Amended in Senate May 31, 2016

Amended in Assembly May 14, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1216

Introduced by Assembly Member Bonta

February 27, 2015

begin delete An act to amend Section 14100.3 of the Welfare and Institutions Code, relating to Medi-Cal. end delete begin insert An act to amend Section 1367.006 of the Health and Safety Code, and to amend Section 10112.28 of the Insurance Code, relating to health care coverage. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1216, as amended, Bonta. begin delete Medi-Cal: plan amendments and waiver applications. end delete begin insert Limitations on cost sharing: family coverage. end insert

begin insert

Existing federal law, the Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that take effect January 1, 2014. Among other things, PPACA establishes annual limits on specified forms of cost sharing, including deductibles, on all essential health benefits for nongrandfathered individual and group health insurance 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. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a plan contract or policy and, commencing January 1, 2017, for a large group market health plan contract or policy, for family coverage that includes a deductible and is a high deductible health plan, as defined in federal law, to include a deductible for each individual covered by the plan contract or policy that is equal to either the amount set forth in a specified provision of federal law or the deductible for individual coverage under the plan contract or policy, whichever is greater.

end insert begin insert

This bill would instead prohibit a large group market health plan contract or policy for family coverage that is a high deductible health plan, as defined in federal law, and that includes a deductible for individual coverage from subjecting an individual covered by the plan contract or policy to a deductible that is greater than the deductible for individual coverage under the plan contract or policy if the deductible for individual coverage is greater than or equal to the amount set forth in the provision of federal law described above. Because a willful violation of this prohibition by a health care service plan would be a crime, this bill would impose a state-mandated local program.

end insert 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 begin delete

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law grants the department the rights and duties necessary to conform to requirements for securing approval of an agreement, or state plan, between the state and the federal government under Title XIX of the federal Social Security Act that describes the nature and scope of the Medi-Cal program. Existing law requires the department to seek approval from the federal Centers for Medicare and Medicaid Services (CMS) of any amendments to the state plan or a waiver from the requirements of the act for the purposes of continued federal financial participation under the act. Existing law requires the department to post on its Internet Web site all submitted state plan amendments and all federal waiver applications and requests for new waivers, waiver amendments, and waiver renewals and extensions, within 10 business days from the date of submission of those documents to CMS. Existing law requires the department to post on its Internet Web site all pending submitted state plan amendments and federal waiver applications and requests that the department submitted to CMS in 2009 and every year thereafter.

end delete begin delete

This bill would instead require the department to post on its Internet Web Site all submitted state plan amendments and all federal waiver applications and requests for new waivers, waiver amendments, and waiver renewals and extensions within 7 business days from the date of submission, and would also require the department to post all pending submitted state plan amendments and federal waiver applications and requests. The bill would require the department to accept public comment on all state plan amendments and waivers, as specified, and would authorize use of information from the comments to make amendments to those documents.

end delete

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 1367.006 of the end insert begin insert Health and Safety Code end insert

begin insert is amended to read: end insert

1367.006.  

(a) This section shall apply to nongrandfathered
individual and group health care service plan contracts that provide
coverage for essential health benefits, as defined in Section
1367.005, and that are issued, amended, or renewed on or after
January 1, 2015.

(b) (1) For nongrandfathered health care service plan contracts
in the individual or small group markets, a health care service plan
contract, except a specialized health care service plan contract,
that is issued, amended, or renewed on or after January 1, 2015,
shall provide for a limit on annual out-of-pocket expenses for all
covered benefits that meet the definition of essential health benefits
in Section 1367.005, including out-of-network emergency care
consistent with Section 1371.4.

(2) For nongrandfathered health care service plan contracts in
the large group market, a health care service plan contract, except
a specialized health care service plan contract, that is issued,
amended, or renewed on or after January 1, 2015, shall provide
for a limit on annual out-of-pocket expenses for covered benefits,
including out-of-network emergency care consistent with Section
1371.4. This limit shall only apply to essential health benefits, as
defined in Section 1367.005, that are covered under the plan to
the extent that this provision does not conflict with federal law or
guidance on out-of-pocket maximums for nongrandfathered health
care service plan contracts in the large group market.

(c) (1) The limit described in subdivision (b) shall not exceed
the limit described in Section 1302(c) of PPACA, and any
subsequent rules, regulations, or guidance issued under that section.

(2) The limit described in subdivision (b) shall result in a total
maximum out-of-pocket limit for all covered essential health
benefits equal to the dollar amounts in effect under Section
223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 with the
dollar amounts adjusted as specified in Section 1302(c)(1)(B) of
PPACA.

