Amended in Assembly May 5, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1102


Introduced by Assembly Member Santiago

February 27, 2015


An act to amend Section 1399.849 of the Health and Safety Code, and to amend Section 10965.3 of the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

AB 1102, as amended, Santiago. Health care coverage: special enrollment periods: triggering event.

Existing federal law, the Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms as of January 1, 2014. Among other things, PPACA requires each state, by January 1, 2014, to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers, and requires each exchange to provide for an initial open enrollment period, annual open enrollment periods, and special enrollment periods.

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 requires a health care service plan or health insurer, on and after October 1, 2013, to offer, market, and sell all of the plan’s or insurer’s health benefit plans that are sold in the individual market for policy years on or after January 1, 2014, to all individuals and dependents in each service area in which the plan or insurer provides or arranges for the provision of health care services, as specified, but requires plans and insurers to limit enrollment in individual health benefit plans to specified open enrollment and special enrollment periods. Existing law requires a health care service plan and health insurer to allow an individual to enroll in or change individual health benefit plans as a result of specified triggering events, including that he or she gains a dependent.

This bill wouldbegin delete requireend deletebegin insert require, until October 1, 2021,end insert a health care service plan or health insurer to allow an individual to enroll or change individual health benefits if the individual becomes pregnant. Because a willful violation of this requirement by a health care service plan would be a crime, this 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:

P2    1

SECTION 1.  

Section 1399.849 of the Health and Safety Code
2 is amended to read:

3

1399.849.  

(a) (1) On and after October 1, 2013, a plan shall
4fairly and affirmatively offer, market, and sell all of the plan’s
5health benefit plans that are sold in the individual market for policy
6years on or after January 1, 2014, to all individuals and dependents
7in each service area in which the plan provides or arranges for the
8provision of health care services. A plan shall limit enrollment in
9individual health benefit plans to open enrollment periods, annual
10enrollment periods, and special enrollment periods as provided in
11subdivisions (c) and (d).

12(2) A plan shall allow the subscriber of an individual health
13benefit plan to add a dependent to the subscriber’s plan at the
14option of the subscriber, consistent with the open enrollment,
P3    1 annual enrollment, and special enrollment period requirements in
2this section.

3(b) An individual health benefit plan issued, amended, or
4renewed on or after January 1, 2014, shall not impose any
5preexisting condition provision upon any individual.

6(c) (1) A plan shall provide an initial open enrollment period
7from October 1, 2013, to March 31, 2014, inclusive, an annual
8enrollment period for the policy year beginning on January 1, 2015,
9from November 15, 2014, to February 15, 2015, inclusive, and
10annual enrollment periods for policy years beginning on or after
11January 1, 2016, from October 15 to December 7, inclusive, of the
12preceding calendar year.

13(2) Pursuant to Section 147.104(b)(2) of Title 45 of the Code
14of Federal Regulations, for individuals enrolled in noncalendar
15year individual health plan contracts, a plan shall also provide a
16limited open enrollment period beginning on the date that is 30
17calendar days prior to the date the policy year ends in 2014.

18(d) (1) Subject to paragraph (2), commencing January 1, 2014,
19a plan shall allow an individual to enroll in or change individual
20health benefit plans as a result of the following triggering events:

21(A) He or she or his or her dependent loses minimum essential
22coverage. For purposes of this paragraph, the following definitions
23shall apply:

24(i) “Minimum essential coverage” has the same meaning as that
25term is defined in subsection (f) of Section 5000A of the Internal
26Revenue Code (26 U.S.C. Sec. 5000A).

27(ii) “Loss of minimum essential coverage” includes, but is not
28 limited to, loss of that coverage due to the circumstances described
29in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the
30Code of Federal Regulations and the circumstances described in
31Section 1163 of Title 29 of the United States Code. “Loss of
32minimum essential coverage” also includes loss of that coverage
33for a reason that is not due to the fault of the individual.

34(iii) “Loss of minimum essential coverage” does not include
35loss of that coverage due to the individual’s failure to pay
36premiums on a timely basis or situations allowing for a rescission,
37subject to clause (ii) and Sections 1389.7 and 1389.21.

38(B) He or she gains a dependent or becomes a dependent.

39(C) He or she is mandated to be covered as a dependent pursuant
40to a valid state or federal court order.

