Amended in Assembly May 11, 2016

Amended in Assembly April 20, 2016

Amended in Assembly April 5, 2016

Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2115


Introduced by Assembly Member Wood

February 17, 2016


An act to amendbegin delete Sections 1366.24 andend deletebegin insert Sectionend insert 1366.50 of the Health and Safety Code, and to amendbegin delete Sections 10128.54 andend deletebegin insert Sectionend insert 10786 of the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

AB 2115, as amended, Wood. Health care coverage: disclosures.

Existing law, the federal Patient Protection and Affordable Care Act, requires each state to, by January 1, 2014, establish an American Health Benefit Exchange that makes available qualified health plans to qualified individuals and small employers. Existing state law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the enrollment of qualified individuals and qualified small employers in qualified health plans.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the 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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires specified health care service plans and health insurers to provide to individuals who cease to be enrolled in individual or group health care coverage a notice informing those individuals that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange or no-cost coverage through Medi-Cal.begin delete Existing law also requires every disclosure form issued by a health care service plan or insurer for specified group benefit plans to include a statement notifying the individual to examine his or her options carefully before declining the group coverage.end delete

This bill wouldbegin delete instead require every disclosure form issued by a health care service plan or insurer for specified group benefit plans to include a statement notifying the individual that he or she may be eligible for reduced-cost coverage through the California Health Benefit Exchange, no-cost coverage through Medi-Cal, coverage through an insured spouse or parent, or free or discounted prescription medicines through a manufacturer’s patient assistance program. The bill would alsoend delete require a statement regarding patient assistance programs to be included in the notice from health care service plans and health insurers to individuals who cease to be enrolled in individual or group health carebegin delete coverage.end deletebegin insert coverage, as specified.end insert Because a willful violation of these requirements by a health care service plan would be a crime, the 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:

begin delete
P2    1

SECTION 1.  

Section 1366.24 of the Health and Safety Code
2 is amended to read:

3

1366.24.  

(a) Every health care service plan evidence of
4coverage, provided for group benefit plans subject to this article,
5that is issued, amended, or renewed on or after January 1, 1999,
6shall disclose to covered employees of group benefit plans subject
7to this article the ability to continue coverage pursuant to this
8article, as required by this section.

P3    1(b) This disclosure shall state that all enrollees who are eligible
2to be qualified beneficiaries, as defined in subdivision (c) of
3Section 1366.21, shall be required, as a condition of receiving
4benefits pursuant to this article, to notify, in writing, the health
5care service plan, or the employer if the employer contracts to
6perform the administrative services as provided for in Section
71366.25, of all qualifying events as specified in paragraphs (1),
8(3), (4), and (5) of subdivision (d) of Section 1366.21 within 60
9days of the date of the qualifying event. This disclosure shall
10inform enrollees that failure to make the notification to the health
11care service plan, or to the employer when under contract to
12provide the administrative services, within the required 60 days
13will disqualify the qualified beneficiary from receiving continuation
14coverage pursuant to this article. The disclosure shall further state
15that a qualified beneficiary who wishes to continue coverage under
16the group benefit plan pursuant to this article must request the
17continuation in writing and deliver the written request, by first-class
18mail, or other reliable means of delivery, including personal
19delivery, express mail, or private courier company, to the health
20care service plan, or to the employer if the plan has contracted
21with the employer for administrative services pursuant to
22subdivision (d) of Section 1366.25, within the 60-day period
23following the later of (1) the date that the enrollee’s coverage under
24the group benefit plan terminated or will terminate by reason of a
25qualifying event, or (2) the date the enrollee was sent notice
26pursuant to subdivision (e) of Section 1366.25 of the ability to
27continue coverage under the group benefit plan. The disclosure
28required by this section shall also state that a qualified beneficiary
29electing continuation shall pay to the health care service plan, in
30accordance with the terms and conditions of the plan contract,
31which shall be set forth in the notice to the qualified beneficiary
32pursuant to subdivision (d) of Section 1366.25, the amount of the
33required premium payment, as set forth in Section 1366.26. The
34disclosure shall further require that the qualified beneficiary’s first
35premium payment required to establish premium payment be
36delivered by first-class mail, certified mail, or other reliable means
37of delivery, including personal delivery, express mail, or private
38courier company, to the health care service plan, or to the employer
39if the employer has contracted with the plan to perform the
40administrative services pursuant to subdivision (d) of Section
P3    11366.25, within 45 days of the date the qualified beneficiary
2provided written notice to the health care service plan or the
3employer, if the employer has contracted to perform the
4administrative services, of the election to continue coverage in
5order for coverage to be continued under this article. This
6disclosure shall also state that the first premium payment must
7equal an amount sufficient to pay any required premiums and all
8premiums due, and that failure to submit the correct premium
9amount within the 45-day period will disqualify the qualified
10beneficiary from receiving continuation coverage pursuant to this
11article.

