BILL NUMBER: SB 189 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 8, 2013
AMENDED IN SENATE APRIL 22, 2013
INTRODUCED BY Senator Monning
(Coauthor: Senator De León)
(Coauthor: Assembly Member Ammiano)
FEBRUARY 7, 2013
An act to add and repeal Section 1367.007 of the Health and Safety
Code, and to add and repeal Section 10112.7 of the Insurance Code,
relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 189, as amended, Monning. Health care coverage: wellness
programs.
Existing 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 1. Section 1367.007 is added to the Health and Safety
Code, to read:
1367.007. (a) A health care service plan shall not offer a
wellness program in connection with a group health care service plan
contract, or offer an incentive or reward under a group health care
service plan contract based on adherence to a wellness program,
unless all of the following requirements are satisfied:
(1) The program is reasonably designed to promote health or
prevent disease. A program complies with the preceding sentence if
the program has a reasonable chance of improving the health of, or
preventing disease in, participating individuals, is not overly
burdensome, is not a subterfuge for discrimination based on a health
status factor, does not lead to cost shifting from employer to
employee , and is not highly suspect in the method chosen to
promote health or prevent disease.
(2) The incentive or reward is not in the form of a discount on,
or rebate of, a premium, deductible, copayment, or coinsurance.
Incentives may include rewards for participation that are not linked
to premiums, deductibles, copayments, or coinsurance.
(2) (A) A financial incentive or reward linked to a premium,
deductible, copayment, coinsurance, or other cost sharing paid by
enrollees is permitted only for participation-based programs. A
financial penalty is not permitted.
(B) The total amount of incentives linked to the share of a
premium, deductible, copayment, coinsurance, or other cost sharing
paid by the enrollee shall not exceed three hundred fifty dollars
($350) annually. This amount shall be adjusted annually in a manner
consistent with Section 1302(c)(4) of the federal Patient Protection
and Affordable Care Act (42 U.S.C. 18022(c)(4)).
(3) The program may use incentives or rewards for participation
that reduce the employee share of premium as long as the employee
share of premium does not exceed 50 percent of the premium charged to
the group. The employee share of premium shall not vary based on a
health outcome or other health status factor.
(4) The program may use incentives or rewards that reduce costs to
enrollees, including reductions in premiums, deductibles,
copayments, coinsurance, or other cost sharing, as long as the amount
does not exceed 20 percent of the original cost without the
incentive or reward.
(3)
(5) Participation in the program is voluntary.
(4)
(6) Receipt of an incentive or reward for participation
in the program is not conditioned on an individual satisfying a
standard that is related to a health status factor. The
following wellness Wellness programs ,
including, but not limited to, the following, shall be deemed
to satisfy this paragraph:
(A) A program that reimburses all or part of the cost for
membership in a fitness center.
(B) A diagnostic testing program that provides a reward for
participation and does not base any part of the reward on outcomes.
(C) A program that provides a reward to individuals for attending
a periodic health education seminar, so long as
participation is not related to a particular health condition or any
the reward is not contingent on a health outcome or
other health status factor.
(5)
(7) Participation in the program is offered to all
similarly situated individuals.
(6)
( 8) Reasonable accommodation is provided
for individuals with disabilities who seek to voluntarily participate
in the program.
(7)
( 9) A reasonably available and equivalent
alternative is provided to those individuals who seek to voluntarily
participate in the program but are unable to participate due to
occupational requirements, a medical condition, or other hardship.
(8)
(10) All materials related to the program disclose the
availability of the accommodations under paragraphs (6)
(8) and (7) (9) .
(9)
(11) The program assesses the cultural competency needs
of the health care service plan's population in its design.
(10)
(12) The program provides language assistance for
limited English-speaking individuals.
(11)
(13) The program does not result in any decrease in
benefits coverage.
(12) The program does not result in an increase in premium for the
product as demonstrated through rate review consistent with Article
6.2 (commencing with Section 1385.01).
(13) The incentive or reward does not exceed the amounts
determined to be unreasonable by regulation by the director in
consultation with the Insurance Commissioner
(14) The plan reports to the department two years after
implementation of the wellness program and every year thereafter,
demonstrating reasonable effectiveness of the program in terms of
improving health of participants and reducing costs, as determined by
the department.
(14)
(15) The incentive or reward does not exceed the
percentage of the cost of coverage under the plan contract identified
in Section 2705(j)(3)(A) of the federal Public Health Service Act
(42 U.S.C. Sec. 300gg-4(j)(3)(A)) or regulations adopted thereunder.
(b) Nothing in this section shall prohibit a wellness program that
was established prior to January 1, 2014, and applied consistent
with all applicable laws in effect immediately prior to that date,
and that is operating immediately prior to that date, from continuing
to be carried out for as long as those laws remain in
effect operat e .
