BILL NUMBER: SB 1313 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Lieu
FEBRUARY 23, 2012
An act to amend Section 1361 of, and to add Sections 1360.2,
1361.2, 1361.3, 1361.4, 1363.06, 1367.004, 1367.041 to, the Health
and Safety Code, and to amend Sections 781 and 790.03 of, and to add
Sections 783.2, 1748.1, 10112.26, 10127.14, 10127.45, 10133.10 to,
the Insurance Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 1313, as introduced, Lieu. Health care coverage.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975
(Knox-Keene Act), provides for the licensure and regulation of health
care service plans by the Department of Managed Health Care and
makes a willful violation of the act a crime. Existing law also
provides for the regulation of health insurers by the Department of
Insurance. Existing law prohibits a health care service plan from
publishing or distributing an advertisement unless a copy thereof has
first been filed with the Director of the Department of Managed
Health Care at least 30 days prior to that use and the director has
not found the advertisement to be untrue, misleading, deceptive, or
in violation of the Knox-Keene Act within those 30 days, except as
specified. Under existing law, if an advertisement fails to comply
with the Knox-Keene Act, the director has the authority to require a
plan to publish a correction or retraction of an untrue, misleading,
or deceptive statement contained in the advertisement and to prohibit
the plan from publishing the advertisement or a material revision
thereof without filing a copy with the director, as specified.
Existing law authorizes the director to exempt a plan or
advertisement from these requirements.
This bill would, until January 1, 2020, prohibit a plan from
publishing or distributing an advertisement unless a copy has first
been filed with the director at least 90 days prior to that use and
the director has not found the advertisement to be untrue,
misleading, deceptive, or in violation of the Knox-Keene Act within
those 90 days. Under the bill, if an advertisement fails to comply
with the Knox-Keene Act, the director would be mandated to require a
plan to publish a correction or retraction of an untrue, misleading,
or deceptive statement contained in the advertisement and to prohibit
the plan from publishing the advertisement or a material revision
thereof without filing a copy with the director, as specified. The
bill would also prohibit the director, until January 1, 2020, from
exempting any advertisements from these requirements. The bill would
also require health insurers and specified insurance agents to comply
with similar advertising requirements.
Existing law prohibits a plan, solicitor, solicitor firm, or
representative from using any advertising or solicitation that is
untrue or misleading or any form of evidence of coverage that is
deceptive. Existing law prohibits an insurer, agent, or broker from
causing to be issued a misrepresentation of the terms of the policy
issued by the insurer, among other things, and makes a violation of
that requirement a crime. Existing law, the federal Patient
Protection and Affordable Care Act (PPACA), enacts various health
care coverage market reforms. Among other things, commencing January
1, 2014, PPACA requires every individual to be covered under minimum
essential coverage, as specified, and requires every health insurance
issuer issuing individual or group health insurance coverage to
accept every employer and individual who applies for coverage.
This bill would prohibit a person from making any statement to a
person that is known, or should have been known, to be a
misrepresentation regarding the requirements of PPACA. The bill would
prohibit a health care service plan or health insurer from offering,
issuing, selling, or renewing an individual or group plan contract
or health insurance policy that does not, at a minimum, cover basic
health care services unless the individual has proof of enrollment in
minimum essential coverage. The bill would also prohibit an entity
that arranges for the provision of health care services from offering
or selling a product to an individual or group unless the individual
enrollee has proof of enrollment in minimum essential coverage. The
bill would require a health care service plan or health insurer that
offers, issues, or sells a plan contract or health insurance policy
that provides coverage that does not constitute minimum essential
coverage to include in all solicitations, marketing materials, and
the evidence of coverage a clear and easily identified disclosure to
that effect, as specified. The bill would enact other related
provisions.
Existing law requires the Department of Managed Health Care and
the Department of Insurance to adopt regulations establishing
standards and requirements to provide enrollees and insureds with
appropriate access to language assistance in obtaining health care
services, as specified.
This bill would require a plan or a health insurer that markets or
advertises in a language other than English to comply with those
language assistance requirements and would make it an unfair business
practice for specified persons engaged in the solicitation of health
care service plans and in the business of insurance to advertise,
market, sell, solicit, or negotiate the purchase of health care
service plan contracts or health insurance policies in a language
other than English without meeting those language assistance
requirements.
