BILL NUMBER: AB 1602 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 24, 2010
AMENDED IN ASSEMBLY APRIL 15, 2010
AMENDED IN ASSEMBLY APRIL 8, 2010
INTRODUCED BY Assembly Member John A. Perez
(Principal coauthors: Assembly Members Bass and Monning)
JANUARY 5, 2010
An act to amend Section Sections 1357.06,
1357.51, and 1373 of, and to add Section 1367.001 to, the
Health and Safety Code, and to amend Section 10277
Sections 10198.7, 10277, and 10708 of, and to add Section
10112.1 to, the Insurance Code, relating to health care coverage,
and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 1602, as amended, John A. Perez. Health care coverage.
(1) Existing law provides various programs to provide health care
coverage to persons with limited financial resources, including the
Medi-Cal program and the Healthy Families Program.
Existing law, the federal Patient Protection and Affordable Care
Act, requires each state to, by January 1, 2014, establish an
American Health Benefit Exchange that facilitates the purchase of
qualified health plans by qualified individuals and qualified small
employers, as specified, and meets certain other requirements.
This bill would enact the California Patient Protection and
Affordable Care Act. The bill would create the California Health
Benefit Exchange (the Exchange) in state government to be governed by
an executive board appointed, in an unspecified manner,
with 5 members, including the Secretary of California
Health and Human Services and 4 other members appointed by the
Governor and the Legislature. The bill would specify the powers and
duties of the board relative to determining eligibility for
enrollment in the Exchange and arranging for coverage with qualified
health plans, and would require the Exchange to facilitate the
purchase of qualified health plans by qualified individuals and
qualified small employers by January 1, 2014. The bill would create
the California Health Trust Fund as a continuously appropriated fund
and would enact other related provisions. The bill would also state
the intent of the Legislature to enact the necessary statutory
changes relative to those specified
federal health care reforms.
(2) 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 that act a crime. Existing law also provides for
the regulation of health insurers by the Department of Insurance.
Existing law requires every health care service plan contract that
provides for termination of coverage of a dependent child upon the
attainment of the limiting age for dependent children to also provide
that attainment of the limiting age shall not terminate the coverage
of a child under certain conditions. Existing law establishes
similar requirements for group health insurance policies that provide
coverage of dependent children.
This bill would prohibit the limiting age in group or
individual contracts or policies from being less
than 26 years of age for dependent children covered by those plan
contracts and insurance policies. The bill would provide
that it does not require certain public employers to pay the cost of
coverage for those dependents who are between 23 and 26 years of age;
instead the bill would authorize certain public employees and
annuitants to elect to provide coverage to those dependents by
contributing the premium for that coverage. The bill would provide
that this limiting age requirement shall apply with respect to
employment contracts subject to collective bargaining that are
issued, amended, or renewed on or after September 23, 2010.
The bill would modify certain of the requirements applicable to
group or individual health care service plan contracts and health
insurance policies issued, amended, renewed, or delivered on or after
September 23, 2010, consistent with requirements of the federal
Patient Protection and Affordable Care Act. The bill would prohibit
lifetime limits on the dollar value of benefits and would authorize
annual limits on the dollar value of benefits only in specified
circumstances. The bill would require coverage, and prohibit
cost-sharing requirements applicable to enrollees or insureds, for
certain health care benefits. The bill would prohibit preexisting
condition exclusions for enrollees or insureds under 19 years of age.
These provisions would apply only to health care service
plan contracts and health insurance policies that are required to
provide essential health benefits, as defined.
Because a willful violation of these requirements with respect to
a health care service plan would be a crime, the bill would impose a
state-mandated local program.
(3) 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: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known and may be cited as the
California Patient Protection and Affordable Care Act.
SEC. 2. It is the intent of the Legislature to enact the necessary
statutory changes provided for in, and consistent with,
federal health reform to California law in order to be
consistent with the federal Patient Protection and Affordable Care
Act (Public Law 111-148), as amended by the federal Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152), hereafter
the federal act . In doing so, it in is
the intent of the Legislature to do all of the following:
(a) Ensure that all Californians have access to affordable,
comprehensive, quality health care.
(a) Reduce the number of uninsured Californians by creating an
organized, transparent marketplace for Californians to purchase
affordable, quality health care coverage, to claim available federal
tax credits and cost-sharing subsidies, and to meet the personal
responsibility requirements imposed under the federal act.
(b) Leverage available federal funds to the greatest extent
possible.
(c) Strengthen the health care delivery system through (1)
enhanced access to effective primary and preventive services,
including management of chronic illnesses; (2) investment in training
the health care workforce; (3) promotion of cost-effective health
technologies; and (4) implementation of meaningful, systemwide cost
containment strategies.
(c) Strengthen the health care delivery system.
(d) Guarantee the availability and renewability of health
care coverage through the private health insurance market to
individuals qualified individuals and
qualified small employers .
(e) Require that health care service plans and health insurers
issuing coverage in the individual market and
small employer markets compete on the basis of price, quality,
and service, and not on risk selection.
(f) Engage in early and systematic evaluation at each step of the
implementation process to identify the impacts on state costs, the
costs of coverage, employment and insurance markets, health delivery
systems, quality of care, and overall progress in moving toward
universal coverage.
(f) Meet the requirements of the federal act.
SEC. 3. (a) There is in state government the California Health
Benefit Exchange, an independent public entity, which
shall be known as the Exchange. The Exchange shall be governed by an
executive board consisting of ____ five
members. Of the members of the board, ____
two shall be appointed by the Governor, ____
one shall be appointed by the Senate Committee on Rules,
and ____ one shall be appointed by the
Speaker of the Assembly.
(b) The board shall
be responsible for of the Assembly. The Secretary of
California Health and Human Services or his or her designee shall
serve as a voting, ex officio member of the board.
(b) Members of the board shall be appointed for a term of four
years. Vacancies shall be filled by appointment for the unexpired
term.
(c) Each person appointed to the board shall have demonstrated and
acknowledged expertise in at least two of the following areas:
(1) The health care coverage market.
(2) The small group health care coverage market.
(3) Health benefits plan administration.
(4) Health care finance.
(5) Administering a public or private health care delivery system.
(6) Health plan purchasing.
(d) Each member of the board shall have the responsibility and
duty to meet the requirements of this act and the federal act, to
serve the public interest of the individuals and small businesses
seeking health care coverage through the Exchange, and to ensure the
operational well-being and fiscal solvency of the Exchange.
(e) A member of the board or of the staff of the Exchange shall
not be employed by, a consultant to, a member of the board of
directors of, affiliated with an agent of, or otherwise a
representative of, a carrier or other insurer, an agent or broker, a
health care provider, or a health care facility or health clinic. A
board member shall not receive compensation for his or her service on
the board but may receive a per diem and reimbursement for travel
and other necessary expenses, as provided in Section 103 of the
Business and Professions Code, while engaged in the performance of
official duties of the board.
(f) The board shall hire an executive director to organize,
administer, and manage the operations of the Exchange and to serve as
secretary to the board. The executive director shall serve as an ex
officio, nonvoting member of the board.
(g) The board shall be subject to the Bagley-Keene Open Meeting
Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1
of Division 3 of Title 2 of the Government Code), except that the
board may hold closed sessions when considering matters related to
litigation, personnel, contracting, and rates.
