Amended in Senate April 20, 2015

Senate Bill No. 503

Introduced by Senator Hernandez

February 26, 2015

An act to amend begin delete Section 1366.24 of end delete begin insert Sections 1366.22, 1366.25, and 24100 of, and to amend, repeal, and add Section 1366.24 of, end insert the Health and Safety Code, and to amend begin delete Section 10128.54 of end delete begin insert Sections 10128.52 and 10128.55 of, and to amend, repeal, and add Section 10128.54 of, end insert the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

SB 503, as amended, Hernandez. Cal-COBRA: disclosures.

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. The California Continuation Benefits Replacement Act (Cal-COBRA) requires health care service plans and health insurers providing coverage under a group benefit plan to employers of 2 to 19 eligible employees to offer a continuation of that coverage for a specified period of time to certain qualified beneficiaries, as specified. Existing law requires a group benefit plan that is subject to Cal-COBRA to make specified disclosures to covered employees, including that a covered employee who is considering declining continuation of coverage should be aware that companies selling individual health insurance may require a review of the employee’s medical history that could result in a higher premium or denial of coverage.

This bill would eliminate the disclosure requirement described above. begin insert If federal law requiring an individual to maintain minimum health coverage is repealed or amended to no longer apply to the individual market, as specified, the bill would reenact that disclosure requirement to become operative 12 months after that repeal or amendment. The bill would require a group benefit plan that is subject to Cal-COBRA and that issues, amends, or renews a disclosure on or after July 1, 2016, to include a notice regarding additional health care coverage options in that disclosure, as specified. The bill would require a group contract that is issued, amended, or renewed on or after July 1, 2016, between a group benefit plan that is subject to Cal-COBRA and an employer to require the employer to give that notice regarding additional health care coverage options to a qualified beneficiary of the contract. The bill would make conforming changes to related provisions. end insert

begin insert

Because a willful violation of the bill’s requirements relative to health care service plans 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

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . 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 1366.22 of the end insert begin insert Health and Safety Code end insert
begin insert is amended to read: end insert

1366.22.  

The continuation coverage requirements of this article
do not apply to the following individuals:

(a) Individuals who are entitled to Medicare benefits or become
entitled to Medicare benefits pursuant to Title XVIII of the United
States Social Security Act, as amended or superseded. Entitlement
to Medicare Part A only constitutes entitlement to benefits under
Medicare.

(b) Individuals who have other hospital, medical, or surgical
coverage or who are covered or become covered under another
group benefit plan, including a self-insured employee welfare
benefit plan, that provides coverage for individuals and that does
not impose any exclusion or limitation with respect to any
preexisting condition of the individual, other than a preexisting
condition limitation or exclusion that does not apply to or is
satisfied by the qualified beneficiary pursuant to Sections 1357
and 1357.06. A group conversion option under any group benefit
plan shall not be considered as an arrangement under which an
individual is or becomes covered.

(c) Individuals who are covered, become covered, or are eligible
for federal COBRA coverage pursuant to Section 4980B of the
United States Internal Revenue Code or Chapter 18 of the
Employee Retirement Income Security Act, 29 U.S.C. Section
1161 et seq.

(d) Individuals who are covered, become covered, or are eligible
for coverage pursuant to Chapter 6A of the Public Health Service
Act, 42 U.S.C. Section 300bb-1 et seq.

(e) Qualified beneficiaries who fail to meet the requirements of
subdivision (b) of Section 1366.24 or subdivision begin delete (h) end delete begin insert (i) end insert of Section
1366.25 regarding notification of a qualifying event or election of
continuation coverage within the specified time limits.

(f) Except as provided in Section 3001 of ARRA, qualified
beneficiaries who fail to submit the correct premium amount
required by subdivision (b) of Section 1366.24 and Section
1366.26, in accordance with the terms and conditions of the plan
contract, or fail to satisfy other terms and conditions of the plan
contract.

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

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

1366.24.  

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

(b) This disclosure shall state that all enrollees who are eligible
to be qualified beneficiaries, as defined in subdivision (c) of
Section 1366.21, shall be required, as a condition of receiving
benefits pursuant to this article, to notify, in writing, the health
care service plan, or the employer if the employer contracts to
perform the administrative services as provided for in Section
1366.25, of all qualifying events as specified in paragraphs (1),
(3), (4), and (5) of subdivision (d) of Section 1366.21 within 60
days of the date of the qualifying event. This disclosure shall
inform enrollees that failure to make the notification to the health
care service plan, or to the employer when under contract to
provide the administrative services, within the required 60 days
will disqualify the qualified beneficiary from receiving continuation
coverage pursuant to this article. The disclosure shall further state
that a qualified beneficiary who wishes to continue coverage under
the group benefit plan pursuant to this article shall request the
continuation in writing and deliver the written request, by first-class
mail, or other reliable means of delivery, including personal
delivery, express mail, or private courier company, to the health
care service plan, or to the employer if the plan has contracted
with the employer for administrative services pursuant to
subdivision (d) of Section 1366.25, within the 60-day period
following the later of (1) the date that the enrollee’s coverage under
the group benefit plan terminated or will terminate by reason of a
qualifying event, or (2) the date the enrollee was sent notice
pursuant to subdivision (e) of Section 1366.25 of the ability to
continue coverage under the group benefit plan. The disclosure
required by this section shall also state that a qualified beneficiary
electing continuation shall pay to the health care service plan, in
accordance with the terms and conditions of the plan contract,
which shall be set forth in the notice to the qualified beneficiary
pursuant to subdivision (d) of Section 1366.25, the amount of the
required premium payment, as set forth in Section 1366.26. The
disclosure shall further require that the qualified beneficiary’s first
premium payment required to establish premium payment be
delivered by first-class mail, certified mail, or other reliable means
of delivery, including personal delivery, express mail, or private
courier company, to the health care service plan, or to the employer
if the employer has contracted with the plan to perform the
administrative services pursuant to subdivision (d) of Section
1366.25, within 45 days of the date the qualified beneficiary
provided written notice to the health care service plan or the
employer, if the employer has contracted to perform the
administrative services, of the election to continue coverage in
order for coverage to be continued under this article. This
disclosure shall also state that the first premium payment shall
equal an amount sufficient to pay any required premiums and all
premiums due, and that failure to submit the correct premium
amount within the 45-day period will disqualify the qualified
beneficiary from receiving continuation coverage pursuant to this
article.

