BILL NUMBER: AB 1602 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 17, 2010
AMENDED IN SENATE AUGUST 2, 2010
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 add Title 22 (commencing with Section 100500)
to the Government Code, to amend Sections 1357.06, 1357.51, and 1373
of, and to add Sections 1346.2 and 1367.001 to, the Health and Safety
Code, and to amend Sections 10198.7, 10277, and 10708 of, and to add
Sections 10112.1 and 10112.2 to, the Insurance An act
to add Sections 100502, 100503, 100504, 100505, 100506, 100507,
100520, 100521, and 100522 to the Government Code, to add Section
1366.6 to the Health and Safety Code, and to add Section 10112.3 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
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 provides for the licensure and regulation of health
care service plans by the Department of Managed Health Care and makes
a willful violation of its provisions a crime. Existing law also
provides for the regulation of health insurers by the Department of
Insurance.
Existing law, the federal Patient Protection and Affordable Care
Act (PPACA) , 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 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
, and would , contingent on the enactment
of SB 900, which would create the California Health Benefit Exchange
(the Exchange), specify the powers and duties of the board
governing the Exchange relative to determining eligibility for
enrollment in the Exchange and arranging for coverage with
under qualified health plans, and would require
the board to facilitate the purchase of qualified health plans
through the Exchange by qualified individuals and qualified small
employers by January 1, 2014. The bill would prohibit a
carrier that is not participating in the Exchange from offering a
catastrophic plan, as defined, in the individual market.
The bill would create the California Health Trust Fund as a
continuously appropriated fund and would enact other related
provisions.
The bill would impose various requirements on participating plans
and insurers and, commencing January 1, 2014, on nonparticipating
plans and insurers, as specified. Because a willful violation of
these requirements by a health care service plan would be a crime,
the bill would impose a state-mandated local program.
The bill would require the Director of the Department of Managed
Health Care and the Insurance Commissioner to review an Internet
portal developed by the United States Department of Health and Human
Services and to jointly develop and maintain an electronic
clearinghouse of coverage available in the individual and small group
markets if the federal Internet portal does not adequately achieve
certain purposes.
(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 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 also prohibit
preexisting condition exclusions for enrollees or insureds under 19
years of age.
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
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 to California law in order to be
establish an American Health Benefit Exchange in
California and its administrative authority in a manner that is
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 is the intent of the Legislature to
do all of the following:
(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) Strengthen the health care delivery system.
(c) Guarantee the availability and renewability of health care
coverage through the private health insurance market to qualified
individuals and qualified small employers.
(d) Require that health care service plans and health insurers
issuing coverage in the individual and small employer markets compete
on the basis of price, quality, and service, and not on risk
selection.
(e) Meet the requirements of the federal act and all
applicable federal guidance and regulations .
SEC. 3. Title 22 (commencing with Section
100500) is added to the Government Code, to read:
TITLE 22. CALIFORNIA HEALTH BENEFIT EXCHANGE
100500. For purposes of this division, the following definitions
shall apply:
(a) "Board" means the board described in subdivision (a) of
Section 100501.
(b) "Carrier" means either a private health insurer holding a
valid outstanding certificate of authority from the Insurance
Commissioner or a health care service plan, as defined under
subdivision (f) of Section 1345 of the Health and Safety Code,
licensed by the Department of Managed Health Care.
(c) "Exchange" means the California Health Benefit Exchange
established by Section 100501.
(d) "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).
(e) "Fund" means the California Health Trust Fund established by
Section 100520.
(f) "SHOP Program" means the Small Business Health Options Program
established by subdivision (m) of Section 100502.
100501. (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 who are residents of California. 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. 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, other than an ex officio member, 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) Individual health care coverage.
(2) Small group health care coverage.
(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) In making appointments to the board, the appointing
authorities shall take into consideration the cultural, ethnic, and
geographical diversity of the state so that the board's composition
reflects the communities of California.
(f) 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
while serving on the board and during the first year following his or
her service on the board. 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.
