Amended in Senate April 24, 2013

Senate Bill No. 780

Introduced by Senator Jackson

February 22, 2013

An act to amend begin insert Section 1373.65 of the Health and Safety Code, and to amend end insert Sections 10123.12, 10601, and 10604 of, and to add Section 10133.57 to, the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

SB 780, as amended, Jackson. begin delete Disability insurance. end delete begin insert Health care coverage. end insert

begin insert

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.

end insert begin insert

Existing law requires a health care service plan to submit a filing to the department at least 75 days prior to the termination date of its contract with a provider group or a general acute care hospital that includes the written notice the plan proposes to send to its affected enrollees. The filing is required to be reviewed and approved by the department prior to the notice being sent the enrollees. Existing law also requires the plan to provide written notice to affected enrollees, as provided, prior to the termination date of a contract between the plan and a provider group or a general acute care hospital. A plan operating as a preferred provider organization is only required to send the written notice to all enrollees who reside within a 15-mile radius of a terminated hospital if it is a general acute care hospital.

end insert begin insert

This bill would delete the requirements with regard to preferred provider organizations. The bill would distinguish between enrollees of an assigned group provider and enrollees of an unassigned group provider for purposes of whether the 75-day filing is required to be submitted to the department. The bill would also require that the plan send a department approved written notice to the enrollees, whether or not a filing was required, when a provider group contract or a general acute care hospital contract is terminated. The bill would distinguish between the enrollees of an assigned or an unassigned provider group or general acute care hospital with regard to the timing of the consumer notice and method of delivery, and would impose specified continued access to services and billing requirements on plans and providers for the enrollees of an unassigned provider group or an unassigned general acute care hospital. Because a willful violation of these requirements with respect to health care service plans would be a crime, the bill would impose a state-mandated local program.

end insert

Existing law provides for the regulation of health insurers by the Department of Insurance. Under existing law, a health insurer may contract with providers for alternative rates of payment. Existing law requires those insurers to file a policy with the department describing how the insurer facilitates the continuity of care for new insureds under group policies receiving services for an acute condition from a noncontracting provider. Existing law also requires those health insurers to, at the request of an insured, arrange for the completion of covered services by a terminated provider if the insured is undergoing treatment for certain conditions, as specified.

begin delete

The bill would require a health insurer to notify the department at least 30 days prior to terminating a contract with a provider group or general acute care hospital to provide services at alternative rates of payment if the contract termination would result in a material change to the provider network, and would require the insurer to send written notice, at least 15 days prior to the termination date of the contract, to all insureds who have obtained services from the provider group or general acute hospital within the last 6 months, as specified.

end delete begin insert

This bill would require, among other things, a health insurer to submit a filing to the department, at least 75 days prior to the termination date of its contract with a provider group or a general acute care hospital to provide services at alternative rates of payment, that includes the written notice the insurer proposes to send to its insureds. The bill would require the filing to be reviewed and approved by the department prior to the notice being sent to the insureds. The bill would set a threshold for the number of insureds receiving health care services from a group provider within the preceding 12 months for purposes of whether the filing is required to be submitted to the department. The bill would also require that the health insurer send a department approved written notice to specified insureds, whether or not a filing was required, when a provider group contract or a general acute care hospital contract is terminated, and would impose specified continued access to services and billing requirements on insurers and providers for insureds receiving health care services from a terminated provider group or general acute care hospital.

end insert

Existing law requires disability insurance policies to include a disclosure form that contains specified information, including the principal benefits and coverage of the policy, the exceptions, reductions, and limitations that apply to the policy, and a statement, with respect to health insurance policies, describing how participation in the policy may affect the choice of physician, hospital, or health care providers, and describing the extent of financial liability that may be incurred if care is furnished by a nonparticipating provider.

