Amended in Senate May 5, 2015

Amended in Senate April 20, 2015

Senate BillNo. 503


Introduced by Senator Hernandez

February 26, 2015


An act to amend Sections 1366.22, 1366.25, and 24100 of, and to amend, repeal, and add Section 1366.24 of, the Health and Safety Code, and to amend Sections 10128.52 and 10128.55 of, and to amend, repeal, and add Section 10128.54 of, 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. If federal law requiring an individual to maintain minimum health coverage is repealed or amended to no longer apply to the individual market, as specified, the bill would reenact that disclosure requirement to become operative 12 months after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.

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.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

P2    1

SECTION 1.  

Section 1366.22 of the Health and Safety Code
2 is amended to read:

3

1366.22.  

The continuation coverage requirements of this article
4do not apply to the following individuals:

5(a) Individuals who are entitled to Medicare benefits or become
6entitled to Medicare benefits pursuant to Title XVIII of the United
7States Social Security Act, as amended or superseded. Entitlement
8to Medicare Part A only constitutes entitlement to benefits under
9Medicare.

10(b) Individuals who have other hospital, medical, or surgical
11coverage or who are covered or become covered under another
12group benefit plan, including a self-insured employee welfare
13benefit plan, that provides coverage for individuals and that does
P3    1not impose any exclusion or limitation with respect to any
2preexisting condition of the individual, other than a preexisting
3condition limitation or exclusion that does not apply to or is
4satisfied by the qualified beneficiary pursuant to Sections 1357
5and 1357.06. A group conversion option under any group benefit
6plan shall not be considered as an arrangement under which an
7individual is or becomes covered.

8(c) Individuals who are covered, become covered, or are eligible
9for federal COBRA coverage pursuant to Section 4980B of the
10United States Internal Revenue Code or Chapter 18 of the
11Employee Retirement Income Securitybegin delete Act, 29 U.S.C. Section
121161 et seq.end delete
begin insert Act (29 U.S.C. Sec. 116 et seq.).end insert

13(d) Individuals who are covered, become covered, or are eligible
14for coverage pursuant to Chapter 6A of the Public Health Service
15begin delete Act, 42 U.S.C. Section 300bb-1 et seq.end deletebegin insert Act (42 U.S.C. Sec. 300bb-1
16et seq.).end insert

17(e) Qualified beneficiaries who fail to meet the requirements of
18subdivision (b) of Section 1366.24 or subdivision (i) of Section
191366.25 regarding notification of a qualifying event or election of
20continuation coverage within the specified time limits.

21(f) Except as provided in Section 3001 of ARRA, qualified
22beneficiaries who fail to submit the correct premium amount
23required by subdivision (b) of Section 1366.24 and Section
241366.26, in accordance with the terms and conditions of the plan
25contract, or fail to satisfy other terms and conditions of the plan
26 contract.

27

SEC. 2.  

Section 1366.24 of the Health and Safety Code is
28amended to read:

29

1366.24.  

(a) Every health care service plan evidence of
30coverage, provided for group benefit plans subject to this article,
31that is issued, amended, or renewed on or after January 1, 1999,
32shall disclose to covered employees of group benefit plans subject
33to this article the ability to continue coverage pursuant to this
34 article, as required by this section.

35(b) This disclosure shall state that all enrollees who are eligible
36to be qualified beneficiaries, as defined in subdivision (c) of
37Section 1366.21, shall be required, as a condition of receiving
38benefits pursuant to this article, to notify, in writing, the health
39care service plan, or the employer if the employer contracts to
40perform the administrative services as provided for in Section
P4    11366.25, of all qualifying events as specified in paragraphs (1),
2(3), (4), and (5) of subdivision (d) of Section 1366.21 within 60
3days of the date of the qualifying event. This disclosure shall
4inform enrollees that failure to make the notification to the health
5care service plan, or to the employer when under contract to
6provide the administrative services, within the required 60 days
7will disqualify the qualified beneficiary from receiving continuation
8coverage pursuant to this article. The disclosure shall further state
9that a qualified beneficiary who wishes to continue coverage under
10the group benefit plan pursuant to this article shall request the
11continuation in writing and deliver the written request, by first-class
12mail, or other reliable means of delivery, including personal
13delivery, express mail, or private courier company, to the health
14care service plan, or to the employer if the plan has contracted
15with the employer for administrative services pursuant to
16subdivision (d) of Section 1366.25, within the 60-day period
17following the later of (1) the date that the enrollee’s coverage under
18the group benefit plan terminated or will terminate by reason of a
19qualifying event, or (2) the date the enrollee was sent notice
20pursuant to subdivision (e) of Section 1366.25 of the ability to
21continue coverage under the group benefit plan. The disclosure
22required by this section shall also state that a qualified beneficiary
23electing continuation shall pay to the health care service plan, in
24accordance with the terms and conditions of the plan contract,
25which shall be set forth in the notice to the qualified beneficiary
26pursuant to subdivision (d) of Section 1366.25, the amount of the
27required premium payment, as set forth in Section 1366.26. The
28disclosure shall further require that the qualified beneficiary’s first
29premium payment required to establish premium payment be
30delivered by first-class mail, certified mail, or other reliable means
31of delivery, including personal delivery, express mail, or private
32courier company, to the health care service plan, or to the employer
33if the employer has contracted with the plan to perform the
34administrative services pursuant to subdivision (d) of Section
351366.25, within 45 days of the date the qualified beneficiary
36provided written notice to the health care service plan or the
37employer, if the employer has contracted to perform the
38administrative services, of the election to continue coverage in
39order for coverage to be continued under this article. This
40disclosure shall also state that the first premium payment shall
P4    1equal an amount sufficient to pay any required premiums and all
2premiums due, and that failure to submit the correct premium
3amount within the 45-day period will disqualify the qualified
4beneficiary from receiving continuation coverage pursuant to this
5article.

6(c) The disclosure required by this section shall also describe
7separately how qualified beneficiaries whose continuation coverage
8terminates under a prior group benefit plan pursuant to subdivision
9(b) of Section 1366.27 may continue their coverage for the balance
10of the period that the qualified beneficiary would have remained
11covered under the prior group benefit plan, including the
12requirements for election and payment. The disclosure shall clearly
13state that continuation coverage shall terminate if the qualified
14beneficiary fails to comply with the requirements pertaining to
15enrollment in, and payment of premiums to, the new group benefit
16plan within 30 days of receiving notice of the termination of the
17prior group benefit plan.

18(d) Prior to August 1, 1998, every health care service plan shall
19provide to all covered employees of employers subject to this
20article a written notice containing the disclosures required by this
21section, or shall provide to all covered employees of employers
22subject to this section a new or amended evidence of coverage that
23includes the disclosures required by this section. Any specialized
24health care service plan that, in the ordinary course of business,
25maintains only the addresses of employer group purchasers of
26benefits and does not maintain addresses of covered employees,
27may comply with the notice requirements of this section through
28the provision of the notices to its employer group purchasers of
29benefits.

30(e) Every plan disclosure form issued, amended, or renewed on
31and after January 1, 1999, for a group benefit plan subject to this
32article shall provide a notice that, under state law, an enrollee may
33be entitled to continuation of group coverage and that additional
34information regarding eligibility for this coverage may be found
35in the plan’s evidence of coverage.

36(f) A disclosure issued, amended, or renewed on or after July
371, 2016, for a group benefit plan subject to this article shall include
38the following notice:

39“In addition to your coverage continuation options, you may be
40eligible for the following:

P6    11. Coverage through the state health insurance marketplace, also
2known as Covered California. By enrolling through Covered
3California, you may qualify for lower monthly premiums and lower
4out-of-pocket costs. Your family members may also qualify for
5coverage through Covered California.

62. Coverage through Medi-Cal. Depending on your income, you
7may qualify for low or no-cost coverage throughbegin delete the state Medicaid
8program that is known asend delete
Medi-Cal.begin insert Your family members may
9also qualify for Medi-Cal.end insert

103. Coverage through an insured spouse. If your spouse has
11coverage that extends to family members, you may bebegin delete eligibleend deletebegin insert ableend insert
12 to be added on that benefit plan.

13Be aware that therebegin delete may beend deletebegin insert isend insert a deadline to enroll inbegin delete some of
14these options.end delete
begin insert Covered California, although you can apply for
15Medi-Cal at anytime.end insert
To find out more about how to apply for
16Covered California and Medi-Cal, visit the Covered California
17Internet Web site at http://www.coveredca.com.”

18(g) (1) If Section 5000A of the Internal Revenue Code, as added
19by Section 1501 of PPACA, is repealed or amended to no longer
20apply to the individual market, as defined in Section 2791 of the
21federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this
22section shall become inoperative and is repealed 12 months after
23the date of that repeal or amendment.

