BILL NUMBER: AB 1917	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 23, 2014
	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.
   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 requires an individual or group health care service plan
contract or health 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
  not exceed   1/12  of the annual
out-of-pocket limit for a  supply of up to 30 days of 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
 for the time-limited course of treatment  . 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 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 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   1/12  of
the annual out-of-pocket limit applicable under Section 1367.006 
for a supply of up to 30 days  .
   (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  for the time-limited
course of treatment  .
   (2) For a health care service plan contract that meets the
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) The cost-sharing limits established in subdivision (a) shall
only apply to outpatient prescription drugs covered by the contract
that constitute essential health benefits, as defined in Section
1367.005.  
   (b) 
    (c)  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) 
    (d)  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) 
    (e)  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. 
   (e) 
    (f)  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 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 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   1/12  of
the annual out-of-pocket limit applicable under Section 10112.28 
for a supply of up to 30 days  .
   (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  for the time-limited
course of treatment  .
   (2) For a health insurance policy that meets the 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) The cost-sharing limits established in subdivision (a) shall
only apply to outpatient prescription drugs covered by the policy
that constitute essential health benefits, as defined in Section
10112.27.  
   (b) 
    (c)  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) 
    (d)  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) 
    (e)  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. 
   (e) 
    (f)  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.