Amended in Assembly May 28, 2013

Amended in Senate March 6, 2013

California Legislature—2013–14 First Extraordinary Session

Senate Bill No. 3

Introduced by Senator Hernandez

February 5, 2013

An act to amend Sections 100501 and 100503 of, and to add Sections begin delete 100504.5, end delete begin insert 100504.5 and end insert 100504.6 begin delete , and 100504.7 end delete to, the Government Code, to amend Section 1366.6 of, and to add Section 1399.864 to, the Health and Safety Code, begin delete and end delete to amend Section 10112.3 of, and to add Section 10961 to, the Insurance Code, begin insert and to add Section 14005.70 to the Welfare and Institutions Code, end insert relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

SB 3, as amended, Hernandez. Health care coverage: bridge plan.

Existing law, the federal Patient Protection and Affordable Care Act, 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.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income persons receive health care benefits. 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. Existing law also provides for the regulation of health insurers by the Department of Insurance.

Under existing law, carriers that sell any products outside the California Health Benefit Exchange (Exchange) are required to fairly and affirmatively offer, market, and sell all products made available to individuals or small employers in the Exchange to individuals or small employers, respectively, purchasing coverage outside the Exchange.

Existing law also requires carriers that participate in the Exchange to fairly and affirmatively offer, market, and sell in the Exchange at least one product within 5 levels of specified coverage.

This bill would exempt a bridge plan product, as defined, from that latter requirement.

This bill would, among other things, also require the Exchange to enter into contracts with and certify as a qualified health plan bridge plan products that meet specified requirements, including being a Medi-Cal managed care plan. The bill would also require the Exchange begin delete , subject to federal approval, to enroll individuals in a bridge plan end delete begin insert to make available bridge plan products to eligible individuals end insert . The bill would authorize the Exchange begin insert , after consulting with stakeholders, end insert to adopt regulations to implement those provisions, and until January 1, 2016, exempt the adoption, amendment, or repeal of those regulations from the Administrative Procedure Act.

The bill would authorize a health care service plan or insurance carrier offering a bridge plan product in the Exchange to limit the products it offers in the Exchange to the bridge plan product begin insert , except as required by federal law end insert . The bill would define “bridge plan product” as an individual health benefit plan offered by a licensed health care service plan or health insurer that contracts with the Exchange, as specified.

begin insert

The bill would also require the State Department of Health Care Services to impose specified requirements in its contracts with a health care service plan or health insurer to provide Medi-Cal managed care coverage but would authorize the department to contract with the Exchange to delegate the implementation of those provisions.

end insert

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.  

(a) It is the intent of the Legislature that the
Exchange provide a more affordable coverage option for
low-income individuals, improve continuity of care for individuals
moving from Medi-Cal to the Exchange, and reduce the need for
individuals previously enrolled in the Medi-Cal program to change
health plans due to changes in their household income.

(b) In addition to other plan choices, it is the intent of the
Legislature that the Exchange offer quality, affordable health plan
choices that, to the extent possible, will be the lowest cost silver
plan offered in the individual’s geographic region through
Medi-Cal managed care plans that bridge Medicaid coverage and
private commercial health insurance for eligible lower income
individuals.

begin insert

(c) It is intent of the Legislature that the Exchange encourage
Medi-Cal managed care plans to seek to contract to offer bridge
plan products.

end insert

SEC. 2.  

Section 100501 of the Government Code is amended
to read:

100501.  

For purposes of this title, the following definitions
shall apply:

(a) “Board” means the board described in subdivision (a) of
Section 100500.

(b) “Bridge plan product” means an individual health benefit
plan as defined in subdivision begin delete (e) end delete begin insert (f) end insert of Section 1399.845 of the
Health and Safety Code that is offered by a health care service
plan licensed under the Knox-Keene Health Care Service Plan Act
of 1975 (Chapter 2.2 (commencing with Section 1340) of Division
2 of the Health and Safety Code) or as defined in subdivision (a)
of Section 10198.6 of the Insurance Code that is offered by a health
insurer licensed under the Insurance Code that contracts with the
Exchange pursuant to this title.

(c) “Carrier” means either a private health insurer holding a
valid outstanding certificate of authority from the Insurance
Commissioner or a health care service plan, as defined under
subdivision (f) of Section 1345 of the Health and Safety Code,
licensed by the Department of Managed Health Care.

(d) “Exchange” means the California Health Benefit Exchange
established by Section 100500.