24(2) For purposes of this subdivision, “PPACA” means the federal
25Patient Protection and Affordable Care Act (Public Law 111-148),
26as amended by the federal Health Care and Education
27Reconciliation Act of 2010 (Public Law 111-152), and any rules,
28regulations, or guidance issued pursuant to that law.

29

SEC. 3.  

Section 1366.24 is added to the Health and Safety
30Code
, to read:

31

1366.24.  

(a) Every health care service plan evidence of
32coverage, provided for group benefit plans subject to this article,
33that is issued, amended, or renewed on or after January 1, 1999,
34shall disclose to covered employees of group benefit plans subject
35to this article the ability to continue coverage pursuant to this
36article, as required by this section.

37(b) This disclosure shall state that all enrollees who are eligible
38to be qualified beneficiaries, as defined in subdivision (c) of
39Section 1366.21, shall be required, as a condition of receiving
40benefits pursuant to this article, to notify, in writing, the health
P7    1care service plan, or the employer if the employer contracts to
2perform the administrative services as provided for in Section
31366.25, of all qualifying events as specified in paragraphs (1),
4(3), (4), and (5) of subdivision (d) of Section 1366.21 within 60
5days of the date of the qualifying event. This disclosure shall
6inform enrollees that failure to make the notification to the health
7care service plan, or to the employer when under contract to
8provide the administrative services, within the required 60 days
9will disqualify the qualified beneficiary from receiving continuation
10coverage pursuant to this article. The disclosure shall further state
11that a qualified beneficiary who wishes to continue coverage under
12the group benefit plan pursuant to this article must request the
13continuation in writing and deliver the written request, by first-class
14mail, or other reliable means of delivery, including personal
15delivery, express mail, or private courier company, to the health
16care service plan, or to the employer if the plan has contracted
17with the employer for administrative services pursuant to
18subdivision (d) of Section 1366.25, within the 60-day period
19following the later of (1) the date that the enrollee’s coverage under
20the group benefit plan terminated or will terminate by reason of a
21qualifying event, or (2) the date the enrollee was sent notice
22pursuant to subdivision (e) of Section 1366.25 of the ability to
23continue coverage under the group benefit plan. The disclosure
24required by this section shall also state that a qualified beneficiary
25electing continuation shall pay to the health care service plan, in
26accordance with the terms and conditions of the plan contract,
27which shall be set forth in the notice to the qualified beneficiary
28pursuant to subdivision (d) of Section 1366.25, the amount of the
29required premium payment, as set forth in Section 1366.26. The
30disclosure shall further require that the qualified beneficiary’s first
31premium payment required to establish premium payment be
32delivered by first-class mail, certified mail, or other reliable means
33of delivery, including personal delivery, express mail, or private
34courier company, to the health care service plan, or to the employer
35if the employer has contracted with the plan to perform the
36administrative services pursuant to subdivision (d) of Section
371366.25, within 45 days of the date the qualified beneficiary
38provided written notice to the health care service plan or the
39employer, if the employer has contracted to perform the
40administrative services, of the election to continue coverage in
P7    1order for coverage to be continued under this article. This
2disclosure shall also state that the first premium payment must
3equal an amount sufficient to pay any required premiums and all
4premiums due, and that failure to submit the correct premium
5amount within the 45-day period will disqualify the qualified
6beneficiary from receiving continuation coverage pursuant to this
7article.

8(c) The disclosure required by this section shall also describe
9separately how qualified beneficiaries whose continuation coverage
10terminates under a prior group benefit plan pursuant to subdivision
11(b) of Section 1366.27 may continue their coverage for the balance
12of the period that the qualified beneficiary would have remained
13covered under the prior group benefit plan, including the
14requirements for election and payment. The disclosure shall clearly
15state that continuation coverage shall terminate if the qualified
16beneficiary fails to comply with the requirements pertaining to
17enrollment in, and payment of premiums to, the new group benefit
18plan within 30 days of receiving notice of the termination of the
19prior group benefit plan.

20(d) Prior to August 1, 1998, every health care service plan shall
21provide to all covered employees of employers subject to this
22article a written notice containing the disclosures required by this
23section, or shall provide to all covered employees of employers
24subject to this section a new or amended evidence of coverage that
25includes the disclosures required by this section. Any specialized
26health care service plan that, in the ordinary course of business,
27maintains only the addresses of employer group purchasers of
28benefits and does not maintain addresses of covered employees,
29may comply with the notice requirements of this section through
30the provision of the notices to its employer group purchasers of
31benefits.

32(e) Every plan disclosure form issued, amended, or renewed on
33or after January 1, 1999, for a group benefit plan subject to this
34article shall provide a notice that, under state law, an enrollee may
35be entitled to continuation of group coverage and that additional
36information regarding eligibility for this coverage may be found
37in the plan’s evidence of coverage.

38(f) Every disclosure issued, amended, or renewed on or after
39the operative date of this section for a group benefit plan subject
40to this article shall include the following notice:

begin insert end insert

P9    1“Please examine your options carefully before declining this
2coverage. You should be aware that companies selling individual
3health insurance typically require a review of your medical history
4that could result in a higher premium or you could be denied
5coverage entirely.”

6(g) A disclosure issued, amended, or renewed on or after July
71, 2016, for a group benefit plan subject to this article shall include
8the following notice:

9“In addition to your coverage continuation options, you may be
10eligible for the following:

111. Coverage through the state health insurance marketplace, also
12known as Covered California. By enrolling through Covered
13California, you may qualify for lower monthly premiums and lower
14out-of-pocket costs. Your family members may also qualify for
15coverage through Covered California.

162. Coverage through Medi-Cal. Depending on your income, you
17may qualify for low or no-cost coverage throughbegin delete the state Medicaid
18program that is known asend delete
Medi-Cal.begin insert Your family members may
19also qualify for Medi-Cal.end insert

203. Coverage through an insured spouse. If your spouse has
21coverage that extends to family members, you may bebegin delete eligibleend deletebegin insert ableend insert
22 to be added on that benefit plan.

23Be aware that therebegin delete may beend deletebegin insert isend insert a deadline to enroll inbegin delete some of
24these options.end delete
begin insert Covered California, although you can apply for
25Medi-Cal anytime.end insert
To find out more about how to apply for
26Covered California and Medi-Cal, visit the Covered California
27Internet Web site at http://www.coveredca.com.”

28(h) (1) If Section 5000A of the Internal Revenue Code, as added
29by Section 1501 of PPACA, is repealed or amended to no longer
30apply to the individual market, as defined in Section 2791 of the
31federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this
32section shall become operative 12 months after the date of that
33repeal or amendment.

34(2) For purposes of this subdivision, “PPACA” means the federal
35Patient Protection and Affordable Care Act (Public Law 111-148),
36as amended by the federal Health Care and Education
37Reconciliation Act of 2010 (Public Law 111-152), and any rules,
38regulations, or guidance issued pursuant to that law.

39

SEC. 4.  

Section 1366.25 of the Health and Safety Code is
40amended to read:

P10   1

1366.25.  

(a) Every group contract between a health care service
2plan and an employer subject to this article that is issued, amended,
3or renewed on or after July 1, 1998, shall require the employer to
4notify the plan, in writing, of any employee who has had a
5qualifying event, as defined in paragraph (2) of subdivision (d) of
6Section 1366.21, within 30 days of the qualifying event. The group
7contract shall also require the employer to notify the plan, in
8writing, within 30 days of the date, when the employer becomes
9subject to Section 4980B of the United States Internal Revenue
10Code or Chapter 18 of the Employee Retirement Income Security
11begin delete Act, 29 U.S.C. Sec. 1161 et seq.end deletebegin insert Act (29 U.S.C. Sec. 1161 et seq.).end insert

12(b) Every group contract between a plan and an employer subject
13to this article that is issued, amended, or renewed on or after July
141, 1998, shall require the employer to notify qualified beneficiaries
15currently receiving continuation coverage, whose continuation
16coverage will terminate under one group benefit plan prior to the
17end of the period the qualified beneficiary would have remained
18covered, as specified in Section 1366.27, of the qualified
19beneficiary’s ability to continue coverage under a new group
20benefit plan for the balance of the period the qualified beneficiary
21would have remained covered under the prior group benefit plan.
22This notice shall be provided either 30 days prior to the termination
23or when all enrolled employees are notified, whichever is later.

24Every health care service plan and specialized health care service
25plan shall provide to the employer replacing a health care service
26plan contract issued by the plan, or to the employer’s agent or
27broker representative, within 15 days of any written request,
28information in possession of the plan reasonably required to
29administer the notification requirements of this subdivision and
30subdivision (c).