(h) The board shall apply fo
r planning and establishment grants made available to the
Exchange pursuant to Section 1311 of the federal act. If an executive
director has not been hired under subdivision (f) when the United
States Secretary of Health and Human Services makes the initial
planning and establishment grants available, the California Health
and Human Services Agency shall, upon request of the board, submit
the initial application for planning and establishment grants to the
United States Secretary of Health and Human Services. The board shall
be responsible for using the funds awarded by the United
States Secretary of Health and Human Services for the planning and
establishment of the Exchange , consistent with subdivision (b)
of Section 1311 of the federal act .
(c)
(i) The board shall, at a minimum, do all of the
following to implement Section 1311 of the federal Patient
Protection and Affordable Care Act act :
(1) Implement procedures for the certification, recertification,
and decertification, consistent with guidelines established by the
United States Secretary of Health and Human Services, of health plans
as qualified health plans. The board shall require health plans
seeking certification as qualified health plans to do all of the
following:
(A) Submit a justification for any premium increase prior to
implementation of the increase. The plans shall prominently post that
information on their Internet Web sites. The board shall take this
information, and the information and the recommendations provided to
the board by the Department of Insurance or the Department of Managed
Health Care under paragraph (1) of subdivision (b) of Section 2794
of the federal Public Health Service Act, into consideration when
determining whether to make the health plan available through the
Exchange. The board shall take into account any excess of premium
growth outside the Exchange as compared to the rate of that growth
inside the Exchange, including information reported by the Department
of Insurance and the Department of Managed Health Care.
(B) (i) Make available to the public and submit to the board, the
United States Secretary of Health and Human Services, and the
Insurance Commissioner or the Department of Managed Health Care, as
applicable, accurate and timely disclosure of the following
information:
(I) Claims payment policies and practices.
(II) Periodic financial disclosures.
(III) Data on enrollment.
(IV) Data on disenrollment.
(V) Data on the number of claims that are denied.
(VI) Data on rating practices.
(VII) Information on cost sharing and payments with respect to any
out-of-network coverage.
(VIII) Information on enrollee and participant rights under Title
I of the federal act.
(IX) Other information as determined appropriate by the United
States Secretary of Health and Human Services.
(ii) The information required under clause (i) shall be provided
in plain language, as defined in subparagraph (B) of paragraph (3) of
subdivision (e) of Section 1311 of the federal act.
(C) Permit individuals to learn, in a timely manner upon the
request of the individual, the amount of cost sharing, including, but
not limited to, deductibles, copayments, and coinsurance, under the
individual's plan or coverage that the individual would be
responsible for paying with respect to the furnishing of a specific
item or service by a participating provider. At a minimum, this
information shall be made available to the individual through an
Internet Web site and through other means for individuals without
access to the Internet.
(2) Provide for the operation of a toll-free telephone hotline to
respond to requests for assistance.
(3) Maintain an Internet Web site through which enrollees and
prospective enrollees of qualified health plans may obtain
standardized comparative information on those plans. In
developing the Internet Web site, the board shall ensure that
information is presented in a plainly worded and easily
understandable format to assist enrollees and potential enrollees in
making an informed coverage choice.
(4) Assign a rating to each qualified health plan offered through
the Exchange in accordance with the criteria developed by the United
States Secretary of Health and Human Services.
(5) Utilize a standardized format for presenting health benefits
plan options in the Exchange, including the use of the uniform
outline of coverage established under Section 2715 of the
federal Public Health Service Act.
(6) Inform individuals of eligibility requirements for the
Medi-Cal program, the Healthy Families Program, or any applicable
state or local public program and, if, through screening of the
application by the Exchange, the Exchange determines that an
individual is eligible for any such program, enroll that individual
in the program.
(7) Establish and make available by electronic means a calculator
to determine the actual cost of coverage after the application of any
premium tax credit under Section 36B of the Internal Revenue Code of
1986 and any cost sharing cost-sharing
reduction under Section 1402 of the federal Patient
Protection and Affordable Care Act act .
(8) Grant a certification attesting that, for purposes of the
individual responsibility penalty under Section 5000A of the Internal
Revenue Code of 1986, an individual is exempt from the individual
requirement or from the penalty imposed by that section because of
any of the following:
(A) There is no affordable qualified health plan available through
the Exchange or the individual's employer covering the individual.
(B) The individual meets the requirements for any other exemption
from the individual responsibility requirement or penalty.
(9) Transfer to the Secretary of the Treasury all of the
following:
(A) A list of the individuals who are issued a certification under
paragraph (8), including the name and taxpayer identification number
of each individual.
(B) The name and taxpayer identification number of each individual
who was an employee of an employer but who was determined to be
eligible for the premium tax credit under Section 36B of the Internal
Revenue Code of 1986 because of either of the following:
(i) The employer did not provide minimum essential coverage.
(ii) The employer provided the minimum essential coverage but it
was determined under subparagraph (C) of paragraph (2) of subsection
(c) of Section 36B of the Internal Revenue Code of 1986 to either be
unaffordable to the employee or not provide the required minimum
actuarial value.
(C) The name and taxpayer identification number of each individual
who notifies the Exchange under paragraph (4) of subsection (b) of
Section 1411 of the federal Patient Protection and Affordable
Care Act act that they have changed employers
and of each individual who ceases coverage under a qualified health
plan during a plan year and the effective date of that cessation.
(10) Provide to each employer the name of each employee of the
employer described in subparagraph (B) of paragraph (9) who ceases
coverage under a qualified health plan during a plan year and the
effective date of that cessation.
(d) The board may do all of the following consistent with the
standards, regulations, and rules promulgated by the United States
Secretary of Health and Human Services:
(11) Perform duties required of, or delegated to, the Exchange by
the United States Secretary of Health and Human Services or the
Secretary of the Treasury related to determining eligibility for
premium tax credits, reduced cost sharing, or individual
responsibility exemptions.
(12) Establish the navigator program in accordance with
subdivision (i) of Section 1311 of the federal act. Any entity chosen
by the Exchange as a navigator shall do all of the following:
(A) Conduct public education activities to raise awareness of the
availability of qualified health plans.
(B) Distribute fair and impartial information concerning
enrollment in qualified health plans, and the availability of premium
tax credits under Section 36B of the Internal Revenue Code of 1986
and cost-sharing reductions under Section 1402 of the federal act.
(C) Facilitate enrollment in qualified health plans.
(D) Provide referrals to any applicable office of health insurance
consumer assistance or health insurance ombudsman established under
Section 2793 of the federal Public Health Service Act, or any other
appropriate state agency or agencies, for any enrollee with a
grievance, complaint, or question regarding his or health plan,
coverage, or a determination under that plan or coverage.
(E) Provide information in a manner that is culturally and
linguistically appropriate to the needs of the population being
served by the Exchange.
(13) Establish the Small Business Health Options Program, separate
from the activities of the board related to the individual market,
to assist qualified small employers in facilitating the enrollment of
their employees in qualified health plans offered in the small group
market.
(j) In addition to meeting the minimum requirements of Section
1311 of the federal act, the board shall do all of the following:
(1) Determine eligibility, enrollment, and disenrollment criteria
and processes for enrollees and potential enrollees in the Exchange.
(2) Determine the participation requirements and the standards and
selection criteria for qualified health plans, including reasonable
limits on a plan's administrative costs.
(2) Determine the minimum requirements a health plan must meet to
be considered for participation in the Exchange as a qualified health
plan, and the standards and criteria for selecting qualified health
plans to be offered through the Exchange. In the course of
selectively contracting for health care coverage offered to qualified
individuals and qualified small employers through the Exchange, the
board shall seek to contract with carriers to provide health
insurance choices that offer the optimal choice, value, quality, and
service.