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

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

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

begin insert

(f) A disclosure issued, amended, or renewed on or after July
1, 2016, for a group benefit plan subject to this article shall include
the following notice:

end insert begin insert

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

end insert begin insert

1. Coverage through the state health insurance marketplace,
also known as Covered California. By enrolling through Covered
California, you may qualify for lower monthly premiums and lower
out-of-pocket costs. Your family members may also qualify for
coverage through Covered California.

end insert begin insert

2. Coverage through Medi-Cal. Depending on your income, you
may qualify for low or no-cost coverage through the state Medicaid
program that is known as Medi-Cal.

end insert begin insert

3. Coverage through an insured spouse. If your spouse has
coverage that extends to family members, you may be eligible to
be added on that benefit plan.

end insert begin insert

Be aware that there may be a deadline to enroll in some of these
options. To find out more about how to apply for Covered
California and Medi-Cal, visit the Covered California Internet
Web site at http://www.coveredca.com.”

end insert begin insert

(g) (1) If Section 5000A of the Internal Revenue Code, as added
by Section 1501 of PPACA, is repealed or amended to no longer
apply to the individual market, as defined in Section 2791 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this
section shall become inoperative and is repealed 12 months after
the date of that repeal or amendment.

end insert begin insert

(2) For purposes of this subdivision, “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 pursuant to that law.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 1366.24 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 1366.24. end insert   

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

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

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

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

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

(f) Every disclosure issued, amended, or renewed on or after
the operative date of this section for a group benefit plan subject
to this article shall include the following notice:

“Please examine your options carefully before declining this
coverage. You should be aware that companies selling individual
health insurance typically require a review of your medical history
that could result in a higher premium or you could be denied
coverage entirely.”

(g) A disclosure issued, amended, or renewed on or after July
1, 2016, for a group benefit plan subject to this article shall include
the following notice:

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

1. Coverage through the state health insurance marketplace,
also known as Covered California. By enrolling through Covered
California, you may qualify for lower monthly premiums and lower
out-of-pocket costs. Your family members may also qualify for
coverage through Covered California.

2. Coverage through Medi-Cal. Depending on your income, you
may qualify for low or no-cost coverage through the state Medicaid
program that is known as Medi-Cal.

3. Coverage through an insured spouse. If your spouse has
coverage that extends to family members, you may be eligible to
be added on that benefit plan.

Be aware that there may be a deadline to enroll in some of these
options. To find out more about how to apply for Covered
California and Medi-Cal, visit the Covered California Internet
Web site at http://www.coveredca.com.”

(h) (1) If Section 5000A of the Internal Revenue Code, as added
by Section 1501 of PPACA, is repealed or amended to no longer
apply to the individual market, as defined in Section 2791 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this
section shall become operative 12 months after the date of that
repeal or amendment.

(2) For purposes of this subdivision, “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 pursuant to that law.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 1366.25 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

1366.25.  

(a) Every group contract between a health care service
plan and an employer subject to this article that is issued, amended,
or renewed on or after July 1, 1998, shall require the employer to
notify the plan, in writing, of any employee who has had a
qualifying event, as defined in paragraph (2) of subdivision (d) of
Section 1366.21, within 30 days of the qualifying event. The group
contract shall also require the employer to notify the plan, in
writing, within 30 days of the date, when the employer becomes
subject to Section 4980B of the United States Internal Revenue
Code or Chapter 18 of the Employee Retirement Income Security
Act, 29 U.S.C. Sec. 1161 et seq.

(b) Every group contract between a plan and an employer subject
to this article that is issued, amended, or renewed on or after July
1, 1998, shall require the employer to notify qualified beneficiaries
currently receiving continuation coverage, whose continuation
coverage will terminate under one group benefit plan prior to the
end of the period the qualified beneficiary would have remained
covered, as specified in Section 1366.27, of the qualified
beneficiary’s ability to continue coverage under a new group
benefit plan for the balance of the period the qualified beneficiary
would have remained covered under the prior group benefit plan.
This notice shall be provided either 30 days prior to the termination
or when all enrolled employees are notified, whichever is later.

Every health care service plan and specialized health care service
plan shall provide to the employer replacing a health care service
plan contract issued by the plan, or to the employer’s agent or
broker representative, within 15 days of any written request,
information in possession of the plan reasonably required to
administer the notification requirements of this subdivision and
subdivision (c).

(c) Notwithstanding subdivision (a), the group contract between
the health care service plan and the employer shall require the
employer to notify the successor plan in writing of the qualified
beneficiaries currently receiving continuation coverage so that the
successor plan, or contracting employer or administrator, may
provide those qualified beneficiaries with the necessary premium
information, enrollment forms, and instructions consistent with
the disclosure required by subdivision (c) of Section 1366.24 and
subdivision (e) of this section to allow the qualified beneficiary to
continue coverage. This information shall be sent to all qualified
beneficiaries who are enrolled in the plan and those qualified
beneficiaries who have been notified, pursuant to Section 1366.24,
of their ability to continue their coverage and may still elect
coverage within the specified 60-day period. This information
shall be sent to the qualified beneficiary’s last known address, as
provided to the employer by the health care service plan or
disability insurer currently providing continuation coverage to the
qualified beneficiary. The successor plan shall not be obligated to
provide this information to qualified beneficiaries if the employer
or prior plan or insurer fails to comply with this section.

(d) A health care service plan may contract with an employer,
or an administrator, to perform the administrative obligations of
the plan as required by this article, including required notifications
and collecting and forwarding premiums to the health care service
plan. Except for the requirements of subdivisions (a), (b), and (c),
this subdivision shall not be construed to permit a plan to require
an employer to perform the administrative obligations of the plan
as required by this article as a condition of the issuance or renewal
of coverage.

(e) Every health care service plan, or employer or administrator
that contracts to perform the notice and administrative services
pursuant to this section, shall, within 14 days of receiving a notice
of a qualifying event, provide to the qualified beneficiary the
necessary benefits information, premium information, enrollment
forms, and disclosures consistent with the notice requirements
contained in subdivisions (b) and (c) of Section 1366.24 to allow
the qualified beneficiary to formally elect continuation coverage.
This information shall be sent to the qualified beneficiary’s last
known address.

(f) Every health care service plan, or employer or administrator
that contracts to perform the notice and administrative services
pursuant to this section, shall, during the 180-day period ending
on the date that continuation coverage is terminated pursuant to
paragraphs (1), (3), and (5) of subdivision (a) of Section 1366.27,
notify a qualified beneficiary who has elected continuation
coverage pursuant to this article of the date that his or her coverage
will terminate, and shall notify the qualified beneficiary of any
conversion coverage available to that qualified beneficiary. This
requirement shall not apply when the continuation coverage is
terminated because the group contract between the plan and the
employer is being terminated.

(g) (1) A health care service plan shall provide to a qualified
beneficiary who has a qualifying event during the period specified
in subparagraph (A) of paragraph (3) of subdivision (a) of Section
3001 of ARRA, a written notice containing information on the
availability of premium assistance under ARRA. This notice shall
be sent to the qualified beneficiary’s last known address. The notice
shall include clear and easily understandable language to inform
the qualified beneficiary that changes in federal law provide a new
opportunity to elect continuation coverage with a 65-percent
premium subsidy and shall include all of the following:

(A) The amount of the premium the person will pay. For
qualified beneficiaries who had a qualifying event between
September 1, 2008, and May 12, 2009, inclusive, if a health care
service plan is unable to provide the correct premium amount in
the notice, the notice may contain the last known premium amount
and an opportunity for the qualified beneficiary to request, through
a toll-free telephone number, the correct premium that would apply
to the beneficiary.

(B) Enrollment forms and any other information required to be
included pursuant to subdivision (e) to allow the qualified
beneficiary to elect continuation coverage. This information shall
not be included in notices sent to qualified beneficiaries currently
enrolled in continuation coverage.

