SB 43, as introduced, Hernandez. Health care coverage: essential health benefits.
Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that take effect January 1, 2014. Among other things, PPACA requires a health insurance issuer that offers coverage in the small group or individual market to ensure that the coverage includes the essential health benefits package, as defined. PPACA requires each state, by January 1, 2014, to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers. PPACA defines a qualified health plan as a plan that, among other requirements, provides an essential health benefits package. Existing state law creates the California Health Benefit Exchange (the Exchange) to facilitate the purchase of qualified health plans by qualified individuals and qualified small employers.
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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires an individual or small group health care service plan contract or individual or small group health insurance policy issued, amended, or renewed on or after January 1, 2015, to cover essential health benefits, defined to include the health benefits covered by particular benchmark plans. Existing law specifies that these provisions do not apply to specified plans, including grandfathered plans. Existing law authorizes the Department of Managed Health Care and the Department of Insurance to adopt emergency regulations implementing these provisions until March 1, 2016.
This bill would authorize the Department of Managed Health Care and the Department of Insurance to adopt emergency regulations implementing amendments made to the above-described provisions during the 2015-16 Regular Session until July 1, 2018.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1367.005 of the Health and Safety Code,
2as amended by Section 7 of Chapter 572 of the Statutes of 2014,
3is amended to read:
(a) An individual or small group health care service
5plan contract issued, amended, or renewed on or after January 1,
62014, shall, at a minimum, include coverage for essential health
7benefits pursuant to PPACA and as outlined in this section. For
8purposes of this section, “essential health benefits” means all of
9the following:
10(1) Health benefits within the categories identified in Section
111302(b) of PPACA: ambulatory patient services, emergency
12services, hospitalization, maternity and newborn care, mental health
13and substance use disorder services, including behavioral health
14treatment, prescription drugs, rehabilitative and habilitative services
15and devices, laboratory services, preventive and wellness services
16and chronic disease management, and pediatric
services, including
17oral and vision care.
18(2) (A) The health benefits covered by the Kaiser Foundation
19Health Plan Small Group HMO 30 plan (federal health product
20identification number 40513CA035) as this plan was offered during
21the first quarter of 2012, as follows, regardless of whether the
P3 1benefits are specifically referenced in the evidence of coverage or
2plan contract for that plan:
3(i) Medically necessary basic health care services, as defined
4in subdivision (b) of Section 1345 and in Section 1300.67 of Title
528 of the California Code of Regulations.
6(ii) The health benefits mandated to be covered by the plan
7pursuant to statutes enacted before December 31, 2011, as
8described in the following sections: Sections 1367.002, 1367.06,
9and 1367.35 (preventive services for children); Section
1367.25
10(prescription drug coverage for contraceptives); Section 1367.45
11(AIDS vaccine); Section 1367.46 (HIV testing); Section 1367.51
12(diabetes); Section 1367.54 (alpha feto protein testing); Section
131367.6 (breast cancer screening); Section 1367.61 (prosthetics for
14laryngectomy); Section 1367.62 (maternity hospital stay); Section
151367.63 (reconstructive surgery); Section 1367.635 (mastectomies);
16Section 1367.64 (prostate cancer); Section 1367.65
17(mammography); Section 1367.66 (cervical cancer); Section
181367.665 (cancer screening tests); Section 1367.67 (osteoporosis);
19Section 1367.68 (surgical procedures for jaw bones); Section
201367.71 (anesthesia for dental); Section 1367.9 (conditions
21attributable to diethylstilbestrol); Section 1368.2 (hospice care);
22Section 1370.6 (cancer clinical trials); Section 1371.5 (emergency
23response ambulance or ambulance transport services); subdivision
24(b) of Section 1373 (sterilization operations or procedures); Section
251373.4 (inpatient hospital and ambulatory maternity);
Section
261374.56 (phenylketonuria); Section 1374.17 (organ transplants for
27HIV); Section 1374.72 (mental health parity); and Section 1374.73
28(autism/behavioral health treatment).
29(iii) Any other benefits mandated to be covered by the plan
30pursuant to statutes enacted before December 31, 2011, as
31described in those statutes.