With respect to health insurance policies, this bill would require the disclosure form to include additional information, including conditions and procedures for cancellation, rescission, or nonrenewal, a description of the limitations on the insured’s choice of provider, and, with respect to insurers that contract for alternate rates of payment, a statement describing the basic method of reimbursement made to its participating providers, as specified. The bill would also require the first page of the disclosure form for health insurance policies to include other specified information. The bill would require a health insurer, medical group, or participating provider that uses or receives financial bonuses or other incentives to provide a written summary of specified information to any requesting person.

begin insert

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.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1373.65 of the end insert begin insert Health and Safety Code end insert
begin insert is amended to read: end insert

begin delete

1373.65.  

(a) At least 75 days prior to the termination date of
its contract with a provider group or a general acute care hospital,
the health care service plan shall submit an enrollee block transfer
filing to the department that includes the written notice the plan
proposes to send to affected enrollees. The plan may not send this
notice to enrollees until the department has reviewed and approved
its content. If the department does not respond within seven days
of the date of its receipt of the filing, the notice shall be deemed
approved.

(b) At least 60 days prior to the termination date of a contract
between a health care service plan and a provider group or a general
acute care hospital, the plan shall send the written notice described
in subdivision (a) by United States mail to enrollees who are
assigned to the terminated provider group or hospital. A plan that
is unable to comply with the timeframe because of exigent
circumstances shall apply to the department for a waiver. The plan
is excused from complying with this requirement only if its waiver
application is granted by the department or the department does
not respond within seven days of the date of its receipt of the
waiver application. If the terminated provider is a hospital and the
plan assigns enrollees to a provider group with exclusive admitting
privileges to the hospital, the plan shall send the written notice to
each enrollee who is a member of the provider group and who
resides within a 15-mile radius of the terminated hospital. If the
plan operates as a preferred provider organization or assigns
members to a provider group with admitting privileges to hospitals
in the same geographic area as the terminated hospital, the plan
shall send the written notice to all enrollees who reside within a
15-mile radius of the terminated hospital.

(c) The health care service plan shall send enrollees of a
preferred provider organization the written notice required by
subdivision (b) only if the terminated provider is a general acute
care hospital.

end delete

begin insert

begin insert 1373.65. end insert   

end insert begin insert

(a) For the purposes of this section, the following
terms have the following meanings:

end insert begin insert

(1) “Assigned general acute care hospital” means a general
acute care hospital to which the health plan, either directly or
through its contracts with its delegated entities, directs enrollees
to receive nonemergency services.

end insert begin insert

(2) “Assigned provider group” means a provider group to which
a health plan directs its enrollees to receive specialty physician
services or a provider group that includes primary care physicians
to which a health plan assigns its members.

end insert begin insert

(3) “Provider group” means a medical group, independent
practice association, or any other similar organization.

end insert begin insert

(4) “Unassigned general acute care hospital” is a general acute
care hospital that is not an assigned general acute care hospital.

end insert begin insert

(5) “Unassigned provider group” means a provider group that
is not an assigned provider group.

end insert begin insert

(b) (1) At least 75 days prior to the termination date of its
contract with a provider group or a general acute care hospital,
the health care service plan shall submit a filing to the department
that includes the written notice the plan proposes to send to
enrollees. The plan shall not send this notice to enrollees until the
department has reviewed and approved the filing. If the department
does not respond within seven days of the date of the filing, the
filing shall be deemed approved.

end insert begin insert

(2) For the purposes of a termination with an assigned provider
group, the health care service plan shall submit a filing to the
department, as required by paragraph (1), if 2,000 or more
enrollees will be transferred or redirected by the plan from the
assigned provider group as a result of the termination of the
provider contract.

end insert begin insert

(3) For purposes of a termination with an unassigned provider
group, the health care service plan shall submit a filing to the
department, as required by paragraph (1), if 1,700 or more
enrollees were treated by the unassigned provider group within
the 12 months preceding the filing date specified in paragraph (1).

end insert begin insert

(4) The director may adopt by regulation a different filing
threshold from the threshold stated in paragraph (2), and in
consultation with the Department of Insurance, may adopt by
regulation a different filing threshold from the threshold stated in
paragraph (3).