(C) A description of the option to enroll in different coverage
as provided in subparagraph (B) of paragraph (1) of subdivision
(a) of Section 3001 of ARRA. This description shall advise the
qualified beneficiary to contact the covered employee’s former
employer for prior approval to choose this option.

(D) The eligibility requirements for premium assistance in the
amount of 65 percent of the premium under Section 3001 of
ARRA.

(E) The duration of premium assistance available under ARRA.

(F) A statement that a qualified beneficiary eligible for premium
assistance under ARRA may elect continuation coverage no later
than 60 days of the date of the notice.

(G) A statement that a qualified beneficiary eligible for premium
assistance under ARRA who rejected or discontinued continuation
coverage prior to receiving the notice required by this subdivision
has the right to withdraw that rejection and elect continuation
coverage with the premium assistance.

(H) A statement that reads as follows:

“IF YOU ARE HAVING ANY DIFFICULTIES READING OR
UNDERSTANDING THIS NOTICE, PLEASE CONTACT [name
of health plan] at [insert appropriate telephone number].”

(2) With respect to qualified beneficiaries who had a qualifying
event between September 1, 2008, and May 12, 2009, inclusive,
the notice described in this subdivision shall be provided by the
later of May 26, 2009, or seven business days after the date the
plan receives notice of the qualifying event.

(3) With respect to qualified beneficiaries who had or have a
qualifying event between May 13, 2009, and the later date specified
in subparagraph (A) of paragraph (3) of subdivision (a) of Section
3001 of ARRA, inclusive, the notice described in this subdivision
shall be provided within the period of time specified in subdivision
(e).

(4) Nothing in this section shall be construed to require a health
care service plan to provide the plan’s evidence of coverage as a
part of the notice required by this subdivision, and nothing in this
section shall be construed to require a health care service plan to
amend its existing evidence of coverage to comply with the changes
made to this section by the enactment of Assembly Bill 23 of the
2009-10 Regular Session or by the act amending this section during
the second year of the 2009-10 Regular Session.

(5) The requirement under this subdivision to provide a written
notice to a qualified beneficiary and the requirement under
paragraph (1) of subdivision begin delete (h) end delete begin insert (i) end insert to provide a new opportunity
to a qualified beneficiary to elect continuation coverage shall be
deemed satisfied if a health care service plan previously provided
a written notice and additional election opportunity under Section
3001 of ARRA to that qualified beneficiary prior to the effective
date of the act adding this paragraph.

begin insert

(h) A group contract between a group benefit plan and an
employer subject to this article that is issued, amended, or renewed
on or after July 1, 2016, shall require the employer to give the
following notice to a qualified beneficiary:

end insert begin insert

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

end insert begin insert

1. Coverage through the state health insurance marketplace,
also known as Covered California. By enrolling through Covered
California, you may qualify for lower monthly premiums and lower
out-of-pocket costs. Your family members may also qualify for
coverage through Covered California.

end insert begin insert

2. Coverage through Medi-Cal. Depending on your income, you
may qualify for low or no-cost coverage through the state Medicaid
program that is known as Medi-Cal.

end insert begin insert

3. Coverage through an insured spouse. If your spouse has
coverage that extends to family members, you may be eligible to
be added on that benefit plan.

end insert begin insert

Be aware that there may be a deadline to enroll in some of these
options. To find out more about how to apply for Covered
California and Medi-Cal, visit the Covered California Internet
Web site at http://www.coveredca.com.”

end insert begin delete

(h)

end delete

begin insert (i) end insert  (1) Notwithstanding any other begin delete provision of end delete law, a qualified
beneficiary eligible for premium assistance under ARRA may elect
continuation coverage no later than 60 days after the date of the
notice required by subdivision (g).

(2) For a qualified beneficiary who elects to continue coverage
pursuant to this subdivision, the period beginning on the date of
the qualifying event and ending on the effective date of the
continuation coverage shall be disregarded for purposes of
calculating a break in coverage in determining whether a
preexisting condition provision applies under subdivision (c) of
Section 1357.06 or subdivision (e) of Section 1357.51.

(3) For a qualified beneficiary who had a qualifying event
between September 1, 2008, and February 16, 2009, inclusive, and
who elects continuation coverage pursuant to paragraph (1), the
continuation coverage shall commence on the first day of the month
following the election.

(4) For a qualified beneficiary who had a qualifying event
between February 17, 2009, and May 12, 2009, inclusive, and who
elects continuation coverage pursuant to paragraph (1), the effective
date of the continuation coverage shall be either of the following,
at the option of the beneficiary, provided that the beneficiary pays
the applicable premiums:

(A) The date of the qualifying event.

(B) The first day of the month following the election.

(5) Notwithstanding any other begin delete provision of end delete law, a qualified
beneficiary who is eligible for the special election opportunity
described in paragraph (17) of subdivision (a) of Section 3001 of
ARRA may elect continuation coverage no later than 60 days after
the date of the notice required under subdivision begin delete (j). end delete begin insert (k). end insert For a
qualified beneficiary who elects coverage pursuant to this
paragraph, the continuation coverage shall be effective as of the
first day of the first period of coverage after the date of termination
of employment, except, if federal law permits, coverage shall take
effect on the first day of the month following the election.
However, for purposes of calculating the duration of continuation
coverage pursuant to Section 1366.27, the period of that coverage
shall be determined as though the qualifying event was a reduction
of hours of the employee.

(6) Notwithstanding any other begin delete provision of end delete law, a qualified
beneficiary who is eligible for any other special election
opportunity under ARRA may elect continuation coverage no later
than 60 days after the date of the special election notice required
under ARRA.

begin delete

(i)

end delete

begin insert (j) end insert  A health care service plan shall provide a qualified
beneficiary eligible for premium assistance under ARRA written
notice of the extension of that premium assistance as required
under Section 3001 of ARRA.

begin delete

(j)

end delete

begin insert (k) end insert  A health care service plan, or an administrator or employer
if administrative obligations have been assumed by those entities
pursuant to subdivision (d), shall give the qualified beneficiaries
described in subparagraph (C) of paragraph (17) of subdivision
(a) of Section 3001 of ARRA the written notice required by that
paragraph by implementing the following procedures:

(1) The health care service plan shall, within 14 days of the
effective date of the act adding this subdivision, send a notice to
employers currently contracting with the health care service plan
for a group benefit plan subject to this article. The notice shall do
all of the following:

(A) Advise the employer that employees whose employment is
terminated on or after March 2, 2010, who were previously enrolled
in any group health care service plan or health insurance policy
offered by the employer may be entitled to special health coverage
rights, including a subsidy paid by the federal government for a
portion of the premium.

(B) Ask the employer to provide the health care service plan
with the name, address, and date of termination of employment
for any employee whose employment is terminated on or after
March 2, 2010, and who was at any time covered by any health
care service plan or health insurance policy offered to their
employees on or after September 1, 2008.

(C) Provide employers with a format and instructions for
submitting the information to the health care service plan, or their
administrator or employer who has assumed administrative
obligations pursuant to subdivision (d), by telephone, fax,
electronic mail, or mail.