(g) No member of the board shall make, participate in making, or
in any way attempt to use his or her official position to influence
the making of any decision that he or she knows or has reason to know
will have a reasonably foreseeable material financial effect,
distinguishable from its effect on the public generally, on him or
her or a member of his or her immediate family, or on either of the
following:
(1) Any source of income, other than gifts and other than loans by
a commercial lending institution in the regular course of business
on terms available to the public without regard to official status
aggregating two hundred fifty dollars ($250) or more in value
provided to, received by, or promised to the member within 12 months
prior to the time when the decision is made.
(2) Any business entity in which the member is a director,
officer, partner, trustee, employee, or holds any position of
management.
(h) There shall not be any liability in a private capacity on the
part of the board or any member of the board, or any officer or
employee of the board, for or on account of any act performed or
obligation entered into in an official capacity, when done in good
faith, without intent to defraud, and in connection with the
administration, management, or conduct of this title or affairs
related to this title.
(i) The board shall hire an executive director to organize,
administer, and manage the operations of the Exchange. The executive
director shall serve at the pleasure of the board.
(j) 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), except that the board may hold closed
sessions when considering matters related to litigation, personnel,
contracting, and rates.
(k) The board shall apply for 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 (i) 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. If a majority of the board has not been
appointed 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
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.
100502. The board shall, at a minimum, do all of the following
SEC. 3. Section 100502 is added to the Government Code,
to read:
100502. The board shall, at a minimum, do all of
the following to implement Section 1311 of the federal act:
(a) 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:
(1) 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.
(2) (A) 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.
(B) The information required under subparagraph (A) shall be
provided in plain language, as defined in subparagraph (B) of
paragraph (3) of subdivision (e) of Section 1311 of the federal act.
(3) 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.
(b) Provide for the operation of a toll-free telephone hotline to
respond to requests for assistance.
(c) Maintain an Internet Web site through which enrollees and
prospective enrollees of qualified health plans may obtain
standardized comparative information on those plans.
(d) 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.
(e) 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.
(f) 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.
(g) 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 reduction under Section 1402 of the
federal act.
(h) 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
either of the following:
(1) There is no affordable qualified health plan available through
the Exchange or the individual's employer covering the individual.
(2) The individual meets the requirements for any other exemption
from the individual responsibility requirement or penalty.
(i) Transfer to the Secretary of the Treasury all of the
following:
(1) A list of the individuals who are issued a certification under
subdivision (h), including the name and taxpayer identification
number of each individual.
(2) 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:
(A) The employer did not provide minimum essential coverage.
(B) 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.
(3) 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 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.
(j) Provide to each employer the name of each employee of the
employer described in paragraph (2) of subdivision (i) who ceases
coverage under a qualified health plan during a plan year and the
effective date of that cessation.
(k) 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.
(l) 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:
(1) Conduct public education activities to raise awareness of the
availability of qualified health plans.
(2) 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.
(3) Facilitate enrollment in qualified health plans.
(4) 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 her health plan,
coverage, or a determination under that plan or coverage.
(5) Provide information in a manner that is culturally and
linguistically appropriate to the needs of the population being
served by the Exchange.
(m) 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 through the
Exchange in the small group employer
market in a manner consistent with paragraph (2) of subdivision (a)
of Section 1312 of the federal act.
100503. In addition to meeting the minimum requirements of
SEC. 4. Section 100503 is added to the Government Code,
to read:
100503. In addition to meeting the minimum
requirements of Section 1311 of the federal act, the board
shall do all of the following:
(a) Determine the criteria and process for eligibility,
enrollment, and disenrollment of enrollees and potential enrollees in
the Exchange and coordinate that process with the state and
local government entities administering other health care coverage
programs, including the State Department of Health Care Services, the
Managed Risk Medical Insurance Board, and California counties, in
order to ensure consistent eligibility and enrollment
processes and seamless transitions between coverage .
(b) Develop processes to coordinate with the county entities that
administer eligibility for the Medi-Cal program and the entity that
determines eligibility for the Healthy Families Program, including,
but not limited to, processes for case transfer, referral, and
enrollment in the Exchange of individuals applying for assistance to
those entities, if allowed or required by federal law.
(c) 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.
(d) 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.
