AB 1507, as introduced, Logue. Health care coverage.
Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that take effect with respect to plan years on or after January 1, 2014. Among other things, PPACA requires each health insurance issuer that offers health insurance coverage in the individual or group market in a state to accept every employer and individual in the state that applies for that coverage and to renew that coverage at the option of the plan sponsor or the individual. PPACA prohibits a group health plan and a health insurance issuer offering group or individual health insurance coverage from imposing any preexisting condition exclusion with respect to that plan or coverage. PPACA allows the premium rate charged by a health insurance issuer offering small group or individual coverage to vary only by rating area, age, tobacco use, and whether the coverage is for an individual or family and prohibits discrimination against individuals based on health status. PPACA requires a health insurance issuer that offers coverage in the small group or individual market to ensure that the coverage includes the essential health benefits package, as defined. However, guidance issued under PPACA grants transitional relief to health insurance coverage in the individual or small group market in effect on October 1, 2013, that is renewed for a policy year starting between January 1, 2014, and October 1, 2014, and exempts that coverage from certain PPACA reforms, 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. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law implements the PPACA reforms described above under the Knox-Keene Act and the laws governing health insurance.
This bill would allow an individual or small employer health benefit plan in effect on October 1, 2013, that does not qualify as a grandfathered health plan under PPACA to be renewed until October 1, 2014, and to continue to be in force until December 31, 2014. The bill would exempt an individual or small employer health benefit plan in effect on October 1, 2013, that does not qualify as a grandfathered health plan under PPACA and that is renewed between January 1, 2014, and October, 1, 2014, from various provisions of state law that implement the PPACA reforms described above. The bill would require that these provisions be implemented only to the extent permitted by PPACA.
The bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2⁄3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1367.011 is added to the Health and
2Safety Code, to read:
(a) An individual or small employer health benefit
4plan in effect on October 1, 2013, that does not qualify as a
5grandfathered health plan under Section 1251 of PPACA may be
6renewed until October 1, 2014, and may continue to be in force
7until December 31, 2014, subject to applicable federal law, any
8other requirements imposed by this chapter, and any requirements
9imposed by the health benefit plan.
P3 1(b) An individual or small employer health benefit plan in effect
2on October 1, 2013, that does not qualify as a grandfathered health
3plan under Section 1251 of PPACA and that is renewed for a plan
4or policy year starting between January 1, 2014, and October 1,
52014, inclusive, shall be treated as a “grandfathered health care
6service plan
contract,” a “grandfathered health plan,” a
7“grandfathered health benefit plan,” or “grandfathered coverage”
8under the following provisions, as applicable, until December 31,
92014, subject to the notice requirements imposed under PPACA:
10(1) Article 3.16 (commencing with Section 1357.500), except
11for subdivision (i) of Section 1357.503.
12(2) Article 3.17 (commencing with Section 1357.600).
13(3) Article 3.15 (commencing with Section 1357.50), subject
14to subdivision (c).
15(4) Section 1367.005.
16(5) Section 1367.0065.
17(6) Section 1367.008.
18(7) Section 1367.009.
19(8) Section 1389.4.
20(9) Article 11.8 (commencing with Section 1399.845), except
21for subdivision (h) of Section 1399.849.
22(c) Notwithstanding Section 1399.836, Sections 1399.826 and
231399.828 shall apply to an individual health benefit plan described
24in subdivision (b) until December 31, 2014.
25(d) A small employer health benefit plan described in
26subdivision (b) shall not be subject to Section 1367.007. This
27subdivision shall become inoperative on December 31, 2014.
28(e) This section shall be implemented only to the extent
29permitted by PPACA.
30(f) For purposes of this section, the following definitions shall
31apply:
32(1) “Health benefit plan” means any individual or group health
33care service plan contract that provides medical, hospital, and
34surgical benefits. The term does not include a specialized health
35care service plan contract, a health care service plan contract
36provided in the Medi-Cal program (Chapter 7 (commencing with
37Section 14000) of Part 3 of Division 9 of the Welfare and
38Institutions Code), the Healthy Families Program (Part 6.2
39(commencing with Section 12693) of Division 2 of the Insurance
40Code), the Access for Infants and Mothers Program (Part 6.3
P4 1(commencing with Section 12695) of Division 2 of the Insurance
2Code), the program under Part 6.4 (commencing with Section
312699.50) of Division 2 of the Insurance Code, coverage of
4Medicare services pursuant to contracts with the United States
5government, or Medicare supplement coverage, to the extent
6consistent with PPACA.