32(iv) The health benefits covered by the plan that are not
33otherwise required to be covered under this chapter, to the extent
34required pursuant to Sections 1367.18, 1367.21, 1367.215, 1367.22,
351367.24, and 1367.25, and Section 1300.67.24 of Title 28 of the
36California Code of Regulations.
37(v) Any other health benefits covered by the plan that are not
38otherwise required to be covered under this chapter.
39(B) Where there are any conflicts
or omissions in the plan
40identified in subparagraph (A) as compared with the requirements
P4 1for health benefits under this chapter that were enacted prior to
2December 31, 2011, the requirements of this chapter shall be
3controlling, except as otherwise specified in this section.
4(C) Notwithstanding subparagraph (B) or any other provision
5of this section, the home health services benefits covered under
6the plan identified in subparagraph (A) shall be deemed to not be
7in conflict with this chapter.
8(D) For purposes of this section, the Paul Wellstone and Pete
9Domenici Mental Health Parity and Addiction Equity Act of 2008
10(Public Law 110-343) shall apply to a contract subject to this
11section. Coverage of mental health and substance use disorder
12services pursuant to this paragraph, along with any scope and
13duration limits imposed on the benefits, shall be in compliance
14with the Paul
Wellstone and Pete Domenici Mental Health Parity
15and Addiction Equity Act of 2008 (Public Law 110-343), and all
16rules, regulations, or guidance issued pursuant to Section 2726 of
17the federal Public Health Service Act (42 U.S.C. Sec. 300gg-26).
18(3) With respect to habilitative services, in addition to any
19habilitative services identified in paragraph (2), coverage shall
20also be provided as required by federal rules, regulations, and
21guidance issued pursuant to Section 1302(b) of PPACA.
22Habilitative services shall be covered under the same terms and
23conditions applied to rehabilitative services under the plan contract.
24(4) With respect to pediatric vision care, the same health benefits
25for pediatric vision care covered under the Federal Employees
26Dental and Vision Insurance Program vision plan with the largest
27national enrollment as of the first quarter of 2012. The pediatric
28vision
care benefits covered pursuant to this paragraph shall be in
29addition to, and shall not replace, any vision services covered under
30the plan identified in paragraph (2).
31(5) With respect to pediatric oral care, the same health benefits
32for pediatric oral care covered under the dental plan available to
33subscribers of the Healthy Families Program in 2011-12, including
34the provision of medically necessary orthodontic care provided
35pursuant to the federal Children’s Health Insurance Program
36Reauthorization Act of 2009. The pediatric oral care benefits
37covered pursuant to this paragraph shall be in addition to, and shall
38not replace, any dental or orthodontic services covered under the
39plan identified in paragraph (2).
P5 1(b) Treatment limitations imposed on health benefits described
2in this section shall be no greater than the treatment limitations
3imposed by the corresponding plans
identified in subdivision (a),
4subject to the requirements set forth in paragraph (2) of subdivision
5(a).
6(c) Except as provided in subdivision (d), nothing in this section
7shall be construed to permit a health care service plan to make
8substitutions for the benefits required to be covered under this
9section, regardless of whether those substitutions are actuarially
10equivalent.
11(d) To the extent permitted under Section 1302 of PPACA and
12any rules, regulations, or guidance issued pursuant to that section,
13and to the extent that substitution would not create an obligation
14for the state to defray costs for any individual, a plan may substitute
15its prescription drug formulary for the formulary provided under
16the plan identified in subdivision (a) as long as the coverage for
17prescription drugs complies with the sections referenced in clauses
18(ii) and (iv) of subparagraph (A) of
paragraph (2) of subdivision
19(a) that apply to prescription drugs.
20(e) No health care service plan, or its agent, solicitor, or
21representative, shall issue, deliver, renew, offer, market, represent,
22or sell any product, contract, or discount arrangement as compliant
23with the essential health benefits requirement in federal law, unless
24it meets all of the requirements of this section.
25(f) This section shall apply regardless of whether the plan
26contract is offered inside or outside the California Health Benefit
27Exchange created by Section 100500 of the Government Code.
28(g) Nothing in this section shall be construed to exempt a plan
29or a plan contract from meeting other applicable requirements of
30law.
