BILL NUMBER: AB 2345 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 22, 2010
AMENDED IN ASSEMBLY APRIL 8, 2010
INTRODUCED BY Assembly Member De La Torre
FEBRUARY 19, 2010
An act to add Section 1342.1 to the Health and Safety
Code, and to add Section 10121.8 to amend Section
10113.95 of the Insurance Code, relating to health care
coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 2345, as amended, De La Torre. Health care.
Individual health care coverage: health insurers.
Existing law provides for the regulation of health insurers by the
Department of Insurance and requires a health insurer to have
written policies, procedures, and underwriting guidelines
establishing the criteria and process whereby the insurer makes its
decision to provide or to deny coverage to individuals who apply for
coverage and sets the rate for that coverage. Existing law requires
an insurer to annually file with the commissioner a general
description of the criteria, policies, procedures, or guidelines that
the insurer uses for rating and underwriting decisions related to
individual health insurance policies, as specified.
This bill would additionally require an insurer to annually post
on its Internet Web site that information the insurer uses for rating
and underwriting decisions related to individual health insurance
policies, as specified.
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 violation
of the act a crime. Existing law also provides for the regulation of
health insurers by the Department of Insurance.
This bill would, on and after January 1, 2011, require health care
service plans and health insurers that issue, sell, renew, or offer
contracts or group policies for health care coverage in this state to
meet the requirements of specified provisions of the federal Public
Health Service Act.
Because a violation of these provisions by a health care service
plan would be a crime, this bill would impose a state-mandated local
program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes
no . State-mandated local program: yes
no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10113.95 of the
Insurance Code is amended to read:
10113.95. (a) A health insurer that issues, renews, or amends
individual health insurance policies shall be subject to this
section.
(b) An insurer subject to this section shall have written
policies, procedures, or underwriting guidelines establishing the
criteria and process whereby the insurer makes its decision to
provide or to deny coverage to individuals applying for coverage and
sets the rate for that coverage. These guidelines, policies, or
procedures shall assure ensure that the
plan rating and underwriting criteria comply with Sections 10140 and
10291.5 and all other applicable provisions.
(c) (1) On or before June 1, 2006, and
annually thereafter, every insurer shall file with the commissioner a
general description of the criteria, policies, procedures, or
guidelines that the insurer uses for rating and underwriting
decisions related to individual health insurance policies, which
means automatic declinable health conditions, health conditions that
may lead to a coverage decline, height and weight standards, health
history, health care utilization, lifestyle, or behavior that might
result in a decline for coverage or severely limit the health
insurance products for which they would be eligible. An
(2) An insurer may comply with
this section by submitting to the department underwriting materials
or resource guides provided to agents and brokers, provided that
those materials include the information required to be submitted by
this section.
(3) January 1, 2011, and annually thereafter, every insurer shall
post on its Internet Web site the information specified in paragraph
(1).
(d) Commencing September 1, 2006, the commissioner shall post on
the department's Web site, in a manner accessible and understandable
to consumers, general, noncompany specific information about rating
and underwriting criteria and practices in the individual market and
information about the Major Risk Medical Insurance Program. The
commissioner shall develop the information for the Web site in
consultation with the Department of Managed Health Care to enhance
the consistency of information provided to consumers. Information
about individual health insurance shall also include the following
notification:
"Please examine your options carefully before declining group
coverage or continuation coverage, such as COBRA, that may be
available to you. You should be aware that companies selling
individual health insurance typically require a review of your
medical history that could result in a higher premium or you could be
denied coverage entirely."
(e) Nothing in this section shall authorize public disclosure of
company-specific rating and underwriting criteria and practices
submitted to the commissioner.
(f) This section shall not apply to a closed block of business, as
defined in Section 10176.10.
SECTION 1. Section 1342.1 is added to the
Health and Safety Code, to read:
1342.1. On and after January 1, 2011, every health care service
plan that issues, sells, renews, or offers contracts for health care
coverage in this state in the small or large group markets shall meet
the requirements of Part A (commencing with Section 300gg) of
Subchapter XXV of Chapter 6A of Title 42 of the United States Code.
SEC. 2. Section 10121.8 is added to the
Insurance Code, to read:
10121.8. On and after January 1, 2011, every health insurer that
issues, sells, or offers group policies for health care coverage in
this state in the small or large group markets shall meet the
requirements of Part A (commencing with Section 300gg) of Subchapter
XXV of Chapter 6A of Title 42 of the United States Code.
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.