31(c) Notwithstanding subdivision (a), the group contract between
32the health care service plan and the employer shall require the
33employer to notify the successor plan in writing of the qualified
34beneficiaries currently receiving continuation coverage so that the
35successor plan, or contracting employer or administrator, may
36provide those qualified beneficiaries with the necessary premium
37information, enrollment forms, and instructions consistent with
38the disclosure required by subdivision (c) of Section 1366.24 and
39subdivision (e) of this section to allow the qualified beneficiary to
40continue coverage. This information shall be sent to all qualified
P11   1beneficiaries who are enrolled in the plan and those qualified
2beneficiaries who have been notified, pursuant to Section 1366.24,
3of their ability to continue their coverage and may still elect
4coverage within the specified 60-day period. This information
5shall be sent to the qualified beneficiary’s last known address, as
6provided to the employer by the health care service plan or
7disability insurer currently providing continuation coverage to the
8qualified beneficiary. The successor plan shall not be obligated to
9provide this information to qualified beneficiaries if the employer
10or prior plan or insurer fails to comply with this section.

11(d) A health care service plan may contract with an employer,
12or an administrator, to perform the administrative obligations of
13the plan as required by this article, including required notifications
14and collecting and forwarding premiums to the health care service
15 plan. Except for the requirements of subdivisions (a), (b), and (c),
16this subdivision shall not be construed to permit a plan to require
17an employer to perform the administrative obligations of the plan
18as required by this article as a condition of the issuance or renewal
19of coverage.

20(e) Every health care service plan, or employer or administrator
21that contracts to perform the notice and administrative services
22pursuant to this section, shall, within 14 days of receiving a notice
23of a qualifying event, provide to the qualified beneficiary the
24necessary benefits information, premium information, enrollment
25forms, and disclosures consistent with the notice requirements
26contained in subdivisions (b) and (c) of Section 1366.24 to allow
27the qualified beneficiary to formally elect continuation coverage.
28This information shall be sent to the qualified beneficiary’s last
29known address.

30(f) Every health care service plan, or employer or administrator
31that contracts to perform the notice and administrative services
32pursuant to this section, shall, during the 180-day period ending
33on the date that continuation coverage is terminated pursuant to
34paragraphs (1), (3), and (5) of subdivision (a) of Section 1366.27,
35notify a qualified beneficiary who has elected continuation
36coverage pursuant to this article of the date that his or her coverage
37will terminate, and shall notify the qualified beneficiary of any
38conversion coverage available to that qualified beneficiary. This
39requirement shall not apply when the continuation coverage is
P12   1terminated because the group contract between the plan and the
2employer is being terminated.

3(g) (1) A health care service plan shall provide to a qualified
4beneficiary who has a qualifying event during the period specified
5in subparagraph (A) of paragraph (3) of subdivision (a) of Section
63001 of ARRA, a written notice containing information on the
7availability of premium assistance under ARRA. This notice shall
8be sent to the qualified beneficiary’s last known address. The notice
9shall include clear and easily understandable language to inform
10the qualified beneficiary that changes in federal law provide a new
11opportunity to elect continuation coverage with a 65-percent
12premium subsidy and shall include all of the following:

13(A) The amount of the premium the person will pay. For
14qualified beneficiaries who had a qualifying event between
15September 1, 2008, and May 12, 2009, inclusive, if a health care
16service plan is unable to provide the correct premium amount in
17the notice, the notice may contain the last known premium amount
18and an opportunity for the qualified beneficiary to request, through
19a toll-free telephone number, the correct premium that would apply
20to the beneficiary.

21(B) Enrollment forms and any other information required to be
22included pursuant to subdivision (e) to allow the qualified
23beneficiary to elect continuation coverage. This information shall
24not be included in notices sent to qualified beneficiaries currently
25enrolled in continuation coverage.

26(C) A description of the option to enroll in different coverage
27as provided in subparagraph (B) of paragraph (1) of subdivision
28(a) of Section 3001 of ARRA. This description shall advise the
29qualified beneficiary to contact the covered employee’s former
30employer for prior approval to choose this option.

31(D) The eligibility requirements for premium assistance in the
32amount of 65 percent of the premium under Section 3001 of
33ARRA.

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

35(F) A statement that a qualified beneficiary eligible for premium
36assistance under ARRA may elect continuation coverage no later
37than 60 days of the date of the notice.

38(G) A statement that a qualified beneficiary eligible for premium
39assistance under ARRA who rejected or discontinued continuation
40coverage prior to receiving the notice required by this subdivision
P13   1has the right to withdraw that rejection and elect continuation
2coverage with the premium assistance.

3(H) A statement that reads as follows:


5“IF YOU ARE HAVING ANY DIFFICULTIES READING OR
6UNDERSTANDING THIS NOTICE, PLEASE CONTACT [name
7of health plan] at [insert appropriate telephone number].”


9(2) With respect to qualified beneficiaries who had a qualifying
10event between September 1, 2008, and May 12, 2009, inclusive,
11the notice described in this subdivision shall be provided by the
12later of May 26, 2009, or seven business days after the date the
13plan receives notice of the qualifying event.

14(3) With respect to qualified beneficiaries who had or have a
15qualifying event between May 13, 2009, and the later date specified
16in subparagraph (A) of paragraph (3) of subdivision (a) of Section
173001 of ARRA, inclusive, the notice described in this subdivision
18shall be provided within the period of time specified in subdivision
19(e).

20(4) Nothing in this section shall be construed to require a health
21care service plan to provide the plan’s evidence of coverage as a
22part of the notice required by this subdivision, and nothing in this
23section shall be construed to require a health care service plan to
24amend its existing evidence of coverage to comply with the changes
25made to this section by the enactment of Assembly Bill 23 of the
262009-10 Regular Session or by the act amending this section during
27the second year of the 2009-10 Regular Session.

28(5) The requirement under this subdivision to provide a written
29notice to a qualified beneficiary and the requirement under
30paragraph (1) of subdivision (i) to provide a new opportunity to a
31qualified beneficiary to elect continuation coverage shall be deemed
32satisfied if a health care service plan previously provided a written
33notice and additional election opportunity under Section 3001 of
34ARRA to that qualified beneficiary prior to the effective date of
35the act adding this paragraph.

36(h) A group contract between a group benefit plan and an
37employer subject to this article that is issued, amended, or renewed
38on or after July 1, 2016, shall require the employer to give the
39following notice to a qualified beneficiary:

P14   1“In addition to your coverage continuation options, you may be
2eligible for the following:

31. Coverage through the state health insurance marketplace, also
4known as Covered California. By enrolling through Covered
5California, you may qualify for lower monthly premiums and lower
6out-of-pocket costs. Your family members may also qualify for
7coverage through Covered California.

82. Coverage through Medi-Cal. Depending on your income, you
9may qualify for low or no-cost coverage throughbegin delete the state Medicaid
10program that is known asend delete
Medi-Cal.begin insert Your family members may
11also qualify for Medi-Cal.end insert

123. Coverage through an insured spouse. If your spouse has
13coverage that extends to family members, you may bebegin delete eligibleend deletebegin insert ableend insert
14 to be added on that benefit plan.

15Be aware that therebegin delete may beend deletebegin insert isend insert a deadline to enroll inbegin delete some of
16these options.end delete
begin insert Covered California, although you can apply for
17Medi-Cal anytime.end insert
To find out more about how to apply for
18Covered California and Medi-Cal, visit the Covered California
19Internet Web site at http://www.coveredca.com.”

20(i) (1) Notwithstanding any other law, a qualified beneficiary
21eligible for premium assistance under ARRA may elect
22continuation coverage no later than 60 days after the date of the
23notice required by subdivision (g).

24(2) For a qualified beneficiary who elects to continue coverage
25pursuant to this subdivision, the period beginning on the date of
26the qualifying event and ending on the effective date of the
27continuation coverage shall be disregarded for purposes of
28calculating a break in coverage in determining whether a
29preexisting condition provision applies under subdivision (c) of
30Section 1357.06 or subdivision (e) of Section 1357.51.

31(3) For a qualified beneficiary who had a qualifying event
32between September 1, 2008, and February 16, 2009, inclusive, and
33who elects continuation coverage pursuant to paragraph (1), the
34continuation coverage shall commence on the first day of the month
35following the election.

36(4) For a qualified beneficiary who had a qualifying event
37between February 17, 2009, and May 12, 2009, inclusive, and who
38elects continuation coverage pursuant to paragraph (1), the effective
39date of the continuation coverage shall be either of the following,
P15   1at the option of the beneficiary, provided that the beneficiary pays
2the applicable premiums:

3(A) The date of the qualifying event.