31(h) This section shall not be construed to prohibit a
plan contract
32from covering additional benefits, including, but not limited to,
33spiritual care services that are tax deductible under Section 213 of
34the Internal Revenue Code.
35(i) Subdivision (a) shall not apply to any of the following:
36(1) A specialized health care service plan contract.
37(2) A Medicare supplement plan.
38(3) A plan contract that qualifies as a grandfathered health plan
39under Section 1251 of PPACA or any rules, regulations, or
40guidance issued pursuant to that section.
P6 1(j) Nothing in this section shall be implemented in a manner
2that conflicts with a requirement of PPACA.
3(k) This section shall be implemented
only to the extent essential
4health benefits are required pursuant to PPACA.
5(l) An essential health benefit is required to be provided under
6this section only to the extent that federal law does not require the
7state to defray the costs of the benefit.
8(m) Nothing in this section shall obligate the state to incur costs
9for the coverage of benefits that are not essential health benefits
10as defined in this section.
11(n) A plan is not required to cover, under this section, changes
12to health benefits that are the result of statutes enacted on or after
13December 31, 2011.
14(o) (1) The department may adopt emergency regulations
15implementing this section. The department may, on a one-time
16basis, readopt any emergency regulation authorized
by this section
17that is the same as, or substantially equivalent to, an emergency
18regulation previously adopted under this section.
19(2) The initial adoption of emergency regulations implementing
20this section and the readoption of emergency regulations authorized
21by this subdivision shall be deemed an emergency and necessary
22for the immediate preservation of the public peace, health, safety,
23or general welfare. The initial emergency regulations and the
24readoption of emergency regulations authorized by this section
25shall be submitted to the Office of Administrative Law for filing
26with the Secretary of State and each shall remain in effect for no
27more than 180 days, by which time final regulations may be
28adopted.
29(3) The initial adoption of emergency regulations implementing
30amendments to this section
made during the 2015-16 Regular
31Session and the readoption of emergency regulations authorized
32by this subdivision shall be deemed an emergency and necessary
33for the immediate preservation of the public peace, health, safety,
34or general welfare. The initial emergency regulations and the
35readoption of emergency regulations authorized by this section
36shall be submitted to the Office of Administrative Law for filing
37with the Secretary of State and each shall remain in effect for no
38more than 180 days, by which time final regulations may be
39adopted.
40(3)
end delete
P7 1begin insert(4)end insert The director shall consult with the Insurance Commissioner
2to ensure consistency and uniformity in
the development of
3regulations under this subdivision.
4(4)
end delete
5begin insert(5)end insert This subdivision shall become inoperative onbegin delete March 1, 2016.end delete
6begin insert July 1, 2018.end insert
7(p) For purposes of this section, the following definitions shall
8apply:
9(1) “Habilitative services” means medically necessary health
10care services and health care devices that assist an individual in
11partially or fully
acquiring or improving skills and functioning and
12that are necessary to address a health condition, to the maximum
13extent practical. These services address the skills and abilities
14needed for functioning in interaction with an individual’s
15environment. Examples of health care services that are not
16habilitative services include, but are not limited to, respite care,
17day care, recreational care, residential treatment, social services,
18custodial care, or education services of any kind, including, but
19not limited to, vocational training. Habilitative services shall be
20covered under the same terms and conditions applied to
21rehabilitative services under the plan contract.
22(2) (A) “Health benefits,” unless otherwise required to be
23defined pursuant to federal rules, regulations, or guidance issued
24pursuant to Section 1302(b) of PPACA, means health care items
25or services for the diagnosis, cure, mitigation, treatment, or
26prevention
of illness, injury, disease, or a health condition,
27including a behavioral health condition.
28(B) “Health benefits” does not mean any cost-sharing
29requirements such as copayments, coinsurance, or deductibles.
30(3) “PPACA” means the federal Patient Protection and
31Affordable Care Act (Public Law 111-148), as amended by the
32federal Health Care and Education Reconciliation Act of 2010
33(Public Law 111-152), and any rules, regulations, or guidance
34issued thereunder.
35(4) “Small group health care service plan contract” means a
36group health care service plan contract issued to a small employer,
37as defined in Section 1357.500.