Existing law authorizes the Department of Managed Health Care and
the Department of Insurance to take various enforcement actions
against plans and insurers and other entities that are in violation
of the law, as specified.
Under this bill, if a department fails to determine that certain
violations occurred within 90 days of receiving notice of the alleged
violation, a person damaged by the violation would have the
authority to bring an action to obtain specified remedies. The bill
would prohibit a plan, a solicitor, a health insurer, or specified
insurance agents whose license or certificate of authority is
suspended or revoked from acting in other specified capacities.
Because a violation of certain of the bill's requirements would be
a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1360.2 is added to the Health and Safety Code,
to read:
1360.2. (a) It is unlawful for any person, including a plan,
subject to this chapter to make any statement to any other person
that is known or should have been known to be a misrepresentation
regarding the requirements of 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).
(b) For purposes of subdivision (a), a written or printed
statement or item of information shall be deemed to be a
misrepresentation whether or not it is literally true if, in the
total context in which the statement is made or the item of
information is communicated, the statement or item of information may
be understood by a person not possessing special knowledge regarding
health care coverage as indicating any benefit or advantage, or the
absence of any exclusion, limitation, or disadvantage, of possible
significance to an enrollee, potential enrollee, or potential
subscriber in a plan, and such is not the case.
SEC. 2. Section 1361 of the Health and Safety Code is amended to
read:
1361. (a) Except as provided in subdivision (b), no plan shall
publish or distribute, or allow to be published or distributed on its
behalf, any advertisement not subject to Section 1352.1 unless
(1) a both of the following requirements are
met:
(1) Effective on or after January 1,
2013, to December 31, 2019, inclusive, a true copy there of has
first been filed with the director , at least
30 90 days prior to any such use, or
any shorter period as the director by rule or order may
allow, and (2) the allow. Commencing January 1, 2020,
this copy shall be filed at least 30 days prior to any such use, or
any shorter period as the director by rule or order may allow.
(2) The director by notice has
not found the advertisement, wholly or in part, to be untrue,
misleading, deceptive, or otherwise not in compliance with this
chapter or the rules thereunder, and specified the deficiencies,
within the 30 days period specified in
paragraph (1) or any shorter time as the director by rule or
order may allow.
(b) Except as provided in subdivision (c), a licensed plan
which that has been continuously
licensed under this chapter for the preceding 18 months may publish
or distribute or allow to be published or distributed on its behalf
an advertisement not subject to Section 1352.1 without having filed
the same for the director's prior approval , if
the plan and the material comply with each of the following
conditions:
(1) The advertisement or a material provision thereof has not been
previously disapproved by the director by written notice to the plan
and the plan reasonably believes that the advertisement does not
violate any requirement of this chapter or the rules thereunder.
(2) The plan files a true copy of each new or materially revised
advertisement, used by it or by any person acting on behalf of the
plan, with the director not later than 10 business days after
publication or distribution of the advertisement or within such
additional period as the director may allow by rule or order.
(c) If the director finds that any advertisement of a plan has
materially failed to comply with this chapter or the rules
thereunder, the director may shall , by
order, require the plan to publish in the same or similar medium, an
approved correction or retraction of any untrue, misleading, or
deceptive statement contained in the advertising, and may
shall prohibit the plan from publishing or
distributing, or allowing to be published or distributed on its
behalf , the advertisement or any new materially revised
advertisement without first having filed a copy thereof with the
director , 30 days prior to the publication or
distribution thereof, or any shorter period specified in the order.
An order issued under this subdivision shall be effective for 12
months from its issuance, and may be renewed by order if the
advertisements submitted under this subdivision indicate difficulties
of voluntary compliance with the applicable provisions of this
chapter and the rules thereunder.
(d) A licensed plan or other person regulated under this chapter
may, within 30 days after receipt of any notice or order under this
section, file a written request for a hearing with the director.
(e) The director by rule or order may classify plans and
advertisements and exempt certain classes, wholly or in part, either
unconditionally or upon specified terms and conditions or for
specified periods, from the application of subdivisions (a) and (b).
(e) Prior to January 1, 2020, the director shall not exempt by
rule or order any advertisement from the application of subdivisions
(a) and (b).
