BILL NUMBER: AB 1759	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Blumenfield

                        FEBRUARY 8, 2010

   An act to amend Section 1374.20 of the Health and Safety Code, and
to amend Section 10199.48 of the Insurance Code, relating to health
care coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1759, as introduced, Blumenfield. Health care coverage: premium
rates.
   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 its provisions a crime. Existing law provides for the
regulation of health insurers by the Department of Insurance.
Existing law prohibits, except as specified, a health care service
plan or a health insurer from changing its premium rates or
applicable copayments or coinsurances or deductibles for group health
care service plan contracts or group health insurance policies after
the group contractholder or group policyholder has delivered written
acceptance of the contract or policy, after the start of the open
enrollment period, or after receipt of the premium payment for the
first month of coverage.
   This bill would prohibit a health care service plan or health
insurer from using a change in demographics or enrollment as the
basis for a premium rate change during the length of the contract.
   Because this bill would prohibit certain actions by health care
service plans, the willful violation of which would be a crime, it
would impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1374.20 of the Health and Safety Code is
amended to read:
   1374.20.  (a)  No group health care service plan shall change the
premium rates or applicable copayments or coinsurances or deductibles
for the length of the contract, except as specified in subdivision
(b), during any of the following time periods:
   (1)  After the group contractholder has delivered written notice
of acceptance of the contract.
   (2)  After the start of the employer's annual open enrollment
period.
   (3)  After the receipt of payment of the premium for the first
month of coverage in accordance with the contract effective date.
   (b)  Changes to the premium rates or applicable copayments or
coinsurances or deductibles of a contract shall, subject to the plan
meeting the requirements of this article, be allowed in any of the
following circumstances:
   (1)  When authorized or required in the group contract.
   (2)  When the contract was agreed to under a preliminary agreement
that states that it is subject to execution of a definitive
agreement.
   (3)  When the plan and contractholder mutually agree in writing.

   (c) A health care service plan shall not use a change in
demographics or enrollment as the basis for a premium rate change
during the length of the contract. 
  SEC. 2.  Section 10199.48 of the Insurance Code is amended to read:

   10199.48.  (a) No health insurer shall, with regard to a group
contract, change the premium rates or applicable copayments or
coinsurances or deductibles for the length of the contract, except as
specified in subdivision (b), during any of the following time
periods:
   (1) After the group policyholder or group contractholder has
delivered written notice of acceptance of the contract or policy.
   (2) After the start of the employer's annual open enrollment
period.
   (3) After the receipt of payment of the premium for the first
month of coverage in accordance with the contract or policy effective
date.
   (b) Changes to the premium rates or applicable copayments or
coinsurances or deductibles of a contract or policy shall, subject to
the insurer meeting the requirements of this chapter, be allowed in
any of the following circumstances:
   (1) When authorized or required in the group contract or policy.
   (2) When the contract or policy was agreed to under a preliminary
agreement that states that it is subject to execution of a definitive
agreement.
   (3) When the insurer and the policyholder or contractholder
mutually agree in writing. 
   (c) A health insurer shall not use a change in demographics or
enrollment as the basis for a premium rate change during the length
of the contract. 
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.