(3) For family coverage, an individual within a family shall not
have a maximum out-of-pocket limit that is greater than the
maximum out-of-pocket limit for individual coverage for that
product.

(d) Nothing in this section shall be construed to affect the
reduction in cost sharing for eligible enrollees described in Section
1402 of PPACA, and any subsequent rules, regulations, or guidance
issued under that section.

(e) If an essential health benefit is offered or provided by a
specialized health care service plan, the total annual out-of-pocket
maximum for all covered essential benefits shall not exceed the
limit in subdivision (b). This section shall not apply to a specialized
health care service plan that does not offer an essential health
benefit as defined in Section 1367.005.

(f) The maximum out-of-pocket limit shall apply to any
copayment, coinsurance, deductible, and any other form of cost
sharing for all covered benefits that meet the definition of essential
health benefits in Section 1367.005.

(g) (1) (A) Except as provided in paragraph (2), if a health care
service plan contract for family coverage includes a deductible,
an individual within a family shall not have a deductible that is
greater than the deductible limit for individual coverage for that
product.

(B) Except as provided in paragraph (2), if a large group market
health care service plan contract for family coverage that is issued,
amended, or renewed on or after January 1, 2017, includes a
deductible, an individual within a family shall not have a deductible
that is more than the deductible limit for individual coverage for
that product.

(2) (A)  begin delete If end delete begin insert For coverage in the individual and small group
markets, if end insert a health care service plan contract for family coverage
includes a deductible and is a high deductible health plan under
the definition set forth in Section 223(c)(2) of Title 26 of the United
States Code, the plan contract shall include a deductible for each
individual covered by the plan that is equal to either the amount
set forth in Section 223(c)(2)(A)(i)(II) of Title 26 of the United
States Code or the deductible for individual coverage under the
plan contract, whichever is greater.

(B) If a large group market health care service plan contract for
family coverage that is issued, amended, or renewed on or after
January 1, 2017, begin delete includes a deductible and end delete is a high deductible
health plan under the definition set forth in Section 223(c)(2) of
Title 26 of the United States begin delete Code, the plan contract shall include
a deductible for each individual covered by the plan that is equal
to either the amount set forth in Section 223(c)(2)(A)(i)(II) of Title
26 of the United States Code or the deductible for individual
coverage under the plan contract, whichever is greater. end delete begin insert Code and
includes a deductible for individual coverage that is equal to or
greater than the amount set forth in Section 223(c)(2)(A)(i)(II) of
Title 26 of the United States Code and federal regulations
thereunder, then no individual covered by the plan may be subject
to a deductible greater than the deductible for individual coverage
under the plan contract. end insert

(h) For nongrandfathered health plan contracts in the group
market, “plan year” has the meaning set forth in Section 144.103
of Title 45 of the Code of Federal Regulations. For
nongrandfathered health plan contracts sold in the individual
market, “plan year” means the calendar year.

(i) “PPACA” means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the
federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152), and any rules, regulations, or guidance
issued thereunder.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 10112.28 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

10112.28.  

(a) This section shall apply to nongrandfathered
individual and group health insurance policies that provide
coverage for essential health benefits, as defined in Section
10112.27, and that are issued, amended, or renewed on or after
January 1, 2015.

(b) (1) For nongrandfathered health insurance policies in the
individual or small group markets, a health insurance policy, except
a specialized health insurance policy, that is issued, amended, or
renewed on or after January 1, 2015, shall provide for a limit on
annual out-of-pocket expenses for all covered benefits that meet
the definition of essential health benefits in Section 10112.27,
including out-of-network emergency care.

(2) For nongrandfathered health insurance policies in the large
group market, a health insurance policy, except a specialized health
insurance policy, that is issued, amended, or renewed on or after
January 1, 2015, shall provide for a limit on annual out-of-pocket
expenses for covered benefits, including out-of-network emergency
care. This limit shall apply only to essential health benefits, as
defined in Section 10112.27, that are covered under the policy to
the extent that this provision does not conflict with federal law or
guidance on out-of-pocket maximums for nongrandfathered health
insurance policies in the large group market.

(c) (1) The limit described in subdivision (b) shall not exceed
the limit described in Section 1302(c) of PPACA and any
subsequent rules, regulations, or guidance issued under that section.

(2) The limit described in subdivision (b) shall result in a total
maximum out-of-pocket limit for all covered essential health
benefits that shall equal the dollar amounts in effect under Section
223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 with the
dollar amounts adjusted as specified in Section 1302(c)(1)(B) of
PPACA.