(2) Within 14 days of receipt of the information specified in
paragraph (1) from the employer, the health care service plan shall
send the written notice specified in paragraph (17) of subdivision
(a) of Section 3001 of ARRA to those individuals.

(3) If an individual contacts his or her health care service plan
and indicates that he or she experienced a qualifying event that
entitles him or her to the special election period described in
paragraph (17) of subdivision (a) of Section 3001 of ARRA or any
other special election provision of ARRA, the plan shall provide
the individual with the written notice required under paragraph
(17) of subdivision (a) of Section 3001 of ARRA or any other
applicable provision of ARRA, regardless of whether the plan
receives information from the individual’s previous employer
regarding that individual pursuant to Section 24100. The plan shall
review the individual’s application for coverage under this special
election notice to determine if the individual qualifies for the
special election period and the premium assistance under ARRA.
The plan shall comply with paragraph (5) if the individual does
not qualify for either the special election period or premium
assistance under ARRA.

(4) The requirement under this subdivision to provide the written
notice described in paragraph (17) of subdivision (a) of Section
3001 of ARRA to a qualified beneficiary and the requirement
under paragraph (5) of subdivision begin delete (h) end delete begin insert (i) end insert to provide a new
opportunity to a qualified beneficiary to elect continuation coverage
shall be deemed satisfied if a health care service plan previously
provided the written notice and additional election opportunity
described in paragraph (17) of subdivision (a) of Section 3001 of
ARRA to that qualified beneficiary prior to the effective date of
the act adding this paragraph.

(5) If an individual does not qualify for either a special election
period or the premium assistance under ARRA, the health care
service plan shall provide a written notice to that individual that
shall include information on the right to appeal as set forth in
Section 3001 of ARRA.

(6) A health care service plan shall provide information on its
publicly accessible Internet Web site regarding the premium
assistance made available under ARRA and any special election
period provided under that law. A plan may fulfill this requirement
by linking or otherwise directing consumers to the information
regarding COBRA continuation coverage premium assistance
located on the Internet Web site of the United States Department
of Labor. The information required by this paragraph shall be
located in a section of the plan’s Internet Web site that is readily
accessible to consumers, such as the Web site’s Frequently Asked
Questions section.

begin delete

(k)

end delete

begin insert (l) end insert  For purposes of implementing federal premium assistance
for continuation coverage, the department may designate a model
notice or notices that may be used by health care service plans.
Use of the model notice or notices shall not require prior approval
of the department. Any model notice or notices designated by the
department for purposes of this subdivision shall not be subject to
the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code).

begin delete

(l)

end delete

begin insert (m) end insert  Notwithstanding any other begin delete provision of end delete law, a qualified
beneficiary eligible for premium assistance under ARRA may elect
to enroll in different coverage subject to the criteria provided under
subparagraph (B) of paragraph (1) of subdivision (a) of Section
3001 of ARRA.

begin delete

(m)

end delete

begin insert (n) end insert  A qualified beneficiary enrolled in continuation coverage
as of February 17, 2009, who is eligible for premium assistance
under ARRA may request application of the premium assistance
as of March 1, 2009, or later, consistent with ARRA.

begin delete

(n)

end delete

begin insert (o) end insert  A health care service plan that receives an election notice
from a qualified beneficiary eligible for premium assistance under
ARRA, pursuant to subdivision begin delete (h), end delete begin insert (i), end insert shall be considered a person
entitled to reimbursement, as defined in Section 6432(b)(3) of the
Internal Revenue Code, as amended by paragraph (12) of
subdivision (a) of Section 3001 of ARRA.

begin delete

(o)

end delete

begin insert (p) end insert  (1) For purposes of compliance with ARRA, in the absence
of guidance from, or if specifically required for state-only
continuation coverage by, the United States Department of Labor,
the Internal Revenue Service, or the Centers for Medicare and
Medicaid Services, a health care service plan may request
verification of the involuntary termination of a covered employee’s
employment from the covered employee’s former employer or the
qualified beneficiary seeking premium assistance under ARRA.

(2) A health care service plan that requests verification pursuant
to paragraph (1) directly from a covered employee’s former
employer shall do so by providing a written notice to the employer.
This written notice shall be sent by mail or facsimile to the covered
employee’s former employer within seven business days from the
date the plan receives the qualified beneficiary’s election notice
pursuant to subdivision begin delete (h). end delete begin insert (i). end insert Within 10 calendar days of receipt
of written notice required by this paragraph, the former employer
shall furnish to the health care service plan written verification as
to whether the covered employee’s employment was involuntarily
terminated.

(3) A qualified beneficiary requesting premium assistance under
ARRA may furnish to the health care service plan a written
document or other information from the covered employee’s former
employer indicating that the covered employee’s employment was
involuntarily terminated. This document or information shall be
deemed sufficient by the health care service plan to establish that
the covered employee’s employment was involuntarily terminated
for purposes of ARRA, unless the plan makes a reasonable and
timely determination that the documents or information provided
by the qualified beneficiary are legally insufficient to establish
involuntary termination of employment.

(4) If a health care service plan requests verification pursuant
to this subdivision and cannot verify involuntary termination of
employment within 14 business days from the date the employer
receives the verification request or from the date the plan receives
documentation or other information from the qualified beneficiary
pursuant to paragraph (3), the health care service plan shall either
provide continuation coverage with the federal premium assistance
to the qualified beneficiary or send the qualified beneficiary a
denial letter which shall include notice of his or her right to appeal
that determination pursuant to ARRA.

(5) No person shall intentionally delay verification of
involuntary termination of employment under this subdivision.

begin delete

(p)

end delete

begin insert (q) end insert  The provision of information and forms related to the
premium assistance available pursuant to ARRA to individuals by
a health care service plan shall not be considered a violation of
this chapter provided that the plan complies with all of the
requirements of this article.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 24100 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

24100.  

(a) For purposes of this section, the following
definitions apply:

(1) “ARRA” means Title III of Division B of the federal
American Recovery and Reinvestment Act of 2009 or any
amendment to that federal law extending federal premium
assistance to qualified beneficiaries, as defined in Section 1366.21
of this code or Section 10128.51 of the Insurance Code.

(2) “Employer” means an employer as defined in Section
1366.21 of this code or an employer as defined in Section 10128.51
of the Insurance Code.

(b) An employer shall provide the information described in
subparagraph (B) of paragraph (1) of subdivision begin delete (j) end delete begin insert (k) end insert of Section
1366.25 of this code or subparagraph (B) of paragraph (1) of
subdivision begin delete (j) end delete begin insert (k) end insert of Section 10128.55 of the Insurance Code, as
applicable, with respect to any employee whose employment is
terminated on or after March 2, 2010, and who was enrolled at any
time in a health care service plan or health insurance policy offered
by the employer on or after September 1, 2008. This information
shall be provided to the requesting health care service plan or
health insurer within 14 days of receipt of the notification described
in paragraph (1) of subdivision begin delete (j) end delete begin insert (k) end insert of Section 1366.25 of this
code or paragraph (1) of subdivision begin delete (j) end delete begin insert (k) end insert of Section 10128.55
of the Insurance Code. The employer shall continue to provide the
information to the health care service plan or health insurer within
14 days after the end of each month for any employee whose
employment is terminated in the prior month until the last date
specified in subparagraph (A) of paragraph (3) of subdivision (a)
of Section 3001 of ARRA.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 10128.52 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

10128.52.  