(e) “Federal act” 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 amendments to, or regulations or
guidance issued under, those acts.

(f) “Fund” means the California Health Trust Fund established
by Section 100520.

(g) “Health plan” and “qualified health plan” have the same
meanings as those terms are defined in Section 1301 of the federal
act.

(h) “Healthy Families coverage” means coverage under the
Healthy Families Program pursuant to Part 6.2 (commencing with
Section 12693) of Division 2 of the Insurance Code.

(i) “Medi-Cal coverage” means coverage under the Medi-Cal
program pursuant to Chapter 7 (commencing with Section 14000)
of Part 3 of Division 9 of the Welfare and Institutions Code.

(j) “Modified adjusted gross income” shall have the same
meaning as the term is used in begin delete paragraph (B) of subdivision (d) of end delete
Section begin delete 1401 end delete begin insert 1401(d)(2)(B) end insert (26 U.S.C. Sec. 36B) of the federal
act.

(k) “Members of the modified adjusted gross income household”
shall mean any individual who would be included in the calculation
for modified adjusted gross income pursuant to begin delete subdivision (a) of end delete
Section begin delete 1401 end delete begin insert 1401(a) end insert (26 U.S.C. Sec. 36B(d)) of the federal act
and as otherwise determined by the Exchange as permitted by the
federal act and this title.

(l) “SHOP Program” means the Small Business Health Options
Program established by subdivision (m) of Section 100502.

(m) “Supplemental coverage” means coverage through a
specialized health care service plan contract, as defined in
subdivision (o) of Section 1345 of the Health and Safety Code, or
a specialized health insurance policy, as defined in Section 106 of
the Insurance Code.

SEC. 3.  

Section 100503 of the Government Code is amended
to read:

100503.  

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

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

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

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

(d) Provide, in each region of the state, a choice of qualified
health plans at each of the five levels of coverage contained in
begin delete subdivisions end delete begin insert subsections end insert (d) and (e) of Section 1302 of the federal
act.

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

(f) (1) Except as otherwise provided in this section and Section
100504.5, require, as a condition of participation in the Exchange,
carriers that sell any products outside the Exchange to do both of
the following:

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

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

(2) For purposes of this subdivision, “product” does not include
contracts entered into pursuant to Part 6.2 (commencing with
Section 12693) of Division 2 of the Insurance Code between the
Managed Risk Medical Insurance Board and carriers for enrolled
Healthy Families beneficiaries or contracts entered into pursuant
to Chapter 7 (commencing with Section 14000) of, or Chapter 8
(commencing with Section 14200) of, Part 3 of Division 9 of the
Welfare and Institutions Code between the State Department of
Health Care Services and carriers for enrolled Medi-Cal
beneficiaries. “Product” also does not include a bridge plan product
offered pursuant to Section 100504.5.

(3)  begin delete A end delete begin insert Except as required by Section 1301(a)(1)(C)(ii) of the
federal act, a end insert carrier offering a bridge plan product in the Exchange
may limit the products it offers in the Exchange solely to a bridge
plan product contract.

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

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

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

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

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

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

(m) Employ necessary staff.

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

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

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

(ii) Other relevant labor pools.

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

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

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

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

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

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

(q) (1) Annually prepare a written report on the implementation
and performance of the Exchange functions during the preceding
fiscal year, including, at a minimum, the manner in which funds
were expended and the progress toward, and the achievement of,
the requirements of this title. begin insert The report shall also include data
provided by health care service plans and health insurers offering
bridge plan products regarding the extent of health care provider
and health facility overlap in their Medi-Cal networks as compared
to the health care provider and health facility networks contracting
with the plan or insurer in their bridge plan contracts. end insert This report
shall be transmitted to the Legislature and the Governor and shall
be made available to the public on the Internet Web site of the
Exchange. A report made to the Legislature pursuant to this
subdivision shall be submitted pursuant to Section 9795.

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

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

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

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

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

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

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

(4) The State Medi-Cal Director.

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

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

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

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

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

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

SEC. 4.  

Section 100504.5 is added to the Government Code,
to read:

100504.5.  

