BILL NUMBER: SB 1313 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 2, 2012
AMENDED IN SENATE APRIL 18, 2012
AMENDED IN SENATE APRIL 10, 2012
INTRODUCED BY Senator Lieu
FEBRUARY 23, 2012
An act to amend Section 1361 of, and to add Sections 1360.2,
1361.4, 1363.06, 1367.004, and 1367.041 to, the Health and Safety
Code, and to amend Section 781 of, and to add Sections 790.16,
1748.1, 10112.26, 10127.14, 10127.45, and 10133.10 to, the Insurance
Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 1313, as amended, 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 60 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 60 days. The bill would authorize the director to
extend this period of review by an additional 60
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 from exempting certain types of materials 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, or making
or permitting the use of any verbal statement, that is untrue or
misleading or any form of evidence of coverage that is deceptive, as
specified. 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 offering coverage in the individual or small group markets to
ensure that the coverage includes a specified essential health
benefits package.
This bill would make it an unfair business practice for
prohibit an insurer or agent to use
from using any advertising or solicitation, or
make or permit making or permitting the
use of any verbal statement, that is untrue or misleading or any
form of evidence of coverage that is deceptive, as specified. The
bill would prohibit a person health care
service plan, insurer, and specified persons from making any
statement to a person that is known, or should have been known, to be
deceptive or a misrepresentation regarding the
requirements of PPACA. The bill would prohibit a specialized health
care service plan , with certain exceptions,
from offering, issuing, selling, or renewing an individual or group
plan contract that does not, at a minimum, cover basic health care
services unless the individual or group has proof of enrollment in
minimum essential coverage, as defined. The bill would also prohibit
an entity a discount health plan 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 prohibit a health insurer, a specialized health insurer,
or an insurer offering policies or certificates of specified disease
or hospital confinement indemnity insurance from offering, issuing,
selling, or renewing an individual or small group health insurance
policy that does not, at a minimum, cover essential health benefits,
as defined, unless the individual or group has proof of enrollment in
minimum essential coverage, as defined , with certain
exceptions . 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. Existing law requires plans and insurers to
translate specified vital documents into a language when a certain
proportion of its enrollees or insureds indicate a preference for
written materials in that language.
Under this bill, if a solicitor or an insurance agent advertises
or markets health care service plan contracts or health insurance
policies in a language other than English, the plan or insurer would
be required to comply with those language assistance requirements.
The bill would require a solicitor, solicitor firm, or insurance
agent to disclose to the plan or insurer the non-English languages in
which the solicitor, solicitor firm, or insurance agent markets,
advertises, negotiates, or solicits contracts or policies offered by
the plan or insurer, as specified. The bill would require a health
care service plan or health insurer that advertises or markets in a
language in which vital documents do not have to be translated to
translate certain documents into that language. These provisions
would not apply to the Medi-Cal program or the Healthy Families
Program.
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
No plan, solicitor, solicitor firm, or representative
shall make any statement to any other person
that is known or should have been known to be
deceptive or 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). Nothing in this
section shall be construed to limit or restrict in any way the
department's authority under any provision of this chapter.
(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 both
of the following requirements are met:
(1) Effective on or after January 1, 2013, to December
31, 2019, inclusive, a A true copy thereof has
first been filed with the director at least 60
30 days prior to any such use, or any shorter period as
the director by rule or order may allow. Between January 1, 2013, and
December 31, 2019, inclusive, the director may, at his or her
discretion, extend the period of review by up to 60
90 days. 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 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 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 shall may , 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 shall
may 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), except for the following: (b).
(1) Advertisements or marketing materials that include
endorsements or ratings about quality of care.
(2) Advertisement or marketing materials about new health care
products.
(3) Enrollment-related materials, including, but not limited to,
disclosure forms, contract documents, and enrollment forms.
(4) Any other materials as provided by regulation.
SEC. 3. 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. 4. 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. 5. Section 1367.004 is added to the Health and Safety Code,
to read:
1367.004. (a) (1) On and after January 1, 2014, a specialized
health care service plan shall not offer, issue, sell, or renew for
any group a plan contract that does not, at a minimum, cover basic
health care services unless the group provides proof of coverage that
constitutes minimum essential coverage, as defined in Section 5000A
(f) of the Internal Revenue Code and any rules or regulations issued
thereunder.
(2) On and after January 1, 2014, a specialized health care
service plan shall not offer, issue, sell, or renew for any
individual 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.
(3) For products offered through the California Health Benefit
Exchange, the Exchange may provide proof of coverage of essential
health benefits for an individual or small group.