The continuation coverage requirements of this
article do not apply to the following individuals:

(a) Individuals who are entitled to Medicare benefits or become
entitled to Medicare benefits pursuant to Title XVIII of the United
States Social Security Act, as amended or superseded. Entitlement
to Medicare Part A only constitutes entitlement to benefits under
Medicare.

(b) Individuals who have other hospital, medical, or surgical
coverage, or who are covered or become covered under another
group benefit plan, including a self-insured employee welfare
benefit plan, that provides coverage for individuals and that does
not impose any exclusion or limitation with respect to any
preexisting condition of the individual, other than a preexisting
condition limitation or exclusion that does not apply to or is
satisfied by the qualified beneficiary pursuant to Sections 10198.6
and 10198.7. A group conversion option under any group benefit
plan shall not be considered as an arrangement under which an
individual is or becomes covered.

(c) Individuals who are covered, become covered, or are eligible
for federal COBRA coverage pursuant to Section 4980B of the
United States Internal Revenue Code or Chapter 18 of the
Employee Retirement Income Security Act, 29 U.S.C. Section
1161 et seq.

(d) Individuals who are covered, become covered, or are eligible
for coverage pursuant to Chapter 6A of the Public Health Service
Act, 42 U.S.C. Section 300bb-1 et seq.

(e) Qualified beneficiaries who fail to meet the requirements of
subdivision (b) of Section 10128.54 or subdivision begin delete (h) end delete begin insert (i) end insert of Section
10128.55 regarding notification of a qualifying event or election
of continuation coverage within the specified time limits.

(f) Except as provided in Section 3001 of ARRA, qualified
beneficiaries who fail to submit the correct premium amount
required by subdivision (b) of Section 10128.55 and Section
10128.57, in accordance with the terms and conditions of the policy
or contract, or fail to satisfy other terms and conditions of the
policy or contract.

begin delete SEC. 2. end delete
begin insert SEC. 7. end insert   

Section 10128.54 of the Insurance Code is amended
to read:

10128.54.  

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

(b) This disclosure shall state that all insureds who are eligible
to be qualified beneficiaries, as defined in subdivision (c) of
Section 10128.51, shall be required, as a condition of receiving
benefits pursuant to this article, to notify, in writing, the insurer,
or the employer if the employer contracts to perform the
administrative services as provided for in Section 10128.55, of all
qualifying events as specified in paragraphs (1), (3), (4), and (5)
of subdivision (d) of Section 10128.51 within 60 days of the date
of the qualifying event. This disclosure shall inform insureds that
failure to make the notification to the insurer, or to the employer
when under contract to provide the administrative services, within
the required 60 days will disqualify the qualified beneficiary from
receiving continuation coverage pursuant to this article. The
disclosure shall further state that a qualified beneficiary who wishes
to continue coverage under the group benefit plan pursuant to this
article shall request the continuation in writing and deliver the
written request, by first-class mail, or other reliable means of
delivery, including personal delivery, express mail, or private
courier company, to the disability insurer, or to the employer if
the plan has contracted with the employer for administrative
services pursuant to subdivision (d) of Section 10128.55, within
the 60-day period following the later of (1) the date that the
insured’s coverage under the group benefit plan terminated or will
terminate by reason of a qualifying event, or (2) the date the insured
was sent notice pursuant to subdivision (e) of Section 10128.55
of the ability to continue coverage under the group benefit plan.
The disclosure required by this section shall also state that a
qualified beneficiary electing continuation shall pay to the disability
insurer, in accordance with the terms and conditions of the policy
or contract, which shall be set forth in the notice to the qualified
beneficiary pursuant to subdivision (d) of Section 10128.55, the
amount of the required premium payment, as set forth in Section
10128.56. The disclosure shall further require that the qualified
beneficiary’s first premium payment required to establish premium
payment be delivered by first-class mail, certified mail, or other
reliable means of delivery, including personal delivery, express
mail, or private courier company, to the disability insurer, or to
the employer if the employer has contracted with the insurer to
perform the administrative services pursuant to subdivision (d) of
Section 10128.55, within 45 days of the date the qualified
beneficiary provided written notice to the insurer or the employer,
if the employer has contracted to perform the administrative
services, of the election to continue coverage in order for coverage
to be continued under this article. This disclosure shall also state
that the first premium payment shall equal an amount sufficient
to pay all required premiums and all premiums due, and that failure
to submit the correct premium amount within the 45-day period
will disqualify the qualified beneficiary from receiving continuation
coverage pursuant to this article.

(c) The disclosure required by this section shall also describe
separately how qualified beneficiaries whose continuation coverage
terminates under a prior group benefit plan pursuant to Section
10128.57 may continue their coverage for the balance of the period
that the qualified beneficiary would have remained covered under
the prior group benefit plan, including the requirements for election
and payment. The disclosure shall clearly state that continuation
coverage shall terminate if the qualified beneficiary fails to comply
with the requirements pertaining to enrollment in, and payment of
premiums to, the new group benefit plan within 30 days of
receiving notice of the termination of the prior group benefit plan.

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

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

begin insert

(f) A disclosure issued, amended, or renewed on or after July
1, 2016, for a group benefit plan subject to this article shall include
the following notice:

end insert begin insert

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

end insert begin insert

1. Coverage through the state health insurance marketplace,
also known as Covered California. By enrolling through Covered
California, you may qualify for lower monthly premiums and lower
out-of-pocket costs. Your family members may also qualify for
coverage through Covered California.

end insert begin insert

2. Coverage through Medi-Cal. Depending on your income, you
may qualify for low or no-cost coverage through the state Medicaid
program that is known as Medi-Cal.

end insert begin insert

3. Coverage through an insured spouse. If your spouse has
coverage that extends to family members, you may be eligible to
be added on that benefit plan.

end insert begin insert

Be aware that there may be a deadline to enroll in some of these
options. To find out more about how to apply for Covered
California and Medi-Cal, visit the Covered California Internet
Web site at http://www.coveredca.com.”

end insert begin insert

(g) (1) If Section 5000A of the Internal Revenue Code, as added
by Section 1501 of PPACA, is repealed or amended to no longer
apply to the individual market, as defined in Section 2791 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this
section shall become inoperative and is repealed 12 months after
the date of that repeal or amendment.

end insert begin insert

(2) For purposes of this subdivision, “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 pursuant to that law.

end insert

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 10128.54 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 10128.54. end insert   