(e) Require, as a condition of participation in the Exchange,
carriers to fairly and affirmatively offer, market, and sell in the
Exchange at least one product within each of the five
levels of coverage contained in subdivisions (d) and (e) of Section
1302 of the federal act. The board may require carriers to offer
additional products within each of those five levels of coverage.
This subdivision shall not apply to a carrier that solely offers
supplemental coverage in the Exchange under paragraph (10) of
subdivision (a) of Section 100504.
(f) Require, as a condition of participation in the Exchange,
carriers that sell any products outside the Exchange to do both of
the following:
(1) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
(2) 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.
(g) Determine when an enrollee's coverage commences and the extent
and scope of coverage.
(h) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.
(i) Determine and approve cost-sharing provisions for qualified
health plans.
(j) Establish uniform billing and payment policies for qualified
health plans offered in the Exchange to ensure consistent enrollment
and disenrollment activities for individuals enrolled in the
Exchange.
(j)
(k) Undertake activities necessary to market and
publicize the availability of health care coverage and federal
subsidies through the Exchange. The board shall also undertake
outreach and enrollment activities that seek to assist enrollees and
potential enrollees with enrolling and reenrolling in the Exchange in
the least burdensome manner, including populations that may
experience barriers to enrollment, such as the disabled and those
with limited English language proficiency.
(k)
(l) Select and set performance standards and
compensation for navigators selected under subdivision (l) of Section
100502.
(l)
(m) Employ necessary staff.
(m) Assess a charge, at the lowest possible rate, on the qualified
health plans offered by carriers to support the development,
(n) Assess a charge on the qualified
health plans offered by carriers that is reasonable and necessary to
support the development, operations, and prudent cash
management of the Exchange. This charge shall not affect the
requirement under Section 1301 of the federal act that carriers
charge the same premium rate for each qualified health plan whether
offered inside or outside the Exchange.
(n)
(o) Authorize expenditures, as necessary, from the
California Health Trust Fund to pay program expenses to administer
the Exchange.
(o)
(p) 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.
(p)
(q) 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.
(q)
(r) Exercise all powers reasonably necessary to carry
out the powers and responsibilities expressly granted or
imposed by this act. and comply with the duties,
responsibilities, and requirements of this act and the federal act.
(r)
(s) Consult with stakeholders relevant to carrying out
the activities under this title, including, but not limited to, all
of the following:
(1) Health care consumers who are enrolled in health plans.
(2) Individuals and entities with experience in facilitating
enrollment in 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.
(s)
(t) Facilitate the purchase of qualified health plans
in the Exchange by qualified individuals and qualified small
employers no later than January 1, 2014.
(t)
(u) Report, or contract with an independent entity to
report, to the Legislature by December 1, 2018, on whether to adopt
the option in paragraph (3) of subdivision (c) of Section 1312 of the
federal act to merge the individual and small group
employer markets. In its report, the board shall
provide information, based on at least two years of data from the
Exchange, on the potential impact on rates paid by individuals and by
small employers in a merged individual and small group
employer market, as compared to the rates paid
by individuals and small employers if a separate individual and small
group employer market is maintained. A
report made pursuant to this paragraph shall be submitted pursuant
to Section 9795.
(u)
(v) With respect to the SHOP Program, collect premiums
and administer all other necessary and related tasks, including, but
not limited to, enrollment and plan payment, in order to make the
offering of employee plan choice as simple as possible for qualified
small employers.
(v)
(w) Require carriers participating in the Exchange to
immediately notify the Exchange, under the terms and conditions
established by the board when an individual is or will be enrolled in
or disenrolled from any qualified health plan offered by the
carrier.
(w)
(x) Ensure that the Exchange provides oral
interpretation services in any language for individuals seeking
coverage through the Exchange and makes available a toll-free
telephone number for the hearing and speech impaired. The board shall
ensure that written information made available by the Exchange is
presented in a plainly worded, easily understandable format and made
available in prevalent languages.
100504. (a) The board may do the following:
SEC. 5. Section 100504 is added to the Government Code,
to read:
100504. (a) The board may do the following:
(1) With respect to individual coverage made available in the
Exchange, collect premiums and assist in the administration of
subsidies.
(2) Enter into contracts.
(3) Sue and be sued.
(4) 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.
(5) 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.