end insert begin insert

(c) (1) In the event of a contract termination between a health
care service plan and an assigned provider group or an assigned
general acute care hospital, the plan shall do all of the following:

end insert begin insert

(A) Send the written notice described in subdivision (b) by
United States mail at least 60 days prior to the termination date
to enrollees who are assigned to the terminated provider group
or general acute care hospital.

end insert begin insert

(B) A plan that is unable to comply with the timeframe in
subparagraph (A) because of exigent circumstances shall apply
to the department for a waiver. The plan is excused from complying
with the 60-day notice requirement only if its waiver application
is granted by the department or the department does not respond
within seven days of the date of its receipt of the waiver
application.

end insert begin insert

(2) In the event of a contract termination between a health care
service plan and an unassigned provider group or an unassigned
general acute care hospital, the plan shall do all of the following:

end insert begin insert

(A) Send the written notice described in subdivision (b), within
one business day of the contract termination with an unassigned
provider group, to all of the following persons:

end insert begin insert

(i) Any unassigned enrollee who has received health care
services from the terminated unassigned provider group within
the 12 months preceding the date of termination.

end insert begin insert

(ii) Any unassigned enrollee who has any health care services
scheduled with the terminated unassigned provider group after
the date of termination.

end insert begin insert

(B) Send the written notice described in subdivision (b), within
one business day of the contract termination with an unassigned
general acute care hospital, to all of the following persons:

end insert begin insert

(i) Any enrollee who has received health care services from the
terminated unassigned general acute care hospital within the 12
months preceding the date of termination.

end insert begin insert

(ii) Any enrollee who is assigned to a provider group with any
physicians who have exclusive admitting privileges to the
terminated unassigned general acute care hospital.

end insert begin insert

(iii) Any enrollee who has authorized health care services
scheduled at a terminating unassigned general acute care hospital
after the date of termination.

end insert begin insert

(C) Allow enrollees to continue to access services that were
authorized or scheduled at the terminated unassigned provider
group or unassigned general acute care hospital prior to the date
of termination. Those services shall be provided until completion
of the authorized or scheduled services for at least 60 days from
the date of the notice unless a longer period of time is required
pursuant to Section 1373.96. The amount of, and the requirement
for payment of, copayments, deductibles, coinsurance, and other
cost sharing components by an enrollee during the period of
completion of authorized or scheduled services with a terminated
unassigned provider group or unassigned general acute care
hospital pursuant to this subparagraph shall be the same that
would be paid by the enrollee when receiving care from a provider
currently contracting with or employed by the plan.

end insert begin insert

(D) Provide reimbursement for services provided under
subparagraph (C) either at a rate agreed upon by the health care
service plan and the terminated provider group or general acute
care hospital or the rate for those services as provided in the
terminating contract. In no event shall the provider bill the patient
for the cost of services beyond the copayment, deductible, or other
cost sharing components of what the enrollee would have been
responsible for if the provider group or general acute care hospital
was currently contracted with the health care service plan.

end insert begin insert

(d) Even if a filing is not required to be submitted by subdivision
(b), a health care service plan shall send enrollee notices as
required by subdivision (c). A health care service plan may only
send enrollee notices for which a template has been filed and
approved by the department pursuant to Section 1373.95.

end insert begin delete

(d)

end delete

begin insert (e) end insert  If an individual provider terminates his or her contract or
employment with a provider group that contracts with a health
care service plan, the plan may require that the provider group
send the begin delete notice end delete begin insert notices end insert required by begin delete subdivision (b) end delete begin insert subdivisions
(c) and (d) end insert .

begin delete

(e)

end delete

begin insert (f) end insert  If, after sending the begin delete notice end delete begin insert notices end insert required by begin delete subdivision
(b) end delete begin insert subdivisions (c) and (d) end insert , a health care service plan reaches an
agreement with begin delete a end delete begin insert any end insert terminated provider begin insert group or general acute
care hospital end insert to renew or enter into a new contract or to not
terminate their contract, the plan shall begin insert send a subsequent written
notice to all enrollees that were sent the notices required by
subdivisions (c) and (d) informing them of the status. The plan
shall end insert offer each affected enrollee the option to return to that
provider. If an begin delete affected end delete begin insert assigned end insert enrollee does not exercise this
option, the plan shall reassign the enrollee to another provider
begin insert group or general acute care hospital end insert .