SEC. 3. Section 1361.2 is added to the Health and Safety Code, to
read:
1361.2. It is an unfair business practice for a solicitor,
solicitor firm, or representative of a health care service plan to
advertise, market, sell, solicit, or negotiate the purchase of health
care service plan contracts in a language other than English without
meeting the requirements of Sections 1367.04 and 1367.07 and any
rules or regulations adopted thereunder.
SEC. 4. Section 1361.3 is added to the Health and Safety Code, to
read:
1361.3. (a) If the department fails to determine that a violation
of this chapter relating to fraud, deceptive marketing or
advertising, misrepresentation, failing to provide language
assistance services, or any other harmful activities against
consumers occurred within 90 days of receiving notice of the alleged
violation, a person damaged by the violation may bring an action in a
court of competent jurisdiction to recover all of the following:
(1) Actual damages.
(2) Civil penalties of not more than one thousand dollars ($1,000)
per day for each violation.
(3) For intentional or willful violations of this article,
exemplary damages in an amount the court deems proper.
(4) Equitable relief as the court deems proper.
(5) Reasonable attorney's fees and court costs.
(b) The rights, remedies, and penalties established by this
section are cumulative and shall not supersede the rights, remedies,
or penalties established under other laws.
SEC. 5. Section 1361.4 is added to the Health and Safety Code, to
read:
1361.4. A person licensed pursuant to Section 1351 whose license
is revoked or suspended pursuant to the grounds set forth in this
article, Article 3 (commencing with Section 1349), or Article 5
(commencing with Section 1367), and a person who engages in
solicitation, as defined in subdivision (l) of Section 1345 who is
disciplined pursuant to Section 1388, shall be prohibited from doing
any of the following:
(a) Becoming a navigator as determined by the California Health
Benefit Exchange pursuant to subdivision (l) of Section 100502 of the
Government Code in accordance with subdivision (i) of Section 1311
of 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).
(b) Becoming licensed as a life licensee agent as defined in
Section 1622 of the Insurance Code.
(c) Becoming a designated individual or organization authorized to
receive a fee under Section 12693.32 of the Insurance Code.
SEC. 6. Section 1363.06 is added to the Health and Safety Code, to
read:
1363.06. The director shall adopt rules to implement Section 2715
of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-15).
In so doing, the director shall minimize duplication with disclosure
requirements under California law.
SEC. 7. Section 1367.004 is added to the Health and Safety Code,
to read:
1367.004. (a) On and after January 1, 2014, a health care service
plan, including a specialized health care service plan, shall not
offer, issue, sell, or renew for any individual or group a plan
contract that does not, at a minimum, cover basic health care
services unless the individual enrollee has proof of enrollment in
coverage that constitutes minimum essential coverage, as defined in
Section 5000A(f) of the Internal Revenue Code and any rules or
regulations issued thereunder.
(b) On and after January 1, 2014, any entity that arranges for the
provision of health care services shall not offer or sell a product
or service to an individual or group unless the individual enrollee
has proof of enrollment in coverage that constitutes minimum
essential coverage as defined in Section 5000A(f) of the Internal
Revenue Code and any rules or regulations issued thereunder.
(c) On and after January 1, 2014, a health care service plan,
including a specialized health care service plan, that offers,
issues, or sells a plan contract that provides coverage that does not
constitute minimum essential coverage, as defined in Section 5000A
(f) of the Internal Revenue Code and any rules or regulations issued
thereunder, shall include in all solicitations, marketing materials,
and the evidence of coverage a clear and easily identified disclosure
that the contract does not meet the requirements of federal law with
respect to minimum essential coverage and may expose an individual
enrolled in the contract to significant federal tax penalties unless
the individual also obtains coverage that provides minimum essential
coverage as required by federal law.
SEC. 8. Section 1367.041 is added to the Health and Safety Code,
to read:
1367.041. (a) A health care service plan that advertises or
markets in a language other than English shall comply with the
requirements of Sections 1367.04 and 1367.07 and any rules or
regulations promulgated thereunder.
(b) If a solicitor advertises or markets in a language other than
English, the health care service plan for which the solicitor is
advertising or marketing shall meet the requirements of Sections
1367.04 and 1367.07 and any rules or regulations promulgated
thereunder.