12(c) The disclosure required by this section shall also describe
13separately how qualified beneficiaries whose continuation coverage
14terminates under a prior group benefit plan pursuant to subdivision
15(b) of Section 1366.27 may continue their coverage for the balance
16of the period that the qualified beneficiary would have remained
17covered under the prior group benefit plan, including the
18requirements for election and payment. The disclosure shall clearly
19state that continuation coverage shall terminate if the qualified
20beneficiary fails to comply with the requirements pertaining to
21enrollment in, and payment of premiums to, the new group benefit
22plan within 30 days of receiving notice of the termination of the
23prior group benefit plan.

24(d) Prior to August 1, 1998, every health care service plan shall
25provide to all covered employees of employers subject to this
26article a written notice containing the disclosures required by this
27section, or shall provide to all covered employees of employers
28subject to this section a new or amended evidence of coverage that
29includes the disclosures required by this section. Any specialized
30health care service plan that, in the ordinary course of business,
31maintains only the addresses of employer group purchasers of
32benefits and does not maintain addresses of covered employees,
33may comply with the notice requirements of this section through
34the provision of the notices to its employer group purchasers of
35benefits.

36(e) Every plan disclosure form issued, amended, or renewed on
37and after January 1, 1999, for a group benefit plan subject to this
38article shall provide a notice that, under state law, an enrollee may
39be entitled to continuation of group coverage and that additional
P5    1information regarding eligibility for this coverage may be found
2in the plan’s evidence of coverage.

3(f) A disclosure issued, amended, or renewed on or after July
41, 2017, for a group benefit plan subject to this article shall include
5the following notice:


7“In addition to your coverage continuation options, you may be
8eligible for the following:

9(1) Coverage through Covered California. By enrolling through
10Covered California during the annual open enrollment period, you
11may qualify for lower monthly premiums and lower out-of-pocket
12costs. Your family members may also qualify for coverage through
13Covered California. To find out more about how to apply through
14Covered California, visit the Covered California Internet Web site
15at http:www.coveredca.com.

16(2) Coverage though Medi-Cal. Depending on your income,
17you may qualify for low- or no-cost coverage though Medi-Cal
18and can apply anytime. Your family members may also qualify
19for Medi-Cal. To find out more about how to apply for Medi-Cal,
20visit the Covered California Internet Web site at
21http:www.coveredca.com.

22(3) Coverage through an insured spouse or parent. If your spouse
23has coverage that extends to family members, you may be eligible
24to be added to that benefit plan. Federal law does not require
25employers to offer coverage to spouses.

26(4) Free or discounted prescription medicines through a
27manufacturer. You may be eligible for a patient assistance program
28offered by the manufacturer of any medicines you currently may
29be taking. To find out more about these programs, contact the
30manufacturer of your medicine or use an Internet Web site search
31tool, such as those provided by the Partnership for Prescription
32Assistance at https://www.ppars.org or RxAssist at
33 http://www.rxassist.org. The manufacturer determines which
34individuals and which prescription medications are eligible for the
35manufacturer’s program. This assistance does not constitute
36coverage and will not meet the requirements of the individual
37mandate under the Affordable Care Act.”


end delete
P6    1

begin deleteSEC. 2.end delete
2
begin insertSECTION 1.end insert  

Section 1366.50 of the Health and Safety Code
3 is amended to read:

4

1366.50.  

(a) begin insert(1)end insertbegin insertend insert On and after January 1, 2017, a health care
5service plan providing individual or group health care coverage
6shall provide to enrollees or subscribers who cease to be enrolled
7in coverage a notice informing them that they may be eligible for
8reduced-cost coverage through the California Health Benefit
9Exchange established under Title 22 (commencing with Section
10100500) of the Government Code, no-cost coverage through
11Medi-Cal, or free or reducedbegin insert costend insert prescriptionbegin delete coverageend delete medicines
12through a manufacturer’s patient assistance program. The notice
13shall include information on obtaining coverage or assistance
14pursuant to those programs, shall be in no less than 12-point type,
15and shall be developed by the department, no later than July 1,
162017, in consultation with the Department ofbegin delete Insuranceend deletebegin insert Insurance,
17the Office of the Patient Advocate,end insert
and the California Health
18Benefit Exchange.

begin insert

19
(2) The notice shall include a statement clarifying that assistance
20through a manufacturer’s patient assistance program does not
21constitute coverage under, and will not meet the requirements of
22the individual mandate under, the federal Patient Protection and
23Affordable Care Act.

end insert
begin insert

24
(3) The department shall include information in the notice on
25locating free or reduced cost programs for health care and
26prescription medicines, such as through the Internet Web site of
27the Office of the Patient Advocate.

end insert

28(b) The notice described in subdivision (a) may be incorporated
29into or sent simultaneously with and in the same manner as any
30other notices sent by the health care service plan.

