Amended in Assembly June 15, 2013

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 begin insert , repeal, and add end insert Sections 100501 and 100503 of, and to add begin insert and repeal end insert Sections 100504.5 and 100504.6 begin delete to end delete begin insert of end insert , the Government Code, to amend begin insert , repeal, and add end insert Section 1366.6 of, and to add begin insert and repeal end insert Section 1399.864 begin delete to end delete begin insert of end insert , the Health and Safety Code, to amend begin insert , repeal, and add end insert Section 10112.3 of, and to add begin insert and repeal end insert Section 10961 begin delete to end delete begin insert of end insert , the Insurance Code, and to add begin insert and repeal end insert Section 14005.70 begin delete to end delete begin insert of end insert 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 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.

begin insert

The bill would require the Exchange to annually prepare a specified written report on the implementation and performance of the Exchange functions during the preceding fiscal year, and to prepare, or contract for the preparation of, an evaluation of the bridge plan program using the first 3 years of experience with the program, as specified.

end insert

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.

begin insert

The bill would require the Exchange to seek federal approval to allow specified individuals 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 the bridge plan product for which the individual is eligible is not offered in that individual’s service area or is not selected as a bridge plan product by the Exchange.

end insert begin insert

The bill would provide that its provisions would become inoperative on the October 1 that is 5 years after the date that federal approval of the bridge plan option occurs.

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.

(c) It is begin insert the end insert 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 (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 Section 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 Section 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.

begin insert

(n) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 100501 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 100501. end insert   

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

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

(b) “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.

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

(d) “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.

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

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

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

(h) “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.

(i) This section shall become operative only if Section 2 of the
act that added this section becomes inoperative pursuant to
subdivision (n) of that Section 2.

end insert

begin delete SEC. 3. end delete
begin insert SEC. 4. end insert   

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
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 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) 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.

begin insert

(2) The Exchange shall prepare, or contract for the preparation
of, an evaluation of the bridge plan program using the first three
years of experience with the program. The evaluation shall be
provided to the health policy and fiscal committees of the
Legislature in the fourth year following federal approval of the
bridge plan option. The evaluation shall include, but not be limited
to, all of the following:

end insert begin insert

(A) The number of individuals eligible to participate in the
bridge plan program each year by category of eligibility.

end insert begin insert

(B) The number of eligible individuals who elect a bridge plan
option each year by category of eligibility.

end insert begin insert

(C) The average length of time, by region and statewide, that
individuals remain in the bridge plan option each year by category
of eligibility.

end insert begin insert

(D) The regions of the state with a bridge plan option, and the
carriers in each region that offer a bridge plan, by year.

end insert begin insert

(E) The premium difference each year, by region, between the
bridge plan and the first and second lowest cost plan for
individuals in the Exchange who are not eligible for the bridge
plan.

end insert begin insert

(F) The effect of the bridge plan on the premium subsidy amount
for bridge plan eligible individuals each year by each region.

end insert begin insert

(G) Based on a survey of individuals enrolled in the bridge plan:

end insert begin insert

(i) Whether individuals enrolling in the bridge plan product are
able to keep their existing health care providers.

end insert begin insert

(ii) Whether individuals would want to retain their bridge plan
product, buy a different Exchange product, or decline to purchase
health insurance if there was no bridge plan product available.
The Exchange may include questions designed to elicit the
information in this subparagraph as part of an existing survey of
individuals receiving coverage in the Exchange.

end insert begin insert

(3) In addition to the evaluation required by paragraph (2), the
Exchange shall post the items in subparagraphs (A) to (F),
inclusive, on its Internet Web site each year.

end insert begin delete

(2)

end delete

begin insert (4) end insert  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 Section 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.

begin insert

(z) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 100503 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 100503. end insert   

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
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 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) 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.

(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. 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 Section 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.

(z) This section shall become operative only if Section 4 of the
act that added this section becomes inoperative pursuant to
subdivision (z) of that Section 4.

end insert

begin delete SEC. 4. end delete
begin insert SEC. 6. end insert   

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 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:

(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 begin insert end insert begin insert pursuant to Section 14005.70
of the Welfare and Institutions Code end insert .

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

(3) Enroll in the bridge plan product only individuals who meet
the requirements of Section 14005.70 of the Welfare and
Institutions Code.

(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.

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

begin insert

(d) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

end insert

begin delete SEC. 5. end delete
begin insert SEC. 7. end insert   

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

100504.6.  

begin insert (a) end insert begin insert   end insert The Exchange shall have the authority to adopt
regulations to implement the provisions of Section 100504.5. 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).

begin insert

(b) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

end insert

begin delete SEC. 6. end delete
begin insert SEC. 8. 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 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 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 Section 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
Section 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 (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.

begin insert

(g) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

end insert

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 1366.6 is added to the end insert begin insert Health and Safety Code end insert begin insert ,
to read: end insert

begin insert

begin insert 1366.6. end insert   

(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) 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 subsections (d) and (e) of Section 1302 of the federal
act. The board established under Section 100500 of the
Government Code may require plans to sell additional products
within each of those levels of coverage. 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.

(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.

(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 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 Section 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 Section 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) This section shall become operative only if Section 8 of the
act that added this section becomes inoperative pursuant to
subdivision (g) of that Section 8.

end insert

begin delete SEC. 7. end delete
begin insert SEC. 10. 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 (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.

begin delete

(3)

end delete

begin insert (c) end insert  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.

begin delete

(4) Maintain a

end delete

begin insert (d) end insert begin insert   end insert begin insert A health care service plan shall maintain a end insert 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

(5)

end delete

begin insert (e) end insert  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 begin insert , provided the health care service
plan meets the requirements of subdivision (b) of Section 14005.70
of the Welfare and Institutions Code end insert .

begin delete

(6)

end delete

begin insert ( end insert begin insert f) end insert  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.

begin insert

(g) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

end insert

begin delete SEC. 8. end delete
begin insert SEC. 11. 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 (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 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 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 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 begin insert , end insert only
sell the four levels of coverage contained in Section 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 Section 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.

begin insert

(g) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

end insert

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 10112.3 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 10112.3. end insert   

(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 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 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.

(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.

(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 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 Section 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 Section 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) This section shall become operative only if Section 11 of the
act that added this section becomes inoperative pursuant to
subdivision (g) of that Section 11.

end insert

begin delete SEC. 9. end delete
begin insert SEC. 13. 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) 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
100504.5 of the Government Code shall file the policy form with
the commissioner pursuant to Section 10290.

(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 begin insert , provided the health care service plan meets the
requirements of subdivision (b) of Section 14005.70 of the Welfare
and Institutions Code end 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.

(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, begin insert to end insert 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.

begin insert

(e) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

end insert

begin delete SEC. 10. end delete
begin insert SEC. 14. end insert   

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. begin insert The
Exchange shall request approval from the federal government to
limit enrollment under this subparagraph to individuals with a
family income at or below 250 percent of the federal poverty level. end insert

(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.

begin delete

(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.

end delete

(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.

begin insert

(c) Notwithstanding subdivision (a) of Section 1399.849 of the
Health and Safety Code and subdivision (a) of Section 10965.3 of
the Insurance Code, the State Department of Health Care Services
may allow a Medi-Cal managed care plan, pursuant to its contract
under this section, to limit enrollment into bridge plan products
to eligible individuals identified in paragraph (2) of subdivision
(a) of this section based on limitations in contracted network
capacity for bridge plan products as provided in Section 1399.857
of the Health and Safety Code or Section 10753.12 of the Insurance
Code.

end insert begin insert

(d) This section shall become inoperative on the October 1 that
is five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative
and is repealed.

end insert