(6) Adopt rules and regulations, as necessary. Until January 1,
2016, 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). 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.
(7) Collaborate with the State Department of Health Care Services
and the Managed Risk Medical Insurance Board , to the
extent possible, to allow an individual the option to remain enrolled
with his or her carrier
and provider network in the event the individual experiences a loss
of eligibility of premium tax credits and becomes eligible for the
Medi-Cal program or the Healthy Families Program, or loses
eligibility for the Medi-Cal program or the Healthy Families Program
and becomes eligible for premium tax credits through the Exchange.
(8) Share information with relevant state departments, consistent
with the confidentiality provisions in Section 1411 of the federal
act, necessary for the administration of the Exchange.
(9) Require carriers participating in the Exchange to make
available to the Exchange and regularly update an electronic
directory of contracting health care providers so that individuals
seeking coverage through the Exchange can search by health care
provider name to determine which health plans in the Exchange include
that health care provider in their network. The board may also
require a carrier to provide regularly updated information to the
Exchange as to whether a health care provider is accepting new
patients for a particular health plan. The Exchange may provide an
integrated and uniform consumer directory of health care providers
indicating which carriers the providers contract with and whether the
providers are currently accepting new patients. The Exchange may
also establish methods by which health care providers may transmit
relevant information directly to the Exchange, rather than through a
carrier.
(10) Make available supplemental coverage for enrollees of the
Exchange to the extent permitted by the federal act, provided that no
General Fund money is used to subsidize the cost of that coverage.
(b) The Exchange shall only collect information from individuals
or designees of individuals necessary to administer the Exchange and
consistent with Section 1411 of the federal act.
(c) The Exchange shall have the authority to offer standardized
products.
100505. A carrier that is not participating in the Exchange shall
not offer, market, or sell a catastrophic plan, as defined in
subdivision (e) of Section 1302 of the federal act, in the individual
market.
100520. (a) The California Health Trust Fund is hereby
SEC. 6. Section 100505 is added to the
Government Code , to read:
100505. The board shall establish and use a competitive process
to select participating carriers and any other contractors under this
title. Any contract entered into pursuant to this title shall be
exempt from Chapter 2 (commencing with Section 10100) of Division 2
of the Public Contract Code, and shall be exempt from the review or
approval of any division of the Department of General Services.
SEC. 7. Section 100506 is added to the
Government Code , to read:
100506. (a) The board shall establish an appeal process for
prospective and current enrollees of the Exchange that complies with
all requirements of the federal act concerning the role of a state
Exchange in facilitating federal appeals of Exchange-related
determinations. In no event shall the scope of those appeals be
construed to be broader than the requirements of the federal act.
Once the federal regulations concerning appeals have been issued in
final form by the United States Secretary of Health and Human
Services, the board may establish additional requirements related to
appeals.
(b) The board shall not be required to provide an appeal if the
subject of the appeal is within the jurisdiction of the Department of
Managed Health Care pursuant to the Knox-Keene Health Care Service
Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of
Division 2 of the Health and Safety Code) and its implementing
regulations, or within the jurisdiction of the Department of
Insurance pursuant to the Insurance Code and its implementing
regulations.
SEC. 8. Section 100507 is added to the
Government Code , to read:
100507. (a) Notwithstanding any other provision of law, the
Exchange shall not be subject to licensure or regulation by the
Department of Insurance or the Department of Managed Health Care.
(b) Carriers that contract with the Exchange shall have a license
or certificate of authority from, and shall be in good standing with,
their respective regulatory agencies.
SEC. 9. Section 100520 is added to the Government Code,
to read:
100520. (a) The California
Health Trust Fund is hereby created in the State Treasury for
the purpose of this title. Notwithstanding Section 13340, all moneys
in the fund shall be continuously appropriated without regard to
fiscal year for the purposes of this title. 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.
(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.
(e) Notwithstanding Section 16305.7, 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. 10. Section 100521 is added to the
Government Code , to read:
100521. The state shall not be liable beyond the assets of the
fund for any obligations incurred, or liabilities sustained, in the
operation of the Exchange.