(3) Provide, in each region of the state, a choice of qualified
health plans at each of the five levels of coverage contained in
subdivisions (d) and (e) of Section 1302 of the federal act.
(4) Require, as a condition of participation in the Exchange,
carriers to fairly and affirmatively offer, market, and sell in the
Exchange the five levels of coverage contained in subdivisions (d)
and (e) of Section 1302 of the federal act.
(A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
(B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small employers
purchasing coverage outside the Exchange.
(5) Require, as a condition of participation in the Exchange,
carriers that sell any products outside the Exchange to do both of
the following:
(3)
(6) Determine when an enrollee's coverage commences and
the extent and scope of coverage.
(4) Determine premium schedules, collect the premiums, and
administer subsidies to eligible enrollees.
(5) Determine rates paid to qualified health plans.
(6) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.
(7) Determine and approve cost-sharing provisions for qualified
health plans.
(7) Develop and maintain an electronic clearinghouse of
information regarding all health benefits products offered by
carriers in the individual and small employer markets to facilitate
fair and affirmative marketing of all individual and small employer
plans inside and outside the Exchange. In performing this function,
the board shall routinely monitor individual and small employer
benefits filings with the Department of Managed Health Care and the
Department of Insurance and complaints submitted by individuals and
small employers with those regulatory agencies, and shall use any
other available means to maintain the clearinghouse.
(8) Undertake activities necessary to market and publicize the
availability of health care coverage through the Exchange.
(9) Select and set performance standards and compensation for
navigators selected under paragraph (12) of subdivision (i).
(10) Employ necessary staff.
(11) Assess a charge as a part of the premium, at the lowest
possible rate, on carriers participating in the Exchange, to support
the development, operations, and prudent cash management of the
Exchange.
(12) Authorize expenditures, as necessary, from the California
Health Trust Fund to pay program expenses to administer the Exchange.
(13) Keep an accurate accounting of all activities, receipts, and
expenditures, and annually submit to the United States Secretary of
Health and Human Services a report concerning that accounting.
(14) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenue in the fund, and if
sufficient revenue is not available to pay estimated expenditures,
institute appropriate measures to ensure fiscal solvency.
(15) Exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed by this act.
(16) Consult with stakeholders relevant to carrying out the
activities under this section, including, but not limited to, all of
the following:
(A) Health care consumers who are enrolled in health plans.
(B) Individuals and entities with experience in facilitating
enrollment in health plans.
(C) Representatives of small businesses and self-employed
individuals.
(D) The Director of Health Care Services.
(E) Advocates for enrolling hard-to-reach populations.
(18) Facilitate the purchase of qualified health plans by
qualified individuals and qualified small employers no later than
January 1, 2014.
(k) The board may do the following:
(1) Collect premiums and assist in the administration of
subsidies.
(2) Report, or contract with an independent entity to report, to
the Legislature on whether to adopt the option in subdivision (b) of
Section 1311 of the federal act to provide a single exchange for
providing services to both qualified individuals and qualified small
employers in the Exchange. In its report, the board shall provide
data on the potential impact on rates paid by individuals and by
small employers in a merged individual and small group market, as
compared to the rates paid by individuals and small employers if a
separate individual and small group market is maintained. A report
made pursuant to this paragraph shall be submitted pursuant to
Section 9795 of the Government Code.
(8)
(3) Enter into contracts.
(9)
(4) Sue and be sued.
(10) Employ necessary staff.
(11)
(5) Receive and accept gifts, grants, or donations of
moneys from any agency of the United States, any agency of the state,
any municipality, county, or other political subdivision of the
state.
(12)
(6) Receive and accept gifts, grants, or donations from
individuals, associations, private foundations, or corporations,
subject to the adoption by the board at a public meeting of conflict
of interest provisions.
(13) Authorize expenditures, as necessary, from the fund to pay
program expenses to administer the Exchange.
(14) Keep an accurate accounting of all activities, receipts, and
expenditures and annually submit to the United States Secretary of
Health and Human Services a report concerning that accounting.
(15)
(7) Adopt rules and regulations, as necessary.
Until January 1, 2014, any necessary rules and regulations may be
adopted as emergency regulations in accordance with the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
The adoption of these regulations shall be deemed to be an emergency
and necessary for the immediate preservation of the public peace,
health and safety, or general welfare.
(16) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenues in the fund, and if
sufficient revenue is not available to pay estimated expenditures,
institute appropriate measures to ensure fiscal solvency.
(17) Share information with the Employment Development Department
for the purpose of the administration and enforcement of this
section.
(18) Exercise all powers reasonably necessary to carry out the
powers and responsibilities expressly granted or imposed by this
section.
(e) The board shall consult with stakeholders relevant to carrying
out the activities under this section, including, but not limited
to, all of the following:
(1) Health care consumers who are enrollees in qualified health
plans.
(2) Individuals and entities with experience in facilitating
enrollment in qualified health plans.
(3) Representatives of small businesses and self-employed
individuals.
(4) The Director of Health Care Services.
(5) Advocates for enrolling hard-to-reach populations.
(f) No later than January 1, 2014, the Exchange shall facilitate
the purchase of qualified health plans by qualified individuals and
qualified small employers.
(l) As used in this section, "federal act" means the federal
Patient Protection and Affordable Care Act (Public Law 111-148), as
amended by the federal Health Care and Education Reconciliation Act
of 2010 (Public Law 111-152).
SEC. 4. (a) The California Health Trust Fund is hereby created in
the State Treasury for the purpose of this section and Section 3 of
this act. Notwithstanding Section 13340 of the Government Code, all
moneys in the fund shall be continuously appropriated without regard
to fiscal year for the purposes of this section and Section 3 of this
act. Any moneys in the fund that are unexpended or unencumbered at
the end of a fiscal year may be carried forward to the next
succeeding fiscal year.
(b) Notwithstanding any other provision of law, moneys deposited
in the fund shall not be loaned to, or borrowed by, any other special
fund or the General Fund, or a county general fund or any other
county fund.
(b)
(c) The board of the California Health Benefit Exchange
shall establish and maintain a prudent reserve in the fund.
(d) The board or staff of the Exchange shall not utilize any funds
intended for the administrative and operational expenses of the
Exchange for staff retreats, promotional giveaways, excessive
executive compensation, or promotion of federal or state legislative
or regulatory modifications.
(c)
(e) Notwithstanding Section 16305.7 of the Government
Code, all interest earned on the moneys that have been deposited into
the fund shall be retained in the fund and used for purposes
consistent with the fund.
SEC. 5. Section 1357.06 of the Health
and Safety Code is amended to read:
1357.06. (a) Preexisting condition provisions of a plan contract
shall not exclude coverage for a period beyond six months following
the individual's effective date of coverage and may only relate to
conditions for which medical advice, diagnosis, care, or treatment,
including prescription drugs, was recommended or received from a
licensed health practitioner during the six months immediately
preceding the effective date of coverage.
(b) A plan that does not utilize a preexisting condition provision
may impose a waiting or affiliation period, not to exceed 60 days,
before the coverage issued subject to this article shall become
effective. During the waiting or affiliation period no premiums shall
be charged to the enrollee or the subscriber.
