Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2115

Introduced by Assembly Member Wood

February 17, 2016

An act to amend Section 1367.009 of the Health and Safety Code, relating to health care service plans.

LEGISLATIVE COUNSEL’S DIGEST

AB 2115, as amended, Wood. Health care service plans: levels of coverage.

Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that begin delete take end delete begin insert took end insert effect January 1, 2014. Among other things, PPACA establishes annual limits on deductibles for employer-sponsored plans and defines bronze, silver, gold, and platinum levels of coverage for the nongrandfathered individual and small group markets.

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, including defining levels of coverage. Existing law makes a willful violation of the act a crime. begin insert Existing law requires the actuarial value for nongrandfathered small group markets to be determined in accordance with, among other things, a consideration by the Department of Managed Health Care, in consultation with the Department of Insurance and the California Health Benefit Exchange, of whether to exercise state-level flexibility with respect to the actuarial value calculator in order to take into account the unique characteristics of the California health care coverage market. end insert

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This bill would make a technical, nonsubstantive change to these provisions.

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This bill would require the Department of Managed Health Care to also work in consultation with the State Department of Health Care Services in making the above consideration.

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

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

SECTION 1.  

Section 1367.009 of the Health and Safety Code
is amended to read:

1367.009.  

(a) Levels of coverage for the nongrandfathered
small group market are defined as follows:

(1) Bronze level: A health care service plan contract in the
bronze level shall provide a level of coverage that is actuarially
equivalent to 60 percent of the full actuarial value of the benefits
provided under the plan contract.

(2) Silver level: A health care service plan contract in the silver
level shall provide a level of coverage that is actuarially equivalent
to 70 percent of the full actuarial value of the benefits provided
under the plan contract.

(3) Gold level: A health care service plan contract in the gold
level shall provide a level of coverage that is actuarially equivalent
to 80 percent of the full actuarial value of the benefits provided
under the plan contract.

(4) Platinum level: A health care service plan contract in the
platinum level shall provide a level of coverage that is actuarially
equivalent to 90 percent of the full actuarial value of the benefits
provided under the plan contract.

(b) Actuarial value for nongrandfathered small employer health
care service plan contracts shall be determined in accordance with
all of the following:

(1) Actuarial value shall not vary by more than plus or minus
2 percent.

(2) Actuarial value shall be determined on the basis of essential
health benefits as defined in Section 1367.005 and as provided to
a standard, nonelderly population. For this purpose, a standard
population shall not include those receiving coverage through the
Medi-Cal or Medicare programs.

(3) The department may use the actuarial value methodology
developed consistent with Section 1302(d) of PPACA.

(4) The actuarial value for pediatric dental benefits, whether
offered by a full service plan or a specialized plan, shall be
consistent with federal law and guidance applicable to the plan
type.

(5) The department, in consultation with the Department of
begin delete Insurance end delete begin insert Insurance, the State Department of Health Care Services, end insert
and the Exchange, shall consider whether to exercise state-level
flexibility with respect to the actuarial value calculator in order to
take into account the unique characteristics of the California health
care coverage market, including the prevalence of health care
service plans, total cost of care paid for by the plan, price of care,
patterns of service utilization, and relevant demographic factors.

(6) Employer contributions toward health reimbursement
accounts and health savings accounts shall count toward the
actuarial value of the product in the manner specified in federal
rules and guidance.

(c) “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.