(3) For family coverage, an individual within a family shall not
have a maximum out-of-pocket limit that is greater than the
maximum out-of-pocket limit for individual coverage for that
product.

(d) Nothing in this section shall be construed to affect the
reduction in cost sharing for eligible insureds described in Section
1402 of PPACA and any subsequent rules, regulations, or guidance
issued under that section.

(e) If an essential health benefit is offered or provided by a
specialized health insurance policy, the total annual out-of-pocket
maximum for all covered essential benefits shall not exceed the
limit in subdivision (b). This section shall not apply to a specialized
health insurance policy that does not offer an essential health
benefit as defined in Section 10112.27.

(f) The maximum out-of-pocket limit shall apply to any
copayment, coinsurance, deductible, and any other form of cost
sharing for all covered benefits that meet the definition of essential
health benefits, as defined in Section 10112.27.

(g) (1) (A) Except as provided in paragraph (2), if a health
insurance policy for family coverage includes a deductible, an
individual within a family shall not have a deductible that is greater
than the deductible limit for individual coverage for that product.

(B) Except as provided in paragraph (2), for a large group market
health insurance policy for family coverage that is issued, amended,
or renewed on or after January 1, 2017, includes a deductible, an
individual within a family shall not have a deductible that is greater
than the deductible limit for individual coverage for that product.

(2)  begin delete (A) end delete begin delete   end delete begin delete If end delete begin insert For coverage in the individual and small group
markets, if end insert a health insurance policy for family coverage includes
a deductible and is a high deductible health plan under the
definition set forth in Section 223(c)(2) of Title 26 of the United
States Code, the policy shall include a deductible for each
individual covered by the policy that is equal to either the amount
set forth in Section 223(c)(2)(A)(i)(II) of Title 26 of the United
States Code or the deductible for individual coverage under the
policy, whichever is greater.

begin delete

(B) If

end delete

begin insert If end insert a large group market health insurance policy for family
coverage that is issued, amended, or renewed on or after January
1, 2017, begin delete includes a deductible and end delete is a high deductible health plan
under the definition set forth in Section 223(c)(2) of Title 26 of
the United States begin delete Code, the policy shall include a deductible for
each individual covered by the policy that is equal to either the
amount set forth in Section 223(c)(2)(A)(i)(II) of Title 26 of the
United States Code or the deductible for individual coverage under
the policy, whichever is greater. end delete begin insert Code and includes a deductible
for individual coverage that is equal to or greater than the amount
set forth in Section 223(c)(2)(A)(i)(II) of Title 26 of the United
States Code and federal regulations thereunder, then no individual
covered by the plan may be subject to a deductible greater than
the deductible for individual coverage under the policy. end insert

(h) For nongrandfathered health insurance policies in the group
market, “policy year” has the meaning set forth in Section 144.103
of Title 45 of the Code of Federal Regulations. For
nongrandfathered health insurance policies sold in the individual
market, “policy year” means the calendar year.

(i) “PPACA” means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the
federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152), and any rules, regulations, or guidance
issued thereunder.

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

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.

end insert

begin delete

SECTION 1.  

Section 14100.3 of the Welfare and Institutions
Code is amended to read:

14100.3.  

(a) (1) The State Department of Health Care Services
shall post on its Internet Web site all submitted state plan
amendments and all federal waiver applications and requests for
new waivers, waiver amendments, and waiver renewals and
extensions, within seven business days from the date the
department submits these documents for approval to the federal
Centers for Medicare and Medicaid Services (CMS).

(2) The department shall accept public comment on all submitted
state plan amendments and all federal waiver applications and
requests for new waivers, waiver amendments, and waiver renewals
and extensions, for a period of 30 days from the date the
department submits these documents for approval to CMS, and
post the comments on the department’s Internet Web site. The
department shall not be required to respond to any comment
submitted. However, the department may use any information
provided in the comments to make amendments to any submitted
state plan amendment or waiver, as the department deems
necessary.

(b) The department shall post on its Internet Web site final
approval or denial letters and accompanying documents for all
submitted state plan amendments and federal waiver applications
and requests within 10 business days from the date the department
receives notification of final approval or denial from CMS.

(c) If the department notifies CMS of the withdrawal of a
submitted state plan amendment or federal waiver application or
request, as described in subdivisions (a) and (b), the department
shall post on its Internet Web site the withdrawal notification within
10 business days from the date the department notifies CMS of
the withdrawal.

(d) Unless already posted on the Internet Web site pursuant to
subdivisions (a) to (c), inclusive, the department shall post on its
Internet Web site all pending submitted state plan amendments
and federal waiver applications and requests.

end delete