P4    1(D) He or she has been released from incarceration.

2(E) His or her health coverage issuer substantially violated a
3material provision of the health coverage contract.

4(F) He or she gains access to new health benefit plans as a result
5of a permanent move.

6(G) He or she was receiving services from a contracting provider
7under another health benefit plan, as defined in Section 1399.845
8of this code or Section 10965 of the Insurance Code, for one of
9the conditions described in subdivision (c) of Section 1373.96 and
10that provider is no longer participating in the health benefit plan.

11(H) He or she demonstrates to the Exchange, with respect to
12health benefit plans offered through the Exchange, or to the
13department, with respect to health benefit plans offered outside
14the Exchange, that he or she did not enroll in a health benefit plan
15during the immediately preceding enrollment period available to
16the individual because he or she was misinformed that he or she
17was covered under minimum essential coverage.

18(I) He or she is a member of the reserve forces of the United
19States military returning from active duty or a member of the
20California National Guard returning from active duty service under
21Title 32 of the United States Code.

22(J) begin deleteAn end deletebegin insertOn and after January 1, 2016, and until October 1, 2021,
23an end insert
individual becomes pregnant.

24(K) With respect to individual health benefit plans offered
25through the Exchange, in addition to the triggering events listed
26in this paragraph, any other events listed in Section 155.420(d) of
27Title 45 of the Code of Federal Regulations.

28(2) With respect to individual health benefit plans offered
29outside the Exchange, an individual shall have 60 days from the
30date of a triggering event identified in paragraph (1) to apply for
31coverage from a health care service plan subject to this section.
32With respect to individual health benefit plans offered through the
33Exchange, an individual shall have 60 days from the date of a
34triggering event identified in paragraph (1) to select a plan offered
35through the Exchange, unless a longer period is provided in Part
36155 (commencing with Section 155.10) of Subchapter B of Subtitle
37A of Title 45 of the Code of Federal Regulations.

38(e) With respect to individual health benefit plans offered
39through the Exchange, the effective date of coverage required
40pursuant to this section shall be consistent with the dates specified
P5    1in Section 155.410 or 155.420 of Title 45 of the Code of Federal
2Regulations, as applicable. A dependent who is a registered
3domestic partner pursuant to Section 297 of the Family Code shall
4have the same effective date of coverage as a spouse.

5(f) With respect to individual health benefit plans offered outside
6the Exchange, the following provisions shall apply:

7(1) After an individual submits a completed application form
8for a plan contract, the health care service plan shall, within 30
9days, notify the individual of the individual’s actual premium
10charges for that plan established in accordance with Section
111399.855. The individual shall have 30 days in which to exercise
12the right to buy coverage at the quoted premium charges.

13(2) With respect to an individual health benefit plan for which
14an individual applies during the initial open enrollment period
15described in subdivision (c), when the subscriber submits a
16premium payment, based on the quoted premium charges, and that
17payment is delivered or postmarked, whichever occurs earlier, by
18December 15, 2013, coverage under the individual health benefit
19plan shall become effective no later than January 1, 2014. When
20that payment is delivered or postmarked within the first 15 days
21of any subsequent month, coverage shall become effective no later
22than the first day of the following month. When that payment is
23delivered or postmarked between December 16, 2013, and
24December 31, 2013, inclusive, or after the 15th day of any
25subsequent month, coverage shall become effective no later than
26the first day of the second month following delivery or postmark
27of the payment.

28(3) With respect to an individual health benefit plan for which
29an individual applies during the annual open enrollment period
30described in subdivision (c), when the individual submits a
31premium payment, based on the quoted premium charges, and that
32payment is delivered or postmarked, whichever occurs later, by
33December 15, coverage shall become effective as of the following
34January 1. When that payment is delivered or postmarked within
35the first 15 days of any subsequent month, coverage shall become
36effective no later than the first day of the following month. When
37that payment is delivered or postmarked between December 16
38and December 31, inclusive, or after the 15th day of any subsequent
39month, coverage shall become effective no later than the first day
P6    1of the second month following delivery or postmark of the
2payment.