(c) By March 1, 2019, the department shall submit a report to the
appropriate policy committees of the Legislature on the operation of
health care service plan-based wellness programs.
(d) For purposes of this section, "wellness program" means a
program that is designed to promote health or prevent disease.
(e) This section shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
SEC. 2. Section 10112.7 is added to the Insurance Code, to read:
10112.7. (a) A health insurer shall not offer a wellness program
in connection with a group health insurance policy , or
offer an incentive or reward under a group health insurance policy
based on adherence to a wellness program , unless all of
the following requirements are satisfied:
(1) The program is reasonably designed to promote health or
prevent disease. A program complies with the preceding sentence if
the program has a reasonable chance of improving the health of, or
preventing disease in, participating individuals, is not overly
burdensome, is not a subterfuge for discrimination based on a health
status factor, does not lead to cost shifting from employer to
employee , and is not highly suspect in the method chosen to
promote health or prevent disease.
(2) The incentive or reward is not in the form of a discount on,
or rebate of, a premium, deductible, copayment, or coinsurance.
Incentives may include rewards for participation that are not linked
to premiums, deductibles, copayments, or coinsurance.
(2) (A) A financial incentive or reward linked to a premium,
deductible, copayment, coinsurance, or other cost sharing paid by
insureds is permitted only for participation-based programs. A
financial penalty is not permitted.
(B) The total amount of incentives linked to the share of a
premium, deductible, copayment, coinsurance, or other cost sharing
paid by the insured shall not exceed three hundred fifty dollars
($350) annually. This amount shall be adjusted annually in a manner
consistent with Section 1302(c)(4) of the federal Patient Protection
and Affordable Care Act (42 U.S.C. 18022(c)(4)).
(3) The program may use incentives or rewards for participation
that reduce the employee share of premium as long as the employee
share of premium does not exceed 50 percent of the premium charged to
the group. The employee share of premium shall not vary based on a
health outcome or other health status factor.
(4) The program may use incentives or rewards that reduce costs to
insureds, including reductions in premiums, deductibles, copayments,
coinsurance, or other cost sharing, as long as the amount does not
exceed 20 percent of the original cost without the incentive or
reward.
(3)
(5) Participation in the program is voluntary.
(4)
(6) Receipt of an incentive or reward for participation
in the program is not conditioned on an individual satisfying a
standard that is related to a health status factor. The
following wellness Wellness programs ,
including, but not limited to, the following, shall be deemed
to satisfy this paragraph:
(A) A program that reimburses all or part of the cost for
membership in a fitness center.
(B) A diagnostic testing program that provides a reward for
participation and does not base any part of the reward on outcomes.
(C) A program that provides a reward to individuals for attending
a periodic health education seminar, so long as
participation is not related to a particular health condition or any
the reward is not contingent on a health outcome or
other health status factor.
(5)
(7) Participation in the program is offered to all
similarly situated individuals.
(6)
(8) Reasonable accommodation is provided for
individuals with disabilities who seek to voluntarily participate in
the program.
(7)
(9) A reasonably available and equivalent alternative
is provided to those individuals who seek to voluntarily participate
in the program but are unable to participate due to occupational
requirements, a medical condition, or other hardship.
(8)
(10) All materials related to the program disclose the
availability of the accommodations under paragraphs (6)
(8) and (7) (9) .
(9)
(11) The program assesses the cultural competency needs
of the health care service plan's insurer's
covered population in its design.
(10)
(1 2) The program provides language
assistance for limited English-speaking individuals.
(11)
(1 3) The program does not result in any
decrease in benefits coverage.
(12) The program does not result in an increase in premium for the
product as demonstrated through rate review consistent with Article
4.5 (commencing with Section 10181).
(13) The incentive or reward does not exceed the amounts
determined to be unreasonable by regulation by the commissioner in
consultation with the Director of the Department of Managed Health
Care.
(14) The insurer reports to the department two years after
implementation of a wellness program and every year thereafter,
demonstrating reasonable effectiveness of the program in terms of
improving health of participants and reducing costs, as determined by
the department.
(14)
(15) The incentive or reward does not exceed the
percentage of the cost of coverage under the policy identified in
Section 2705(j)(3)(A) of the federal Public Health Service Act (42
U.S.C. Sec. 300gg-4(j)(3)(A)) or regulations adopted thereunder.
(b) Nothing in this section shall prohibit a wellness program that
was established prior to January 1, 2014, and applied consistent
with all applicable laws in effect immediately prior to that date,
and that is operating immediately prior to that date, from continuing
to be carried out for as long as those laws remain in
effect operat e .
(c) By March 1, 2019, the department shall submit a report to the
appropriate policy committees of the Legislature on the operation of
health insurer-based wellness programs.
(d) For purposes of this section, "wellness program" means a
program that is designed to promote health or prevent disease.
(e) This section shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.