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

(b) This disclosure shall state that all insureds who are eligible
to be qualified beneficiaries, as defined in subdivision (c) of Section
10128.51, shall be required, as a condition of receiving benefits
pursuant to this article, to notify, in writing, the insurer, or the
employer if the employer contracts to perform the administrative
services as provided for in Section 10128.55, of all qualifying
events as specified in paragraphs (1), (3), (4), and (5) of
subdivision (d) of Section 10128.51 within 60 days of the date of
the qualifying event. This disclosure shall inform insureds that
failure to make the notification to the insurer, or to the employer
when under contract to provide the administrative services, within
the required 60 days will disqualify the qualified beneficiary from
receiving continuation coverage pursuant to this article. The
disclosure shall further state that a qualified beneficiary who
wishes to continue coverage under the group benefit plan pursuant
to this article must request the continuation in writing and deliver
the written request, by first-class mail, or other reliable means of
delivery, including personal delivery, express mail, or private
courier company, to the disability insurer, or to the employer if
the plan has contracted with the employer for administrative
services pursuant to subdivision (d) of Section 10128.55, within
the 60-day period following the later of (1) the date that the
insured’s coverage under the group benefit plan terminated or
will terminate by reason of a qualifying event, or (2) the date the
insured was sent notice pursuant to subdivision (e) of Section
10128.55 of the ability to continue coverage under the group
benefit plan. The disclosure required by this section shall also
state that a qualified beneficiary electing continuation shall pay
to the disability insurer, in accordance with the terms and
conditions of the policy or contract, which shall be set forth in the
notice to the qualified beneficiary pursuant to subdivision (d) of
Section 10128.55, the amount of the required premium payment,
as set forth in Section 10128.56. The disclosure shall further
require that the qualified beneficiary’s first premium payment
required to establish premium payment be delivered by first-class
mail, certified mail, or other reliable means of delivery, including
personal delivery, express mail, or private courier company, to
the disability insurer, or to the employer if the employer has
contracted with the insurer to perform the administrative services
pursuant to subdivision (d) of Section 10128.55, within 45 days
of the date the qualified beneficiary provided written notice to the
insurer or the employer, if the employer has contracted to perform
the administrative services, of the election to continue coverage
in order for coverage to be continued under this article. This
disclosure shall also state that the first premium payment must
equal an amount sufficient to pay all required premiums and all
premiums due, and that failure to submit the correct premium
amount within the 45-day period will disqualify the qualified
beneficiary from receiving continuation coverage pursuant to this
article.

(c) The disclosure required by this section shall also describe
separately how qualified beneficiaries whose continuation coverage
terminates under a prior group benefit plan pursuant to Section
10128.57 may continue their coverage for the balance of the period
that the qualified beneficiary would have remained covered under
the prior group benefit plan, including the requirements for election
and payment. The disclosure shall clearly state that continuation
coverage shall terminate if the qualified beneficiary fails to comply
with the requirements pertaining to enrollment in, and payment
of premiums to, the new group benefit plan within 30 days of
receiving notice of the termination of the prior group benefit plan.

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

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

(f) Every disclosure issued, amended, or renewed on or after
the operative date of this section for a group benefit plan subject
to this article shall include the following notice:

“Please examine your options carefully before declining this
coverage. You should be aware that companies selling individual
health insurance typically require a review of your medical history
that could result in a higher premium or you could be denied
coverage entirely.”

(g) A disclosure issued, amended, or renewed on or after July
1, 2016, for a group benefit plan subject to this article shall include
the following notice:

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

1. Coverage through the state health insurance marketplace,
also known as Covered California. By enrolling through Covered
California, you may qualify for lower monthly premiums and lower
out-of-pocket costs. Your family members may also qualify for
coverage through Covered California.

2. Coverage through Medi-Cal. Depending on your income, you
may qualify for low or no-cost coverage through the state Medicaid
program that is known as Medi-Cal.

3. Coverage through an insured spouse. If your spouse has
coverage that extends to family members, you may be eligible to
be added on that benefit plan.

Be aware that there may be a deadline to enroll in some of these
options. To find out more about how to apply for Covered
California and Medi-Cal, visit the Covered California Internet
Web site at http://www.coveredca.com.”

(h) (1) If Section 5000A of the Internal Revenue Code, as added
by Section 1501 of PPACA, is repealed or amended to no longer
apply to the individual market, as defined in Section 2791 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this
section shall become operative 12 months after the date of that
repeal or amendment.

(2) For purposes of this subdivision, “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 pursuant to that law.

end insert

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 10128.55 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

10128.55.  

(a) Every group benefit plan contract between a
disability insurer and an employer subject to this article that is
issued, amended, or renewed on or after July 1, 1998, shall require
the employer to notify the insurer in writing of any employee who
has had a qualifying event, as defined in paragraph (2) of
subdivision (d) of Section 10128.51, within 30 days of the
qualifying event. The group contract shall also require the employer
to notify the insurer, in writing, within 30 days of the date when
the employer becomes subject to Section 4980B of the United
States Internal Revenue Code or Chapter 18 of the Employee
Retirement Income Security Act, 29 U.S.C. Sec. 1161 et seq.

(b) Every group benefit plan contract between a disability insurer
and an employer subject to this article that is issued, amended, or
renewed after July 1, 1998, shall require the employer to notify
qualified beneficiaries currently receiving continuation coverage,
whose continuation coverage will terminate under one group
benefit plan prior to the end of the period the qualified beneficiary
would have remained covered, as specified in Section 10128.57,
of the qualified beneficiary’s ability to continue coverage under a
new group benefit plan for the balance of the period the qualified
beneficiary would have remained covered under the prior group
benefit plan. This notice shall be provided either 30 days prior to
the termination or when all enrolled employees are notified,
whichever is later.

Every disability insurer shall provide to the employer replacing
a group benefit plan policy issued by the insurer, or to the
employer’s agent or broker representative, within 15 days of any
written request, information in possession of the insurer reasonably
required to administer the notification requirements of this
subdivision and subdivision (c).

(c) Notwithstanding subdivision (a), the group benefit plan
contract between the insurer and the employer shall require the
employer to notify the successor plan in writing of the qualified
beneficiaries currently receiving continuation coverage so that the
successor plan, or contracting employer or administrator, may
provide those qualified beneficiaries with the necessary premium
information, enrollment forms, and instructions consistent with
the disclosure required by subdivision (c) of Section 10128.54 and
subdivision (e) of this section to allow the qualified beneficiary to
continue coverage. This information shall be sent to all qualified
beneficiaries who are enrolled in the group benefit plan and those
qualified beneficiaries who have been notified, pursuant to Section
10128.54 of their ability to continue their coverage and may still
elect coverage within the specified 60-day period. This information
shall be sent to the qualified beneficiary’s last known address, as
provided to the employer by the health care service plan or,
disability insurer currently providing continuation coverage to the
qualified beneficiary. The successor insurer shall not be obligated
to provide this information to qualified beneficiaries if the
employer or prior insurer or health care service plan fails to comply
with this section.

(d) A disability insurer may contract with an employer, or an
administrator, to perform the administrative obligations of the plan
as required by this article, including required notifications and
collecting and forwarding premiums to the insurer. Except for the
requirements of subdivisions (a), (b), and (c), this subdivision shall
not be construed to permit an insurer to require an employer to
perform the administrative obligations of the insurer as required
by this article as a condition of the issuance or renewal of coverage.