begin delete

(f)

end delete

begin insert (g) end insert  A health care service plan and a provider shall include in
all written, printed, or electronic communications sent to an
enrollee that concern the contract termination or block transfer,
the following statement in not less than 8-point type: begin delete “If end delete

begin insert end insert

begin insert “If end insert you have been receiving care from a health care provider,
you may have a right to keep your provider for a designated time
period. Please contact your HMO’s customer service department,
and if you have further questions, you are encouraged to contact
the Department of Managed Health Care, which protects HMO
consumers, by telephone at its toll-free number, 1-888-HMO-2219,
or at a TDD number for the hearing impaired at 1-877-688-9891,
or online at www.hmohelp.ca.gov.”

begin insert end insert
begin delete

(g) For purposes of this section, “provider group” means a
medical group, independent practice association, or any other
similar organization.

end delete

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 10123.12 of the Insurance Code is amended
to read:

10123.12.  

(a) Every health insurer, including those insurers
that contract for alternative rates of payment pursuant to Section
10133, and every self-insured employee welfare benefit plan that
will affect the choice of physician, hospital, or other health care
providers, shall include within its disclosure form and within its
evidence or certificate of coverage a statement clearly describing
how participation in the policy or plan may affect the choice of
physician, hospital, or other health care providers, and describing
the nature and extent of the financial liability that is, or that may
be, incurred by the insured, enrollee, or covered dependents if care
is furnished by a provider that does not have a contract with the
insurer or plan to provide service at alternative rates of payment
pursuant to Section 10133. The form shall clearly inform
prospective insureds or plan enrollees that participation in the
policy or plan will affect the person’s choice in this regard by
placing the following statement in a conspicuous place on all
material required to be given to prospective insureds or plan
enrollees including promotional and descriptive material, disclosure
forms, and certificates and evidences of coverage:

 
PLEASE READ THE FOLLOWING INFORMATION SO
YOU WILL KNOW FROM WHOM OR WHAT GROUP OF
PROVIDERS HEALTH CARE MAY BE OBTAINED

It is not the intent of this section to require that the names of
individual health care providers be enumerated to prospective
insureds or enrollees.

If a health insurer providing coverage for hospital, medical, or
surgical expenses provides a list of facilities to patients or
contracting providers, the insurer shall include within the listing
a notification that insureds or enrollees may contact the insurer in
order to obtain a list of the facilities with which the health insurer
is contracting for subacute care and/or transitional inpatient care.

(b) Every health insurer that contracts for alternative rates of
payment pursuant to Section 10133 shall include within its
disclosure form a statement clearly describing the basic method
of reimbursement, including the scope and general methods of
payment, made to its contracting providers of health care services,
and whether financial bonuses or any other incentives are used.
The disclosure form shall indicate that, if an insured wishes to
know more about these issues, the insured may request additional
information from the insurer, the insured’s provider, or the
provider’s medical group regarding the information required
pursuant to subdivision (c).

(c) If a health insurer, medical group, or participating health
care provider uses or receives financial bonuses or any other
incentives, the insurer, medical group, or health care provider shall
provide a written summary to any person who requests it that
includes both of the following:

(1) A general description of the bonus and any other incentive
arrangements used in its compensation agreements. Nothing in
this paragraph shall be construed to require disclosure of trade
secrets or commercial or financial information that is privileged
or confidential, such as payment rates, as determined by the
commissioner, pursuant to state law.

(2) A description regarding whether, and in what manner, the
bonuses and any other incentives are related to a provider’s use of
referral services.

(d) The statements and written information provided pursuant
to subdivisions (b) and (c) shall be communicated in clear and
simple language that enables consumers to evaluate and compare
health insurance policies.

begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

Section 10133.57 is added to the Insurance Code, to
read:

begin delete

10133.57.  

