SB 189, as introduced, Monning. Health care coverage: wellness programs.
Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that take effect January 1, 2014. Among other things, PPACA allows the premium rate charged by a health insurance issuer offering small group or individual coverage to vary only by family composition, rating area, age, and tobacco use, as specified, and prohibits discrimination against individuals based on health status, as specified. PPACA prohibits a health insurance issuer from requiring any individual to pay a premium or contribution that is greater than the premium or contribution paid by a similarly situated individual on the basis of any health status-related factor and prohibits construing this provision to prevent a group health insurance issuer from establishing premium discounts or rebates or modifying copayments or deductibles in return for adherence to wellness programs, as specified.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law allows small employer health care service plan contracts and health insurance policies for plan years on or after January 1, 2014, to vary rates only based on age, geographic, region, and family size, as specified.
This bill, until January 1, 2020, would prohibit a health care service plan or health insurer from offering a wellness program in connection with a group health care service plan contract or group health insurance policy, or offering an incentive or reward under a group health care service plan contract or group health insurance policy, based on adherence to a wellness program, unless specified requirements are satisfied. The bill would specify that it does not apply to wellness programs established prior to its enactment provided that those programs comply with all other applicable laws, as specified.
Because a willful violation of the bill’s requirements relative to health care service plans would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 1367.007 is added to the Health and
2Safety Code, to read:
(a) A health care service plan shall not offer a
4wellness program in connection with a group health care service
5plan contract, or offer an incentive or reward under a group health
6care service plan contract based on adherence to a wellness
7program, unless all of the following requirements are satisfied:
8(1) The program is reasonably designed to promote health or
9prevent disease. A program complies with the preceding sentence
10if the program has a reasonable chance of improving the health
11of, or preventing disease in, participating individuals, is not overly
12burdensome, is not a subterfuge for discriminating based on a
13health status factor, does not lead to cost shifting, and is not highly
14suspect in the method chosen to promote health or
prevent disease.
15(2) The incentive or reward is not in the form of a discount on
16or rebate of premium, deductible, copayment, or coinsurance.
P3 1Incentives may include rewards for participation that are not linked
2to premiums, deductibles, copayments, or coinsurance.
3(3) Participation in the program is voluntary.
4(4) Receipt of an incentive or reward for participation in the
5program is not conditioned on an individual satisfying a standard
6that is related to a health status factor. The following wellness
7programs shall be deemed to satisfy this paragraph:
8(A) A program that reimburses all or part of the cost for
9memberships in a fitness center.
10(B) A diagnostic testing program that provides a
reward for
11participation and does not base any part of the reward on outcomes.
12(C) A program that provides a reward to individuals for
13attending a periodic health education seminar, so long as
14participation is not related to a particular health condition or any
15other health status factor.
16(5) Participation in the program is offered to all similarly situated
17individuals.
18(6) Reasonable accommodation is provided for individuals with
19disabilities who seek to voluntarily participate in the program.
20(7) A reasonably available and equivalent alternative is provided
21to those individuals who seek to voluntarily participate in the
22program but are unable to participate due to occupational
23requirements, a medical condition, or other hardship.
24(8) All materials related to the program disclose the availability
25of the accommodations under paragraphs (6) and (7).
26(9) The program assesses the cultural competency needs of the
27health care service plan’s population in its design.
28(10) The program provides language assistance for limited
29English-speaking individuals.
30(11) The program does not result in any decrease in benefits
31coverage.
32(12) The program does not result in an increase in premium for
33the product as demonstrated through rate review consistent with
34Article 6.2 (commencing with Section 1385.01).
35(13) The incentive or reward does not exceed the amounts
36determined
to be unreasonable by regulation by the director in
37consultation with the Insurance Commissioner
38(14) The incentive or reward does not exceed the percentage of
39the cost of coverage under the plan contract identified in Section
P4 12705(j)(3)(A) of the federal Public Health Service Act (42 U.S.C.
2Sec. 300gg-4) or regulations adopted thereunder.
3(b) Nothing in this section shall prohibit a wellness program
4that was established prior to January 1, 2014, and applied consistent
5with all applicable laws in effect immediately prior to that date,
6and that is operating immediately prior to that date, from continuing
7to be carried out for as long as those laws remain in effect.