SEC. 9. Section 781 of the Insurance Code is amended to read:
781. (a) A person shall not make any statement that is known, or
should have been known, to be a misrepresentation (1) to any other
person for the purpose of inducing, or tending to induce,
such the other person either to take out a
policy of insurance, or to refuse to accept a policy issued upon an
application therefor and instead take out any policy in another
insurer, or (2) to a policyholder in any insurer for the purpose of
inducing or tending to induce him or her to lapse,
forfeit or surrender his or her insurance therein , or inducing
or tending to induce a lapse in that insurance .
(b) A person shall not make any representation or comparison of
insurers or policies to an insured which that
is misleading , for the purpose of inducing
or tending to induce him or her to lapse,
forfeit, change , or surrender his or her insurance,
or inducing or tending to induce a lapse in that insurance,
whether on a temporary or permanent plan.
(c) (1) A person shall not make any statement to any other person
that is known or should have been known to be a misrepresentation
regarding the requirements of 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).
(2) For purposes of this subdivision, a written or printed
statement or item of information shall be deemed to be a
misrepresentation whether or not it is literally true if, in the
total context in which the statement is made or the item of
information is communicated, the statement or item of information may
be understood by a person not possessing special knowledge regarding
health care coverage as indicating any benefit or advantage, or the
absence of any exclusion, limitation, or disadvantage, of possible
significance to an insured, potential insured, or potential policy
holder, and such is not the case.
SEC. 10. Section 783.2 is added to the Insurance Code, to read:
783.2. (a) If the commissioner fails to determine that a
violation of this code relating to fraud, deceptive marketing or
advertising, misrepresentation, failing to provide language
assistance services, or any other harmful activities against
consumers occurred within 90 days of receiving notice of the alleged
violation, a person damaged by the violation may bring an action in a
court of competent jurisdiction to recover all of the following:
(1) Actual damages.
(2) Civil penalties of not more than one thousand dollars ($1,000)
per day for each violation.
(3) For intentional or willful violations of this article,
exemplary damages in an amount the court deems proper.
(4) Equitable relief as the court deems proper.
(5) Reasonable attorney's fees and court costs.
(b) The rights, remedies, and penalties established by this
section are cumulative and shall not supersede the rights, remedies,
or penalties established under other laws.
SEC. 11. Section 790.03 of the Insurance Code is amended to read:
790.03. The following are hereby defined as unfair methods of
competition and unfair and deceptive acts or practices in the
business of insurance.
(a) Making, issuing, circulating, or causing to be made, issued or
circulated, any estimate, illustration, circular, or statement
misrepresenting the terms of any policy issued or to be issued or the
benefits or advantages promised thereby or the dividends or share of
the surplus to be received thereon, or making any false or
misleading statement as to the dividends or share of surplus
previously paid on similar policies, or making any misleading
representation or any misrepresentation as to the financial condition
of any insurer, or as to the legal reserve system upon which any
life insurer operates, or using any name or title of any policy or
class of policies misrepresenting the true nature thereof, or making
any misrepresentation to any policyholder insured in any company for
the purpose of inducing or tending to induce the policyholder to
lapse, forfeit, or surrender his or her insurance.
(b) Making or disseminating or causing to be made or disseminated
before the public in this state, in any newspaper or other
publication, or any advertising device, or by public outcry or
proclamation, or in any other manner or means whatsoever, any
statement containing any assertion, representation, or statement with
respect to the business of insurance or with respect to any person
in the conduct of his or her insurance business, which is untrue,
deceptive, or misleading, and which is known, or which by the
exercise of reasonable care should be known, to be untrue, deceptive,
or misleading.
(c) Entering into any agreement to commit, or by any concerted
action committing, any act of boycott, coercion, or intimidation
resulting in or tending to result in unreasonable restraint of, or
monopoly in, the business of insurance.
(d) Filing with any supervisory or other public official, or
making, publishing, disseminating, circulating, or delivering to any
person, or placing before the public, or causing directly or
indirectly, to be made, published, disseminated, circulated,
delivered to any person, or placed before the public any false
statement of financial condition of an insurer with intent to
deceive.
(e) Making any false entry in any book, report, or statement of
any insurer with intent to deceive any agent or examiner lawfully
appointed to examine into its condition or into any of its affairs,
or any public official to whom the insurer is required by law to
report, or who has authority by law to examine into its condition or
into any of its affairs, or, with like intent, willfully omitting to
make a true entry of any material fact pertaining to the business of
the insurer in any book, report, or statement of the insurer.