(a) To the extent approved by the appropriate federal
agency, for the purpose of implementing the option in paragraph
(7) of subdivision (a) of Section 100504, the Exchange shall begin insert make
available bridge plan products to individuals specified in Section
14005.70 of the Welfare and Institutions Code. In implementing
this requirement, the Exchange, using the selective contracting
authority described in subdivision (c) of Section 100503, shall end insert
contract with, and certify as a qualified health plan, a bridge plan
product that begin delete meets the following requirements: end delete

begin delete (1) end delete begin delete   end delete begin delete Is end delete begin insert is, at a minimum, end insert certified by the Exchange as a qualified
bridge plan product. For purposes of this section, in order to be a
qualified bridge plan product, the plan shall do all of the following:

begin delete

(A)

end delete

begin insert (1) end insert  Be a health care service plan or health insurer that contracts
with the State Department of Health Care Services to provide
Medi-Cal managed care plan services.

begin delete

(B)

end delete

begin insert (2) end insert  Meet minimum requirements to contract with the Exchange
as a qualified health plan pursuant to Section 1301 of the begin delete PPACA end delete
begin insert federal Patient Protection and Affordable Care Act (Public Law
111-148) end insert and Sections 100502, 100503, and 100507 of this code.

begin delete

(C)

end delete

begin insert (3) end insert  Enroll in the bridge plan product only individuals who meet
the requirements of begin delete paragraph (2) end delete begin insert Section 14005.70 of the Welfare
and Institutions Code end insert .

begin delete

(D)

end delete

begin insert (4) end insert  Comply with the medical loss ratio requirements of Section
1399.864 of the Health and Safety Code or Section 10961 of the
Insurance Code.

begin insert

(5) Demonstrate the bridge plan product has, at minimum, a
substantially similar provider network as the Medi-Cal managed
care plan offered by the health care service plan or health insurer.

end insert begin delete

(2) (A) Any of the following individuals may have the option
of enrolling in a bridge plan product if one is available:

(i) Individuals who are determined to be eligible for the
Exchange that can demonstrate that their Medi-Cal coverage or
their Healthy Families coverage was terminated as defined in
regulations adopted by the Exchange pursuant to Section 100504.7.

(ii) Other members of the modified adjusted gross income
household in which there are Medi-Cal or Healthy Families
enrollees.

(iii) Individuals eligible pursuant to Section 100504.6.

(B) (i) Individuals who are eligible to enroll in a bridge plan
product under clause (i) of subparagraph (A) shall only be eligible
to enroll in a bridge plan product offered by the health care service
plan or health insurer through which the individual was enrolled
prior to eligibility for a bridge plan product as either a Medi-Cal
beneficiary or as a Healthy Families enrollee.

(ii) Individuals who are eligible to enroll in a bridge plan product
under clause (ii) of subparagraph (A) shall only be eligible to enroll
in a bridge plan product offered by the health care service plan or
health insurer through which the member of the household was
enrolled as a Medi-Cal beneficiary or as a Healthy Families
enrollee.

end delete

(b) The Exchange shall provide information on all of the
available Exchange-qualified health plans in the area, including,
but not limited to, bridge plan product options for selection by
individuals eligible to enroll in a bridge plan product.

begin delete

(c) The State Department of Health Care Services shall ensure
that its contracts with a health care service plan or health insurer
to provide Medi-Cal managed care coverage contain a provision
requiring the health care service plan or health insurer to provide
coverage in its bridge plan product to its Medi-Cal managed care
enrollees and other individuals that meet the requirements of
paragraph (2) of subdivision (a) if the Medi-Cal managed care
plan offers a bridge plan product pursuant to this section.

(d)

end delete

begin insert (c) end insert  Nothing in this section shall be implemented in a manner
that conflicts with a requirement of the federal act.

begin delete

SEC. 5.  

Section 100504.6 is added to the Government Code,
to read:

100504.6.  

(a) To the extent approved by the appropriate federal
agency, the Exchange shall also offer to individuals and allow an
individual to enroll in a bridge plan product that is offered in the
Exchange pursuant to Section 100504.5 if the individual meets
both of the following requirements:

(1) Is eligible for the Exchange.

(2) Has a household income of not more than 200 percent of
the federal poverty line as determined by the Exchange.