(b) On and after January 1, 2014, any entity
a discount health plan 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) This section shall not apply to the offer, sale, issuance, or
renewal of specialized health care service plan contracts that
include only limited-scope dental or vision benefits meeting the
requirements of Section 9832(c)(2)(A) of the Internal Revenue Code,
except that all solicitation, marketing materials, and the evidence
of coverage relating to those contracts shall include the disclosure
required in subdivision (d) and a clear disclosure of whether or not
the contract covers the pediatric oral or vision services required by
Section 1302(b)(1)(J) of the federal Patient Protection and
Affordable Care Act (Public Law 111-148).
(c)
(d) 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. 6. 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, which language does not
meet the minimum enrollee thresholds established under Sections
1367.04 and 1367.07 or the regulations adopted thereunder, shall
translate into that language the documents listed in clauses (i),
(iii), and (v) of subparagraph (B) of paragraph (1) of subdivision
(b) of Section 1367.04 and in subparagraphs (F) and (G) of paragraph
(7) of subdivision (b) of Section 1300.67.04 of Title 28 of the
California Code of Regulations.
(b) Once the enrollee population of the non-English-language
population meets a threshold listed in subparagraph (A) of paragraph
(1) of subdivision (b) of Section 1367.04, the plan shall translate
all vital documents as required under Sections 1367.04 and 1367.07
and the regulations adopted thereunder.
(c) If a solicitor or solicitor firm advertises or
markets health care service plan contracts in a language other than
English, the health care service plan for which the solicitor or
solicitor firm is advertising or marketing shall meet the
requirements of Sections 1367.04 and 1367.07 and, if applicable,
Section 1367.041, and any rules or regulations adopted thereunder.
(d) A solicitor or solicitor firm shall disclose to the health
care service plan for which the solicitor or solicitor firm markets,
advertises, or solicits health care service plan coverage each of the
non-English languages in which the solicitor or solicitor firm
markets, advertises, or solicits that coverage.
(e) This section shall not apply to the Medi-Cal program or the
Healthy Families Program.
SEC. 7. 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, 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 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 that is misleading for the purpose
of inducing or tending to induce him or her to 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 No health insurer, or agent as defined in
Section 1622, shall make any statement to any other
person that is known or should have been known to be
deceptive or 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).
(d) Nothing in this section shall be construed to limit or
restrict in any way the department's authority under any other
provision of this chapter.
(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
policyholder, and such is not the case.
SEC. 8. Section 790.16 is added to the Insurance Code, to read:
790.16. (a) It is an unfair method of competition and an unfair
and deceptive act or practice in the business of insurance for an
insurer or agent, as defined in Section 1622, to use or permit the
use of any advertising or solicitation that is untrue or misleading,
or any form of evidence of coverage that is deceptive. For purposes
of this section:
(1) A written or printed statement or item of information shall be
deemed untrue if it does not conform to fact in any respect which
is, or may be significant to an insured or policyholder, or potential
insured or policyholder of a policy.
(2) A written or printed statement or item of information shall be
deemed misleading whether or not it may be literally true, if, in
the total context in which the statement is made or such item of
information is communicated, such 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, or potential
insured or policyholder, of a policy, and such is not the case.
(3) An evidence of coverage shall be deemed to be deceptive if the
evidence of coverage taken as a whole and with consideration given
to typography and format, as well as language, shall be such as to
cause a reasonable person, not possessing special knowledge of
policies, and evidence of coverage therefor to expect benefits,
service charges, or other advantages which the evidence of coverage
does not provide or which the insurer issuing such coverage or
evidence of coverage does not regularly make available to insureds or
policyholders covered under such evidence of coverage.
(b) It is an unfair method of competition and an unfair and
deceptive act or practice for an insurer or agent, as defined in
Section 1622, to use or permit the use of any verbal statement that
is untrue, misleading, or deceptive or make any representations about
coverage offered by the insurer or its cost that does not conform to
fact. All verbal statements are to be held to the same standards as
those for printed matter provided in subdivision (a).
790.16. (a) No health insurer, or agent as defined in Section
1622, shall use or permit the use of any advertising or solicitation
that is untrue or misleading, or any form of evidence of coverage
that is deceptive. For purposes of this section:
(1) A written or printed statement or item of information shall be
deemed untrue if it does not conform to fact in any respect which
is, or may be, significant to an insured or policyholder, or
potential insured or policyholder, of a policy.
(2) A written or printed statement or item of information shall be
deemed misleading whether or not it may be 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, or potential insured or policyholder, of
a policy, and such is not the case.