31(c) This section shall not apply with respect to a specialized
32health care service plan contract or a Medicare supplemental plan
33 contract.

begin delete
34

SEC. 3.  

Section 10128.54 of the Insurance Code is amended
35to read:

36

10128.54.  

(a) Every insurer’s evidence of coverage for group
37benefit plans subject to this article, that is issued, amended, or
38renewed on or after January 1, 1999, shall disclose to covered
39employees of group benefit plans subject to this article the ability
P7    1to continue coverage pursuant to this article, as required by this
2section.

3(b) This disclosure shall state that all insureds who are eligible
4to be qualified beneficiaries, as defined in subdivision (c) of
5Section 10128.51, shall be required, as a condition of receiving
6benefits pursuant to this article, to notify, in writing, the insurer,
7or the employer if the employer contracts to perform the
8administrative services as provided for in Section 10128.55, of all
9qualifying events as specified in paragraphs (1), (3), (4), and (5)
10of subdivision (d) of Section 10128.51 within 60 days of the date
11of the qualifying event. This disclosure shall inform insureds that
12failure to make the notification to the insurer, or to the employer
13when under contract to provide the administrative services, within
14the required 60 days will disqualify the qualified beneficiary from
15receiving continuation coverage pursuant to this article. The
16disclosure shall further state that a qualified beneficiary who wishes
17to continue coverage under the group benefit plan pursuant to this
18article must request the continuation in writing and deliver the
19written request, by first-class mail, or other reliable means of
20delivery, including personal delivery, express mail, or private
21courier company, to the disability insurer, or to the employer if
22the plan has contracted with the employer for administrative
23services pursuant to subdivision (d) of Section 10128.55, within
24the 60-day period following the later of (1) the date that the
25insured’s coverage under the group benefit plan terminated or will
26terminate by reason of a qualifying event, or (2) the date the insured
27was sent notice pursuant to subdivision (e) of Section 10128.55
28of the ability to continue coverage under the group benefit plan.
29The disclosure required by this section shall also state that a
30qualified beneficiary electing continuation shall pay to the disability
31insurer, in accordance with the terms and conditions of the policy
32or contract, which shall be set forth in the notice to the qualified
33beneficiary pursuant to subdivision (d) of Section 10128.55, the
34amount of the required premium payment, as set forth in Section
3510128.56. The disclosure shall further require that the qualified
36beneficiary’s first premium payment required to establish premium
37payment be delivered by first-class mail, certified mail, or other
38reliable means of delivery, including personal delivery, express
39mail, or private courier company, to the disability insurer, or to
40 the employer if the employer has contracted with the insurer to
P8    1perform the administrative services pursuant to subdivision (d) of
2Section 10128.55, within 45 days of the date the qualified
3beneficiary provided written notice to the insurer or the employer,
4if the employer has contracted to perform the administrative
5services, of the election to continue coverage in order for coverage
6to be continued under this article. This disclosure shall also state
7that the first premium payment must equal an amount sufficient
8to pay all required premiums and all premiums due, and that failure
9to submit the correct premium amount within the 45-day period
10will disqualify the qualified beneficiary from receiving continuation
11coverage pursuant to this article.

12(c) The disclosure required by this section shall also describe
13separately how qualified beneficiaries whose continuation coverage
14terminates under a prior group benefit plan pursuant to Section
1510128.57 may continue their coverage for the balance of the period
16that the qualified beneficiary would have remained covered under
17the prior group benefit plan, including the requirements for election
18and payment. The disclosure shall clearly state that continuation
19coverage shall terminate if the qualified beneficiary fails to comply
20with the requirements pertaining to enrollment in, and payment of
21premiums to, the new group benefit plan within 30 days of
22receiving notice of the termination of the prior group benefit plan.

23(d) Prior to August 1, 1998, every insurer shall provide to all
24covered employees of employers subject to this article written
25notice containing the disclosures required by this section, or shall
26provide to all covered employees of employers subject to this
27article a new or amended evidence of coverage that includes the
28disclosures required by this section. Any insurer that, in the
29ordinary course of business, maintains only the addresses of
30employer group purchasers of benefits, and does not maintain
31addresses of covered employees, may comply with the notice
32requirements of this section through the provision of the notices
33to its employer group purchasers of benefits.