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

5(5) Notwithstanding any other law, a qualified beneficiary who
6is eligible for the special election opportunity described in
7paragraph (17) of subdivision (a) of Section 3001 of ARRA may
8elect continuation coverage no later than 60 days after the date of
9the notice required under subdivision (k). For a qualified
10beneficiary who elects coverage pursuant to this paragraph, the
11continuation coverage shall be effective as of the first day of the
12first period of coverage after the date of termination of
13employment, except, if federal law permits, coverage shall take
14effect on the first day of the month following the election.
15However, for purposes of calculating the duration of continuation
16coverage pursuant to Section 1366.27, the period of that coverage
17shall be determined as though the qualifying event was a reduction
18of hours of the employee.

19(6) Notwithstanding any other law, a qualified beneficiary who
20is eligible for any other special election opportunity under ARRA
21may elect continuation coverage no later than 60 days after the
22date of the special election notice required under ARRA.

23(j) A health care service plan shall provide a qualified
24beneficiary eligible for premium assistance under ARRA written
25notice of the extension of that premium assistance as required
26under Section 3001 of ARRA.

27(k) A health care service plan, or an administrator or employer
28if administrative obligations have been assumed by those entities
29pursuant to subdivision (d), shall give the qualified beneficiaries
30described in subparagraph (C) of paragraph (17) of subdivision
31(a) of Section 3001 of ARRA the written notice required by that
32paragraph by implementing the following procedures:

33(1) The health care service plan shall, within 14 days of the
34effective date of the act adding this subdivision, send a notice to
35employers currently contracting with the health care service plan
36for a group benefit plan subject to this article. The notice shall do
37all of the following:

38(A) Advise the employer that employees whose employment is
39terminated on or after March 2, 2010, who were previously enrolled
40in any group health care service plan or health insurance policy
P16   1offered by the employer may be entitled to special health coverage
2rights, including a subsidy paid by the federal government for a
3portion of the premium.

4(B) Ask the employer to provide the health care service plan
5with the name, address, and date of termination of employment
6for any employee whose employment is terminated on or after
7March 2, 2010, and who was at any time covered by any health
8care service plan or health insurance policy offered to their
9employees on or after September 1, 2008.

10(C) Provide employers with a format and instructions for
11submitting the information to the health care service plan, or their
12administrator or employer who has assumed administrative
13obligations pursuant to subdivision (d), by telephone, fax,
14electronic mail, or mail.

15(2) Within 14 days of receipt of the information specified in
16paragraph (1) from the employer, the health care service plan shall
17send the written notice specified in paragraph (17) of subdivision
18(a) of Section 3001 of ARRA to those individuals.

19(3) If an individual contacts his or her health care service plan
20and indicates that he or she experienced a qualifying event that
21entitles him or her to the special election period described in
22paragraph (17) of subdivision (a) of Section 3001 of ARRA or any
23other special election provision of ARRA, the plan shall provide
24the individual with the written notice required under paragraph
25(17) of subdivision (a) of Section 3001 of ARRA or any other
26applicable provision of ARRA, regardless of whether the plan
27receives information from the individual’s previous employer
28regarding that individual pursuant to Section 24100. The plan shall
29review the individual’s application for coverage under this special
30election notice to determine if the individual qualifies for the
31special election period and the premium assistance under ARRA.
32The plan shall comply with paragraph (5) if the individual does
33not qualify for either the special election period or premium
34assistance under ARRA.

35(4) The requirement under this subdivision to provide the written
36notice described in paragraph (17) of subdivision (a) of Section
373001 of ARRA to a qualified beneficiary and the requirement
38under paragraph (5) of subdivision (i) to provide a new opportunity
39to a qualified beneficiary to elect continuation coverage shall be
40deemed satisfied if a health care service plan previously provided
P17   1the written notice and additional election opportunity described in
2paragraph (17) of subdivision (a) of Section 3001 of ARRA to that
3qualified beneficiary prior to the effective date of the act adding
4this paragraph.

5(5) If an individual does not qualify for either a special election
6period or the premium assistance under ARRA, the health care
7service plan shall provide a written notice to that individual that
8shall include information on the right to appeal as set forth in
9Section 3001 of ARRA.

10(6) A health care service plan shall provide information on its
11publicly accessible Internet Web site regarding the premium
12assistance made available under ARRA and any special election
13period provided under that law. A plan may fulfill this requirement
14by linking or otherwise directing consumers to the information
15regarding COBRA continuation coverage premium assistance
16located on the Internet Web site of the United States Department
17of Labor. The information required by this paragraph shall be
18located in a section of the plan’s Internet Web site that is readily
19accessible to consumers, such as the Web site’s Frequently Asked
20Questions section.

21(l) For purposes of implementing federal premium assistance
22for continuation coverage, the department may designate a model
23notice or notices that may be used by health care service plans.
24Use of the model notice or notices shall not require prior approval
25of the department. Any model notice or notices designated by the
26department for purposes of this subdivision shall not be subject to
27the Administrative Procedure Act (Chapter 3.5 (commencing with
28Section 11340) of Part 1 of Division 3 of Title 2 of the Government
29Code).

30(m) Notwithstanding any other law, a qualified beneficiary
31eligible for premium assistance under ARRA may elect to enroll
32in different coverage subject to the criteria provided under
33subparagraph (B) of paragraph (1) of subdivision (a) of Section
343001 of ARRA.

35(n) A qualified beneficiary enrolled in continuation coverage
36as of February 17, 2009, who is eligible for premium assistance
37under ARRA may request application of the premium assistance
38as of March 1, 2009, or later, consistent with ARRA.

39(o) A health care service plan that receives an election notice
40from a qualified beneficiary eligible for premium assistance under
P18   1ARRA, pursuant to subdivision (i), shall be considered a person
2entitled to reimbursement, as defined in Section 6432(b)(3) of the
3Internal Revenue Code, as amended by paragraph (12) of
4subdivision (a) of Section 3001 of ARRA.

5(p) (1) For purposes of compliance with ARRA, in the absence
6of guidance from, or if specifically required for state-only
7continuation coverage by, the United States Department of Labor,
8the Internal Revenue Service, or the Centers for Medicare and
9Medicaid Services, a health care service plan may request
10verification of the involuntary termination of a covered employee’s
11employment from the covered employee’s former employer or the
12qualified beneficiary seeking premium assistance under ARRA.

13(2) A health care service plan that requests verification pursuant
14to paragraph (1) directly from a covered employee’s former
15employer shall do so by providing a written notice to the employer.
16This written notice shall be sent by mail or facsimile to the covered
17employee’s former employer within seven business days from the
18date the plan receives the qualified beneficiary’s election notice
19pursuant to subdivision (i). Within 10 calendar days of receipt of
20written notice required by this paragraph, the former employer
21shall furnish to the health care service plan written verification as
22to whether the covered employee’s employment was involuntarily
23terminated.

24(3) A qualified beneficiary requesting premium assistance under
25ARRA may furnish to the health care service plan a written
26document or other information from the covered employee’s former
27employer indicating that the covered employee’s employment was
28involuntarily terminated. This document or information shall be
29deemed sufficient by the health care service plan to establish that
30the covered employee’s employment was involuntarily terminated
31for purposes of ARRA, unless the plan makes a reasonable and
32timely determination that the documents or information provided
33by the qualified beneficiary are legally insufficient to establish
34involuntary termination of employment.

35(4) If a health care service plan requests verification pursuant
36to this subdivision and cannot verify involuntary termination of
37employment within 14 business days from the date the employer
38receives the verification request or from the date the plan receives
39documentation or other information from the qualified beneficiary
40pursuant to paragraph (3), the health care service plan shall either
P19   1provide continuation coverage with the federal premium assistance
2to the qualified beneficiary or send the qualified beneficiary a
3denial letter which shall include notice of his or her right to appeal
4that determination pursuant to ARRA.

5(5) No person shall intentionally delay verification of
6involuntary termination of employment under this subdivision.

7(q) The provision of information and forms related to the
8premium assistance available pursuant to ARRA to individuals by
9a health care service plan shall not be considered a violation of
10this chapter provided that the plan complies with all of the
11requirements of this article.

12

SEC. 5.  

Section 24100 of the Health and Safety Code is
13amended to read:

14

24100.  

(a) For purposes of this section, the following
15definitions apply:

16(1) “ARRA” means Title III of Division B of the federal
17American Recovery and Reinvestment Act of 2009 or any
18amendment to that federal law extending federal premium
19assistance to qualified beneficiaries, as defined in Section 1366.21
20of this code or Section 10128.51 of the Insurance Code.