(3) An evidence of coverage shall be deemed to be deceptive if the
evidence of coverage taken as a whole and with consideration given
to typography and format, as well as language, is such as to cause a
reasonable person, not possessing special knowledge of policies and
evidence of coverage therefor to expect benefits, service charges, or
other advantages which the evidence of coverage does not provide or
which the insurer issuing the coverage or evidence of coverage does
not regularly make available to insureds or policyholders covered
under the evidence of coverage.
(b) No health insurer, or agent as defined in Section 1622, shall
use or permit the use of any verbal statement that is untrue,
misleading, or deceptive or make any representations about coverage
offered by the insurer or its cost that does not conform to fact. All
verbal statements shall be held to the same standards as those for
printed matter provided in subdivision (a).
SEC. 9. 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. 10. Section 10112.26 is added to the Insurance Code, to read:
10112.26. (a) (1) On and after January 1, 2014, a health insurer,
as defined in subdivision (b) of Section 106, shall not offer,
issue, sell, or renew for any individual or any small group a policy
of health insurance that does not, at a minimum, cover essential
health benefits, as defined by the state pursuant to regulations,
rules, or guidance, adopted pursuant to 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), 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. This paragraph shall not
apply to a policy that qualifies as a grandfathered health plan,
within the meaning of Section 1251 of the federal Patient Protection
and Affordable Care Act (Public law 111-148).
(2) On and after January 1, 2014, a specialized health insurer and
an insurer offering policies or certificates of specified disease or
hospital confinement indemnity insurance shall not offer, issue,
sell, or renew for any small group a policy of health insurance that
does not, at a minimum, cover essential health benefits, as defined
by the state pursuant to regulations, rules, or guidance, adopted
pursuant to 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), unless the
group provides 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.
(3) On and after January 1, 2014, a specialized health insurer and
an insurer offering policies or certificates of specified disease or
hospital confinement indemnity insurance shall not offer, issue,
sell, or renew for any individual a policy of health insurance that
does not, at a minimum, cover essential health benefits, as defined
by the state pursuant to regulations, rules, or guidance, adopted
pursuant to 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), 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.
(4) For products offered through the California Health Benefit
Exchange, the Exchange may provide proof of coverage of essential
health benefits for an individual or small group.
(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.
(c) This section shall not apply to the offer, sale, issuance, or
renewal of specialized health insurance contracts that include only
limited-scope dental or vision benefits meeting the requirements of
Section 9832(c)(2)(A) of the Internal Revenue Code, except that all
solicitation, marketing materials, and the evidence of coverage
relating to those contracts shall include the disclosure required in
subdivision (b) and a clear disclosure of whether or not the contract
covers the pediatric oral or vision services required by Section
1302(b)(1)(J) of the federal Patient Protection and Affordable Care
Act (Public Law 111-148).
SEC. 11. 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. 12. 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, 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 60 30
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. Between January 1, 2013,
and December 31, 2019, inclusive, the commissioner may, at his or her
discretion, extend the period of review by up to 60
90 days. 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
may , 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
may 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 may classify certain types of insurance 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), except for the following: (b).
(1) Advertisements or marketing materials that include
endorsements or ratings about quality of care.
(2) Advertisement or marketing materials about new health care
products.
(3) Enrollment-related materials, including, but not limited to,
disclosure forms, contract documents, and enrollment forms.
(4) Any products described in subdivision (a) of Section 10112.26.
(5) Any other materials as provided by regulation.
(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. 13. 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, which language does not meet the minimum insured
thresholds established under Sections 10133.8 and 10133.9 or the
regulations adopted thereunder, shall translate into that language
the documents listed in clauses (i), (iii), and (v) of subparagraph
(B) of paragraph (3) of subdivision (b) of Section 10133.8 and in
paragraphs (6) and (7) of subdivision (k) of Section 2538.2 of Title
10 of the California Code of Regulations.
(b) Once the insured population of the non-English-language
population meets a threshold listed in subparagraph (A) of paragraph
(3) of subdivision (b) of Section 10133.8, the insurer shall
translate all vital documents as required under Sections 10133.8 and
10133.9 and the regulations adopted thereunder.
(c) If an agent advertises or licensed to
sell health insurance pursuant to Section 1622 markets ,
sells, advertises, or negotiates 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, if applicable, Section 10133.10, and any rules or
regulations promulgated thereunder.
(d) An agent licensed to sell health insurance policies pursuant
to Section 1622 shall disclose to the insurer or insurers for which
the agent markets, sells, advertises, or negotiates health insurance
policies each of the languages in which the agent markets, sells,
advertises, or negotiates health insurance policies.
(e) This section shall not apply to the Medi-Cal program or the
Healthy Families Program.
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.