(c) In determining whether a preexisting condition provision or a
waiting or affiliation period applies to any person, a plan shall
credit the time the person was covered under creditable coverage,
provided the person becomes eligible for coverage under the
succeeding plan contract within 62 days of termination of prior
coverage, exclusive of any waiting or affiliation period, and applies
for coverage with the succeeding plan contract within the applicable
enrollment period. A plan shall also credit any time an eligible
employee must wait before enrolling in the plan, including any
affiliation or employer-imposed waiting or affiliation period.
However, if a person's employment has ended, the availability of
health coverage offered through employment or sponsored by an
employer has terminated, or an employer's contribution toward health
coverage has terminated, a plan shall credit the time the person was
covered under creditable coverage if the person becomes eligible for
health coverage offered through employment or sponsored by an
employer within 180 days, exclusive of any waiting or affiliation
period, and applies for coverage under the succeeding plan contract
within the applicable enrollment period.
(d) In addition to the preexisting condition exclusions authorized
by subdivision (a) and the waiting or affiliation period authorized
by subdivision (b), health plans providing coverage to a guaranteed
association may impose on employers or individuals purchasing
coverage who would not be eligible for guaranteed coverage if they
were not purchasing through the association a waiting or affiliation
period, not to exceed 60 days, before the coverage issued subject to
this article shall become effective. During the waiting or
affiliation period, no premiums shall be charged to the enrollee or
the subscriber.
(e) An individual's period of creditable coverage shall be
certified pursuant to subdivision (e) of Section 2701 of Title XXVII
of the federal Public Health Services Act(42
Act (42 U.S.C. Sec. 300gg(e)).
(f) A health care service plan issuing group coverage may not
impose a preexisting condition exclusion to any of the following:
(1) To a newborn individual, who, as of the last day of the 30-day
period beginning with the date of birth, has applied for coverage
through the employer-sponsored plan.
(2) To a child who is adopted or placed for adoption before
attaining 18 years of age and who, as of the last day of the 30-day
period beginning with the date of adoption or placement for adoption,
is covered under creditable coverage and applies for coverage
through the employer-sponsored plan. This provision shall not apply
if, for 63 continuous days, the child is not covered under any
creditable coverage.
(3) To a condition relating to benefits for pregnancy or maternity
care.
(g) Notwithstanding any other provision of this chapter, a group
health care service plan contract that is issued, amended, renewed,
or delivered on or after September 23, 2010, may not impose any
preexisting condition exclusion with respect to coverage under the
contract of any enrollee under 19 years of age.
SEC. 6. Section 1357.51 of the Health
and Safety Code is amended to read:
1357.51. (a) No plan contract that covers three or more enrollees
shall exclude coverage for any individual on the basis of a
preexisting condition provision for a period greater than six months
following the individual's effective date of coverage. Preexisting
condition provisions contained in plan contracts may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the six months immediately
preceding the effective date of coverage.
(b) No plan contract that covers one or two individuals shall
exclude coverage on the basis of a preexisting condition provision
for a period greater than 12 months following the individual's
effective date of coverage, nor shall the plan limit or exclude
coverage for a specific enrollee by type of illness, treatment,
medical condition, or accident, except for satisfaction of a
preexisting condition clause pursuant to this article. Preexisting
condition provisions contained in plan contracts may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the 12 months immediately
preceding the effective date of coverage.
(c) A plan that does not utilize a preexisting condition provision
may impose a waiting or affiliation period not to exceed 60 days,
before the coverage issued subject to this article shall become
effective. During the waiting or affiliation period, the plan is not
required to provide health care services and no premium shall be
charged to the subscriber or enrollee.
(d) A plan that does not utilize a preexisting condition provision
in plan contracts that cover one or two individuals may impose a
contract provision excluding coverage for waivered conditions. No
plan may exclude coverage on the basis of a waivered condition for a
period greater than 12 months following the individual's effective
date of coverage. A waivered condition provision contained in plan
contracts may relate only to conditions for which medical advice,
diagnosis, care, or treatment, including use of prescription drugs,
was recommended or received from a licensed health practitioner
during the 12 months immediately preceding the effective date of
coverage.
(e) In determining whether a preexisting condition provision, a
waivered condition provision, or a waiting or affiliation period
applies to any enrollee, a plan shall credit the time the enrollee
was covered under creditable coverage, provided that the enrollee
becomes eligible for coverage under the succeeding plan contract
within 62 days of termination of prior coverage, exclusive of any
waiting or affiliation period, and applies for coverage under the
succeeding plan within the applicable enrollment period. A plan shall
also credit any time that an eligible employee must wait before
enrolling in the plan, including any postenrollment or
employer-imposed waiting or affiliation period.
However, if a person's employment has ended, the availability of
health coverage offered through employment or sponsored by an
employer has terminated, or an employer's contribution toward health
coverage has terminated, a plan shall credit the time the person was
covered under creditable coverage if the person becomes eligible for
health coverage offered through employment or sponsored by an
employer within 180 days, exclusive of any waiting or affiliation
period, and applies for coverage under the succeeding plan contract
within the applicable enrollment period.
(f) No plan shall exclude late enrollees from coverage for more
than 12 months from the date of the late enrollee's application for
coverage. No plan shall require any premium or other periodic charge
to be paid by or on behalf of a late enrollee during the period of
exclusion from coverage permitted by this subdivision.
(g) A health care service plan issuing group coverage may not
impose a preexisting condition exclusion upon the following:
(1) A newborn individual, who, as of the last day of the 30-day
period beginning with the date of birth, has applied for coverage
through the employer-sponsored plan.
(2) A child who is adopted or placed for adoption before attaining
18 years of age and who, as of the last day of the 30-day period
beginning with the date of adoption or placement for adoption, is
covered under creditable coverage and applies for coverage through
the employer-sponsored plan. This provision shall not apply if, for
63 continuous days, the child is not covered under any creditable
coverage.
(3) A condition relating to benefits for pregnancy or maternity
care.
(h) An individual's period of creditable coverage shall be
certified pursuant to subsection (e) of Section 2701 of Title XXVII
of the federal Public Health Services Act (42 U.S.C. Sec. 300gg(e)).
(i) Notwithstanding any other provision of this chapter, a health
benefit plan, as defined in Section 1357.50, that is issued, amended,
renewed, or delivered on or after September 23, 2010, may not impose
any preexisting condition exclusion with respect to coverage under
the plan of any enrollee under 19 years of age.
SEC. 5. SEC. 7. Section 1367.001 is
added to the Health and Safety Code, to read:
1367.001. (a) (1) A group or individual health care service plan
contract that is issued, amended, renewed, or delivered on or after
September 23, 2010, may not establish lifetime limits on the dollar
value of benefits for any participant or beneficiary.
(2) With respect to plan years beginning prior to January 1, 2014,
a group or individual health care service plan contract that is
issued, amended, renewed, or delivered on or after September 23,
2010, may only establish a restricted annual limit on the dollar
value of benefits for any participant or beneficiary with respect to
the scope of benefits that are essential health benefits under
subsection (b) of Section 1302 of the federal Patient Protection and
Affordable Care Act, as determined by the United States Secretary of
Health and Human Services.
(b) (1) Subject to the minimum interval established by the United
States Secretary of Health and Human Services pursuant to subsection
(b) of Section 2713 of Section 1001 of the federal Patient Protection
and Affordable Care Act, a group or individual health care service
plan contract that is issued, amended, renewed, or delivered on or
after September 23, 2010, shall, at a minimum, provide coverage for,
and shall not impose any cost sharing requirements for, all of the
following:
(A) Evidence-based items or services that have in effect a rating
of "A" or "B" in the current recommendations of the United States
Preventive Services Task Force.
