BILL NUMBER: AB 1917 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 7, 2014
INTRODUCED BY Assembly Member Gordon
FEBRUARY 19, 2014
An act to add Section 1367.0095 to the Health and Safety Code, and
to add Section 10112.298 to the Insurance Code, relating to health
care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 1917, as amended, Gordon. Outpatient prescription drugs: cost
sharing.
Existing federal law, the federal Patient Protection and
Affordable Care Act (PPACA), enacts various health care coverage
market reforms that take effect January 1, 2014. Among other things,
PPACA requires that a health insurance issuer offering coverage in
the individual or small group market to ensure that the coverage
includes the essential health benefits package, as defined. PPACA
requires the essential health benefits package to limit cost-sharing
for the coverage in a specified manner. PPACA also requires a group
health plan to ensure that any annual cost-sharing imposed under the
plan does not exceed those limitations. PPACA specifies that certain
of its reforms do not apply to grandfathered plans, as defined.
PPACA also requires each state to establish an American
Health Benefits Exchange for the purpose of facilitating the
enrollment of qualified individuals and qualified small employers in
qualified health plans and provides reduced cost sharing for certain
low-income individuals who enroll in a qualified health plan in the
silver level of coverage through the Exchange.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law also provides for the
regulation of health insurers by the Department of Insurance.
Existing law establishes the California Health Benefit
Exchange for the purpose of facilitating the enrollment of qualified
individuals and qualified small employers in qualified health plans
as required under PPACA. Existing law requires a
nongrandfathered an individual or group health
care service plan contract or healt h insurance
policy , including a specialized plan contract or policy,
but excluding a grandfathered health plan, that provides
coverage for essential health benefits, as defined, and that is
issued, amended, or renewed on or after January 1, 2015, to provide
for an annual limit on out-of-pocket expenses for all covered
benefits that meet the definition of essential health benefits.
With respect to a health care service plan contract or health
insurance policy that is subject to those annual out-of-pocket
limits, and is issued, amended, or renewed on or after January
1, 2016, for an individual contract or policy, or July 1,
2015, for a group contract or policy, this bill would require
that the copayment, coinsurance, or any other form of cost sharing
for a covered outpatient prescription drug for an individual
prescription for a supply of up to 30 days not exceed 1/24 of the
annual out-of-pocket limit. The bill would also require that
an enrollee who is eligible for a reduction in cost sharing through
a qualified health plan offered through the Exchange not be required
to pay in any single month more than 1/24
of the annual limit on out-of-pocket expenses for
that product limit for a drug that does not have a
time-limited course of treatment or that has a time-limited course of
treatment of more than 3 months. For a drug that has a
time-limited course of treatment of 3 months or less, the bill would
require that the copayment, coinsurance, or other form of cost
sharing not exceed 1/2 of the annual
out-of-pocket limit. The bill would specify that its provisions also
apply to specialized plan contracts and policies that offer essential
health benefits, as specified . Because a willful violation of
the bill's requirements by a health care service plan 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 1367.0095 is added to the Health and Safety
Code, to read:
1367.0095. (a) (1) With respect to a nongrandfathered
an individual or group health care service plan
contract subject to Section 1367.006, the copayment, coinsurance, or
any other form of cost sharing for a covered outpatient prescription
drug for an individual prescription for a supply of up to 30 days
shall not exceed 1/24 of the annual
out-of-pocket limit set forth in Section 1367.006. the
following:
(A) For a prescription drug that does not have a time-limited
course of treatment or that has a time-limited course of treatment of
more than three months, 1/24 of the annual out-of-pocket limit
applicable under Section 1367.006.
(B) For a prescription drug that has a time-limited course of
treatment of three months or less, 1/2 of the annual out-of-pocket
limit applicable under Section 1367.006.
(2) For a health care service plan contract that meets the
definiton definition of a
high deductible health plan set forth in Section 223(c)(2) of Title
26 of the United States Code, paragraph (1) shall only apply once an
enrollee's deductible has been satisfied for the plan year.
(3) Paragraph (1) shall not apply to coverage under a health care
service plan contract for the Medicare Program pursuant to Title
XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et
seq.).
(b) Nothing in this section shall be construed to affect the
reduction in cost sharing for eligible enrollees described in Section
1402 of PPACA and any subsequent rules, regulations, or guidance
issued under that section.