SEC. 11. Section 100522 is added to the
Government Code , to read:
100522. The Exchange shall not make expenditures that exceed the
amount of available moneys in the fund.
SEC. 12. Section 1366.6 is added to the
Health and Safety Code , to read:
1366.6. (a) For purposes of this section, the following
definitions shall apply:
(1) "Exchange" means the California Health Benefit Exchange
established in Title 22 (commencing with Section 100500) of the
Government Code.
(2) "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), and any amendments to, or regulations or guidance issued
under, those acts.
(3) "Qualified health plan" has the same meaning as that term is
defined in Section 1301 of the federal act.
(4) "Small employer" has the same meaning as that term is defined
in Section 1357.
(b) Health care service plans participating in the Exchange shall
fairly and affirmatively offer, market, and sell in the Exchange at
least one product within each of the five levels of coverage
contained in subdivisions (d) and (e) of Section 1302 of the federal
act. The board established under Section 100501 of the Government
Code may require plans to sell additional products within each of
those levels of coverage. This subdivision shall not apply to a plan
that solely offers supplemental coverage in the Exchange under
paragraph (10) of subdivision (a) of Section 100504 of the Government
Code.
(c) Health care service plans participating in the Exchange that
sell any products outside the Exchange shall do both of the
following:
(1) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
(2) 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.
(d) Commencing January 1, 2014, a health care service plan shall,
with respect to plan contracts that cover hospital, medical, or
surgical expenses, only sell the five levels of coverage contained in
subdivisions (d) and (e) of Section 1302 of the federal act, except
that a health care service plan that does not participate in the
Exchange shall, with respect to plan contracts that cover hospital,
medical, or surgical benefits, only sell the four levels of coverage
contained in subdivision (d) of Section 1302 of the federal act.
(e) Commencing January 1, 2014, a health care service plan that
does not participate in the Exchange shall, with respect to plan
contracts that cover hospital, medical, or benefits, offer the
standardized products for qualified health plans offered in the
Exchange. This subdivision shall not be construed to prohibit the
plan from offering other products provided that it complies with
subdivision (d).
SEC. 13. Section 10112.3 is added to the
Insurance Code , to read:
10112.3. (a) For purposes of this section, the following
definitions shall apply:
(1) "Exchange" means the California Health Benefit Exchange
established in Title 22 (commencing with Section 100500) of the
Government Code.
(2) "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), and any amendments to, or regulations or guidance issued
under, those acts.
(3) "Qualified health plan" has the same as that term is defined
in Section 1301 of the federal act.
(4) "Small employer" has the same meaning as that term is defined
in Section 10700.
(b) Health insurers participating in the Exchange shall fairly and
affirmatively offer, market, and sell in the Exchange at least one
product within each of the five levels of coverage contained in
subdivisions (d) and (e) of Section 1302 of the federal act. The
board established under Section 100501 of the Government Code may
require insurers to sell additional products within each of those
levels of coverage. This subdivision shall not apply to an insurer
that solely offers supplemental coverage in the Exchange under
paragraph (10) of subdivision (a) of Section 100504 of the Government
Code.
(c) Health insurers participating in the Exchange that sell any
products outside the Exchange shall do both of the following:
(1) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
(2) 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.
(d) Commencing January 1, 2014, a health insurer, with respect to
policies that cover hospital, medical, or surgical benefits, may only
sell the five levels of coverage contained in subdivisions (d) and
(e) of Section 1302 of the federal act, except that a health insurer
that does not participate in the Exchange may, with respect to
policies that cover hospital, medical, or surgical benefits only sell
the four levels of coverage contained in subdivision (d) of Section
1302 of the federal act.
(e) Commencing January 1, 2014, a health insurer that does not
participate in the Exchange shall, with respect to policies that
cover hospital, medical, or surgical expenses, offer the standardized
products for qualified health plans offered in the Exchange. This
subdivision shall not be construed to prohibit the insurer from
offering other products provided that it complies with subdivision
(d).
SEC. 14. 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.
SEC. 15. This act shall become operative only if
Senate Bill 900 of the 2009-10 Regular Session is also enacted and
becomes operative. All matter omitted in this version of the
bill appears in the bill as amended in the Senate, August 2, 2010.
(JR11)