(f) (1) Making or permitting any unfair discrimination between
individuals of the same class and equal expectation of life in the
rates charged for any contract of life insurance or of life annuity
or in the dividends or other benefits payable thereon, or in any
other of the terms and conditions of the contract.
(2) This subdivision shall be interpreted, for any contract of
ordinary life insurance or individual life annuity applied for and
issued on or after January 1, 1981, to require differentials based
upon the sex of the individual insured or annuitant in the rates or
dividends or benefits, or any combination thereof. This requirement
is satisfied if those differentials are substantially supported by
valid pertinent data segregated by sex, including, but not limited
to, mortality data segregated by sex.
(3) However, for any contract of ordinary life insurance or
individual life annuity applied for and issued on or after January 1,
1981, but before the compliance date, in lieu of those differentials
based on data segregated by sex, rates, or dividends or benefits, or
any combination thereof, for ordinary life insurance or individual
life annuity on a female life may be calculated as follows: (A)
according to an age not less than three years nor more than six years
younger than the actual age of the female insured or female
annuitant, in the case of a contract of ordinary life insurance with
a face value greater than five thousand dollars ($5,000) or a
contract of individual life annuity; and (B) according to an age not
more than six years younger than the actual age of the female
insured, in the case of a contract of ordinary life insurance with a
face value of five thousand dollars ($5,000) or less. "Compliance
date" as used in this paragraph shall mean the date or dates
established as the operative date or dates by future amendments to
this code directing and authorizing life insurers to use a mortality
table containing mortality data segregated by sex for the calculation
of adjusted premiums and present values for nonforfeiture benefits
and valuation reserves as specified in Sections 10163.1 and 10489.2
or successor sections.
(4) Notwithstanding the provisions of this subdivision, sex-based
differentials in rates or dividends or benefits, or any combination
thereof, shall not be required for (A) any contract of life insurance
or life annuity issued pursuant to arrangements which may be
considered terms, conditions, or privileges of employment as these
terms are used in Title VII of the Civil Rights Act of 1964 (Public
Law 88-352), as amended, and (B) tax sheltered annuities for
employees of public schools or of tax exempt organizations described
in Section 501(c)(3) of the Internal Revenue Code.
(g) Making or disseminating, or causing to be made or
disseminated, before the public in this state, in any newspaper or
other publication, or any other advertising device, or by public
outcry or proclamation, or in any other manner or means whatever,
whether directly or by implication, any statement that a named
insurer, or named insurers, are members of the California Insurance
Guarantee Association, or insured against insolvency as defined in
Section 119.5. This subdivision shall not be interpreted to prohibit
any activity of the California Insurance Guarantee Association or the
commissioner authorized, directly or by implication, by Article 14.2
(commencing with Section 1063).
(h) Knowingly committing or performing with such frequency as to
indicate a general business practice any of the following unfair
claims settlement practices:
(1) Misrepresenting to claimants pertinent facts or insurance
policy provisions relating to any coverages at issue.
(2) Failing to acknowledge and act reasonably promptly upon
communications with respect to claims arising under insurance
policies.
(3) Failing to adopt and implement reasonable standards for the
prompt investigation and processing of claims arising under insurance
policies.
(4) Failing to affirm or deny coverage of claims within a
reasonable time after proof of loss requirements have been completed
and submitted by the insured.
(5) Not attempting in good faith to effectuate prompt, fair, and
equitable settlements of claims in which liability has become
reasonably clear.
(6) Compelling insureds to institute litigation to recover amounts
due under an insurance policy by offering substantially less than
the amounts ultimately recovered in actions brought by the insureds,
when the insureds have made claims for amounts reasonably similar to
the amounts ultimately recovered.
(7) Attempting to settle a claim by an insured for less than the
amount to which a reasonable person would have believed he or she was
entitled by reference to written or printed advertising material
accompanying or made part of an application.
(8) Attempting to settle claims on the basis of an application
which was altered without notice to, or knowledge or consent of, the
insured, his or her representative, agent, or broker.
(9) Failing, after payment of a claim, to inform insureds or
beneficiaries, upon request by them, of the coverage under which
payment has been made.
(10) Making known to insureds or claimants a practice of the
insurer of appealing from arbitration awards in favor of insureds or
claimants for the purpose of compelling them to accept settlements or
compromises less than the amount awarded in arbitration.