3(4) With respect to an individual health benefit plan for which
4an individual applies during a special enrollment period described
5in subdivision (d), the following provisions shall apply:

6(A) When the individual submits a premium payment, based
7on the quoted premium charges, and that payment is delivered or
8postmarked, whichever occurs earlier, within the first 15 days of
9the month, coverage under the plan shall become effective no later
10than the first day of the following month. When the premium
11payment is neither delivered nor postmarked until after the 15th
12day of the month, coverage shall become effective no later than
13the first day of the second month following delivery or postmark
14of the payment.

15(B) Notwithstanding subparagraph (A), in the case of a birth,
16adoption, or placement for adoption, the coverage shall be effective
17on the date of birth, adoption, or placement for adoption.

18(C) Notwithstanding subparagraph (A), in the case of marriage
19or becoming a registered domestic partner or in the case where a
20qualified individual loses minimum essential coverage, the
21coverage effective date shall be the first day of the month following
22the date the plan receives the request for special enrollment.

23(g) (1) A health care service plan shall not establish rules for
24eligibility, including continued eligibility, of any individual to
25enroll under the terms of an individual health benefit plan based
26on any of the following factors:

27(A) Health status.

28(B) Medical condition, including physical and mental illnesses.

29(C) Claims experience.

30(D) Receipt of health care.

31(E) Medical history.

32(F) Genetic information.

33(G) Evidence of insurability, including conditions arising out
34of acts of domestic violence.

35(H) Disability.

36(I) Any other health status-related factor as determined by any
37federal regulations, rules, or guidance issued pursuant to Section
382705 of the federal Public Health Service Act.

39(2) Notwithstanding Section 1389.1, a health care service plan
40shall not require an individual applicant or his or her dependent
P7    1to fill out a health assessment or medical questionnaire prior to
2enrollment under an individual health benefit plan. A health care
3service plan shall not acquire or request information that relates
4to a health status-related factor from the applicant or his or her
5dependent or any other source prior to enrollment of the individual.

6(h) (1) A health care service plan shall consider as a single risk
7pool for rating purposes in the individual market the claims
8experience of all insureds and all enrollees in all nongrandfathered
9individual health benefit plans offered by that health care service
10plan in this state, whether offered as health care service plan
11contracts or individual health insurance policies, including those
12insureds and enrollees who enroll in individual coverage through
13the Exchange and insureds and enrollees who enroll in individual
14coverage outside of the Exchange. Student health insurance
15 coverage, as that coverage is defined in Section 147.145(a) of Title
1645 of the Code of Federal Regulations, shall not be included in a
17health care service plan’s single risk pool for individual coverage.

18(2) Each calendar year, a health care service plan shall establish
19an index rate for the individual market in the state based on the
20total combined claims costs for providing essential health benefits,
21as defined pursuant to Section 1302 of PPACA, within the single
22risk pool required under paragraph (1). The index rate shall be
23adjusted on a marketwide basis based on the total expected
24marketwide payments and charges under the risk adjustment and
25reinsurance programs established for the state pursuant to Sections
261343 and 1341 of PPACA and Exchange user fees, as described
27in subdivision (d) of Section 156.80 of Title 45 of the Code of
28Federal Regulations. The premium rate for all of the health benefit
29plans in the individual market within the single risk pool required
30under paragraph (1) shall use the applicable marketwide adjusted
31index rate, subject only to the adjustments permitted under
32paragraph (3).

33(3) A health care service plan may vary premium rates for a
34particular health benefit plan from its index rate based only on the
35following actuarially justified plan-specific factors:

36(A) The actuarial value and cost-sharing design of the health
37benefit plan.

38(B) The health benefit plan’s provider network, delivery system
39characteristics, and utilization management practices.

P8    1(C) The benefits provided under the health benefit plan that are
2in addition to the essential health benefits, as defined pursuant to
3Section 1302 of PPACA and Section 1367.005. These additional
4benefits shall be pooled with similar benefits within the single risk
5pool required under paragraph (1) and the claims experience from
6those benefits shall be utilized to determine rate variations for
7plans that offer those benefits in addition to essential health
8benefits.

9(D) With respect to catastrophic plans, as described in subsection
10(e) of Section 1302 of PPACA, the expected impact of the specific
11eligibility categories for those plans.

12(E) Administrative costs, excluding user fees required by the
13Exchange.

14(i) This section shall only apply with respect to individual health
15benefit plans for policy years on or after January 1, 2014.

16(j) This section shall not apply to a grandfathered health plan.