(B) Immunizations that have in effect a recommendation from the
Advisory Committee on Immunization Practices of the federal Centers
for Disease Control and Prevention with respect to the individual
involved.
(C) With respect to infants, children, and adolescents,
evidence-informed preventive care and screenings provided for in the
comprehensive guidelines supported by the federal Health Resources
and Services Administration.
(D) With respect to women, any additional preventive care and
screenings not described in subparagraph (A) as provided for in
comprehensive guidelines supported by the federal Health Resources
and Services Administration.
(2) For purposes of this subdivision, the current recommendations
of the United States Preventive Services Task Force regarding breast
cancer screening, mammography, and prevention shall be considered
the most current, other than recommendations issued by the task force
in November of 2009, or within 30 days of that month.
(3) Nothing in this subdivision shall be construed to prohibit a
plan from providing coverage for services in addition to those
recommended by the United States Preventive Services Task Force or to
deny coverage for services that are not recommended by the task
force.
(c) A group or individual health care service plan contract that
is issued, amended, renewed, or delivered on or after September 23,
2010, may not impose any preexisting condition exclusion with respect
to coverage under the plan of any enrollee under 19 years of age.
(d) This section shall not apply to a group or individual health
care service plan contract that is not required to provide essential
health benefits. "Essential health benefits" shall have the meaning
as determined by the United States Secretary of Health and Human
Services pursuant to the federal Patient Protection and Affordable
Care Act.
(c) This section shall not apply to Medicare supplement plans or
to specialized health care service plans.
(e)
(d) This section shall apply notwithstanding any other
provision of this chapter.
SEC. 6. SEC. 8. Section 1373 of the
Health and Safety Code is amended to read:
1373. (a) A plan contract may not provide an exception for other
coverage if the other coverage is entitlement to Medi-Cal benefits
under Chapter 7 (commencing with Section 14000) or Chapter 8
(commencing with Section 14200) of Part 3 of Division 9 of the
Welfare and Institutions Code, or Medicaid benefits under Subchapter
19 (commencing with Section 1396) of Chapter 7 of Title 42 of the
United States Code.
Each plan contract shall be interpreted not to provide an
exception for the Medi-Cal or Medicaid benefits.
A plan contract shall not provide an exemption for enrollment
because of an applicant's entitlement to Medi-Cal benefits under
Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing
with Section 14200) of Part 3 of Division 9 of the Welfare and
Institutions Code, or Medicaid benefits under Subchapter 19
(commencing with Section 1396) of Chapter 7 of Title 42 of the United
States Code.
A plan contract may not provide that the benefits payable
thereunder are subject to reduction if the individual insured has
entitlement to the Medi-Cal or Medicaid benefits.
(b) A plan contract that provides coverage, whether by specific
benefit or by the effect of general wording, for sterilization
operations or procedures shall not impose any disclaimer, restriction
on, or limitation of, coverage relative to the covered individual's
reason for sterilization.
As used in this section, "sterilization operations or procedures"
shall have the same meaning as that specified in Section 10120 of the
Insurance Code.
(c) Every plan contract that provides coverage to the spouse or
dependents of the subscriber or spouse shall grant immediate accident
and sickness coverage, from and after the moment of birth, to each
newborn infant of any subscriber or spouse covered and to each minor
child placed for adoption from and after the date on which the
adoptive child's birth parent or other appropriate legal authority
signs a written document, including, but not limited to, a health
facility minor release report, a medical authorization form, or a
relinquishment form, granting the subscriber or spouse the right to
control health care for the adoptive child or, absent this written
document, on the date there exists evidence of the subscriber's or
spouse's right to control the health care of the child placed for
adoption. No plan may be entered into or amended if it contains any
disclaimer, waiver, or other limitation of coverage relative to the
coverage or insurability of newborn infants of, or children placed
for adoption with, a subscriber or spouse covered as required by this
subdivision.
(d) (1) Every plan contract that provides that coverage of a
dependent child of a subscriber shall terminate upon attainment of
the limiting age for dependent children specified in the plan, shall
also provide that attainment of the limiting age shall not operate to
terminate the coverage of the child while the child is and continues
to meet both of the following criteria:
(A) Incapable of self-sustaining employment by reason of a
physically or mentally disabling injury, illness, or condition.
(B) Chiefly dependent upon the subscriber for support and
maintenance.
(2) The plan shall notify the subscriber that the dependent child'
s coverage will terminate upon attainment of the limiting age unless
the subscriber submits proof of the criteria described in
subparagraphs (A) and (B) of paragraph (1) to the plan within 60 days
of the date of receipt of the notification. The plan shall send this
notification to the subscriber at least 90 days prior to the date
the child attains the limiting age. Upon receipt of a request by the
subscriber for continued coverage of the child and proof of the
criteria described in subparagraphs (A) and (B) of paragraph (1), the
plan shall determine whether the child meets that criteria before
the child attains the limiting age. If the plan fails to make the
determination by that date, it shall continue coverage of the child
pending its determination.
(3) The plan may subsequently request information about a
dependent child whose coverage is continued beyond the limiting age
under this subdivision but not more frequently than annually after
the two-year period following the child's attainment of the limiting
age.
(4) If the subscriber changes carriers to another plan or to a
health insurer, the new plan or insurer shall continue to provide
coverage for the dependent child. The new plan or insurer may request
information about the dependent child initially and not more
frequently than annually thereafter to determine if the child
continues to satisfy the criteria in subparagraphs (A) and (B) of
paragraph (1). The subscriber shall submit the information requested
by the new plan or insurer within 60 days of receiving the request.
(5) Except as specified in this section and except as necessary to
be consistent with the regulations promulgated by the United States
Secretary of Health and Human Services that define "dependent" for
purposes of the limiting age, under no circumstances shall the
limiting age be less than 26 years of age. Nothing in this
section shall require employers participating in the Public Employees'
Medical and Hospital Care Act to pay the cost of coverage for
dependents who are at least 23 years of age, but less than 26 years
of age. Employees or annuitants receiving benefits pursuant to the
Public Employees' Medical and Hospital Care Act may elect to provide
coverage to their dependents who are at least 23 years of age, but
are less than 26 years of age, provided they contribute the premium
for that coverage. Nothing in this section shall require the
University of California to pay the cost of coverage for dependents
who are at least 23 years of age, but less than 26 years of age.
Employees or annuitants of the University of California may elect to
provide coverage to their dependents who are at least 23 years of
age, but less than 26 years of age, provided they contribute the
premium for that coverage. Nothing in this section shall require a
city to pay the cost of coverage for dependents who are at least 23
years of age, but less than 26 years of age. Employees or annuitants
of a city may elect to provide coverage to their dependents who are
at least 23 years of age, but less than 26 years of age, provided
they contribute the premium for that coverage. The provision
requiring the limiting age to be up to 26 years of age shall not be
effective for employment contracts subject to collective bargaining
that are effective prior to September 23, 2010. Any employment
contract subject to collective bargaining that is issued, amended, or
renewed after on and after September 23, 2010, shall be subject to
the provisions of this section.
(e) A plan contract that provides coverage, whether by specific
benefit or by the effect of general wording, for both an employee and
one or more covered persons dependent upon the employee and provides
for an extension of the coverage for any period following a
termination of employment of the employee shall also provide that
this extension of coverage shall apply to dependents upon the same
terms and conditions precedent as applied to the covered employee,
for the same period of time, subject to payment of premiums, if any,
as required by the terms of the policy and subject to any applicable
collective bargaining agreement.