(11) Delaying the investigation or payment of claims by requiring
an insured, claimant, or the physician of either, to submit a
preliminary claim report, and then requiring the subsequent
submission of formal proof of loss forms, both of which submissions
contain substantially the same information.
(12) Failing to settle claims promptly, where liability has become
apparent, under one portion of the insurance policy coverage in
order to influence settlements under other portions of the insurance
policy coverage.
(13) Failing to provide promptly a reasonable explanation of the
basis relied on in the insurance policy, in relation to the facts or
applicable law, for the denial of a claim or for the offer of a
compromise settlement.
(14) Directly advising a claimant not to obtain the services of an
attorney.
(15) Misleading a claimant as to the applicable statute of
limitations.
(16) Delaying the payment or provision of hospital, medical, or
surgical benefits for services provided with respect to acquired
immune deficiency syndrome or AIDS-related complex for more than 60
days after the insurer has received a claim for those benefits, where
the delay in claim payment is for the purpose of investigating
whether the condition preexisted the coverage. However, this 60-day
period shall not include any time during which the insurer is
awaiting a response for relevant medical information from a health
care provider.
(i) Canceling or refusing to renew a policy in violation of
Section 676.10.
(j) Marketing, soliciting, or advertising policies of health
insurance, as defined in subdivision (b) of Section 106, or
categories of coverage described in subdivision (a) of Section 10604,
in a language other than English without meeting the requirements
set forth in Sections 10133.8 and 10133.9.
SEC. 12. Section 1748.1 is added to the Insurance Code, to read:
1748.1. A person licensed pursuant to Section 1622 whose license
is revoked or suspended pursuant to the grounds set forth in Article
6 (commencing with Section 1666) of Chapter 5 of Part 2 of Division
1, or an insurer whose certificate of authority is revoked or
suspended, shall be prohibited from doing any of the following:
(a) Becoming a navigator as determined by the California Health
Benefit Exchange pursuant to subdivision (l) of Section 100502 of the
Government Code in accordance with subdivision (i) of Section 1311
of 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).
(b) Engaging in solicitation, as defined in Section 1345 of the
Health and Safety Code, or being approved by the Department of
Managed Health Care to become a solicitor or solicitor firm.
(c) Being approved for licensure by the Department of Managed
Health Care, as set forth in Section 1351 of the Health and Safety
Code.
(d) Becoming a designated individual or organization authorized to
receive a fee under Section 12693.32.
SEC. 13. Section 10112.26 is added to the Insurance Code, to read:
10112.26. (a) On and after January 1, 2014, a health insurer,
including a specialized health insurer, shall not offer, issue, sell,
or renew for any individual or any group a policy of health
insurance that does not, at a minimum, cover basic health care
services unless the individual insured has proof of enrollment in
coverage that constitutes minimum essential coverage, as defined in
Section 5000A(f) of the Internal Revenue Code and any rules or
regulations issued thereunder.
(b) On and after January 1, 2014, a health insurer, including a
specialized health insurer, that offers, issues, or sells a policy of
health insurance that provides coverage that does not constitute
minimum essential coverage, as defined in Section 5000A(f) of the
Internal Revenue Code and any rules or regulations issued thereunder,
shall include in all solicitations, marketing materials, and the
evidence of coverage a clear and easily identified disclosure that
the policy does not meet the requirements of federal law with respect
to minimum essential coverage and may expose an individual covered
under the policy to significant federal tax penalties unless the
individual also obtains coverage that provides minimum essential
coverage as required by federal law.
SEC. 14. Section 10127.14 is added to the Insurance Code, to read:
10127.14. The commissioner shall adopt rules to implement Section
2715 of the federal Public Health Service Act (42 U.S.C. Sec.
300gg-15). In so doing, the commissioner shall minimize duplication
with disclosure requirements under California law.
SEC. 15. Section 10127.45 is added to the Insurance Code, to read:
10127.45. (a) Except as provided in subdivision (b), no insurer
offering policies of health insurance, as defined in subdivision (b)
of Section 106, or categories of coverage described in subdivision
(a) of Section 10604, and no agent
licensed to sell policies of health insurance pursuant to
Section 1622, shall publish or distribute, or allow to be published
or distributed on its behalf, any advertisement until both of the
following occur:
(1) A true copy thereof has first been filed with the
commissioner, at least 90 days prior to any such use beginning
January 1, 2013, to December 31, 2019, inclusive, or any shorter
period as the commissioner by rule or order may allow. Commencing
January 1, 2020, this copy shall be filed at least 30 days prior to
any such use, or any shorter period, as the commissioner by rule or
order may allow.
