BILL NUMBER: AB 2088	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Roger Hernández

                        FEBRUARY 20, 2014

   An act to add Sections 10112.8 and 10112.9 to the Insurance Code,
relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2088, as introduced, Roger Hernández. Health insurance: minimum
value: specified disease and hospital confinement policies.
   Existing law, the federal Patient Protection and Affordable Care
Act (PPACA), enacts various health care coverage market reforms that
take effect January 1, 2014, and exempts health insurance coverage
that provides excepted benefits from those reforms. PPACA requires
each state to establish an American Health Benefits Exchange and
allows qualified individuals to obtain premium assistance for
coverage purchased through the Exchange. PPACA specifies that this
premium assistance is not available if the individual is eligible for
affordable employer-sponsored coverage that provides minimum value,
as specified.
   Existing law provides for the regulation of health insurers by the
Insurance Commissioner. Existing law requires that health benefit
plans issued by health insurers in the small group market and the
individual market comply with specified requirements. Existing law
defines a health benefit plan for this purpose to exclude a policy or
certificate of specified disease or hospital confinement indemnity
if the insurer certifies to the commissioner that the policy is being
offered as supplemental health insurance and not as a substitute for
essential health benefits. Existing law requires an insurer issuing
these policies in the small group market or the individual market to
require that the persons to be covered are covered by coverage that
is not designed to serve as supplemental coverage.
   This bill would extend that requirement to an insurer issuing a
policy of specified disease or hospital confinement indemnity or a
policy that does not provide 60% minimum value in the large group
market. The bill would require an insurer issuing those policies in
the large group market to file a certification with the commissioner
stating that the policies are being offered or marketed as
supplemental health insurance and not as a substitute for minimum
essential coverage.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 10112.8 is added to the Insurance Code, to
read:
   10112.8.  (a)  An insurer issuing a policy or certificate of
specified disease or hospital confinement indemnity to a large group
shall require that the persons to be covered by the policy are
covered by an individual or group policy or contract that arranges or
provides medical, hospital, and surgical coverage not designed to
supplement other private or governmental plans.
   (b) An insurer issuing a policy or certificate of specified
disease or hospital confinement indemnity to a large group shall
comply with the following, in addition to complying with subdivision
(a):
   (1) The insurer shall file, on or before March 1 of each year, a
certification with the commissioner that contains the statement and
information described in paragraph (2).
   (2) The certification required in paragraph (1) shall contain the
following:
   (A) A statement from the insurer certifying that policies or
certificates described in this section (i) are being offered and
marketed as supplemental health insurance and not as a substitute for
coverage that provides minimum essential coverage as defined in
Section 5000A of the federal Internal Revenue Code, and (ii) the
disclosure form as described in Section 10603 contains the following
statement prominently on the first page: "This is a supplement to
health insurance. It is not a substitute for essential health
benefits or minimum essential coverage as defined in federal law."
   (B) A summary description of each policy or certificate described
in this section, including the average annual premium rates, or range
of premium rates in cases where premiums vary by age, gender, or
other factors, charged for the policies and certificates issued or
delivered in this state.
   (3) In the case of a policy or certificate that is described in
this section and that is offered for the first time in this state
with respect to plan years on or after January 1, 2015, the insurer
files with the commissioner the information and statement required in
paragraph (2) at least 30 days prior to the date that the policy or
certificate is issued or delivered in this state.
   (c) As used in this section, the following definitions apply:
   (1) "Large group" means a group that is not a small employer, as
defined in Section 10753.
   (2) "Policies or certificates of specified disease" and "policies
or certificates of hospital confinement indemnity" mean policies or
certificates of insurance sold to an insured to supplement other
health insurance coverage as specified in this section.
  SEC. 2.  Section 10112.9 is added to the Insurance Code, to read:
   10112.9.  (a) An insurer issuing a policy or certificate of health
insurance that does not provide a minimum value of at least 60
percent to a large group shall require that the persons to be covered
by the policy are covered by an individual or group policy or
contract that arranges or provides medical, hospital, and surgical
coverage not designed to supplement other private or government
plans.
   (b) An insurer may offer, market, or sell a policy or certificate
of health insurance in the large group market that provides a minimum
value of less than 60 percent if the insurer offering the policy or
certificate complies with the following, in addition to complying
with subdivision (a):
   (1) The insurer files, on or before March 1 of each year, a
certification with the commissioner that contains the statement and
information described in paragraph (2).
   (2) The certification required in paragraph (1) shall contain the
following:
   (A) A statement from the insurer certifying that policies or
certificates described in this section (i) are being offered and
marketed as supplemental health insurance and not as a substitute for
coverage that provides minimum essential coverage as defined in
Section 5000A of the federal Internal Revenue Code, and (ii) the
disclosure form as described in Section 10603 contains the following
statement prominently on the first page: "This is a supplement to
health insurance. It is not a substitute for essential health
benefits or minimum essential coverage as defined in federal law."
   (B) A summary description of each policy or certificate described
in this section, including the average annual premium rates, or range
of premium rates in cases where premiums vary by age, gender, or
other factors, charged for the policies and certificates issued or
delivered in this state.
   (3) In the case of a policy or certificate that is described in
this section and that is offered for the first time in this state
with respect to plan years on or after January 1, 2015, the insurer
files with the commissioner the information and statement required in
paragraph (2) at least 30 days prior to the date that the policy or
certificate is issued or delivered in this state.
   (c) For purposes of this section, a plan provides a minimum value
of at least 60 percent if it complies with Section 36B(c)(2)(C) of
the federal Internal Revenue Code and any regulations or guidance
adopted under that section.
   (d) For purposes of this section, the following definitions apply:

   (1) "Large group" means a group that is not a small employer, as
defined in Section 10753.
   (2)  "Plan year" has the meaning set forth in Section 144.103 of
Title 45 of the Code of Federal Regulations.