17(k) If Section 5000A of the Internal Revenue Code, as added
18by Section 1501 of PPACA, is repealed or amended to no longer
19apply to the individual market, as defined in Section 2791 of the
20federal Public Health Service Act (42 U.S.C. Sec. 300gg-91),
21subdivisions (a), (b), and (g) shall become inoperative 12 months
22after that repeal or amendment.

23

SEC. 2.  

Section 10965.3 of the Insurance Code is amended to
24read:

25

10965.3.  

(a) (1) On and after October 1, 2013, a health insurer
26shall fairly and affirmatively offer, market, and sell all of the
27insurer’s health benefit plans that are sold in the individual market
28for policy years on or after January 1, 2014, to all individuals and
29dependents in each service area in which the insurer provides or
30arranges for the provision of health care services. A health insurer
31shall limit enrollment in individual health benefit plans to open
32enrollment periods, annual enrollment periods, and special
33enrollment periods as provided in subdivisions (c) and (d).

34(2) A health insurer shall allow the policyholder of an individual
35health benefit plan to add a dependent to the policyholder’s health
36benefit plan at the option of the policyholder, consistent with the
37open enrollment, annual enrollment, and special enrollment period
38requirements in this section.

P9    1(b) An individual health benefit plan issued, amended, or
2renewed on or after January 1, 2014, shall not impose any
3preexisting condition provision upon any individual.

4(c) (1) A health insurer shall provide an initial open enrollment
5period from October 1, 2013, to March 31, 2014, inclusive, an
6annual enrollment period for the policy year beginning on January
71, 2015, from November 15, 2014, to February 15, 2015, inclusive,
8and annual enrollment periods for policy years beginning on or
9after January 1, 2016, from October 15 to December 7, inclusive,
10of the preceding calendar year.

11(2) Pursuant to Section 147.104(b)(2) of Title 45 of the Code
12of Federal Regulations, for individuals enrolled in noncalendar-year
13individual health plan contracts, a health insurer shall also provide
14a limited open enrollment period beginning on the date that is 30
15calendar days prior to the date the policy year ends in 2014.

16(d) (1) Subject to paragraph (2), commencing January 1, 2014,
17a health insurer shall allow an individual to enroll in or change
18individual health benefit plans as a result of the following triggering
19events:

20(A) He or she or his or her dependent loses minimum essential
21coverage. For purposes of this paragraph, both of the following
22definitions shall apply:

23(i) “Minimum essential coverage” has the same meaning as that
24term is defined in subsection (f) of Section 5000A of the Internal
25Revenue Code (26 U.S.C. Sec. 5000A).

26(ii) “Loss of minimum essential coverage” includes, but is not
27limited to, loss of that coverage due to the circumstances described
28in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the
29Code of Federal Regulations and the circumstances described in
30Section 1163 of Title 29 of the United States Code. “Loss of
31minimum essential coverage” also includes loss of that coverage
32for a reason that is not due to the fault of the individual.

33(iii) “Loss of minimum essential coverage” does not include
34loss of that coverage due to the individual’s failure to pay
35premiums on a timely basis or situations allowing for a rescission,
36subject to clause (ii) and Sections 10119.2 and 10384.17.

37(B) He or she gains a dependent or becomes a dependent.

38(C) He or she is mandated to be covered as a dependent pursuant
39to a valid state or federal court order.

40(D) He or she has been released from incarceration.

P10   1(E) His or her health coverage issuer substantially violated a
2material provision of the health coverage contract.

3(F) He or she gains access to new health benefit plans as a result
4of a permanent move.

5(G) He or she was receiving services from a contracting provider
6under another health benefit plan, as defined in Section 10965 of
7this code or Section 1399.845 of the Health and Safety Code, for
8one of the conditions described in subdivision (a) of Section
910133.56 and that provider is no longer participating in the health
10benefit plan.

11(H) He or she demonstrates to the Exchange, with respect to
12health benefit plans offered through the Exchange, or to the
13department, with respect to health benefit plans offered outside
14the Exchange, that he or she did not enroll in a health benefit plan
15during the immediately preceding enrollment period available to
16the individual because he or she was misinformed that he or she
17was covered under minimum essential coverage.

18(I) He or she is a member of the reserve forces of the United
19States military returning from active duty or a member of the
20California National Guard returning from active duty service under
21Title 32 of the United States Code.