8(c) By March 1, 2019, the department shall submit a report to
9the appropriate policy committees of the Legislature on the
10operation of health care service
plan-based wellness programs.
11(d) For purposes of this section, “wellness program” means a
12program that is designed to promote health or prevent disease.
13(e) This section shall remain in effect only until January 1, 2020,
14and as of that date is repealed, unless a later enacted statute, that
15is enacted before January 1, 2020, deletes or extends that date.
Section 10112.7 is added to the Insurance Code, to
17read:
(a) A health insurer shall not offer a wellness program
19in connection with a group health insurance policy or offer an
20incentive or reward under a group health insurance policy based
21on adherence to a wellness program unless all of the following
22requirements are satisfied:
23(1) The program is reasonably designed to promote health or
24prevent disease. A program complies with the preceding sentence
25if the program has a reasonable chance of improving the health
26of, or preventing disease in, participating individuals, is not overly
27burdensome, is not a subterfuge for discriminating based on a
28health status factor, does not lead to cost shifting, and is not highly
29suspect in the method chosen to promote health or prevent disease.
30(2) The incentive or reward is not in the form of a discount on
31or rebate of premium, deductible, copayment, or coinsurance.
32Incentives may include rewards for participation that are not linked
33to premiums, deductibles, copayments, or coinsurance.
34(3) Participation in the program is voluntary.
35(4) Receipt of an incentive or reward for participation in the
36program is not conditioned on an individual satisfying a standard
37that is related to a health status factor. The following wellness
38programs shall be deemed to satisfy this paragraph:
39(A) A program that reimburses all or part of the cost for
40memberships in a fitness center.
P5 1(B) A diagnostic testing program that provides a reward for
2
participation and does not base any part of the reward on outcomes.
3(C) A program that provides a reward to individuals for
4attending a periodic health education seminar, so long as
5participation is not related to a particular health condition or any
6other health status factor.
7(5) Participation in the program is offered to all similarly situated
8individuals.
9(6) Reasonable accommodation is provided for individuals with
10disabilities who seek to voluntarily participate in the program.
11(7) A reasonably available and equivalent alternative is provided
12to those individuals who seek to voluntarily participate in the
13program but are unable to participate due to occupational
14requirements, a medical condition, or other hardship.
15(8) All materials related to the program disclose the availability
16of the accommodations under paragraphs (6) and (7).
17(9) The program assesses the cultural competency needs of the
18health care service plan’s population in its design.
19(10) The program provides language assistance for limited
20English-speaking individuals.
21(11) The program does not result in any decrease in benefits
22coverage.
23(12) The program does not result in an increase in premium for
24the product as demonstrated through rate review consistent with
25Article 4.5 (commencing with Section 10181).
26(13) The incentive or reward does not exceed the amounts
27determined to
be unreasonable by regulation by the commissioner
28in consultation with the Director of the Department of Managed
29Health Care.
30(14) The incentive or reward does not exceed the percentage of
31the cost of coverage under the policy identified in Section
322705(j)(3)(A) of the federal Public Health Service Act (42 U.S.C.
33Sec. 300gg-4(j)(3)(A)) or regulations adopted thereunder.
34(b) Nothing in this section shall prohibit a wellness program
35that was established prior to January 1, 2014, and applied consistent
36with all applicable laws in effect immediately prior to that date,
37and that is operating immediately prior to that date, from continuing
38to be carried out for as long as those laws remain in effect.
P6 1(c) By March 1, 2019, the department shall submit a report to
2the appropriate policy committees of the Legislature on the
3
operation of health insurer-based wellness programs.
4(d) For purposes of this section, “wellness program” means a
5program that is designed to promote health or prevent disease.
6(e) This section shall remain in effect only until January 1, 2020,
7and as of that date is repealed, unless a later enacted statute, that
8is enacted before January 1, 2020, deletes or extends that date.
No reimbursement is required by this act pursuant to
10Section 6 of Article XIII B of the California Constitution because
11the only costs that may be incurred by a local agency or school
12district will be incurred because this act creates a new crime or
13infraction, eliminates a crime or infraction, or changes the penalty
14for a crime or infraction, within the meaning of Section 17556 of
15the Government Code, or changes the definition of a crime within
16the meaning of Section 6 of Article XIII B of the California
17Constitution.
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