AB 1163, as introduced, Rodriguez. Health care services plan and health insurers: agents and brokers: notice of contract changes.
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.
This bill would prohibit a material change made by a health care service plan or a health insurer to the terms and conditions of a contract between the plan or insurer and an agent or broker from becoming effective until the plan or insurer has delivered to the agent or broker, written or electronic notice of the change or changes to the contract, within a specified time period. These provisions would not apply if the material change is agreed to by the plan or insurer and the agent or broker, or if the change at issue is required pursuant to state or federal law.
This bill would exempt violations of the provisions relating to health care service plans from the from criminal offense and other disciplinary provisions of the Knox-Keene Health Care Service Plan Act of 1975.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1399.3 is added to the Health and Safety
2Code, to read:
(a) A material change made by a health care service
4plan, as defined in subdivision (f) of Section 1345, to the terms
5and conditions of a contract between the health care service plan
6and an agent or broker shall not become effective until the health
7care service plan has delivered to the agent or broker, at least 120
8days prior to the effective date of the change, written or electronic
9notice indicating the change or changes to the contract. For
10purposes of this section, “material” means a provision in a contract
11to which a reasonable person would attach importance in
12determining the action to be taken upon the provision.
13(b) Subdivision (a) shall not apply under either of the following
14circumstances:
15(1) The change to the contract is mutually agreed upon by the
16health care service plan and the agent or broker.
17(2) The change to the contract is required by state or federal
18law.
19(c) This section is not subject to Article 7 (commencing with
20Section 1386) or Article 8 (commencing with Section 1390).
Section 769.56 is added to the Insurance Code, to read:
(a) A material change made by a health insurer, as
23defined in subdivision (b) of Section 106, to the terms and
24conditions of a contract between the health insurer and an agent
25or broker shall not become effective until the health insurer has
26delivered to the agent or broker, at least 120 days prior to the
27effective date of the change, written or electronic notice indicating
28the change or changes to the contract. For purposes of this section,
29“material” means a provision in a contract to which a reasonable
30person would attach importance in determining the action to be
31taken upon the provision.
32(b) Subdivision (a) shall not apply under either of the following
33circumstances:
34(1) The
change to the contract is mutually agreed upon by the
35health insurer and the agent or broker.
P3 1(2) The change to the contract is required by state or federal
2law.
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