(a) At least 30 days prior to the termination date of
a contract between a health insurer and a provider group or a
general acute care hospital to provide services at alternative rates
of payment pursuant to Section 10133, the insurer shall submit a
written notice notifying the department of the termination if the
termination of the contract would result in a material change to
the insurer’s provider network, as defined by the department by
regulation. The insurer shall include with that notice the written
notice the insurer proposes to send to affected insureds pursuant
to subdivision (b).

(b) At least 15 days prior to the termination date of a contract
between a health insurer and a provider group or a general acute
care hospital to provide services at alternative rates of payment
pursuant to Section 10133, the insurer shall send the written notice
described in subdivision (a) by United States mail to all insureds
who have obtained services from the provider group or general
acute care hospital within the preceding six months.

end delete

begin insert

begin insert 10133.57. end insert   

end insert begin insert

(a) For purposes of this section, “provider group”
means a medical group, independent practice association, or any
other similar organization.

end insert begin insert

(b) (1) At least 75 days prior to the termination date of its
contract with a provider group or a general acute care hospital
to provide services at alternative rates of payment pursuant to
Section 10133, the health insurer shall submit a filing to the
department that includes the written notice the insurer proposes
to send to the insureds. The insurer shall not send this notice to
the insureds until the department has reviewed and approved the
filing. If the department does not respond to the insured within
seven days of the date of the filing, the filing shall be deemed
approved.

end insert begin insert

(2) For purposes of a termination with a provider group, the
health insurer shall submit a filing to the department, as required
by paragraph (1), if 1,700 or more insureds were treated by the
provider group within the 12 months preceding the filing date
specified in paragraph (1).

end insert begin insert

(3) The department, in consultation with the Department of
Managed Health Care, may adopt by regulation a different filing
threshold from the threshold stated in paragraph (2).

end insert begin insert

(c) In the event of a contract termination between a health
insurer and a provider group or general acute care hospital, the
insurer shall do all of the following:

end insert begin insert

(1) Send the written notice described in subdivision (b), within
one business day of the contract termination with a provider group,
to all of the following persons:

end insert begin insert

(A) Any insured who has received health care services from the
terminated provider group within the 12 months preceding the
date of termination.

end insert begin insert

(B) Any insured who has any health care services scheduled
with the terminated provider group after the date of termination.

end insert begin insert

(2) Send the written notice described in subdivision (b), within
one business day of the contract termination with a general acute
care hospital, to all of the following persons:

end insert begin insert

(A) Any insured who has received health care services from the
terminated general acute care hospital within the 12 months
preceding the date of termination.

end insert begin insert

(B) Any insured who has authorized health care services
scheduled at a terminating general acute care hospital after the
date of termination.

end insert begin insert

(3) Allow insureds to continue to access services that were
authorized or scheduled at the terminated provider group or
general acute care hospital prior to the date of termination. Those
services shall be provided until completion of the authorized or
scheduled services for at least 60 days from the date of the notice
unless a longer period of time is required pursuant to Section
10133.56. The amount of, and the requirement for payment of,
copayments, deductibles, coinsurance, and other cost-sharing
components by an insured during the period of completion of
authorized or scheduled services with a terminated provider group
or general acute care hospital pursuant to this paragraph shall
be the same that would be paid by the insured when receiving care
from a provider currently contracting with the insurer.

end insert begin insert

(4) Provide reimbursement for services provided under
paragraph (3) either at a rate agreed upon by the insurer and the
terminated provider group or general acute care hospital or the
rate for those services as provided in the terminating contract. In
no event shall the provider bill the patient for the cost of services
beyond the copayment, deductible, or other cost-sharing
components of what the insured would have been responsible for
if the provider group or general acute care hospital was currently
contracted with the insurer.

end insert begin insert

(d) Even if a filing is not required to be submitted by subdivision
(b), a health insurer shall send insured notices as required by
subdivision (c). A health insurer may only send insured notices
that have been filed and approved by the department pursuant to
this section.