(c) An enrollee who is eligible for a reduction in cost sharing
pursuant to Section 1402 of PPACA shall not be required to pay in any
single month more than 1/24 of the annual limit on out-of-pocket
expenses for the cost sharing reduction product.
(c) If an essential health benefit, as defined in Section
1367.005, is offered or provided by a specialized health care service
plan contract, this section shall apply to the outpatient
prescription drugs covered by the contract that constitute essential
health benefits. This section shall not apply to a specialized health
care service plan contract that does not offer or provide an
essential health benefit, as defined in Section 1367.005.
(d) This section shall only apply to an individual health care
service plan contract that is issued, amended, or renewed on or after
January 1, 2016, and to a group health care service plan contract
that is issued, amended, or renewed on or after July 1, 2015.
(d)
(e) For purposes of this section, the following
definitions shall apply:
(1) "Outpatient prescription drug" means a drug approved by the
federal Food and Drug Administration , and prescribed by a
licensed health care professional acting within his or her scope of
practice, that is self-administered by a patient, administered
by a licensed health care professional in an outpatient setting, or
administered in a clinical setting that is not an inpatient setting.
(2) For nongrandfathered health care service plan contracts in the
group market, "plan year" has the meaning set forth in Section
144.103 of Title 45 of the Code of Federal Regulations. For
nongrandfathered health care service plan contracts sold in the
individual market, "plan year" means the calendar year.
(3) "PPACA" means 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), and
any rules, regulations, or guidance issued thereunder.
SEC. 2. Section 10112.298 is added to the Insurance Code, to read:
10112.298. (a) (1) With respect to a nongrandfathered
an individual or group health insurance policy
subject to Section 10112.28, the copayment, coinsurance, or any other
form of cost sharing for a covered outpatient prescription drug for
an individual prescription for a supply of up to 30 days shall not
exceed 1/24 of the annual out-of-pocket
limit set forth in Section 10112.28. the following:
(A) For a prescription drug that does not have a time-limited
course of treatment or that has a time-limited course of treatment of
more than three months, 1/24 of the annual out-of-pocket limit
applicable under Section 10112.28.
(B) For a prescription drug that has a time-limited course of
treatment of three months or less, 1/2 of the annual out-of-pocket
limit applicable under Section 10112.28.
(2) For a health insurance policy that meets the
definiton definition of a high deductible health
plan set forth in Section 223(c)(2) of Title 26 of the United States
Code, paragraph (1) shall only apply once an insured's deductible
has been satisfied for the plan year.
(3) Paragraph (1) shall not apply to coverage under a health
insurance policy for the Medicare Program pursuant to Title XVIII of
the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.).
(b) Nothing in this section shall be construed to affect the
reduction in cost sharing for eligible insureds described in Section
1402 of PPACA and any subsequent rules, regulations, or guidance
issued under that section.
(c) An insured who is eligible for a reduction in cost sharing
pursuant to Section 1402 of PPACA shall not be required to pay in any
single month more than 1/24 of the annual limit on out-of-pocket
expenses for the cost sharing reduction product.
(c) If an essential health benefit, as defined in Section
10112.27, is offered or provided by a specialized health insurance
policy, this section shall apply to the outpatient prescription drugs
covered by the policy that constitute essential health benefits.
This section shall not apply to a specialized health insurance policy
that does not offer or provide an essential health benefit, as
defined in Section 10112.27.
(d) This section shall only apply to an individual health
insurance policy that is issued, amended, or renewed on or after
January 1, 2016, and to a group health insurance policy that is
issued, amended, or renewed on or after July 1, 2015.
(d)
(e) For purposes of this section, the following
definitions shall apply:
(1) "Outpatient prescription drug" means a drug approved by the
federal Food and Drug Administration , and prescribed by a
licensed health care professional acting within his or her scope of
practice, that is self-administered by a patient, administered
by a licensed health care professional in an outpatient setting, or
administered in a clinical setting that is not an inpatient setting.
(2) For nongrandfathered health insurance policies in the group
market, "plan year" has the meaning set forth in Section 144.103 of
Title 45 of the Code of Federal Regulations. For nongrandfathered
health insurance policies sold in the individual market, "plan year"
means the calendar year.
(3) "PPACA" means 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), and
any rules, regulations, or guidance issued thereunder.
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.