(2) The commissioner by notice has not found the advertisement,
wholly or in part, to be untrue, misleading, deceptive, or otherwise
not in compliance with this code or the rules thereunder, and
specified the deficiencies, within the period specified in paragraph
(1) or any shorter time as the commissioner by rule or order may
allow.
(b) Except as provided in subdivision (c), an insurer or agent
that has been continuously licensed under this code for the preceding
18 months may publish or distribute or allow to be published or
distributed on its behalf an advertisement without having filed the
advertisement for the commissioner's prior approval, if the insurer
or agent and the material comply with each of the following
conditions:
(1) The advertisement or a material provision thereof has not been
previously disapproved by the commissioner by written notice to the
insurer or agent and the insurer or agent reasonably believes that
the advertisement does not violate any requirement of this code or
the rules thereunder.
(2) The insurer or agent files a true copy of each new or
materially revised advertisement, used by it or by any person acting
on behalf of the insurer or agent, with the commissioner not later
than 10 business days after publication or distribution of the
advertisement or within such additional period as the commissioner
may allow by rule or order.
(c) If the commissioner finds that any advertisement of an insurer
or agent has materially failed to comply with this code or the rules
thereunder, the commissioner shall, by order, require the insurer or
agent to publish in the same or similar medium, an approved
correction or retraction of any untrue, misleading, or deceptive
statement contained in the advertising, and shall prohibit the
insurer or agent from publishing or distributing, or allowing to be
published or distributed on its behalf the advertisement or any new
materially revised advertisement without first having filed a copy
thereof with the commissioner 30 days prior to the publication or
distribution thereof, or any shorter period specified in the order.
An order issued under this subdivision shall be effective for 12
months from its issuance, and may be renewed by order if the
advertisements submitted under this subdivision indicate difficulties
of voluntary compliance with the applicable provisions of this code
and the rules thereunder.
(d) An insurer or agent or other person regulated under this code
may, within 30 days after receipt of any notice or order under this
section, file a written request for a hearing with the commissioner.
(e) The commissioner shall not exempt certain classes of plans or
advertisements, wholly or in part, either unconditionally or upon
specified terms and conditions or for specified periods, from the
application of subdivisions (a) and (b).
(f) Two copies of a proposed advertisement, marketing document, or
educational material shall be filed. To minimize the expense of
changes in advertising copy, the advertisement may be submitted in
draft form for preliminary review subject to the later filing of a
proof or final copy, and the later filing of a proof or final copy
may be waived when the draft copy is presented in a manner reasonably
representing the final appearance of the advertisement. The text of
audio-visual advertising shall indicate any directions for
presentation, including voice qualities and the juxtaposition of the
visual materials with the text. The commissioner shall allow insurers
and agents to file these materials electronically.
(g) The commissioner shall not issue letters of nondisapproval of
advertising. If the person submitting the advertisement requests an
order shortening the 30-day or 90-day waiting period specified in
paragraph (1) of subdivision (a), that order shall be issued when an
appropriate showing of the need therefor is made.
SEC. 16. Section 10133.10 is added to the Insurance Code, to read:
10133.10. (a) An insurer that markets, advertises, or produces
educational materials for health insurance policies in a language
other than English shall comply with the requirements of Sections
10133.8 and 10133.9 and any rules or regulations promulgated
thereunder.
(b) A health insurer shall disclose to the commissioner each of
the languages in which the insurer does any of the following:
(1) Markets, advertises, or produces educational materials for
health insurance policies.
(2) Furnishes, provides, or distributes to life licensee agents,
licensed under Section 1622, marketing, advertising, or educational
materials.
(c) If an agent advertises or markets health insurance policies in
a language other than English, the insurer for which that individual
is an agent shall meet the requirements of Sections 10133.8 and
10133.9 and any rules or regulations promulgated thereunder. An agent
licensed to sell health insurance policies pursuant to Section 1622
shall annually disclose to the commissioner each of the languages in
which he or she markets, sells, advertises, or negotiates health
insurance policies.
SEC. 17. 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.