end insert begin delete

(c)

end delete

begin insert (e) end insert  If an individual provider terminates his or her contract or
employment with a provider group that contracts with a health
insurer begin delete and that termination is subject to the requirements of
subdivision (b) end delete , the insurer may require that the provider group
send the begin delete notice required by subdivision (b) end delete begin insert notices required by
subdivisions (c) and (d) end insert .

begin delete

(d)

end delete

begin insert (f) end insert  If, after sending the begin delete notice required by subdivision (b) end delete begin insert notices
required by subdivisions (c) and (d) end insert , a health insurer reaches an
agreement with a terminated provider group or general acute care
hospital to renew or enter into a new contract or to not terminate
its contract, the insurer shall send a begin insert subsequent end insert written notice begin delete notifying the affected covered lives end delete begin insert to all insureds that were sent
the notices required by subdivisions (c) and (d) informing those
insureds end insert that the provider group or hospital remains in their
provider network.

begin delete

(e) A health insurer or a provider group shall include in the
written notice sent pursuant to subdivision (b) or (c) the following
information in not less than 12-point type:

(1) The name of the terminated provider group or general acute
care hospital, or in the case of a notice sent pursuant to subdivision
(c), the name of the terminated individual provider.

(2) The date of the pending contract termination.

(3) A description explaining how to access a list of contracted
providers in the insured’s provider network.

(4) A statement that the insured may contact the insurer’s
customer service department to request completion of care for an
ongoing course of treatment from a terminated provider and a
telephone number for further explanation.

(5) A statement informing the insured that he or she may be
required to pay a larger portion of costs if the insured continues
to use the terminated provider.

(6) The following statement:

end delete begin insert

(g) A health insurer or a provider group shall include in all
written, printed, or electronic communications sent to an insured
that concern the contract termination, the following statement in
not less than 8-point type:

end insert

“If you have been receiving care from a health care provider,
you may have a right to keep your provider for a designated time
period. Please contact your insurer’s customer service department,
and if you have further questions, you are encouraged to contact
the Department of Insurance, which protects insurance consumers,
by telephone at its toll-free number, 800-927-HELP (4357), or at
a TDD number for the hearing impaired at 800-482-4833, or online
at www.insurance.ca.gov.”

begin delete

(f)

end delete

begin insert (h) end insert  The commissioner may adopt regulations in accordance with
the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code) that are necessary to implement the provisions of this
section.

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

Section 10601 of the Insurance Code is amended to
read:

10601.  

As used in this chapter:

(a) “Benefits and coverage” means the accident, sickness, or
disability indemnity available under a policy of disability insurance.

(b) “Exception” means any provision in a policy whereby
coverage for a specified hazard or condition is entirely eliminated.

(c) “Reduction” means any provision in a policy that reduces
the amount of a policy benefit to some amount or period less than
would be otherwise payable for medically authorized expenses or
services had the reduction not been used.

(d) “Limitation” means any provision other than an exception
or a reduction that restricts coverage under the policy.

(e) “Presenting for examination or sale” means either (1)
publication and dissemination of any brochure, mailer,
advertisement, or form that constitutes a presentation of the
provisions of the policy and that provides a policy enrollment or
application form, or (2) consultations or discussions between
prospective beneficiaries or their contract agents and employees
or agents of disability insurers, when those consultations or
discussions include presentation of formal, organized information
about the policy that is intended to influence or inform the
prospective insured or beneficiary, such as brochures, summaries,
charts, slides, or other modes of information in lieu of or in addition
to the policy itself.

(f) “Disability insurance” means every policy of disability
insurance and self-insured employee welfare benefit plan issued,
delivered, or entered into pursuant to or described in Chapter 1
(commencing with Section 10110) or Chapter 4 (commencing with
Section 10270) of this part.

(g) “Insurer” means every insurer transacting disability insurance
and every self-insured employee welfare plan specified in
subdivision (f).

(h) “Disclosure form” means the standard supplemental
disclosure form required pursuant to Section 10603.

(i) “Small group health insurance policy” means a group health
insurance policy issued to a small employer, as defined in Section
10700, 10753, or 10755.

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

Section 10604 of the Insurance Code is amended to
read:

10604.  