22(J) begin deleteAn end deletebegin insertOn and after January 1, 2016, and until October 1, 2021,
23an end insert
individual becomes pregnant.

24(K) With respect to individual health benefit plans offered
25through the Exchange, in addition to the triggering events listed
26in this paragraph, any other events listed in Section 155.420(d) of
27Title 45 of the Code of Federal Regulations.

28(2) With respect to individual health benefit plans offered
29outside the Exchange, an individual shall have 60 days from the
30date of a triggering event identified in paragraph (1) to apply for
31coverage from a health care service plan subject to this section.
32With respect to individual health benefit plans offered through the
33Exchange, an individual shall have 60 days from the date of a
34triggering event identified in paragraph (1) to select a plan offered
35through the Exchange, unless a longer period is provided in Part
36155 (commencing with Section 155.10) of Subchapter B of Subtitle
37A of Title 45 of the Code of Federal Regulations.

38(e) With respect to individual health benefit plans offered
39through the Exchange, the effective date of coverage required
40pursuant to this section shall be consistent with the dates specified
P11   1in Section 155.410 or 155.420 of Title 45 of the Code of Federal
2Regulations, as applicable. A dependent who is a registered
3domestic partner pursuant to Section 297 of the Family Code shall
4have the same effective date of coverage as a spouse.

5(f) With respect to an individual health benefit plan offered
6outside the Exchange, the following provisions shall apply:

7(1) After an individual submits a completed application form
8for a plan, the insurer shall, within 30 days, notify the individual
9of the individual’s actual premium charges for that plan established
10in accordance with Section 10965.9. The individual shall have 30
11days in which to exercise the right to buy coverage at the quoted
12premium charges.

13(2) With respect to an individual health benefit plan for which
14an individual applies during the initial open enrollment period
15described in subdivision (c), when the policyholder submits a
16premium payment, based on the quoted premium charges, and that
17payment is delivered or postmarked, whichever occurs earlier, by
18December 15, 2013, coverage under the individual health benefit
19plan shall become effective no later than January 1, 2014. When
20that payment is delivered or postmarked within the first 15 days
21of any subsequent month, coverage shall become effective no later
22than the first day of the following month. When that payment is
23delivered or postmarked between December 16, 2013, and
24December 31, 2013, inclusive, or after the 15th day of any
25subsequent month, coverage shall become effective no later than
26the first day of the second month following delivery or postmark
27of the payment.

28(3) With respect to an individual health benefit plan for which
29an individual applies during the annual open enrollment period
30described in subdivision (c), when the individual submits a
31premium payment, based on the quoted premium charges, and that
32payment is delivered or postmarked, whichever occurs later, by
33December 15, coverage shall become effective as of the following
34January 1. When that payment is delivered or postmarked within
35the first 15 days of any subsequent month, coverage shall become
36effective no later than the first day of the following month. When
37that payment is delivered or postmarked between December 16
38and December 31, inclusive, or after the 15th day of any subsequent
39month, coverage shall become effective no later than the first day
P12   1of the second month following delivery or postmark of the
2payment.

3(4) With respect to an individual health benefit plan for which
4an individual applies during a special enrollment period described
5in subdivision (d), the following provisions shall apply:

6(A) When the individual submits a premium payment, based
7on the quoted premium charges, and that payment is delivered or
8postmarked, whichever occurs earlier, within the first 15 days of
9the month, coverage under the plan shall become effective no later
10than the first day of the following month. When the premium
11payment is neither delivered nor postmarked until after the 15th
12day of the month, coverage shall become effective no later than
13the first day of the second month following delivery or postmark
14of the payment.

15(B) Notwithstanding subparagraph (A), in the case of a birth,
16adoption, or placement for adoption, the coverage shall be effective
17on the date of birth, adoption, or placement for adoption.

18(C) Notwithstanding subparagraph (A), in the case of marriage
19or becoming a registered domestic partner or in the case where a
20qualified individual loses minimum essential coverage, the
21coverage effective date shall be the first day of the month following
22the date the insurer receives the request for special enrollment.

23(g) (1) A health insurer shall not establish rules for eligibility,
24including continued eligibility, of any individual to enroll under
25the terms of an individual health benefit plan based on any of the
26following factors:

27(A) Health status.