Section 10112.27 of the Insurance Code, as amended
39by Section 14 of Chapter 572 of the Statutes of 2014, is amended
40to read:
(a) An individual or small group health insurance
2policy issued, amended, or renewed on or after January 1, 2014,
3shall, at a minimum, include coverage for essential health benefits
4pursuant to PPACA and as outlined in this section. This section
5shall exclusively govern what benefits a health insurer must cover
6as essential health benefits. For purposes of this section, “essential
7health benefits” means all of the following:
8(1) Health benefits within the categories identified in Section
91302(b) of PPACA: ambulatory patient services, emergency
10services, hospitalization, maternity and newborn care, mental health
11and substance use disorder services, including behavioral health
12treatment, prescription drugs, rehabilitative and habilitative services
13and devices,
laboratory services, preventive and wellness services
14and chronic disease management, and pediatric services, including
15oral and vision care.
16(2) (A) The health benefits covered by the Kaiser Foundation
17Health Plan Small Group HMO 30 plan (federal health product
18identification number 40513CA035) as this plan was offered during
19the first quarter of 2012, as follows, regardless of whether the
20benefits are specifically referenced in the plan contract or evidence
21of coverage for that plan:
22(i) Medically necessary basic health care services, as defined
23in subdivision (b) of Section 1345 of the Health and Safety Code
24and in Section 1300.67 of Title 28 of the California Code of
25Regulations.
26(ii) The health benefits mandated to be covered by the plan
27pursuant to statutes enacted before December 31,
2011, as
28described in the following sections of the Health and Safety Code:
29Sections 1367.002, 1367.06, and 1367.35 (preventive services for
30children); Section 1367.25 (prescription drug coverage for
31contraceptives); Section 1367.45 (AIDS vaccine); Section 1367.46
32(HIV testing); Section 1367.51 (diabetes); Section 1367.54 (alpha
33feto protein testing); Section 1367.6 (breast cancer screening);
34Section 1367.61 (prosthetics for laryngectomy); Section 1367.62
35(maternity hospital stay); Section 1367.63 (reconstructive surgery);
36Section 1367.635 (mastectomies); Section 1367.64 (prostate
37cancer); Section 1367.65 (mammography); Section 1367.66
38(cervical cancer); Section 1367.665 (cancer screening tests);
39Section 1367.67 (osteoporosis); Section 1367.68 (surgical
40procedures for jaw bones); Section 1367.71 (anesthesia for dental);
P9 1Section 1367.9 (conditions attributable to diethylstilbestrol);
2Section 1368.2 (hospice care); Section 1370.6 (cancer clinical
3trials); Section 1371.5 (emergency response ambulance or
4
ambulance transport services); subdivision (b) of Section 1373
5(sterilization operations or procedures); Section 1373.4 (inpatient
6hospital and ambulatory maternity); Section 1374.56
7(phenylketonuria); Section 1374.17 (organ transplants for HIV);
8Section 1374.72 (mental health parity); and Section 1374.73
9(autism/behavioral health treatment).
10(iii) Any other benefits mandated to be covered by the plan
11pursuant to statutes enacted before December 31, 2011, as
12described in those statutes.
13(iv) The health benefits covered by the plan that are not
14otherwise required to be covered under Chapter 2.2 (commencing
15with Section 1340) of Division 2 of the Health and Safety Code,
16to the extent otherwise required pursuant to Sections 1367.18,
171367.21, 1367.215, 1367.22, 1367.24, and 1367.25 of the Health
18and Safety Code, and Section 1300.67.24 of Title 28 of the
19California Code of
Regulations.
20(v) Any other health benefits covered by the plan that are not
21otherwise required to be covered under Chapter 2.2 (commencing
22with Section 1340) of Division 2 of the Health and Safety Code.
23(B) Where there are any conflicts or omissions in the plan
24identified in subparagraph (A) as compared with the requirements
25for health benefits under Chapter 2.2 (commencing with Section
261340) of Division 2 of the Health and Safety Code that were
27enacted prior to December 31, 2011, the requirements of Chapter
282.2 (commencing with Section 1340) of Division 2 of the Health
29and Safety Code shall be controlling, except as otherwise specified
30in this section.