The disclosure form shall include at least the following
information, in concise and specific terms, relative to the disability
insurance policy, together with additional information as the
commissioner may require in connection with the policy:

(a) The applicable category or categories of coverage provided
by the policy, from among the following:

(1) Basic hospital expense coverage.

(2) Basic medical-surgical expense coverage.

(3) Hospital confinement indemnity coverage.

(4) Major medical expense coverage.

(5) Disability income protection coverage.

(6) Accident only coverage.

(7) Specified disease or specified accident coverage.

(8) Other categories as the commissioner may prescribe.

(b) The principal benefits and coverage of the disability
insurance policy, including coverage for acute care and subacute
care if the policy is a health insurance policy, as defined in Section
106.

(c) The exceptions, reductions, and limitations that apply to the
policy.

(d) A summary, including a citation of the relevant contractual
provisions, of the process used to authorize, modify, delay, or deny
payments for services under the coverage provided by the policy
including coverage for subacute care, transitional inpatient care,
or care provided in skilled nursing facilities. This subdivision shall
only apply to policies of health insurance as defined in Section
106.

(e) The full premium cost of the policy.

(f) Any copayment, coinsurance, or deductible requirements
that may be incurred by the insured or his or her family in obtaining
coverage under the policy.

(g) The terms under which the policy may be renewed by the
insured, including any reservation by the insurer of any right to
change premiums.

(h) A statement that the disclosure form is a summary only, and
that the policy itself should be consulted to determine governing
contractual provisions.

(i) For a health insurance policy, as defined in Section 106, all
of the following:

(1) A notice on the first page of the disclosure form that
conforms with all of the following conditions:

(A) (i) States that the form discloses the terms and conditions
of coverage.

(ii) States, with respect to individual health insurance policies,
small group health insurance policies, and any group health
insurance policies, that the applicant has a right to view the
disclosure form and policy prior to beginning coverage under the
policy, and, if the policy does not accompany the disclosure form,
the notice shall specify where the policy can be obtained prior to
beginning coverage.

(B) Includes a statement that the disclosure and the policy should
be read completely and carefully and that individuals with special
health care needs should read carefully those sections that apply
to them.

(C) Includes the insurer’s telephone number or numbers that
may be used by an applicant to receive additional information
about the benefits of the policy, or states where those telephone
number or numbers are located in the disclosure form.

(D) For individual health insurance policies and small group
health insurance policies, states where a health policy benefits and
coverage matrix is located.

(E) Is printed in type no smaller than that used for the remainder
of the disclosure form and is displayed prominently on the page.

(2) A statement as to when benefits shall cease in the event of
nonpayment of premium and the effect of nonpayment upon an
insured who is hospitalized or undergoing treatment for an ongoing
condition.

(3) To the extent that the policy or insurer permits a free choice
of provider to its insureds, the statement shall disclose, consistent
with Section 10123.12, the nature and extent of choice permitted
and the financial liability that is, or may be, incurred by the insured,
covered dependents, or a third party by reason of the exercise of
that choice.

(4) For group health insurance policies, including small group
health insurance policies, a summary of the terms and conditions
under which insureds may remain in the policy in the event the
group ceases to exist, the group policy is terminated, an individual
insured leaves the group, or the insureds’ eligibility status changes.

(5) If the policy utilizes arbitration to settle disputes, a statement
of that fact. If the policy requires binding arbitration, a disclosure
pursuant to Section 10123.19.

(6) A description of any limitations on the insured’s choice of
primary care physician, specialty care physician, or nonphysician
health care practitioner, based on service area and limitations on
the insured’s choice of acute care hospital care, subacute or
transitional inpatient care, or skilled nursing facility.

(7) Conditions and procedures for cancellation, rescission, or
nonrenewal.

(8) A description as to how an insured may request continuity
of care as required by Sections 10133.55 and 10133.56, and request
a second opinion pursuant to Section 10123.68.

(9) Information concerning the right of an insured to request an
independent medical review in accordance with Article 3.5
(commencing with Section 10169) of Chapter 1.

(10) A notice as required by Section 791.04.

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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.

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