(b) Nothing in this section shall be implemented in a manner
that conflicts with a requirement of the federal act.

end delete

begin delete SEC. 6. end delete
begin insert SEC. 5. end insert   

Section begin delete 100504.7 end delete begin insert 100504.6 end insert is added to the Government
Code, to read:

begin delete 100504.7. end delete
begin insert 100504.6. end insert   

The Exchange shall have the authority to adopt
regulations to implement the provisions of begin delete Sections end delete begin insert Section end insert
100504.5 begin delete and 100504.6 end delete . begin insert Prior to the adoption of regulations, the
board and its staff shall meet the requirement of subdivision (t) of
Section 100503 in implementing the bridge plan option. end insert Until
January 1, 2016, the adoption, amendment, or repeal of a regulation
authorized by this section shall be exempted from the
Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2).

begin delete SEC. 7. end delete
begin insert SEC. 6. end insert   

Section 1366.6 of the Health and Safety Code is
amended to read:

1366.6.  

(a) For purposes of this section, the following
definitions shall apply:

(1) “Exchange” means the California Health Benefit Exchange
established in Title 22 (commencing with Section 100500) of the
Government Code.

(2) “Federal act” 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 amendments to, or regulations or
guidance issued under, those acts.

(3) “Qualified health plan” has the same meaning as that term
is defined in Section 1301 of the federal act.

(4) “Small employer” has the same meaning as that term is
defined in Section 1357.

(b) (1) Health care service plans participating in the Exchange
shall fairly and affirmatively offer, market, and sell in the Exchange
at least one product within each of the five levels of coverage
contained in begin delete subdivisions end delete begin insert subsections end insert (d) and (e) of Section 1302
of the federal act.

(2) The board established under Section 100500 of the
Government Code may require plans to sell additional products
within each of those levels of coverage.

(3) This subdivision shall not apply to a plan that solely offers
supplemental coverage in the Exchange under paragraph (10) of
subdivision (a) of Section 100504 of the Government Code.

(4) This subdivision shall not apply to a bridge plan product
that meets the requirements of Section 100504.5 of the Government
Code to the extent approved by the appropriate federal agency.

(c) (1) Health care service plans participating in the Exchange
that sell any products outside the Exchange shall do both of the
following:

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

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

(2) For purposes of this subdivision, “product” does not include
contracts entered into pursuant to Part 6.2 (commencing with
Section 12693) of Division 2 of the Insurance Code between the
Managed Risk Medical Insurance Board and health care service
plans for enrolled Healthy Families beneficiaries or to contracts
entered into pursuant to Chapter 7 (commencing with Section
14000) of, or Chapter 8 (commencing with Section 14200) of, Part
3 of Division 9 of the Welfare and Institutions Code between the
State Department of Health Care Services and health care service
plans for enrolled Medi-Cal beneficiaries, or for contracts with
bridge plan products that meet the requirements of Section
100504.5 of the Government Code.

(d) Commencing January 1, 2014, a health care service plan
shall, with respect to plan contracts that cover hospital, medical,
or surgical benefits, only sell the five levels of coverage contained
in begin delete subdivisions end delete begin insert subsections end insert (d) and (e) of Section 1302 of the
federal act, except that a health care service plan that does not
participate in the Exchange shall, with respect to plan contracts
that cover hospital, medical, or surgical benefits, only sell the four
levels of coverage contained in begin delete subdivision (d) of end delete Section begin delete 1302 end delete
begin insert 1302(d) end insert of the federal act.

(e) Commencing January 1, 2014, a health care service plan
that does not participate in the Exchange shall, with respect to plan
contracts that cover hospital, medical, or surgical benefits, offer
at least one standardized product that has been designated by the
Exchange in each of the four levels of coverage contained in
begin delete subdivision (d) of end delete Section begin delete 1302 end delete begin insert 1302(d) end insert of the federal act. This
subdivision shall only apply if the board of the Exchange exercises
its authority under subdivision (c) of Section 100504 of the
Government Code. Nothing in this subdivision shall require a plan
that does not participate in the Exchange to offer standardized
products in the small employer market if the plan only sells
products in the individual market. Nothing in this subdivision shall
require a plan that does not participate in the Exchange to offer
standardized products in the individual market if the plan only
sells products in the small employer market. This subdivision shall
not be construed to prohibit the plan from offering other products
provided that it complies with subdivision (d).

(f) For purposes of this section, a bridge plan product shall mean
an individual health benefit plan, as defined in subdivision begin delete (e) end delete begin insert (f) end insert
of Section 1399.845 begin insert , end insert that is offered by a health care service plan
licensed under this chapter that contracts with the Exchange
pursuant to Title 22 (commencing with Section 100500) of the
Government Code.

begin delete SEC. 8. end delete
begin insert SEC. 7. end insert   

Section 1399.864 is added to the Health and Safety
Code, to read:

1399.864.  