(f) A group contract shall not discriminate against handicapped
persons or against groups containing handicapped persons. Nothing in
this subdivision shall preclude reasonable provisions in a plan
contract against liability for services or reimbursement of the
handicap condition or conditions relating thereto, as may be allowed
by rules of the director.
(g) Every group contract shall set forth the terms and conditions
under which subscribers and enrollees may remain in the plan in the
event the group ceases to exist, the group contract is terminated or
an individual subscriber leaves the group, or the enrollees'
eligibility status changes.
(h) (1) A health care service plan or specialized health care
service plan may provide for coverage of, or for payment for,
professional mental health services, or vision care services, or for
the exclusion of these services. If the terms and conditions include
coverage for services provided in a general acute care hospital or an
acute psychiatric hospital as defined in Section 1250 and do not
restrict or modify the choice of providers, the coverage shall extend
to care provided by a psychiatric health facility as defined in
Section 1250.2 operating pursuant to licensure by the State
Department of Mental Health. A health care service plan that offers
outpatient mental health services but does not cover these services
in all of its group contracts shall communicate to prospective group
contractholders as to the availability of outpatient coverage for the
treatment of mental or nervous disorders.
(2) No plan shall prohibit the member from selecting any
psychologist who is licensed pursuant to the Psychology Licensing Law
(Chapter 6.6 (commencing with Section 2900) of Division 2 of the
Business and Professions Code), any optometrist who is the holder of
a certificate issued pursuant to Chapter 7 (commencing with Section
3000) of Division 2 of the Business and Professions Code or, upon
referral by a physician and surgeon licensed pursuant to the Medical
Practice Act (Chapter 5 (commencing with Section 2000) of Division 2
of the Business and Professions Code), (A) any marriage and family
therapist who is the holder of a license under Section 4980.50 of the
Business and Professions Code, (B) any licensed clinical social
worker who is the holder of a license under Section 4996 of the
Business and Professions Code, (C) any registered nurse licensed
pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of
the Business and Professions Code, who possesses a master's degree
in psychiatric-mental health nursing and is listed as a
psychiatric-mental health nurse by the Board of Registered Nursing,
or (D) any advanced practice registered nurse certified as a clinical
nurse specialist pursuant to Article 9 (commencing with Section
2838) of Chapter 6 of Division 2 of the Business and Professions Code
who participates in expert clinical practice in the specialty of
psychiatric-mental health nursing, to perform the particular services
covered under the terms of the plan, and the certificate holder is
expressly authorized by law to perform these services.
(3) Nothing in this section shall be construed to allow any
certificate holder or licensee enumerated in this section to perform
professional mental health services beyond his or her field or fields
of competence as established by his or her education, training and
experience.
(4) For the purposes of this section, "marriage and family
therapist" means a licensed marriage and family therapist who has
received specific instruction in assessment, diagnosis, prognosis,
and counseling, and psychotherapeutic treatment of premarital,
marriage, family, and child relationship dysfunctions that is
equivalent to the instruction required for licensure on January 1,
1981.
(5) Nothing in this section shall be construed to allow a member
to select and obtain mental health or psychological or vision care
services from a certificate or licenseholder who is not directly
affiliated with or under contract to the health care service plan or
specialized health care service plan to which the member belongs. All
health care service plans and individual practice associations that
offer mental health benefits shall make reasonable efforts to make
available to their members the services of licensed psychologists.
However, a failure of a plan or association to comply with the
requirements of the preceding sentence shall not constitute a
misdemeanor.
(6) As used in this subdivision, "individual practice association"
means an entity as defined in subsection (5) of Section 1307 of the
federal Public Health Service Act (42 U.S.C. Sec. 300e-1 (5)).
(7) Health care service plan coverage for professional mental
health services may include community residential treatment services
that are alternatives to inpatient care and that are directly
affiliated with the plan or to which enrollees are referred by
providers affiliated with the plan.
(i) If the plan utilizes arbitration to settle disputes, the plan
contracts shall set forth the type of disputes subject to
arbitration, the process to be utilized, and how it is to be
initiated.
(j) A plan contract that provides benefits that accrue after a
certain time of confinement in a health care facility shall specify
what constitutes a day of confinement or the number of consecutive
hours of confinement that are requisite to the commencement of
benefits.
(k) If a plan provides coverage for a dependent child who is over
18 26 years of age and enrolled as a
full-time student at a secondary or postsecondary educational
institution, the following shall apply:
(1) Any break in the school calendar shall not disqualify
the dependent child from coverage.
(2) If the dependent child takes a medical leave of absence, and
the nature of the dependent child's injury, illness, or condition
would render the dependent child incapable of self-sustaining
employment, the provisions of subdivision (d) shall apply if the
dependent child is chiefly dependent on the subscriber for support
and maintenance.
(3) (A) If the dependent child takes a medical leave of absence
from school, but the nature of the dependent child's injury, illness,
or condition does not meet the requirements of paragraph (2), the
dependent child's coverage shall not terminate for a period not to
exceed 12 months or until the date on which the coverage is scheduled
to terminate pursuant to the terms and conditions of the plan,
whichever comes first. The period of coverage under this paragraph
shall commence on the first day of the medical leave of absence from
the school or on the date the physician determines the illness
prevented the dependent child from attending school, whichever comes
first. Any break in the school calendar shall not disqualify the
dependent child from coverage under this paragraph.
(B) Documentation or certification of the medical necessity for a
leave of absence from school shall be submitted to the plan at least
30 days prior to the medical leave of absence from the school, if the
medical reason for the absence and the absence are foreseeable, or
30 days after the start date of the medical leave of absence from
school and shall be considered prima facie evidence of entitlement to
coverage under this paragraph.
(4) This subdivision shall not apply to a specialized health care
service plan or to a Medicare supplement plan.
SEC. 7. SEC. 9. Section 10112.1 is
added to the Insurance Code, to read:
10112.1. (a) (1) A group or individual health insurance policy
that is issued, amended, renewed, or delivered on or after September
23, 2010, may not establish lifetime limits on the dollar value of
benefits for any participant or beneficiary.
(2) With respect to plan years beginning prior to January 1, 2014,
a group or individual health insurance policy that is issued,
amended, renewed, or delivered on or after September 23, 2010, may
only establish a restricted annual limit on the dollar value of
benefits for any participant or beneficiary with respect to the scope
of benefits that are essential health benefits under subsection (b)
of Section 1302 of the federal Patient Protection and Affordable Care
Act, as determined by the United States Secretary of Health and
Human Services.
(b) (1) Subject to the minimum interval established by the United
States Secretary of Health and Human Services pursuant to subsection
(b) of Section 2713 of Section 1001 of the federal Patient Protection
and Affordable Care Act, a group or individual health insurance
policy that is issued, amended, renewed, or delivered on or after
September 23, 2010, shall, at a minimum, provide coverage for, and
shall not impose any cost sharing requirements for, all of the
following:
(A) Evidence-based items or services that have in effect a rating
of "A" or "B" in the current recommendations of the United States
Preventive Services Task Force.
(B) Immunizations that have in effect a recommendation from the
Advisory Committee on Immunization Practices of the federal Centers
for Disease Control and Prevention with respect to the individual
involved.
(C) With respect to infants, children, and adolescents,
evidence-informed preventive care and screenings provided for in the
comprehensive guidelines supported by the federal Health Resources
and Services Administration.