34(e) Every disclosure form issued, amended, or renewed on and
35after January 1, 1999, for a group benefit plan subject to this article
36shall provide a notice that, under state law, an insured may be
37entitled to continuation of group coverage and that additional
38information regarding eligibility for this coverage may be found
39in the evidence of coverage.

P9    1(f) A disclosure issued, amended, or renewed on or after July
21, 2017, for a group benefit plan subject to this article shall include
3the following notice:


5“In addition to your coverage continuation options, you may be
6eligible for the following:

7(1) Coverage through Covered California. By enrolling through
8Covered California during the annual open enrollment period, you
9may qualify for lower monthly premiums and lower out-of-pocket
10costs. Your family members may also qualify for coverage through
11Covered California. To find out more about how to apply through
12Covered California, visit the Covered California Internet Web site
13at http:www.coveredca.com.

14(2) Coverage though Medi-Cal. Depending on your income,
15you may qualify for low- or no-cost coverage though Medi-Cal
16and can apply anytime. Your family members may also qualify
17for Medi-Cal. To find out more about how to apply for Medi-Cal,
18visit the Covered California Internet Web site at
19http:www.coveredca.com.

20(3) Coverage through an insured spouse or parent. If your spouse
21has coverage that extends to family members, you may be eligible
22to be added to that benefit plan. Federal law does not require
23employers to offer coverage to spouses.

24(4) Free or discounted prescription medicines through a
25manufacturer. You may be eligible for a patient assistance program
26offered by the manufacturer of any medicines you currently may
27be taking. To find out more about these programs, contact the
28manufacturer of your medicine or use an Internet Web site search
29tool, such as those provided by the Partnership for Prescription
30Assistance at https://www.ppars.org or RxAssist at
31 http://www.rxassist.org. The manufacturer determines which
32individuals and which prescription medications are eligible for the
33manufacturer’s program. This assistance does not constitute
34coverage and will not meet the requirements of the individual
35mandate under the Affordable Care Act.”


end delete
37

begin deleteSEC. 4.end delete
38
begin insertSEC. 2.end insert  

Section 10786 of the Insurance Code is amended to
39read:

P10   1

10786.  

(a) begin insert(1)end insertbegin insertend insert On and after January 1, 2017, a health insurer
2providing health insurance coverage shall provide to policyholders
3in individual policies or certificate holders in group policies who
4cease to be enrolled in coverage a notice informing them that they
5may be eligible for reduced-cost coverage through the California
6Health Benefit Exchange established under Title 22 (commencing
7with Section 100500) of the Government Code, no-cost coverage
8through Medi-Cal, or free or reducedbegin insert costend insert prescriptionbegin delete coverageend delete
9 medicines through a manufacturer’s patient assistance program.
10The notice shall include information on obtaining coveragebegin insert or
11assistanceend insert
pursuant to those programs, shall be in no less than
1212-point type, and shall be developed by the department, no later
13than July 1, 2017, in consultation with the Department of Managed
14Healthbegin delete Careend deletebegin insert Care,end insertbegin insert the Office of the Patient Advocate,end insert and the
15California Health Benefit Exchange.

begin insert

16
(2) The notice shall include a statement clarifying that assistance
17through a manufacturer’s patient assistance program does not
18constitute coverage under, and will not meet the requirements of
19the individual mandate under, the federal Patient Protection and
20Affordable Care Act.

end insert
begin insert

21
(3) The department shall include information in the notice on
22locating free or reduced cost programs for health care and
23prescription medicines, such as through the Internet Web site of
24the Office of the Patient Advocate.

end insert

25(b) The notice described in subdivision (a) may be incorporated
26into or sent simultaneously with and in the same manner as any
27other notices sent by the health insurer.

28(c) This section shall not apply with respect to a specialized
29health insurance policy or a health insurance policy consisting
30solely of coverage of excepted benefits as described in Section
312722 of the federal Public Health Service Act (42 U.S.C. Sec.
32300gg-21).

33

begin deleteSEC. 5.end delete
34
begin insertSEC. 3.end insert  

No reimbursement is required by this act pursuant to
35Section 6 of Article XIII B of the California Constitution because
36the only costs that may be incurred by a local agency or school
37district will be incurred because this act creates a new crime or
38infraction, eliminates a crime or infraction, or changes the penalty
39for a crime or infraction, within the meaning of Section 17556 of
40the Government Code, or changes the definition of a crime within
P11   1the meaning of Section 6 of Article XIII B of the California
2Constitution.



O

    95