(a) For purposes of this article, a bridge plan product
shall mean an individual health benefit plan, as defined in
subdivision begin delete (e) end delete begin insert (f) end insert of Section 1399.845, that is offered by a health
care service plan licensed under this chapter that contracts with
the Exchange pursuant to Title 22 (commencing with Section
100500) of the Government Code.

(b) Until December 31, 2014, a health care service plan that
contracts with the California Health Benefit Exchange to offer a
qualified bridge plan product pursuant to Section 100504 of the
Government Code shall do all of the following:

(1) As of the effective date of this section, if the health care
service plan has not been approved by the director to offer
individual health benefit plans pursuant to this chapter, the plan
shall file a material modification pursuant to Section 1352 to
expand its license to include individual health benefit plans.

(2) As of the effective date of this section, if the health care
service plan has been approved by the director to offer individual
health benefit plans pursuant to this chapter, the plan shall, pursuant
to Section 1352, file an amendment to expand its license to include
a bridge plan product as an individual health benefit plan.

(3) During the time the health care service plan’s material
modification or amendment is pending approval by the director,
the health care service plan shall be deemed to comply with
subdivision (b) of Section 100507 of the Government Code.

(4) Maintain a medical loss ratio of 85 percent for the bridge
plan product. A health care service plan shall utilize, to the extent
possible, the same methodology for calculating the medical loss
ratio for the bridge plan product that is used for calculating the
health care service plan medical loss ratio pursuant to Section
1367.003 and shall report its medical loss ratio for the bridge plan
product to the department as provided in Section 1367.003.

begin delete

(c) A bridge plan product shall not be required to comply with
the following provisions of this article only to the extent approved
by the appropriate federal agency:

end delete begin delete

(1) Subdivisions (a), (c), and (d) of Section 1399.849.

end delete begin delete

(2) Section 1399.851.

end delete begin delete

(3) Section 1399.853.

end delete begin insert

(5) Notwithstanding subdivision (a) of Section 1399.849, a
health care service plan selling a bridge plan product shall not be
required to fairly and affirmatively offer, market, and sell the
health care service plan’s bridge plan product except to individuals
eligible for the bridge plan product pursuant to the State
Department of Health Care Services and the Medi-Cal managed
care plan’s contract entered into pursuant to Section 14005.70 of
the Welfare and Institutions Code.

end insert begin insert

(6) Notwithstanding subdivision (c) of Section 1399.849, a
health care service plan selling a bridge plan product shall provide
an initial open enrollment period of six months, and an annual
enrollment period and a special enrollment period consistent with
the annual enrollment and special enrollment periods of the
Exchange.

end insert

begin delete SEC. 9. end delete
begin insert SEC. 8. end insert   

Section 10112.3 of the Insurance Code is amended to
read:

10112.3.  

(a) For purposes of this section, the following
definitions shall apply:

(1) “Exchange” means the California Health Benefit Exchange
established in Title 22 (commencing with Section 100500) of the
Government Code.

(2) “Federal act” means the federal Patient Protection and
Affordable Care Act begin delete (P.L. end delete begin insert (Public Law end insert 111-148), as amended by
the federal Health Care and Education Reconciliation Act of 2010
begin delete (P.L. end delete begin insert (Public Law end insert 111-152), and any amendments to, or
regulations or guidance issued under, those acts.

(3) “Qualified health plan” has the same meaning as that term
is defined in Section 1301 of the federal act.

(4) “Small employer” has the same meaning as that term is
defined in Section 10700.

(b) Health insurers participating in the Exchange shall fairly
and affirmatively offer, market, and sell in the Exchange at least
one product within each of the five levels of coverage contained
in begin delete subdivisions end delete begin insert subsections end insert (d) and (e) of Section 1302 of the
federal act. The board established under Section 100500 of the
Government Code may require insurers to sell additional products
within each of those levels of coverage. This subdivision shall not
apply to an insurer that solely offers supplemental coverage in the
Exchange under paragraph (10) of subdivision (a) of Section
100504 of the Government Code. This subdivision shall not apply
to a bridge plan product begin insert of a Medi-Cal managed care plan that
contracts with the State Department of Health Care Services
pursuant to Section 14005.70 of the Welfare and Institutions Code
and end insert that meets the requirements of Section 100504.5 of the
Government Code, to the extent approved by the appropriate
federal agency.