21(2) “Employer” means an employer as defined in Section
221366.21 of this code or an employer as defined in Section 10128.51
23of the Insurance Code.

24(b) An employer shall provide the information described in
25subparagraph (B) of paragraph (1) of subdivision (k) of Section
261366.25 of this code or subparagraph (B) of paragraph (1) of
27subdivision (k) of Section 10128.55 of the Insurance Code, as
28applicable, with respect to any employee whose employment is
29terminated on or after March 2, 2010, and who was enrolled at any
30time in a health care service plan or health insurance policy offered
31by the employer on or after September 1, 2008. This information
32shall be provided to the requesting health care service plan or
33health insurer within 14 days of receipt of the notification described
34in paragraph (1) of subdivision (k) of Section 1366.25 of this code
35or paragraph (1) of subdivision (k) of Section 10128.55 of the
36Insurance Code. The employer shall continue to provide the
37information to the health care service plan or health insurer within
3814 days after the end of each month for any employee whose
39employment is terminated in the prior month until the last date
P20   1specified in subparagraph (A) of paragraph (3) of subdivision (a)
2of Section 3001 of ARRA.

3

SEC. 6.  

Section 10128.52 of the Insurance Code is amended
4to read:

5

10128.52.  

The continuation coverage requirements of this
6article do not apply to the following individuals:

7(a) Individuals who are entitled to Medicare benefits or become
8entitled to Medicare benefits pursuant to Title XVIII of the United
9States Social Security Act, as amended or superseded. Entitlement
10to Medicare Part A only constitutes entitlement to benefits under
11Medicare.

12(b) Individuals who have other hospital, medical, or surgical
13coverage, or who are covered or become covered under another
14group benefit plan, including a self-insured employee welfare
15benefit plan, that provides coverage for individuals and that does
16not impose any exclusion or limitation with respect to any
17preexisting condition of the individual, other than a preexisting
18condition limitation or exclusion that does not apply to or is
19satisfied by the qualified beneficiary pursuant to Sections 10198.6
20and 10198.7. A group conversion option under any group benefit
21plan shall not be considered as an arrangement under which an
22individual is or becomes covered.

23(c) Individuals who are covered, become covered, or are eligible
24for federal COBRA coverage pursuant to Section 4980B of the
25United States Internal Revenue Code or Chapter 18 of the
26Employee Retirement Income Securitybegin delete Act, 29 U.S.C. Section
271161 et seq.end delete
begin insert Act (29 U.S.C. Sec. 1161 et seq.).end insert

28(d) Individuals who are covered, become covered, or are eligible
29for coverage pursuant to Chapter 6A of the Public Health Service begin delete30Act, 42 U.S.C. Section 300bb-1 et seq.end delete begin insert Act (42 U.S.C. Sec. 300bb-1
31et seq.).end insert

32(e) Qualified beneficiaries who fail to meet the requirements of
33subdivision (b) of Section 10128.54 or subdivision (i) of Section
3410128.55 regarding notification of a qualifying event or election
35of continuation coverage within the specified time limits.

36(f) Except as provided in Section 3001 of ARRA, qualified
37beneficiaries who fail to submit the correct premium amount
38required by subdivision (b) of Section 10128.55 and Section
3910128.57, in accordance with the terms and conditions of the policy
P21   1or contract, or fail to satisfy other terms and conditions of the
2policy or contract.

3

SEC. 7.  

Section 10128.54 of the Insurance Code is amended
4to read:

5

10128.54.  

(a) Every insurer’s evidence of coverage for group
6benefit plans subject to this article, that is issued, amended, or
7renewed on or after January 1, 1999, shall disclose to covered
8employees of group benefit plans subject to this article the ability
9to continue coverage pursuant to this article, as required by this
10section.

11(b) This disclosure shall state that all insureds who are eligible
12to be qualified beneficiaries, as defined in subdivision (c) of
13Section 10128.51, shall be required, as a condition of receiving
14benefits pursuant to this article, to notify, in writing, the insurer,
15or the employer if the employer contracts to perform the
16administrative services as provided for in Section 10128.55, of all
17qualifying events as specified in paragraphs (1), (3), (4), and (5)
18of subdivision (d) of Section 10128.51 within 60 days of the date
19of the qualifying event. This disclosure shall inform insureds that
20failure to make the notification to the insurer, or to the employer
21when under contract to provide the administrative services, within
22the required 60 days will disqualify the qualified beneficiary from
23receiving continuation coverage pursuant to this article. The
24disclosure shall further state that a qualified beneficiary who wishes
25to continue coverage under the group benefit plan pursuant to this
26article shall request the continuation in writing and deliver the
27written request, by first-class mail, or other reliable means of
28delivery, including personal delivery, express mail, or private
29courier company, to the disability insurer, or to the employer if
30the plan has contracted with the employer for administrative
31services pursuant to subdivision (d) of Section 10128.55, within
32the 60-day period following the later of (1) the date that the
33insured’s coverage under the group benefit plan terminated or will
34terminate by reason of a qualifying event, or (2) the date the insured
35was sent notice pursuant to subdivision (e) of Section 10128.55
36of the ability to continue coverage under the group benefit plan.
37The disclosure required by this section shall also state that a
38qualified beneficiary electing continuation shall pay to the disability
39insurer, in accordance with the terms and conditions of the policy
40or contract, which shall be set forth in the notice to the qualified
P22   1beneficiary pursuant to subdivision (d) of Section 10128.55, the
2amount of the required premium payment, as set forth in Section
310128.56. The disclosure shall further require that the qualified
4beneficiary’s first premium payment required to establish premium
5payment be delivered by first-class mail, certified mail, or other
6reliable means of delivery, including personal delivery, express
7mail, or private courier company, to the disability insurer, or to
8 the employer if the employer has contracted with the insurer to
9perform the administrative services pursuant to subdivision (d) of
10Section 10128.55, within 45 days of the date the qualified
11beneficiary provided written notice to the insurer or the employer,
12if the employer has contracted to perform the administrative
13services, of the election to continue coverage in order for coverage
14to be continued under this article. This disclosure shall also state
15that the first premium payment shall equal an amount sufficient
16to pay all required premiums and all premiums due, and that failure
17to submit the correct premium amount within the 45-day period
18will disqualify the qualified beneficiary from receiving continuation
19coverage pursuant to this article.

20(c) The disclosure required by this section shall also describe
21separately how qualified beneficiaries whose continuation coverage
22terminates under a prior group benefit plan pursuant to Section
23 10128.57 may continue their coverage for the balance of the period
24that the qualified beneficiary would have remained covered under
25the prior group benefit plan, including the requirements for election
26and payment. The disclosure shall clearly state that continuation
27coverage shall terminate if the qualified beneficiary fails to comply
28with the requirements pertaining to enrollment in, and payment of
29premiums to, the new group benefit plan within 30 days of
30receiving notice of the termination of the prior group benefit plan.

31(d) Prior to August 1, 1998, every insurer shall provide to all
32covered employees of employers subject to this article written
33notice containing the disclosures required by this section, or shall
34provide to all covered employees of employers subject to this
35article a new or amended evidence of coverage that includes the
36disclosures required by this section. Any insurer that, in the
37ordinary course of business, maintains only the addresses of
38employer group purchasers of benefits, and does not maintain
39addresses of covered employees, may comply with the notice
P23   1requirements of this section through the provision of the notices
2to its employer group purchases of benefits.

3(e) Every disclosure form issued, amended, or renewed on and
4after January 1, 1999, for a group benefit plan subject to this article
5shall provide a notice that, under state law, an insured may be
6entitled to continuation of group coverage and that additional
7information regarding eligibility for this coverage may be found
8in the evidence of coverage.

9(f) A disclosure issued, amended, or renewed on or after July
101, 2016, for a group benefit plan subject to this article shall include
11the following notice:

12“In addition to your coverage continuation options, you may be
13eligible for the following:

141. Coverage through the state health insurance marketplace, also
15known as Covered California. By enrolling through Covered
16California, you may qualify for lower monthly premiums and lower
17out-of-pocket costs. Your family members may also qualify for
18coverage through Covered California.

192. Coverage through Medi-Cal. Depending on your income, you
20may qualify for low or no-cost coverage throughbegin delete the state Medicaid
21program that is known asend delete
Medi-Cal.begin insert Your family members may
22also qualify for Medi-Cal.end insert

233. Coverage through an insured spouse. If your spouse has
24coverage that extends to family members, you may bebegin delete eligibleend deletebegin insert ableend insert
25 to be added on that benefit plan.

