BILL NUMBER: SBX1 3 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 28, 2013
AMENDED IN SENATE MARCH 6, 2013
INTRODUCED BY Senator Hernandez
FEBRUARY 5, 2013
An act to amend Sections 100501 and 100503 of, and to add Sections
100504.5, 100504.5 and 100504.6
, and 100504.7 to, the Government Code, to amend
Section 1366.6 of, and to add Section 1399.864 to, the Health and
Safety Code, and to amend Section 10112.3 of, and
to add Section 10961 to, the Insurance Code, and to add
Section 14005.70 to the Welfare and Institutions Code,
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 , subject to federal approval, to enroll
individuals in a bridge plan to make available bridge
plan products to eligible individuals . The bill would
authorize the Exchange , after consulting with stakeholders,
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 ,
except as required by federal law . 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.
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.
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.
(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.
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 (e) (f) 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 paragraph (B) of subdivision (d) of
Section 1401 1401(d)(2)(B)
(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 subdivision
(a) of Section 1401 1401(a)
(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
subdivisions subsections (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 subdivisions
subsections (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) A Except as required by Section 1301
(a)(1)(C)(ii) of the federal act, a 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. 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. 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 paragraph (3) of subdivision (c) of Section
1312 1312(c)(3) 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 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 contract
with, and certify as a qualified health plan, a bridge plan product
that meets the following requirements:
(1) Is
is, at a minimum, 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:
(A)
(1) 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.
(B)
(2) Meet minimum requirements to contract with the
Exchange as a qualified health plan pursuant to Section 1301 of the
PPACA federal Patient Protection and
Affordable Care Act (Public Law 111-148) and Sections 100502,
100503, and 100507 of this code.
(C)
(3) Enroll in the bridge plan product only individuals
who meet the requirements of paragraph (2)
Section 14005.70 of the Welfare and Institutions Code .
(D)
(4) Comply with the medical loss ratio requirements of
Section 1399.864 of the Health and Safety Code or Section 10961 of
the Insurance Code.
(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.
(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.
(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.
(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)
(c) Nothing in this section shall be implemented in a
manner that conflicts with a requirement of the federal act.
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.
SEC. 6. SEC. 5. Section
100504.7 100504.6 is added to the Government
Code, to read:
100504.7. 100504.6. The Exchange
shall have the authority to adopt regulations to implement the
provisions of Sections Section 100504.5
and 100504.6 . 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. 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).
SEC. 7. SEC. 6. 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 subdivisions
subsections (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
subdivisions subsections (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
subdivision (d) of Section 1302
1302(d) 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
subdivision (d) of Section 1302
1302(d) 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
(e) (f) 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.
SEC. 8. SEC. 7. 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 (e) (f) 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.
(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 1399.849.
(2) Section 1399.851.
(3) Section 1399.853.
(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.
(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.
SEC. 9. SEC. 8. 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 (P.L. (Public Law
111-148), as amended by the federal Health Care and Education
Reconciliation Act of 2010 (P.L. (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 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
subdivisions subsections (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 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 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 of the
Government Code .
(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 subdivisions
subsections (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 subdivision (d) of Section
1302 1302(d) 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 subdivision (d)
of Section 1302 1302(d) 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.
SEC. 10. SEC. 9. 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) Until December 31, 2014, a health care service plan
On and after the effective date of this section
, if a health insurance policy has not been filed with the
commissioner, a health insurer that contracts with the
California Health Benefit Exchange to offer a qualified bridge plan
product pursuant to Section 100504 100504.5
of the Government Code shall do all of the following:
file the policy form with the commissioner pursuant to
Section 10290.
(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.
(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.
(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.
(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.
SEC. 10. Section 14005.70 is added to the
Welfare and Institutions Code , to read:
14005.70. (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.