28(B) Medical condition, including physical and mental illnesses.

29(C) Claims experience.

30(D) Receipt of health care.

31(E) Medical history.

32(F) Genetic information.

33(G) Evidence of insurability, including conditions arising out
34of acts of domestic violence.

35(H) Disability.

36(I) Any other health status-related factor as determined by any
37federal regulations, rules, or guidance issued pursuant to Section
382705 of the federal Public Health Service Act.

39(2) Notwithstanding subdivision (c) of Section 10291.5, a health
40insurer shall not require an individual applicant or his or her
P13   1dependent to fill out a health assessment or medical questionnaire
2prior to enrollment under an individual health benefit plan. A health
3insurer shall not acquire or request information that relates to a
4health status-related factor from the applicant or his or her
5dependent or any other source prior to enrollment of the individual.

6(h) (1) A health insurer shall consider as a single risk pool for
7rating purposes in the individual market the claims experience of
8all insureds and enrollees in all nongrandfathered individual health
9benefit plans offered by that insurer in this state, whether offered
10as health care service plan contracts or individual health insurance
11policies, including those insureds and enrollees who enroll in
12individual coverage through the Exchange and insureds and
13enrollees who enroll in individual coverage outside the Exchange.
14Student health insurance coverage, as such coverage is defined in
15 Section 147.145(a) of Title 45 of the Code of Federal Regulations,
16shall not be included in a health insurer’s single risk pool for
17individual coverage.

18(2) Each calendar year, a health insurer shall establish an index
19rate for the individual market in the state based on the total
20combined claims costs for providing essential health benefits, as
21defined pursuant to Section 1302 of PPACA, within the single risk
22pool required under paragraph (1). The index rate shall be adjusted
23on a marketwide basis based on the total expected marketwide
24payments and charges under the risk adjustment and reinsurance
25programs established for the state pursuant to Sections 1343 and
261341 of PPACA and Exchange user fees, as described in
27subdivision (d) of Section 156.80 of Title 45 of the Code of Federal
28Regulations. The premium rate for all of the health benefit plans
29in the individual market within the single risk pool required under
30paragraph (1) shall use the applicable marketwide adjusted index
31rate, subject only to the adjustments permitted under paragraph
32(3).

33(3) A health insurer may vary premium rates for a particular
34health benefit plan from its index rate based only on the following
35actuarially justified plan-specific factors:

36(A) The actuarial value and cost-sharing design of the health
37benefit plan.

38(B) The health benefit plan’s provider network, delivery system
39characteristics, and utilization management practices.

P14   1(C) The benefits provided under the health benefit plan that are
2in addition to the essential health benefits, as defined pursuant to
3Section 1302 of PPACA and Section 10112.27. These additional
4benefits shall be pooled with similar benefits within the single risk
5pool required under paragraph (1) and the claims experience from
6those benefits shall be utilized to determine rate variations for
7plans that offer those benefits in addition to essential health
8benefits.

9(D) With respect to catastrophic plans, as described in subsection
10(e) of Section 1302 of PPACA, the expected impact of the specific
11eligibility categories for those plans.

12(E) Administrative costs, excluding any user fees required by
13the Exchange.

14(i) This section shall only apply with respect to individual health
15benefit plans for policy years on or after January 1, 2014.

16(j) This section shall not apply to a grandfathered health plan.

17(k) If Section 5000A of the Internal Revenue Code, as added
18by Section 1501 of PPACA, is repealed or amended to no longer
19apply to the individual market, as defined in Section 2791 of the
20federal Public Health Service Act (42 U.S.C. Sec. 300gg-91),
21subdivisions (a), (b), and (g) shall become inoperative 12 months
22after the date of that repeal or amendment and individual health
23care benefit plans shall thereafter be subject to Sections 10901.2,
2410951, and 10953.

25

SEC. 3.  

No reimbursement is required by this act pursuant to
26Section 6 of Article XIII B of the California Constitution because
27the only costs that may be incurred by a local agency or school
28district will be incurred because this act creates a new crime or
29infraction, eliminates a crime or infraction, or changes the penalty
30for a crime or infraction, within the meaning of Section 17556 of
31the Government Code, or changes the definition of a crime within
32the meaning of Section 6 of Article XIII B of the California
33Constitution.



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