(e) Every insurer, or employer or administrator that contracts
to perform the notice and administrative services pursuant to this
section, shall, within 14 days of receiving a notice of a qualifying
event, provide to the qualified beneficiary the necessary premium
information, enrollment forms, and disclosures consistent with the
notice requirements contained in subdivisions (b) and (c) of Section
10128.54 to allow the qualified beneficiary to formally elect
continuation coverage. This information shall be sent to the
qualified beneficiary’s last known address.

(f) Every insurer, or employer or administrator that contracts
to perform the notice and administrative services pursuant to this
section, shall, during the 180-day period ending on the date that
continuation coverage is terminated pursuant to paragraphs (1),
(3), and (5) of subdivision (a) of Section 10128.57, notify a
qualified beneficiary who has elected continuation coverage
pursuant to this article of the date that his or her coverage will
terminate, and shall notify the qualified beneficiary of any
conversion coverage available to that qualified beneficiary. This
requirement shall not apply when the continuation coverage is
terminated because the group contract between the insurer and the
employer is being terminated.

(g) (1) An insurer shall provide to a qualified beneficiary who
has a qualifying event during the period specified in subparagraph
(A) of paragraph (3) of subdivision (a) of Section 3001 of ARRA,
a written notice containing information on the availability of
premium assistance under ARRA. This notice shall be sent to the
qualified beneficiary’s last known address. The notice shall include
clear and easily understandable language to inform the qualified
beneficiary that changes in federal law provide a new opportunity
to elect continuation coverage with a 65-percent premium subsidy
and shall include all of the following:

(A) The amount of the premium the person will pay. For
qualified beneficiaries who had a qualifying event between
September 1, 2008, and May 12, 2009, inclusive, if an insurer is
unable to provide the correct premium amount in the notice, the
notice may contain the last known premium amount and an
opportunity for the qualified beneficiary to request, through a
toll-free telephone number, the correct premium that would apply
to the beneficiary.

(B) Enrollment forms and any other information required to be
included pursuant to subdivision (e) to allow the qualified
beneficiary to elect continuation coverage. This information shall
not be included in notices sent to qualified beneficiaries currently
enrolled in continuation coverage.

(C) A description of the option to enroll in different coverage
as provided in subparagraph (B) of paragraph (1) of subdivision
(a) of Section 3001 of ARRA. This description shall advise the
qualified beneficiary to contact the covered employee’s former
employer for prior approval to choose this option.

(D) The eligibility requirements for premium assistance in the
amount of 65 percent of the premium under Section 3001 of
ARRA.

(E) The duration of premium assistance available under ARRA.

(F) A statement that a qualified beneficiary eligible for premium
assistance under ARRA may elect continuation coverage no later
than 60 days of the date of the notice.

(G) A statement that a qualified beneficiary eligible for premium
assistance under ARRA who rejected or discontinued continuation
coverage prior to receiving the notice required by this subdivision
has the right to withdraw that rejection and elect continuation
coverage with the premium assistance.

(H) A statement that reads as follows:

“IF YOU ARE HAVING ANY DIFFICULTIES READING OR
UNDERSTANDING THIS NOTICE, PLEASE CONTACT [name
of insurer] at [insert appropriate telephone number].”

(2) With respect to qualified beneficiaries who had a qualifying
event between September 1, 2008, and May 12, 2009, inclusive,
the notice described in this subdivision shall be provided by the
later of May 26, 2009, or seven business days after the date the
insurer receives notice of the qualifying event.

(3) With respect to qualified beneficiaries who had or have a
qualifying event between May 13, 2009, and the later date specified
in subparagraph (A) of paragraph (3) of subdivision (a) of Section
3001 of ARRA, inclusive, the notice described in this subdivision
shall be provided within the period of time specified in subdivision
(e).

(4) Nothing in this section shall be construed to require an
insurer to provide the insurer’s evidence of coverage as a part of
the notice required by this subdivision, and nothing in this section
shall be construed to require an insurer to amend its existing
evidence of coverage to comply with the changes made to this
section by the enactment of Assembly Bill 23 of the 2009-10
Regular Session or by the act amending this section during the
second year of the 2009-10 Regular Session.

(5) The requirement under this subdivision to provide a written
notice to a qualified beneficiary and the requirement under
paragraph (1) of subdivision begin delete (h) end delete begin insert (i) end insert to provide a new opportunity
to a qualified beneficiary to elect continuation coverage shall be
deemed satisfied if an insurer previously provided a written notice
and additional election opportunity under Section 3001 of ARRA
to that qualified beneficiary prior to the effective date of the act
adding this paragraph.

begin insert

(h) A group contract between a group benefit plan and an
employer subject to this article that is issued, amended, or renewed
on or after July 1, 2016, shall require the employer to give the
following notice to a qualified beneficiary:

end insert begin insert

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

end insert begin insert

1. Coverage through the state health insurance marketplace,
also known as Covered California. By enrolling through Covered
California, you may qualify for lower monthly premiums and lower
out-of-pocket costs. Your family members may also qualify for
coverage through Covered California.

end insert begin insert

2. Coverage through Medi-Cal. Depending on your income, you
may qualify for low or no-cost coverage through the state Medicaid
program that is known as Medi-Cal.

end insert begin insert

3. Coverage through an insured spouse. If your spouse has
coverage that extends to family members, you may be eligible to
be added on that benefit plan.

end insert begin insert

Be aware that there may be a deadline to enroll in some of these
options. To find out more about how to apply for Covered
California and Medi-Cal, visit the Covered California Internet
Web site at http://www.coveredca.com.”

end insert begin delete

(h)

end delete

begin insert (i) end insert  (1) Notwithstanding any other begin delete provision of end delete law, a qualified
beneficiary eligible for premium assistance under ARRA may elect
continuation coverage no later than 60 days after the date of the
notice required by subdivision (g).

(2) For a qualified beneficiary who elects to continue coverage
pursuant to this subdivision, the period beginning on the date of
the qualifying event and ending on the effective date of the
continuation coverage shall be disregarded for purposes of
calculating a break in coverage in determining whether a
preexisting condition provision applies under subdivision (e) of
Section 10198.7 or subdivision (c) of Section 10708.

(3) For a qualified beneficiary who had a qualifying event
between September 1, 2008, and February 16, 2009, inclusive, and
who elects continuation coverage pursuant to paragraph (1), the
continuation coverage shall commence on the first day of the month
following the election.

(4) For a qualified beneficiary who had a qualifying event
between February 17, 2009, and May 12, 2009, inclusive, and who
elects continuation coverage pursuant to paragraph (1), the effective
date of the continuation coverage shall be either of the following,
at the option of the beneficiary, provided that the beneficiary pays
the applicable premiums:

(A) The date of the qualifying event.

(B) The first day of the month following the election.

(5) Notwithstanding any other begin delete provision of end delete law, a qualified
beneficiary who is eligible for the special election period described
in paragraph (17) of subdivision (a) of Section 3001 of ARRA
may elect continuation coverage no later than 60 days after the
date of the notice required under subdivision begin delete (j). end delete begin insert (k). end insert For a qualified
beneficiary who elects coverage pursuant to this paragraph, the
continuation coverage shall be effective as of the first day of the
first period of coverage after the date of termination of
employment, except, if federal law permits, coverage shall take
effect on the first day of the month following the election.
However, for purposes of calculating the duration of continuation
coverage pursuant to Section 10128.57, the period of that coverage
shall be determined as though the qualifying event was a reduction
of hours of the employee.

