AB 1163, as amended, 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 leastbegin delete 120end delete
8begin insert 60end insert days prior to the effective date of the change, written or
9electronic notice indicating the change or changes to the contract.
10For purposes of this section,begin delete “material” means a provision in a
11contract to which a reasonable person would attach
importance in
12determining the action to be taken upon the provision.end delete
13change” is a change that causes the contract not to reflect the
14terms the parties originally intended to be the basis for their mutual
15contractual obligations.end insert
16(b) Subdivision (a) shall not apply under either of the following
17circumstances:
18(1) The change to the contract is mutually agreed upon by the
19health care service plan and the agent or broker.
20(2) The change to the contract is required by state or federal
21law.
22(c) This section is not subject to Article 7 (commencing with
23Section
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
26defined in subdivision (b) of Section 106, to the terms and
27conditions of a contract between the health insurer and an agent
28or broker shall not become effective until the health insurer has
29delivered to the agent or broker, at leastbegin delete 120end deletebegin insert 60end insert days prior to the
30effective date of the change, written or electronic notice indicating
31the change or changes to the contract. For purposes of this section, begin delete32“material” means a provision in a contract to which a reasonable
33person would attach importance in determining the
action to be
34taken upon the provision.end delete
P3 1causes the contract not to reflect the terms the parties originally
2intended to be the basis for their mutual contractual obligations.end insert
3(b) Subdivision (a) shall not apply under either of the following
4circumstances:
5(1) The change to the contract is mutually agreed upon by the
6health insurer and the agent or broker.
7(2) The change to the contract is required by state or federal
8law.
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