(D) With respect to women, any additional preventive care and
screenings not described in subparagraph (A) as provided for in
comprehensive guidelines supported by the federal Health Resources
and Services Administration.
(2) For purposes of this subdivision, the current recommendations
of the United States Preventive Services Task Force regarding breast
cancer screening, mammography, and prevention shall be considered
the most current, other than recommendations issued by the task force
in November of 2009, or within 30 days of that month.
(3) Nothing in this subdivision shall be construed to prohibit a
health insurer from providing coverage for services in addition to
those recommended by the United States Preventive Services Task Force
or to deny coverage for services that are not recommended by the
task force.
(c) A group or individual health insurance policy that is issued,
amended, renewed, or delivered on or after September 23, 2010, may
not impose any preexisting condition exclusion with respect to
coverage under the policy of any insured under 19 years of age.
(d) This section shall not apply to a group or individual health
insurance policy that is not required to provide essential health
benefits. "Essential health benefits" shall have the meaning as
determined by the United States Secretary of Health and Human
Services pursuant to the federal Patient Protection and Affordable
Care Act.
(c) This section shall not apply to specialized health insurance
policies, Medicare supplement policies, CHAMPUS-supplement insurance
policies, TRICARE-supplement insurance policies, accident-only
insurance policies, or insurance policies excluded from the
definition of "health insurance" under subdivision (b) of Section
106.
(e)
(d) This section shall apply notwithstanding any other
provision of this part.
SEC. 10. Section 10198.7 of the
Insurance Code is amended to read:
10198.7. (a) No health benefit plan that covers three or more
persons and that is issued, renewed, or written by any insurer,
nonprofit hospital service plan, self-insured employee welfare
benefit plan, fraternal benefits society, or any other entity shall
exclude coverage for any individual on the basis of a preexisting
condition provision for a period greater than six months following
the individual's effective date of coverage, nor shall limit or
exclude coverage for a specific insured person by type of illness,
treatment, medical condition, or accident except for satisfaction of
a preexisting clause pursuant to this article. Preexisting condition
provisions contained in health benefit plans may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the six months immediately
preceding the effective date of coverage.
(b) No health benefit plan that covers one or two individuals and
that is issued, renewed, or written by any insurer, self-insured
employee welfare benefit plan, fraternal benefits society, or any
other entity shall exclude coverage on the basis of a preexisting
condition provision for a period greater than 12 months following the
individual's effective date of coverage, nor shall limit or exclude
coverage for a specific insured person by type of illness, treatment,
medical condition, or accident, except for satisfaction of a
preexisting condition clause pursuant to this article. Preexisting
condition provisions contained in health benefit plans may relate
only to conditions for which medical advice, diagnosis, care, or
treatment, including use of prescription drugs, was recommended or
received from a licensed health practitioner during the 12 months
immediately preceding the effective date of coverage.
(c) A carrier that does not utilize a preexisting condition
provision may impose a waiting or affiliation period not to exceed 60
days, before the coverage issued subject to this article shall
become effective. During the waiting or affiliation period, the
carrier is not required to provide health care services and no
premium shall be charged to the subscriber or enrollee.
(d) A carrier that does not utilize a preexisting condition
provision in health plans that cover one or two individuals may
impose a contract provision excluding coverage for waivered
conditions. No carrier may exclude coverage on the basis of a
waivered condition for a period greater than 12 months following the
individual's effective date of coverage. A waivered condition
provision contained in health benefit plans may relate only to
conditions for which medical advice, diagnosis, care, or treatment,
including use of prescription drugs, was recommended or received from
a licensed health practitioner during the 12 months immediately
preceding the effective date of coverage.
(e) In determining whether a preexisting condition provision, a
waivered condition provision, or a waiting or affiliation period
applies to any person, all health benefit plans shall credit the time
the person was covered under creditable coverage, provided the
person becomes eligible for coverage under the succeeding health
benefit plan within 62 days of termination of prior coverage,
exclusive of any waiting or affiliation period, and applies for
coverage under the succeeding plan within the applicable enrollment
period. A health benefit plan shall also credit any time an eligible
employee must wait before enrolling in the health benefit plan,
including any affiliation or employer-imposed waiting period.
However, if a person's employment has ended, the availability of
health coverage offered through employment or sponsored by an
employer has terminated or, an employer's contribution toward health
coverage has terminated, a carrier shall credit the time the person
was covered under creditable coverage if the person becomes eligible
for health coverage offered through employment or sponsored by an
employer within 180 days, exclusive of any waiting or affiliation
period, and applies for coverage under the succeeding plan within the
applicable enrollment period.
(f) No health benefit plan that covers three or more persons and
that is issued, renewed, or written by any insurer, nonprofit
hospital service plan, self-insured employee welfare benefit plan,
fraternal benefits society, or any other entity may exclude late
enrollees from coverage for more than 12 months from the date of the
late enrollee's application for coverage. No insurer, nonprofit
hospital service plan, self-insured employee welfare benefit plan,
fraternal benefits society, or any other entity shall require any
premium or other periodic charge to be paid by or on behalf of a late
enrollee during the period of exclusion from coverage permitted by
this subdivision.
(g) An individual's period of creditable coverage shall be
certified pursuant to subdivision (e) of Section 2701 of Title XXVII
of the federal Public Health Services Act, 42 U.S.C. Sec.
300gg(e) Act. (42 U.S.C. Sec. 300gg(e) .
(h) A group health benefit plan may not impose a preexisting
condition exclusion to any of the following:
(1) To a newborn individual, who, as of the last day of the 30-day
period beginning with the date of birth, applied for coverage
through the employer-sponsored plan.
(2) To a child who is adopted or placed for adoption before
attaining 18 years of age and who, as of the last day of the 30-day
period beginning with the date of adoption or placement for adoption,
is covered under creditable coverage and applies for coverage
through the employer-sponsored plan. This provision shall not apply
if, for 63 continuous days, the child is not covered under any
creditable coverage.
(3) To a condition relating to benefits for pregnancy or maternity
care.
(i) Any entity providing aggregate or specific stop loss coverage
or any other assumption of risk with reference to a health benefit
plan shall provide that the plan meets all requirements of this
article concerning waiting periods, preexisting condition provisions,
and late enrollees.
(j) Notwithstanding any other provision of this code, a health
benefit plan that is issued, amended, renewed, or delivered on or
after September 23, 2010, may not impose any preexisting condition
exclusion with respect to coverage under the plan of any insured
under 19 years of age.
SEC. 8. SEC. 11. Section 10277 of
the Insurance Code is amended to read:
10277. (a) A group health insurance policy that provides that
coverage of a dependent child of an employee or other member of the
covered group shall terminate upon attainment of the limiting age for
dependent children specified in the policy, shall also provide that
attainment of the limiting age shall not operate to terminate the
coverage of the child while the child is and continues to meet both
of the following criteria:
(1) Incapable of self-sustaining employment by reason of a
physically or mentally disabling injury, illness, or condition.
(2) Chiefly dependent upon the employee or member for support and
maintenance.
(b) The insurer shall notify the employee or member that the
dependent child's coverage will terminate upon attainment of the
limiting age unless the employee or member submits proof of the
criteria described in paragraphs (1) and (2) of subdivision (a) to
the insurer within 60 days of the date of receipt of the
notification. The insurer shall send this notification to the
employee or member at least 90 days prior to the date the child
attains the limiting age. Upon receipt of a request by the employee
or member for continued coverage of the child and proof of the
criteria described in paragraphs (1) and (2) of subdivision (a), the
insurer shall determine whether the dependent child meets that
criteria before the child attains the limiting age. If the insurer
fails to make the determination by that date, it shall continue
coverage of the child pending its determination.