31(C) Notwithstanding subparagraph (B) or any other provision
32of this section, the home health services benefits covered under
33the plan identified in subparagraph (A)
shall be deemed to not be
34in conflict with Chapter 2.2 (commencing with Section 1340) of
35Division 2 of the Health and Safety Code.
36(D) For purposes of this section, the Paul Wellstone and Pete
37Domenici Mental Health Parity and Addiction Equity Act of 2008
38(Public Law 110-343) shall apply to a policy subject to this section.
39Coverage of mental health and substance use disorder services
40pursuant to this paragraph, along with any scope and duration
P10 1limits imposed on the benefits, shall be in compliance with the
2Paul Wellstone and Pete Domenici Mental Health Parity and
3Addiction Equity Act of 2008 (Public Law 110-343), and all rules,
4regulations, and guidance issued pursuant to Section 2726 of the
5federal Public Health Service Act (42 U.S.C. Sec. 300gg-26).
6(3) With respect to habilitative services, in addition to any
7habilitative services identified in paragraph (2), coverage shall
8
also be provided as required by federal rules, regulations, or
9guidance issued pursuant to Section 1302(b) of PPACA.
10Habilitative services shall be covered under the same terms and
11conditions applied to rehabilitative services under the policy.
12(4) With respect to pediatric vision care, the same health benefits
13for pediatric vision care covered under the Federal Employees
14Dental and Vision Insurance Program vision plan with the largest
15national enrollment as of the first quarter of 2012. The pediatric
16vision care services covered pursuant to this paragraph shall be in
17addition to, and shall not replace, any vision services covered under
18the plan identified in paragraph (2).
19(5) With respect to pediatric oral care, the same health benefits
20for pediatric oral care covered under the dental plan available to
21subscribers of the Healthy Families Program in 2011-12, including
22the
provision of medically necessary orthodontic care provided
23pursuant to the federal Children’s Health Insurance Program
24Reauthorization Act of 2009. The pediatric oral care benefits
25covered pursuant to this paragraph shall be in addition to, and shall
26not replace, any dental or orthodontic services covered under the
27plan identified in paragraph (2).
28(b) Treatment limitations imposed on health benefits described
29in this section shall be no greater than the treatment limitations
30imposed by the corresponding plans identified in subdivision (a),
31subject to the requirements set forth in paragraph (2) of subdivision
32(a).
33(c) Except as provided in subdivision (d), nothing in this section
34shall be construed to permit a health insurer to make substitutions
35for the benefits required to be covered under this section, regardless
36of whether those substitutions are actuarially equivalent.
37(d) To the extent permitted under Section 1302 of PPACA and
38any rules, regulations, or guidance issued pursuant to that section,
39and to the extent that substitution would not create an obligation
40for the state to defray costs for any individual, an insurer may
P11 1substitute its prescription drug formulary for the formulary
2provided under the plan identified in subdivision (a) as long as the
3coverage for prescription drugs complies with the sections
4referenced in clauses (ii) and (iv) of subparagraph (A) of paragraph
5(2) of subdivision (a) that apply to prescription drugs.
6(e) No health insurer, or its agent, producer, or representative,
7shall issue, deliver, renew, offer, market, represent, or sell any
8product, policy, or discount arrangement as compliant with the
9essential health benefits requirement in federal law, unless it meets
10all of the requirements of this section. This
subdivision shall be
11enforced in the same manner as Section 790.03, including through
12the means specified in Sections 790.035 and 790.05.
13(f) This section shall apply regardless of whether the policy is
14offered inside or outside the California Health Benefit Exchange
15created by Section 100500 of the Government Code.
16(g) Nothing in this section shall be construed to exempt a health
17insurer or a health insurance policy from meeting other applicable
18requirements of law.
19(h) This section shall not be construed to prohibit a policy from
20covering additional benefits, including, but not limited to, spiritual
21care services that are tax deductible under Section 213 of the
22Internal Revenue Code.
23(i) Subdivision (a) shall not apply to any of the following:
24(1) A policy that provides excepted benefits as described in
25Sections 2722 and 2791 of the federal Public Health Service Act
26(42 U.S.C. Sec. 300gg-21; 42 U.S.C. Sec. 300gg-91).
