Senate Bill No. 923

Introduced by Senator Hernandez

January 28, 2016

An act to add Section 1374.255 to the Health and Safety Code, and to add Section 10199.49 to the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

SB 923, as introduced, Hernandez. Health care coverage: cost sharing changes.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law prohibits, except as specified, a health care service plan or a health insurer, with regard to a group contract or policy, from changing the premium rates or applicable copayments or coinsurances or deductibles during the term of a group plan contract or policy during specified time periods.

This bill would prohibit, for grandfathered plan contracts and policies and nongrandfathered plan contracts and policies in the individual and small group markets, a health care service plan contract or health insurance policy that is issued, amended, or renewed on or after January 1, 2017, from changing any cost sharing requirements during the plan year or policy year, except when required by a change in state or federal law. Because a willful violation of this prohibition by a health care service plan would be a crime, the bill would impose a state-mandated local program.

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

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

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

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

SECTION 1.  

Section 1374.255 is added to the Health and
Safety Code, to read:

1374.255.  

(a) This section shall apply to grandfathered health
care service plan contracts and nongrandfathered health care service
plan contracts in the individual or small group markets that are
issued, amended, or renewed on or after January 1, 2017.

(b) Notwithstanding paragraph (1) of subdivision (b) of Section
1374.20, a health care service plan contract shall not change any
cost sharing requirements during the plan year, except when
required by a change in state or federal law.

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

(1) “Cost sharing” includes any copayment, coinsurance,
deductible, or any other form of cost sharing by the enrollee other
than the premium or share of premium.

(2) “Plan year” has the meaning set forth in Section 144.103 of
Title 45 of the Code of Federal Regulations. For nongrandfathered
health care service plan contracts in the individual market, “plan
year” means the calendar year.

SEC. 2.  

Section 10199.49 is added to the Insurance Code, immediately following Section 10199.48, to read:

10199.49.  

(a) This section shall apply to grandfathered health
insurance policies and nongrandfathered health insurance policies
in the individual or small group markets that are issued, amended,
or renewed on or after January 1, 2017.

(b) Notwithstanding paragraph (1) of subdivision (b) of Section
10199.48, a health insurance policy shall not change any cost
sharing requirements during the policy year, except when required
by a change in state or federal law.

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

(1) “Cost sharing” includes any copayment, coinsurance,
deductible, or any other form of cost sharing by the insured other
than the premium or share of premium.

(2) “Policy year” has the meaning set forth in Section 144.103
of Title 45 of the Code of Federal Regulations. For
nongrandfathered health insurance policies in the individual market,
“policy year” means the calendar year.

SEC. 3.  

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.