26Be aware that therebegin delete may beend deletebegin insert isend insert a deadline to enroll inbegin delete some of
27these options.end delete
begin insert Covered California, although you can apply for
28Medi-Cal at anytime.end insert
To find out more about how to apply for
29Covered California and Medi-Cal, visit the Covered California
30Internet Web site at http://www.coveredca.com.”

31(g) (1) If Section 5000A of the Internal Revenue Code, as added
32by Section 1501 of PPACA, is repealed or amended to no longer
33apply to the individual market, as defined in Section 2791 of the
34federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this
35section shall become inoperative and is repealed 12 months after
36the date of that repeal or amendment.

37(2) For purposes of this subdivision, “PPACA” means the federal
38Patient Protection and Affordable Care Act (Public Law 111-148),
39as amended by the federal Health Care and Education
P24   1Reconciliation Act of 2010 (Public Law 111-152), and any rules,
2regulations, or guidance issued pursuant to that law.

3

SEC. 8.  

Section 10128.54 is added to the Insurance Code, to
4read:

5

10128.54.  

(a) Every insurer’s evidence of coverage for group
6benefit plans subject to this article, that is issued, amended, or
7renewed on or after January 1, 1999, shall disclose to covered
8employees of group benefit plans subject to this article the ability
9to continue coverage pursuant to this article, as required by this
10section.

11(b) This disclosure shall state that all insureds who are eligible
12to be qualified beneficiaries, as defined in subdivision (c) of
13Section 10128.51, shall be required, as a condition of receiving
14benefits pursuant to this article, to notify, in writing, the insurer,
15or the employer if the employer contracts to perform the
16administrative services as provided for in Section 10128.55, of all
17qualifying events as specified in paragraphs (1), (3), (4), and (5)
18of subdivision (d) of Section 10128.51 within 60 days of the date
19of the qualifying event. This disclosure shall inform insureds that
20failure to make the notification to the insurer, or to the employer
21when under contract to provide the administrative services, within
22the required 60 days will disqualify the qualified beneficiary from
23receiving continuation coverage pursuant to this article. The
24disclosure shall further state that a qualified beneficiary who wishes
25to continue coverage under the group benefit plan pursuant to this
26article must request the continuation in writing and deliver the
27written request, by first-class mail, or other reliable means of
28delivery, including personal delivery, express mail, or private
29courier company, to the disability insurer, or to the employer if
30the plan has contracted with the employer for administrative
31services pursuant to subdivision (d) of Section 10128.55, within
32the 60-day period following the later of (1) the date that the
33insured’s coverage under the group benefit plan terminated or will
34terminate by reason of a qualifying event, or (2) the date the insured
35was sent notice pursuant to subdivision (e) of Section 10128.55
36of the ability to continue coverage under the group benefit plan.
37The disclosure required by this section shall also state that a
38qualified beneficiary electing continuation shall pay to the disability
39insurer, in accordance with the terms and conditions of the policy
40or contract, which shall be set forth in the notice to the qualified
P25   1beneficiary pursuant to subdivision (d) of Section 10128.55, the
2amount of the required premium payment, as set forth in Section
310128.56. The disclosure shall further require that the qualified
4beneficiary’s first premium payment required to establish premium
5payment be delivered by first-class mail, certified mail, or other
6reliable means of delivery, including personal delivery, express
7mail, or private courier company, to the disability insurer, or to
8 the employer if the employer has contracted with the insurer to
9perform the administrative services pursuant to subdivision (d) of
10Section 10128.55, within 45 days of the date the qualified
11beneficiary provided written notice to the insurer or the employer,
12if the employer has contracted to perform the administrative
13services, of the election to continue coverage in order for coverage
14to be continued under this article. This disclosure shall also state
15that the first premium payment must equal an amount sufficient
16to pay all required premiums and all premiums due, and that failure
17to submit the correct premium amount within the 45-day period
18will disqualify the qualified beneficiary from receiving continuation
19coverage pursuant to this article.

20(c) The disclosure required by this section shall also describe
21separately how qualified beneficiaries whose continuation coverage
22terminates under a prior group benefit plan pursuant to Section
2310128.57 may continue their coverage for the balance of the period
24that the qualified beneficiary would have remained covered under
25the prior group benefit plan, including the requirements for election
26and payment. The disclosure shall clearly state that continuation
27coverage shall terminate if the qualified beneficiary fails to comply
28with the requirements pertaining to enrollment in, and payment of
29premiums to, the new group benefit plan within 30 days of
30receiving notice of the termination of the prior group benefit plan.

31(d) Prior to August 1, 1998, every insurer shall provide to all
32covered employees of employers subject to this article written
33notice containing the disclosures required by this section, or shall
34provide to all covered employees of employers subject to this
35article a new or amended evidence of coverage that includes the
36disclosures required by this section. Any insurer that, in the
37ordinary course of business, maintains only the addresses of
38employer group purchasers of benefits, and does not maintain
39addresses of covered employees, may comply with the notice
P26   1requirements of this section through the provision of the notices
2to its employer group purchases of benefits.

3(e) Every disclosure form issued, amended, or renewed on or
4after January 1, 1999, for a group benefit plan subject to this article
5shall provide a notice that, under state law, an insured may be
6entitled to continuation of group coverage and that additional
7information regarding eligibility for this coverage may be found
8in the evidence of coverage.

9(f) Every disclosure issued, amended, or renewed on or after
10the operative date of this section for a group benefit plan subject
11to this article shall include the following notice:

12“Please examine your options carefully before declining this
13coverage. You should be aware that companies selling individual
14health insurance typically require a review of your medical history
15that could result in a higher premium or you could be denied
16coverage entirely.”

17(g) A disclosure issued, amended, or renewed on or after July
181, 2016, for a group benefit plan subject to this article shall include
19the following notice:

20“In addition to your coverage continuation options, you may be
21eligible for the following:

221. Coverage through the state health insurance marketplace, also
23known as Covered California. By enrolling through Covered
24California, you may qualify for lower monthly premiums and lower
25out-of-pocket costs. Your family members may also qualify for
26coverage through Covered California.

272. Coverage through Medi-Cal. Depending on your income, you
28may qualify for low or no-cost coverage throughbegin delete the state Medicaid
29program that is known asend delete
Medi-Cal.begin insert Your family members may
30also qualify for Medi-Cal.end insert

313. Coverage through an insured spouse. If your spouse has
32coverage that extends to family members, you may bebegin delete eligibleend deletebegin insert ableend insert
33 to be added on that benefit plan.

34Be aware that therebegin delete may beend deletebegin insert isend insert a deadline to enroll inbegin delete some of
35these options.end delete
begin insert Covered California, although you can apply for
36Medi-Cal anytime.end insert
To find out more about how to apply for
37Covered California and Medi-Cal, visit the Covered California
38Internet Web site at http://www.coveredca.com.”

39(h) (1) If Section 5000A of the Internal Revenue Code, as added
40by Section 1501 of PPACA, is repealed or amended to no longer
P27   1apply to the individual market, as defined in Section 2791 of the
2federal Public Health Service Act (42 U.S.C. Sec. 300gg-91), this
3section shall become operative 12 months after the date of that
4repeal or amendment.

5(2) For purposes of this subdivision, “PPACA” means the federal
6Patient Protection and Affordable Care Act (Public Law 111-148),
7as amended by the federal Health Care and Education
8Reconciliation Act of 2010 (Public Law 111-152), and any rules,
9regulations, or guidance issued pursuant to that law.

10

SEC. 9.  

Section 10128.55 of the Insurance Code is amended
11to read:

12

10128.55.  

(a) Every group benefit plan contract between a
13disability insurer and an employer subject to this article that is
14issued, amended, or renewed on or after July 1, 1998, shall require
15the employer to notify the insurer in writing of any employee who
16has had a qualifying event, as defined in paragraph (2) of
17subdivision (d) of Section 10128.51, within 30 days of the
18qualifying event. The group contract shall also require the employer
19to notify the insurer, in writing, within 30 days of the date when
20the employer becomes subject to Section 4980B of the United
21States Internal Revenue Code or Chapter 18 of the Employee
22Retirement Income Securitybegin delete Act, 29 U.S.C. Sec. 1161 et seq.end deletebegin insert Act
23(29 U.S.C. Sec. 1161 et seq.).end insert

24(b) Every group benefit plan contract between a disability insurer
25and an employer subject to this article that is issued, amended, or
26renewed after July 1, 1998, shall require the employer to notify
27qualified beneficiaries currently receiving continuation coverage,
28whose continuation coverage will terminate under one group
29benefit plan prior to the end of the period the qualified beneficiary
30would have remained covered, as specified in Section 10128.57,
31of the qualified beneficiary’s ability to continue coverage under a
32new group benefit plan for the balance of the period the qualified
33beneficiary would have remained covered under the prior group
34benefit plan. This notice shall be provided either 30 days prior to
35the termination or when all enrolled employees are notified,
36whichever is later.