(6) Notwithstanding any other begin delete provision of end delete law, a qualified
beneficiary who is eligible for any other special election period
under ARRA may elect continuation coverage no later than 60
days after the date of the special election notice required under
ARRA.

begin delete

(i)

end delete

begin insert (j) end insert  An insurer shall provide a qualified beneficiary eligible for
premium assistance under ARRA written notice of the extension
of that premium assistance as required under Section 3001 of
ARRA.

begin delete

(j)

end delete

begin insert (k) end insert  A health insurer, or an administrator or employer if
administrative obligations have been assumed by those entities
pursuant to subdivision (d), shall give the qualified beneficiaries
described in subparagraph (C) of paragraph (17) of subdivision
(a) of Section 3001 of ARRA the written notice required by that
paragraph by implementing the following procedures:

(1) The insurer shall, within 14 days of the effective date of the
act adding this subdivision, send a notice to employers currently
contracting with the insurer for a group benefit plan subject to this
article. The notice shall do all of the following:

(A) Advise the employer that employees whose employment is
terminated on or after March 2, 2010, who were previously enrolled
in any group health care service plan or health insurance policy
offered by the employer may be entitled to special health coverage
rights, including a subsidy paid by the federal government for a
portion of the premium.

(B) Ask the employer to provide the insurer with the name,
address, and date of termination of employment for any employee
whose employment is terminated on or after March 2, 2010, and
who was at any time covered by any health care service plan or
health insurance policy offered to their employees on or after
September 1, 2008.

(C) Provide employers with a format and instructions for
submitting the information to the insurer, or their administrator or
employer who has assumed administrative obligations pursuant
to subdivision (d), by telephone, fax, electronic mail, or mail.

(2) Within 14 days of receipt of the information specified in
paragraph (1) from the employer, the insurer shall send the written
notice specified in paragraph (17) of subdivision (a) of Section
3001 of ARRA to those individuals.

(3) If an individual contacts his or her health insurer and
indicates that he or she experienced a qualifying event that entitles
him or her to the special election period described in paragraph
(17) of subdivision (a) of Section 3001 of ARRA or any other
special election provision of ARRA, the insurer shall provide the
individual with the notice required under paragraph (17) of
subdivision (a) of Section 3001 of ARRA or any other applicable
provision of ARRA, regardless of whether the insurer receives or
received information from the individual’s previous employer
regarding that individual pursuant to Section 24100 of the Health
and Safety Code. The insurer shall review the individual’s
application for coverage under this special election notice to
determine if the individual qualifies for the special election period
and the premium assistance under ARRA. The insurer shall comply
with paragraph (5) if the individual does not qualify for either the
special election period or premium assistance under ARRA.

(4) The requirement under this subdivision to provide the written
notice described in paragraph (17) of subdivision (a) of Section
3001 of ARRA to a qualified beneficiary and the requirement
under paragraph (5) of subdivision begin delete (h) end delete begin insert (i) end insert to provide a new
opportunity to a qualified beneficiary to elect continuation coverage
shall be deemed satisfied if a health insurer previously provided
the written notice and additional election opportunity described in
paragraph (17) of subdivision (a) of Section 3001 of ARRA to that
qualified beneficiary prior to the effective date of the act adding
this paragraph.

(5) If an individual does not qualify for either a special election
period or the subsidy under ARRA, the insurer shall provide a
written notice to that individual that shall include information on
the right to appeal as set forth in Section 3001 of ARRA.

(6) A health insurer shall provide information on its publicly
accessible Internet Web site regarding the premium assistance
made available under ARRA and any special election period
provided under that law. An insurer may fulfill this requirement
by linking or otherwise directing consumers to the information
regarding COBRA continuation coverage premium assistance
located on the Internet Web site of the United States Department
of Labor. The information required by this paragraph shall be
located in a section of the insurer’s Internet Web site that is readily
accessible to consumers, such as the Web site’s Frequently Asked
Questions section.

begin delete

(k)

end delete

begin insert (l) end insert  Notwithstanding any other begin delete provision of end delete law, a qualified
beneficiary eligible for premium assistance under ARRA may elect
to enroll in different coverage subject to the criteria provided under
subparagraph (B) of paragraph (1) of subdivision (a) of Section
3001 of ARRA.

begin delete

(l)

end delete

begin insert (m) end insert  A qualified beneficiary enrolled in continuation coverage
as of February 17, 2009, who is eligible for premium assistance
under ARRA may request application of the premium assistance
as of March 1, 2009, or later, consistent with ARRA.

begin delete

(m)

end delete

begin insert (n) end insert  An insurer that receives an election notice from a qualified
beneficiary eligible for premium assistance under ARRA, pursuant
to subdivision begin delete (h), end delete begin insert (i), end insert shall be considered a person entitled to
reimbursement, as defined in Section 6432(b)(3) of the Internal
Revenue Code, as amended by paragraph (12) of subdivision (a)
of Section 3001 of ARRA.

begin delete

(n)

end delete

begin insert (o) end insert  (1) For purposes of compliance with ARRA, in the absence
of guidance from, or if specifically required for state-only
continuation coverage by, the United States Department of Labor,
the Internal Revenue Service, or the Centers for Medicare and
Medicaid Services, an insurer may request verification of the
involuntary termination of a covered employee’s employment from
the covered employee’s former employer or the qualified
beneficiary seeking premium assistance under ARRA.

(2) An insurer that requests verification pursuant to paragraph
(1) directly from a covered employee’s former employer shall do
so by providing a written notice to the employer. This written
notice shall be sent by mail or facsimile to the covered employee’s
former employer within seven business days from the date the
insurer receives the qualified beneficiary’s election notice pursuant
to subdivision begin delete (h). end delete begin insert (i). end insert Within 10 calendar days of receipt of written
notice required by this paragraph, the former employer shall furnish
to the insurer written verification as to whether the covered
employee’s employment was involuntarily terminated.

(3) A qualified beneficiary requesting premium assistance under
ARRA may furnish to the insurer a written document or other
information from the covered employee’s former employer
indicating that the covered employee’s employment was
involuntarily terminated. This document or information shall be
deemed sufficient by the insurer to establish that the covered
employee’s employment was involuntarily terminated for purposes
of ARRA, unless the insurer makes a reasonable and timely
determination that the documents or information provided by the
qualified beneficiary are legally insufficient to establish involuntary
termination of employment.

(4) If an insurer requests verification pursuant to this subdivision
and cannot verify involuntary termination of employment within
14 business days from the date the employer receives the
verification request or from the date the insurer receives
documentation or other information from the qualified beneficiary
pursuant to paragraph (3), the insurer shall either provide
continuation coverage with the federal premium assistance to the
qualified beneficiary or send the qualified beneficiary a denial
letter which shall include notice of his or her right to appeal that
determination pursuant to ARRA.

(5) No person shall intentionally delay verification of
involuntary termination of employment under this subdivision.

begin insert

begin insert SEC. 10. 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