SB 657, as introduced, Monning. Health coverage: contracts.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law regulates the manner in which a plan or insurer makes premium or coverage changes to a contract, including requiring prescribed notice to enrollees and insureds within a specified time period.
This bill would make technical, nonsubstantive changes to these provisions.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1374.21 of the Health and Safety Code
2 is amended to read:
(a) begin deleteNo end deletebegin insertA end insertchange in premium rates or changes in
4coverage stated in a group health care service plan contract shall
5begin insert notend insert become effective unless the plan has delivered in writing a
P2 1notice indicating the change or changes at least 60 days prior to
2the contract renewal effective date.
3(b) A health care service plan that declines to offer coverage to
4or denies enrollment for a large group applying for coverage shall,
5at the time of the denial of coverage, provide the
applicant with
6the specific reason or reasons for the decision in writing, in clear,
7easily understandable language.
Section 10199.1 of the Insurance Code is amended to
9read:
(a) begin deleteNo end deletebegin insertAn end insertinsurer or nonprofit hospital service plan
11or administrator acting on its behalf shallbegin insert notend insert terminate a group
12master policy or contract providing hospital, medical, or surgical
13benefits, increase premiums or charges therefor, reduce or eliminate
14benefits thereunder, or restrict eligibility for coverage thereunder
15without providing prior notice of that action.begin delete No suchend deletebegin insert
Theend insert
action
16shallbegin insert notend insert become effective unless written notice of the action was
17delivered by mail to the last known address of the appropriate
18insurance producer and the appropriate administrator, if any, at
19least 45 days prior to the effective date of the action and to the last
20known address of the group policyholder or group contractholder
21at least 60 days prior to the effective date of the action. If
22nonemployee certificate holders or employees of more than one
23employer are covered under the policy or contract, written notice
24shall also be delivered by mail to the last known address of each
25nonemployee certificate holder or affected employer or, if the
26action does not affect all employees and dependents of one or more
27employers, to the last known address of each affected employee
28certificate holder, at least 60 days prior to the effective date of the
29action.
30(b) begin deleteNo end deletebegin insertA end insertholder of a master group policy or a master group
31nonprofit hospital service plan contract or administrator acting on
32its behalf shallbegin insert notend insert terminate the coverage of, increase premiums
33or charges for, or reduce or eliminate benefits available to, or
34restrict eligibility for coverage of a covered person, employer unit,
35or class of certificate holders covered under the policy or contract
36for hospital, medical, or surgical benefits without first providing
37prior notice of the action.begin delete No suchend deletebegin insert
Theend insert action shallbegin insert notend insert become
38effective unless written notice was delivered by mail to the last
39known address of each affected nonemployee certificate holder or
40employer, or if the action does not affect all employees and
P3 1dependents of one or more employers, to the last known address
2of each affected employee certificate holder, at least 60 days prior
3to the effective date of the action.
4(c) A health insurer that declines to offer coverage to or denies
5enrollment for a large group applying for coverage shall, at the
6time of the denial of coverage, provide the applicant with the
7specific reason or reasons for the decision in writing, in clear,
8easily understandable language.
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