(c) The insurer may subsequently request information about a
dependent child whose coverage is continued beyond the limiting age
under subdivision (a), but not more frequently than annually after
the two-year period following the child's attainment of the limiting
age.
(d) If the employee or member changes carriers to another insurer
or to a health care service plan, the new insurer or plan shall
continue to provide coverage for the dependent child. The new plan or
insurer may request information about the dependent child initially
and not more frequently than annually thereafter to determine if the
child continues to satisfy the criteria in paragraphs (1) and (2) of
subdivision (a). The employee or member shall submit the information
requested by the new plan or insurer within 60 days of receiving the
request.
(e) Except as specified in this subdivision and except as
necessary to be consistent with the regulations promulgated by the
United States Secretary of Health and Human Services that define
"dependent" for purposes of the limiting age, under no circumstances
shall the limiting age be less than 26 years of age under a
group or individual health insurance policy that provides coverage of
a dependent child . Nothing in this section shall
require employers participating in the Public Employees' Medical and
Hospital Care Act to pay the cost of coverage for dependents who are
at least 23 years of age, but less than 26 years of age. Employees or
annuitants receiving benefits pursuant to the Public Employees'
Medical and Hospital Care Act may elect to provide coverage to their
dependents who are at least 23 years of age, but are less than 26
years of age, provided they contribute the premium for that coverage.
Nothing in this section shall require the University of California
to pay the cost of coverage for dependents who are at least 23 years
of age, but less than 26 years of age. Employees or annuitants of the
University of California may elect to provide coverage to their
dependents who are at least 23 years of age, but less than 26 years
of age, provided they contribute the premium for that coverage.
Nothing in this section shall require a city to pay the cost of
coverage for dependents who are at least 23 years of age, but less
than 26 years of age. Employees or annuitants of a city may elect to
provide coverage to their dependents who are at least 23 years of
age, but less than 26 years of age, provided they contribute the
premium for that coverage. The provision requiring the limiting age
to be up to 26 years of age shall not be effective for employment
contracts subject to collective bargaining that are effective prior
to September 23, 2010. Any employment contract subject to collective
bargaining that is issued, amended, or renewed after on and after
September 23, 2010, shall be subject to the provisions of this
section.
(f) If a group health insurance policy provides coverage for a
dependent child who is over 18 26 years
of age and enrolled as a full-time student at a secondary or
postsecondary educational institution, the following shall apply:
(1) Any break in the school calendar shall not disqualify the
dependent child from coverage.
(2) If the dependent child takes a medical leave of absence, and
the nature of the dependent child's injury, illness, or condition
would render the dependent child incapable of self-sustaining
employment, the provisions of subdivision (a) shall apply if the
dependent child is chiefly dependent on the policyholder for support
and maintenance.
(3) (A) If the dependent child takes a medical leave of absence
from school, but the nature of the dependent child's injury, illness,
or condition does not meet the requirements of paragraph (2), the
dependent child's coverage shall not terminate for a period not to
exceed 12 months or until the date on which the coverage is scheduled
to terminate pursuant to the terms and conditions of the policy,
whichever comes first. The period of coverage under this paragraph
shall commence on the first day of the medical leave of absence from
the school or on the date the physician determines the illness
prevented the dependent child from attending school, whichever comes
first. Any break in the school calendar shall not disqualify the
dependent child from coverage under this paragraph.
(B) Documentation or certification of the medical necessity for a
leave of absence from school shall be submitted to the insurer at
least 30 days prior to the medical leave of absence from the school,
if the medical reason for the absence and the absence are
foreseeable, or 30 days after the start date of the medical leave of
absence from school and shall be considered prima facie evidence of
entitlement to coverage under this paragraph.
(4) This subdivision shall not apply to a policy of specialized
health insurance, Medicare supplement insurance, CHAMPUS-supplement,
or TRICARE-supplement insurance policies, or to hospital-only,
accident-only, or specified disease insurance policies that reimburse
for hospital, medical, or surgical benefits.
SEC. 12. Section 10708 of the Insurance
Code is amended to read:
10708. (a) Preexisting condition provisions of health benefit
plans shall not exclude coverage for a period beyond six months
following the individual's effective date of coverage and may only
relate to conditions for which medical advice, diagnosis, care, or
treatment, including the use of prescription medications, was
recommended by or received from a licensed health practitioner during
the six months immediately preceding the effective date of coverage.
(b) A carrier that does not utilize a preexisting condition
provision may impose a waiting or affiliation period, not to exceed
60 days, before the coverage issued subject to this chapter shall
become effective. During the waiting or affiliation period, the
carrier is not required to provide health care benefits and no
premiums shall be charged to the subscriber or enrollee.
(c) In determining whether a preexisting condition provision or a
waiting period applies to any person, a plan shall credit the time
the person was covered under creditable coverage, provided the person
becomes eligible for coverage under the succeeding plan contract
within 62 days of termination of prior coverage, exclusive of any
waiting or affiliation period, and applies for coverage with the
succeeding health benefit plan contract within the applicable
enrollment period. A plan shall also credit any time an eligible
employee must wait before enrolling in the health benefit plan,
including any postenrollment or employer-imposed waiting or
affiliation period. However, if a person's employment has ended, the
availability of health coverage offered through employment or
sponsored by an employer has terminated, or an employer's
contribution toward health coverage has terminated, a plan shall
credit the time the person was covered under creditable coverage if
the person becomes eligible for health coverage offered through
employment or sponsored by an employer within 180 days, exclusive of
any waiting or affiliation period, and applies for coverage under the
succeeding health benefit plan within the applicable enrollment
period.
(d) Group health benefit plans may not impose a preexisting
conditions exclusion to the following:
(1) To a newborn individual, who, as of the last day of the 30-day
period beginning with the date of birth, applied for coverage
through the employer-sponsored plan.
(2) To a child who is adopted or placed for adoption before
attaining 18 years of age and who, as of the last day of the 30-day
period beginning with the date of adoption or placement for adoption,
is covered under creditable coverage and applies for coverage
through the employer-sponsored plan. This provision shall not apply
if, for 63 continuous days, the child is not covered under any
creditable coverage.
(3) To a condition relating to benefits for pregnancy or maternity
care.
(e) A carrier providing aggregate or specific stop loss coverage
or any other assumption of risk with reference to a health benefit
plan shall provide that the plan meets all requirements of this
section concerning preexisting condition provisions and waiting or
affiliation periods.
(f) In addition to the preexisting condition exclusions authorized
by subdivision (a) and the waiting or affiliation period authorized
by subdivision (b), carriers providing coverage to a guaranteed
association may impose on employers or individuals purchasing
coverage who would not be eligible for guaranteed coverage if they
were not purchasing through the association a waiting or affiliation
period, not to exceed 60 days, before the coverage issued subject to
this chapter shall become effective. During the waiting or
affiliation period, the carrier is not required to provide health
care benefits and no premiums shall be charged to the insured.
(g) Notwithstanding any other provision of this code, a group
health benefit plan that is issued, amended, renewed, or delivered on
or after September 23, 2010, may not impose any preexisting
condition exclusion with respect to coverage under the plan of any
insured under 19 years of age.
SEC. 9. SEC. 13. 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.