37Every disability insurer shall provide to the employer replacing
38a group benefit plan policy issued by the insurer, or to the
39employer’s agent or broker representative, within 15 days of any
40written request, information in possession of the insurer reasonably
P28   1required to administer the notification requirements of this
2subdivision and subdivision (c).

3(c) Notwithstanding subdivision (a), the group benefit plan
4contract between the insurer and the employer shall require the
5employer to notify the successor plan in writing of the qualified
6beneficiaries currently receiving continuation coverage so that the
7successor plan, or contracting employer or administrator, may
8provide those qualified beneficiaries with the necessary premium
9information, enrollment forms, and instructions consistent with
10the disclosure required by subdivision (c) of Section 10128.54 and
11subdivision (e) of this section to allow the qualified beneficiary to
12continue coverage. This information shall be sent to all qualified
13beneficiaries who are enrolled in the group benefit plan and those
14qualified beneficiaries who have been notified, pursuant to Section
1510128.54 of their ability to continue their coverage and may still
16elect coverage within the specified 60-day period. This information
17shall be sent to the qualified beneficiary’s last known address, as
18provided to the employer by the health care service plan or,
19disability insurer currently providing continuation coverage to the
20qualified beneficiary. The successor insurer shall not be obligated
21to provide this information to qualified beneficiaries if the
22employer or prior insurer or health care service plan fails to comply
23with this section.

24(d) A disability insurer may contract with an employer, or an
25administrator, to perform the administrative obligations of the plan
26as required by this article, including required notifications and
27collecting and forwarding premiums to the insurer. Except for the
28requirements of subdivisions (a), (b), and (c), this subdivision shall
29not be construed to permit an insurer to require an employer to
30perform the administrative obligations of the insurer as required
31by this article as a condition of the issuance or renewal of coverage.

32(e) Every insurer, or employer or administrator that contracts
33to perform the notice and administrative services pursuant to this
34section, shall, within 14 days of receiving a notice of a qualifying
35event, provide to the qualified beneficiary the necessary premium
36information, enrollment forms, and disclosures consistent with the
37notice requirements contained in subdivisions (b) and (c) of Section
3810128.54 to allow the qualified beneficiary to formally elect
39continuation coverage. This information shall be sent to the
40qualified beneficiary’s last known address.

P29   1(f) Every insurer, or employer or administrator that contracts
2to perform the notice and administrative services pursuant to this
3section, shall, during the 180-day period ending on the date that
4continuation coverage is terminated pursuant to paragraphs (1),
5(3), and (5) of subdivision (a) of Section 10128.57, notify a
6qualified beneficiary who has elected continuation coverage
7pursuant to this article of the date that his or her coverage will
8terminate, and shall notify the qualified beneficiary of any
9conversion coverage available to that qualified beneficiary. This
10requirement shall not apply when the continuation coverage is
11terminated because the group contract between the insurer and the
12employer is being terminated.

13(g) (1) An insurer shall provide to a qualified beneficiary who
14has a qualifying event during the period specified in subparagraph
15(A) of paragraph (3) of subdivision (a) of Section 3001 of ARRA,
16a written notice containing information on the availability of
17premium assistance under ARRA. This notice shall be sent to the
18qualified beneficiary’s last known address. The notice shall include
19clear and easily understandable language to inform the qualified
20beneficiary that changes in federal law provide a new opportunity
21to elect continuation coverage with a 65-percent premium subsidy
22and shall include all of the following:

23(A) The amount of the premium the person will pay. For
24qualified beneficiaries who had a qualifying event between
25September 1, 2008, and May 12, 2009, inclusive, if an insurer is
26unable to provide the correct premium amount in the notice, the
27notice may contain the last known premium amount and an
28opportunity for the qualified beneficiary to request, through a
29toll-free telephone number, the correct premium that would apply
30to the beneficiary.

31(B) Enrollment forms and any other information required to be
32included pursuant to subdivision (e) to allow the qualified
33beneficiary to elect continuation coverage. This information shall
34not be included in notices sent to qualified beneficiaries currently
35enrolled in continuation coverage.

36(C) A description of the option to enroll in different coverage
37as provided in subparagraph (B) of paragraph (1) of subdivision
38(a) of Section 3001 of ARRA. This description shall advise the
39qualified beneficiary to contact the covered employee’s former
40employer for prior approval to choose this option.

P30   1(D) The eligibility requirements for premium assistance in the
2amount of 65 percent of the premium under Section 3001 of
3ARRA.

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

5(F) A statement that a qualified beneficiary eligible for premium
6assistance under ARRA may elect continuation coverage no later
7than 60 days of the date of the notice.

8(G) A statement that a qualified beneficiary eligible for premium
9assistance under ARRA who rejected or discontinued continuation
10coverage prior to receiving the notice required by this subdivision
11has the right to withdraw that rejection and elect continuation
12coverage with the premium assistance.

13(H) A statement that reads as follows:


15“IF YOU ARE HAVING ANY DIFFICULTIES READING OR
16UNDERSTANDING THIS NOTICE, PLEASE CONTACT [name
17of insurer] at [insert appropriate telephone number].”


19(2) With respect to qualified beneficiaries who had a qualifying
20 event between September 1, 2008, and May 12, 2009, inclusive,
21the notice described in this subdivision shall be provided by the
22later of May 26, 2009, or seven business days after the date the
23insurer receives notice of the qualifying event.

24(3) With respect to qualified beneficiaries who had or have a
25qualifying event between May 13, 2009, and the later date specified
26in subparagraph (A) of paragraph (3) of subdivision (a) of Section
273001 of ARRA, inclusive, the notice described in this subdivision
28shall be provided within the period of time specified in subdivision
29(e).

30(4) Nothing in this section shall be construed to require an
31insurer to provide the insurer’s evidence of coverage as a part of
32the notice required by this subdivision, and nothing in this section
33shall be construed to require an insurer to amend its existing
34evidence of coverage to comply with the changes made to this
35section by the enactment of Assembly Bill 23 of the 2009-10
36Regular Session or by the act amending this section during the
37second year of the 2009-10 Regular Session.

38(5) The requirement under this subdivision to provide a written
39notice to a qualified beneficiary and the requirement under
40paragraph (1) of subdivision (i) to provide a new opportunity to a
P31   1qualified beneficiary to elect continuation coverage shall be deemed
2satisfied if an insurer previously provided a written notice and
3additional election opportunity under Section 3001 of ARRA to
4that qualified beneficiary prior to the effective date of the act
5adding this paragraph.

6(h) A group contract between a group benefit plan and an
7employer subject to this article that is issued, amended, or renewed
8on or after July 1, 2016, shall require the employer to give the
9following notice to a qualified beneficiary:

10“In addition to your coverage continuation options, you may be
11eligible for the following:

121. Coverage through the state health insurance marketplace, also
13known as Covered California. By enrolling through Covered
14California, you may qualify for lower monthly premiums and lower
15out-of-pocket costs. Your family members may also qualify for
16coverage through Covered California.

172. Coverage through Medi-Cal. Depending on your income, you
18may qualify for low or no-cost coverage throughbegin delete the state Medicaid
19program that is known asend delete
Medi-Cal.begin insert Your family members may
20also qualify for Medi-Cal.end insert

213. Coverage through an insured spouse. If your spouse has
22coverage that extends to family members, you may bebegin delete eligibleend deletebegin insert ableend insert
23 to be added on that benefit plan.

24Be aware that therebegin delete may beend deletebegin insert isend insert a deadline to enroll inbegin delete some of
25these options.end delete
begin insert Covered California, although you can apply for
26Medi-Cal anytime.end insert
To find out more about how to apply for
27Covered California and Medi-Cal, visit the Covered California
28Internet Web site at http://www.coveredca.com.”

29(i) (1) Notwithstanding any other law, a qualified beneficiary
30eligible for premium assistance under ARRA may elect
31continuation coverage no later than 60 days after the date of the
32notice required by subdivision (g).

33(2) For a qualified beneficiary who elects to continue coverage
34pursuant to this subdivision, the period beginning on the date of
35the qualifying event and ending on the effective date of the
36continuation coverage shall be disregarded for purposes of
37calculating a break in coverage in determining whether a
38preexisting condition provision applies under subdivision (e) of
39Section 10198.7 or subdivision (c) of Section 10708.