(c) (1) Health insurers participating in the Exchange that sell
any products outside the Exchange shall do both of the following:

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

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

(2) For purposes of this subdivision, “product” does not include
contracts entered into pursuant to Part 6.2 (commencing with
Section 12693) of Division 2 between the Managed Risk Medical
Insurance Board and health insurers for enrolled Healthy Families
beneficiaries or to contracts entered into pursuant to Chapter 7
(commencing with Section 14000) of, or Chapter 8 (commencing
with Section 14200) of, Part 3 of Division 9 of the Welfare and
Institutions Code between the State Department of Health Care
Services and health insurers for enrolled Medi-Cal beneficiaries
or for contracts with bridge plan products that meet the
requirements of Section 100504.5 begin insert of the Government Code end insert .

(d) Commencing January 1, 2014, a health insurer, with respect
to policies that cover hospital, medical, or surgical benefits, may
only sell the five levels of coverage contained in begin delete subdivisions end delete
begin insert subsections end insert (d) and (e) of Section 1302 of the federal act, except
that a health insurer that does not participate in the Exchange may,
with respect to policies that cover hospital, medical, or surgical
benefits only sell the four levels of coverage contained in
begin delete subdivision (d) of end delete Section begin delete 1302 end delete begin insert 1302(d) end insert of the federal act.

(e) Commencing January 1, 2014, a health insurer that does not
participate in the Exchange shall, with respect to policies that cover
hospital, medical, or surgical expenses, offer at least one
standardized product that has been designated by the Exchange in
each of the four levels of coverage contained in begin delete subdivision (d) of end delete
Section begin delete 1302 end delete begin insert 1302(d) end insert of the federal act. This subdivision shall
only apply if the board of the Exchange exercises its authority
under subdivision (c) of Section 100504 of the Government Code.
Nothing in this subdivision shall require an insurer that does not
participate in the Exchange to offer standardized products in the
small employer market if the insurer only sells products in the
individual market. Nothing in this subdivision shall require an
insurer that does not participate in the Exchange to offer
standardized products in the individual market if the insurer only
sells products in the small employer market. This subdivision shall
not be construed to prohibit the insurer from offering other products
provided that it complies with subdivision (d).

(f) For purposes of this section, a bridge plan product shall mean
an individual health benefit plan, as defined in subdivision (a) of
Section 10198.6 that is offered by a health insurer that contracts
with the Exchange pursuant to Section 100504.5 of the Government
Code.

begin delete SEC. 10. end delete
begin insert SEC. 9. end insert   

Section 10961 is added to the Insurance Code, to read:

10961.  

(a) For purposes of this article, a bridge plan product
shall mean an individual health benefit plan that is offered by a
health insurer licensed under this chapter that contracts with the
Exchange pursuant to Title 22 (commencing with Section 100500)
of the Government Code.

(b)  begin delete Until December 31, 2014, a health care service plan end delete begin insert On and
after the effective date of this section, if a health insurance policy
has not been filed with the commissioner, a health insurer end insert that
contracts with the California Health Benefit Exchange to offer a
qualified bridge plan product pursuant to Section begin delete 100504 end delete begin insert 100504.5 end insert
of the Government Code shall begin delete do all of the following: end delete begin insert file the policy
form with the commissioner pursuant to Section 10290. end insert

begin delete

(1) As of the effective date of this section, if the health insurance
policy has not been approved by the commissioner to offer
individual health benefit plans pursuant to this chapter, the plan
shall file a material modification to expand its license to include
individual health benefit plans.

(2) As of the effective date of this section, if the health insurance
policy has been approved by the commissioner to offer individual
health benefit plans pursuant to this chapter, the insurer shall file
an amendment to expand its license to include a bridge plan product
as an individual health benefit plan.

(3) During such time as the health insurer’s material
modification or amendment is pending approval by the
commissioner, the health insurance policy shall be deemed to
comply with subdivision (b) of Section 100507 of the Government
Code.

(4) Maintain a medical loss ratio of 85 percent for the bridge
plan product. A health insurer shall utilize, to the extent possible,
the same methodology for calculating the medical loss ratio for
the bridge plan product that is used for calculating the health
insurer’s medical loss ratio pursuant to Section 10112.25 and shall
report its medical loss ratio for the bridge plan product to the
department as provided in Section 10112.25.

(c) A bridge plan product shall not be required to comply with
the following provisions of this article only to the extent approved
by the appropriate federal agency:

(1) Subdivisions (a), (c), and (d) of Section 10965.3.