27(2) A policy that qualifies as a grandfathered health plan under
28Section 1251 of PPACA or any binding rules, regulation, or
29guidance issued pursuant to that section.
30(j) Nothing in this section shall be implemented in a manner
31that conflicts with a requirement of PPACA.
32(k) This section shall be implemented only to the extent essential
33health benefits are required pursuant to PPACA.
34(l) An essential health benefit is required to be provided under
35this section only to the extent that federal law does not require the
36
state to defray the costs of the benefit.
37(m) Nothing in this section shall obligate the state to incur costs
38for the coverage of benefits that are not essential health benefits
39as defined in this section.
P12 1(n) An insurer is not required to cover, under this section,
2changes to health benefits that are the result of statutes enacted on
3or after December 31, 2011.
4(o) (1) The commissioner may adopt emergency regulations
5implementing this section. The commissioner may, on a one-time
6basis, readopt any emergency regulation authorized by this section
7that is the same as, or substantially equivalent to, an emergency
8regulation previously adopted under this section.
9(2) The initial adoption of emergency regulations implementing
10this
section and the readoption of emergency regulations authorized
11by this subdivision shall be deemed an emergency and necessary
12for the immediate preservation of the public peace, health, safety,
13or general welfare. The initial emergency regulations and the
14readoption of emergency regulations authorized by this section
15shall be submitted to the Office of Administrative Law for filing
16with the Secretary of State and each shall remain in effect for no
17more than 180 days, by which time final regulations may be
18adopted.
19(3) The initial adoption of emergency regulations implementing
20amendments to this section made during the 2015-16 Regular
21Session and the readoption of emergency regulations authorized
22by this subdivision shall be deemed an emergency and necessary
23for the immediate preservation of the public peace, health, safety,
24or general welfare. The initial
emergency regulations and the
25readoption of emergency regulations authorized by this section
26shall be submitted to the Office of Administrative Law for filing
27with the Secretary of State and each shall remain in effect for no
28more than 180 days, by which time final regulations may be
29adopted.
30(3)
end delete
31begin insert(4)end insert The commissioner shall consult with the Director of the
32Department of Managed Health Care to ensure consistency and
33uniformity in the development of regulations under this
34subdivision.
35(4)
end delete
36begin insert(end insertbegin insert5)end insert This subdivision shall become inoperative onbegin delete March 1, 2016.end delete
37begin insert July 1, 2018.end insert
38(p) Nothing in this section shall impose on health insurance
39policies the cost sharing or network limitations of the plans
40identified in subdivision (a) except to the extent otherwise required
P13 1to comply with provisions of this code, including this section, and
2as otherwise applicable to all health insurance policies offered to
3individuals and small groups.
4(q) For purposes of this section, the following definitions shall
5apply:
6(1) “Habilitative services” means medically necessary health
7care services and health care devices that assist an individual in
8partially or fully acquiring or improving skills and functioning and
9that are necessary to address a health condition, to the maximum
10extent practical. These services address the skills and abilities
11needed for functioning in interaction with an individual’s
12environment. Examples of health care services that are not
13habilitative services include, but are not limited to, respite care,
14day care, recreational care, residential treatment, social services,
15custodial care, or education services of any kind, including, but
16not limited to, vocational training. Habilitative services shall be
17covered under the same terms and conditions applied to
18rehabilitative services under the policy.
19(2) (A) “Health benefits,” unless otherwise required to be
20defined pursuant to federal rules, regulations, or guidance issued
21pursuant to Section 1302(b) of PPACA, means health care items
22or services for the diagnosis, cure, mitigation, treatment, or
23prevention of illness, injury, disease, or a health condition,
24including a behavioral health condition.
25(B) “Health benefits” does not mean any cost-sharing
26requirements such as copayments, coinsurance, or deductibles.
27(3) “PPACA” means the federal Patient Protection and
28Affordable Care Act (Public Law 111-148), as amended by the
29federal Health Care and Education Reconciliation Act of 2010
30(Public Law 111-152), and any rules, regulations, or guidance
31issued thereunder.
32(4) “Small group
health insurance policy” means a group health
33insurance policy issued to a small employer, as defined in Section
3410753.
O
99