P32   1(3) For a qualified beneficiary who had a qualifying event
2between September 1, 2008, and February 16, 2009, inclusive, and
3who elects continuation coverage pursuant to paragraph (1), the
4continuation coverage shall commence on the first day of the month
5following the election.

6(4) For a qualified beneficiary who had a qualifying event
7between February 17, 2009, and May 12, 2009, inclusive, and who
8elects continuation coverage pursuant to paragraph (1), the effective
9date of the continuation coverage shall be either of the following,
10at the option of the beneficiary, provided that the beneficiary pays
11the applicable premiums:

12(A) The date of the qualifying event.

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

14(5) Notwithstanding any other law, a qualified beneficiary who
15is eligible for the special election period described in paragraph
16(17) of subdivision (a) of Section 3001 of ARRA may elect
17continuation coverage no later than 60 days after the date of the
18notice required under subdivision (k). For a qualified beneficiary
19who elects coverage pursuant to this paragraph, the continuation
20coverage shall be effective as of the first day of the first period of
21coverage after the date of termination of employment, except, if
22federal law permits, coverage shall take effect on the first day of
23the month following the election. However, for purposes of
24calculating the duration of continuation coverage pursuant to
25Section 10128.57, the period of that coverage shall be determined
26as though the qualifying event was a reduction of hours of the
27employee.

28(6) Notwithstanding any other law, a qualified beneficiary who
29is eligible for any other special election period under ARRA may
30elect continuation coverage no later than 60 days after the date of
31the special election notice required under ARRA.

32(j) An insurer shall provide a qualified beneficiary eligible for
33premium assistance under ARRA written notice of the extension
34of that premium assistance as required under Section 3001 of
35ARRA.

36(k) A health insurer, or an administrator or employer if
37administrative obligations have been assumed by those entities
38pursuant to subdivision (d), shall give the qualified beneficiaries
39described in subparagraph (C) of paragraph (17) of subdivision
P33   1(a) of Section 3001 of ARRA the written notice required by that
2paragraph by implementing the following procedures:

3(1) The insurer shall, within 14 days of the effective date of the
4act adding this subdivision, send a notice to employers currently
5contracting with the insurer for a group benefit plan subject to this
6article. The notice shall do all of the following:

7(A) Advise the employer that employees whose employment is
8terminated on or after March 2, 2010, who were previously enrolled
9in any group health care service plan or health insurance policy
10offered by the employer may be entitled to special health coverage
11rights, including a subsidy paid by the federal government for a
12portion of the premium.

13(B) Ask the employer to provide the insurer with the name,
14address, and date of termination of employment for any employee
15whose employment is terminated on or after March 2, 2010, and
16who was at any time covered by any health care service plan or
17health insurance policy offered to their employees on or after
18September 1, 2008.

19(C) Provide employers with a format and instructions for
20submitting the information to the insurer, or their administrator or
21employer who has assumed administrative obligations pursuant
22to subdivision (d), by telephone, fax, electronic mail, or mail.

23(2) Within 14 days of receipt of the information specified in
24paragraph (1) from the employer, the insurer shall send the written
25notice specified in paragraph (17) of subdivision (a) of Section
263001 of ARRA to those individuals.

27(3) If an individual contacts his or her health insurer and
28indicates that he or she experienced a qualifying event that entitles
29him or her to the special election period described in paragraph
30(17) of subdivision (a) of Section 3001 of ARRA or any other
31special election provision of ARRA, the insurer shall provide the
32individual with the notice required under paragraph (17) of
33subdivision (a) of Section 3001 of ARRA or any other applicable
34provision of ARRA, regardless of whether the insurer receives or
35received information from the individual’s previous employer
36regarding that individual pursuant to Section 24100 of the Health
37and Safety Code. The insurer shall review the individual’s
38application for coverage under this special election notice to
39determine if the individual qualifies for the special election period
40and the premium assistance under ARRA. The insurer shall comply
P34   1with paragraph (5) if the individual does not qualify for either the
2special election period or premium assistance under ARRA.

3(4) The requirement under this subdivision to provide the written
4notice described in paragraph (17) of subdivision (a) of Section
53001 of ARRA to a qualified beneficiary and the requirement
6under paragraph (5) of subdivision (i) to provide a new opportunity
7to a qualified beneficiary to elect continuation coverage shall be
8deemed satisfied if a health insurer previously provided the written
9notice and additional election opportunity described in paragraph
10(17) of subdivision (a) of Section 3001 of ARRA to that qualified
11beneficiary prior to the effective date of the act adding this
12paragraph.

13(5) If an individual does not qualify for either a special election
14period or the subsidy under ARRA, the insurer shall provide a
15written notice to that individual that shall include information on
16the right to appeal as set forth in Section 3001 of ARRA.

17(6) A health insurer shall provide information on its publicly
18accessible Internet Web site regarding the premium assistance
19made available under ARRA and any special election period
20provided under that law. An insurer may fulfill this requirement
21by linking or otherwise directing consumers to the information
22regarding COBRA continuation coverage premium assistance
23located on the Internet Web site of the United States Department
24of Labor. The information required by this paragraph shall be
25located in a section of the insurer’s Internet Web site that is readily
26accessible to consumers, such as the Web site’s Frequently Asked
27Questions section.

28(l) Notwithstanding any other law, a qualified beneficiary
29eligible for premium assistance under ARRA may elect to enroll
30in different coverage subject to the criteria provided under
31subparagraph (B) of paragraph (1) of subdivision (a) of Section
323001 of ARRA.

33(m) A qualified beneficiary enrolled in continuation coverage
34as of February 17, 2009, who is eligible for premium assistance
35under ARRA may request application of the premium assistance
36as of March 1, 2009, or later, consistent with ARRA.

37(n) An insurer that receives an election notice from a qualified
38beneficiary eligible for premium assistance under ARRA, pursuant
39to subdivision (i), shall be considered a person entitled to
40reimbursement, as defined in Section 6432(b)(3) of the Internal
P35   1Revenue Code, as amended by paragraph (12) of subdivision (a)
2of Section 3001 of ARRA.

3(o) (1) For purposes of compliance with ARRA, in the absence
4of guidance from, or if specifically required for state-only
5continuation coverage by, the United States Department of Labor,
6the Internal Revenue Service, or the Centers for Medicare and
7Medicaid Services, an insurer may request verification of the
8involuntary termination of a covered employee’s employment from
9the covered employee’s former employer or the qualified
10beneficiary seeking premium assistance under ARRA.

11(2) An insurer that requests verification pursuant to paragraph
12(1) directly from a covered employee’s former employer shall do
13so by providing a written notice to the employer. This written
14notice shall be sent by mail or facsimile to the covered employee’s
15former employer within seven business days from the date the
16insurer receives the qualified beneficiary’s election notice pursuant
17to subdivision (i). Within 10 calendar days of receipt of written
18notice required by this paragraph, the former employer shall furnish
19to the insurer written verification as to whether the covered
20employee’s employment was involuntarily terminated.

21(3) A qualified beneficiary requesting premium assistance under
22ARRA may furnish to the insurer a written document or other
23information from the covered employee’s former employer
24indicating that the covered employee’s employment was
25involuntarily terminated. This document or information shall be
26deemed sufficient by the insurer to establish that the covered
27employee’s employment was involuntarily terminated for purposes
28of ARRA, unless the insurer makes a reasonable and timely
29determination that the documents or information provided by the
30qualified beneficiary are legally insufficient to establish involuntary
31termination of employment.

32(4) If an insurer requests verification pursuant to this subdivision
33and cannot verify involuntary termination of employment within
3414 business days from the date the employer receives the
35verification request or from the date the insurer receives
36documentation or other information from the qualified beneficiary
37pursuant to paragraph (3), the insurer shall either provide
38continuation coverage with the federal premium assistance to the
39qualified beneficiary or send the qualified beneficiary a denial
P36   1letter which shall include notice of his or her right to appeal that
2determination pursuant to ARRA.

3(5) No person shall intentionally delay verification of
4involuntary termination of employment under this subdivision.

5

SEC. 10.  

No reimbursement is required by this act pursuant to
6Section 6 of Article XIII B of the California Constitution because
7the only costs that may be incurred by a local agency or school
8district will be incurred because this act creates a new crime or
9infraction, eliminates a crime or infraction, or changes the penalty
10for a crime or infraction, within the meaning of Section 17556 of
11the Government Code, or changes the definition of a crime within
12the meaning of Section 6 of Article XIII B of the California
13Constitution.


CORRECTIONS:

Text--Pages 5, 6, 9, 14, 21, 23, 24, 26, 27, 31, and 32.




O

Corrected 5-11-15—See last page.     97