(2) Section 10965.5.

(3) Section 10965.7.

end delete begin insert

(c) (1) Notwithstanding subdivision (a) of Section 10965.3, a
health insurer selling a bridge plan product shall not be required
to fairly and affirmatively offer, market, and sell the health
insurer’s bridge plan product except to individuals eligible for the
bridge plan product pursuant to the State Department of Health
Care Services and the Medi-Cal managed care plan’s contract
entered into pursuant to Section 14005.70 of the Welfare and
Institutions Code.

end insert begin insert

(2) Notwithstanding subdivision (c) of Section 10965.3, a health
insurer selling a bridge plan product shall provide an initial open
enrollment period of six months, and an annual enrollment period
and a special enrollment period consistent with the annual
enrollment and special enrollment periods of the Exchange.

end insert begin insert

(d) A health insurer that contracts with the California Health
Benefit Exchange to offer a qualified bridge plan product pursuant
to Section 100504 of the Government Code shall maintain a
medical loss ratio of 85 percent for the bridge plan product. A
health insurer shall utilize, the extent possible, the same
methodology for calculating the medical loss ratio for the bridge
plan product that is used for calculating the health insurer’s
medical loss ratio pursuant to Section 10112.25 and shall report
its medical loss ratio for the bridge plan product to the department
as provided in Section 10112.25.

end insert

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 14005.70 is added to the end insert begin insert Welfare and
Institutions Code end insert begin insert , to read: end insert

begin insert

begin insert 14005.70. end insert   

(a) The State Department of Health Care Services
shall ensure that its contracts with a health care service plan or
health insurer to provide Medi-Cal managed care coverage meet
all of the following requirements:

(1) A health care service plan or health insurer shall provide
coverage in its bridge plan product to its Medi-Cal managed care
enrollees and other individuals that meet the requirements in
paragraph (2) if the Medi-Cal managed care plan offers a bridge
plan product pursuant to Section 100504.5 of the Government
Code.

(2) Only the following individuals shall be eligible to enroll in
the Medi-Cal managed care plan’s bridge plan product if the
Medi-Cal managed care plan offers a bridge plan product:

(A) An individual who is determined to be eligible for the
Exchange and who can demonstrate that his or her Medi-Cal
coverage or Healthy Families coverage was terminated.

(B) Other members of the modified adjusted gross income
household, as defined in Section 100501 of the Government Code,
in which there are Medi-Cal or Healthy Families enrollees.

(C) An individual who is determined by the Exchange to be
eligible for the Exchange and who has a household income of not
more than 200 percent of the federal poverty level. This
subparagraph shall only apply if approved by the appropriate
federal agency and shall only be implemented in a manner that
does not conflict with a requirement of the 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 amendments to, or regulations or
guidance issued under those acts.

(3) Provide all of the following:

(A) Except as provided in subparagraph (C) of paragraph (2),
an individual who is eligible to enroll in a bridge plan product
under subparagraph (A) of paragraph (2) shall only be eligible to
enroll in a bridge plan product offered by the health care service
plan or health insurer through which the individual was enrolled
prior to eligibility for a bridge plan product as either a Medi-Cal
beneficiary or as a Healthy Families enrollee.

(B) An individual who is eligible to enroll in a bridge plan
product under subparagraph (B) of paragraph (2) shall only be
eligible to enroll in a bridge plan product offered by the health
care service plan or health insurer through which the member of
the household was enrolled as a Medi-Cal beneficiary or as a
Healthy Families enrollee.

(C) The Exchange shall seek federal approval to allow
individuals described in subparagraphs (A) and (B) the option to
enroll in a different bridge plan product if the individual’s primary
care provider is included in the contracted network of the different
bridge plan product and either of the following applies to the
bridge plan product for which the individual is eligible:

(i) The product is not offered in that individual’s service area.

(ii) The product is not selected as a bridge plan product by the
Exchange.

(4) The Medi-Cal managed care plan shall only offer a bridge
plan product if the bridge plan product premium contribution
amount in the silver category for the eligible individual is equal
to, or less than, the premium contribution amount for the lowest
cost plan in the silver category that would have been available to
that individual without the bridge plan product.

(b) The State Department of Health Care Services may enter
into a contract with the California Health Benefit Exchange to
delegate the implementation of any part of this section to the
Exchange.

end insert