. (a) On and after January 1, 2005, a health insurer
issuing individual policies of health insurance that ceases to offer
individual coverage in this state shall offer coverage to the
policyholders who had been covered by those policies at the time of
withdrawal under the same terms and conditions as provided in
paragraph (3) of subdivision (a), paragraphs (2) to (4), inclusive,
of subdivision (b), subdivisions (c) to (e), inclusive, and
subdivision (h) of Section 12682.1.
(b) The department may adopt regulations to implement this
section.
(c) This section shall not apply when a plan participating in
Medi-Cal, Healthy Families, Access for Infants and Mothers, or any
other contract between the plan and a government entity no longer
contracts with the government entity to provide health coverage in
the state, or a specified area of the state, nor shall this section
apply when a plan ceases entirely to market, offer, and issue any and
all forms of coverage in any part of this state after the effective
date of this section.
(d) (1) This section shall be inoperative on January 1, 2014.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2794 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-04), this section
shall become operative on the date of that repeal or amendment.
(3) For purposes of this subdivision, "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.
SEC. 11. 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. 12. Section 10902.6 of the
Insurance Code is repealed.
10902.6. This chapter shall apply to policies or contracts
offered, delivered, amended, or renewed on or after January 1, 2001.
SEC. 13. Section 10902.6 is added to the
Insurance Code , to read:
10902.6. (a) On and after January 1, 2014, this chapter and
Sections 10785 and 12682.1 shall apply only to grandfathered
individual health insurance policies previously issued to federally
eligible defined individuals.
(b) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-04), this section
shall become inoperative and shall be repealed on January 1 following
the date that it becomes inoperative.
(c) For purposes of this section, the following definitions apply:
(1) "Grandfathered health insurance policy" has the same meaning
as "grandfathered health plan" in Section 1251 of PPACA.
(2) "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.
SEC. 14. Section 12672 of the Insurance
Code is amended to read:
12672. (a) Any group policy issued,
amended, or renewed in this state on or after January 1, 1983, which
provides insurance for employees or members on an expense-incurred or
service basis, other than for a specific disease or for accidental
injuries only, shall contain a provision that an employee or member
whose coverage under the group policy has been terminated for any
reason except as provided in this part, shall be entitled to have a
converted policy issued to him or her by the insurer under whose
group policy he or she was covered, without evidence of insurability,
subject to the terms and conditions of this part.
(b) (1) This section shall be inoperative on January 1, 2014.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2794 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-04), this section
shall become operative on the date of that repeal or amendment.
(3) For purposes of this subdivision, "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.
SECTION 1. Section 1399.805 of the Health and
Safety Code is repealed.
SEC. 2. 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.
SEC. 3. Section 1399.811 of the Health and
Safety Code is repealed.
SEC. 4. Section 1399.811 is added to the Health
and Safety Code, to read:
1399.811. Premiums for contracts offered, delivered, amended, or
renewed by plans on or after January 1, 2014, shall be subject to the
following requirements:
(a) 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.
(b) 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.
SEC. 5. Section 10901.3 of the Insurance Code
is repealed.
SEC. 6. 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.
SEC. 7. Section 10901.9 of the Insurance Code
is repealed.
SEC. 8. Section 10901.9 is added to the
Insurance Code, to read:
10901.9. Commencing on January 1, 2014, premiums for health
benefit plans offered, delivered, amended, or renewed by carriers
shall be subject to the following requirements:
(a) 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.
(b) 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.
SEC. 9. 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.