7(2) “Plan
year” or “policy year” have the meanings set forth in
8Section 144.103 of Title 45 of the Code of Federal Regulations.
9(3) “PPACA” means the federal Patient Protection and
10Affordable Care Act (Public Law 111-148), as amended by the
11federal Health Care and Education Reconciliation Act of 2010
12(Public Law 111-152), and any rules, regulations, or guidance
13issued pursuant to that law.
14(4) “Small employer health benefit plan” means a group health
15benefit plan issued to a small employer, as defined in Section
161357.500 or 1357.600.
Section 10112.299 is added to the Insurance Code, to
18read:
(a) An individual or small employer health benefit
20plan in effect on October 1, 2013, that does not qualify as a
21grandfathered health plan under Section 1251 of PPACA may be
22renewed until October 1, 2014, and may continue to be in force
23until December 31, 2014, subject to applicable federal law, any
24other requirements imposed by this part, and any requirements
25imposed by the health benefit plan.
26(b) An individual or small employer health benefit plan in effect
27on October 1, 2013, that does not qualify as a grandfathered health
28plan under Section 1251 of PPACA and that is renewed for a plan
29or policy year starting between January 1, 2014, and October 1,
302014, inclusive, shall be treated as a “grandfathered health
31insurance policy,” a
“grandfathered health plan,” a “grandfathered
32health benefit plan,” or “grandfathered coverage” under the
33following provisions, as applicable, until December 31, 2014,
34subject to the notice requirements imposed under PPACA:
35(1) Chapter 8.01 (commencing with Section 10753), except for
36subdivision (k) of Section 10753.05.
37(2) Chapter 8.02 (commencing with Section 10755).
38(3) Article 7 (commencing with Section 10198.6), subject to
39subdivision (c).
40(4) Section 10112.27.
P5 1(5) Section 10112.285.
2(6) Section 10112.295.
3(7) Section 10112.297.
4(8) Section 10113.95.
5(9) Chapter 9.9 (commencing with Section 10965), except for
6subdivision (h) of Section 10965.3.
7(c) Notwithstanding Section 10960.5, Sections 10951 and 10953
8shall apply to an individual health benefit plan described in
9subdivision (b) until December 31, 2014.
10(d) A small employer health benefit plan described in
11subdivision (b) shall not be subject to Section 10112.29. This
12subdivision shall become inoperative on December 31, 2014.
13(e) This section shall be implemented only to the extent
14permitted by PPACA.
15(f) For purposes of this section, the following definitions shall
16apply:
17(1) “Health benefit plan” means any individual or group policy
18of health insurance that provides medical, hospital, and surgical
19benefits. The term does not include a policy that provides excepted
20benefits as described in Sections 2722 and 2791 of the federal
21Public Health Service Act (42 U.S.C. Sec. 300gg-21; 42 U.S.C.
22Sec. 300gg-91), a health insurance policy provided in the Medi-Cal
23program (Chapter 7 (commencing with Section 14000) of Part 3
24of Division 9 of the Welfare and Institutions Code), the Healthy
25Families Program (Part 6.2 (commencing with Section 12693) of
26Division 2), the Access for Infants and Mothers Program (Part 6.3
27(commencing with Section 12695) of Division 2), or the program
28under Part 6.4 (commencing with Section 12699.50) of Division
292, coverage of Medicare services pursuant to contracts with the
30United States government, or Medicare supplement coverage, to
31the extent consistent with PPACA.
32(2) “Plan year” or “policy year” have the meanings set forth in
33Section 144.103 of Title 45 of the Code of Federal Regulations.
34(3) “PPACA” means the federal Patient Protection and
35Affordable Care Act (Public Law 111-148), as amended by the
36federal Health Care and Education Reconciliation Act of 2010
37(Public Law 111-152), and any rules, regulations, or guidance
38issued pursuant to that law.
P6 1(4) “Small employer health benefit plan” means a group health
2benefit plan issued to a small employer, as defined in Section
310753 or 10755.
This act is an urgency statute necessary for the
5immediate preservation of the public peace, health, or safety within
6the meaning of Article IV of the Constitution and shall go into
7immediate effect. The facts constituting the necessity are:
8In order to carry out the transitional policy under the federal
9Patient Protection and Affordable Care Act announced by the
10President of the United States on November 14, 2013, and to allow
11individuals and small businesses to reenroll in their current health
12care coverage, it is necessary that this act take effect immediately.
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