Amended in Senate April 9, 2014

Senate Bill No. 1053

Introduced by Senator Mitchell

February 18, 2014

An act to amend begin delete Sections 1367.005 and end delete begin insert Section end insert 1367.25 of the Health and Safety Code, and to amend begin delete Sections 10112.27 and end delete begin insert Section end insert 10123.196 of the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

SB 1053, as amended, Mitchell. Health care coverage: contraceptives.

Existing law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various reforms to the health insurance market. Among other things, PPACA requires a nongrandfathered group health plan and a health insurance issuer offering group or individual insurance coverage to provide coverage for and not impose cost sharing requirements for certain preventive services, including those preventive care and screenings for women provided in specified guidelines. PPACA requires those plans and issuers to provide coverage without begin delete cost-sharing end delete begin insert cost sharing end insert for all federal Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity, as prescribed by a provider, except 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 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 a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drug benefits to provide coverage for a variety of federal Food and Drug Administration (FDA) approved prescription contraceptive methods designated by the plan or insurer, except as specified. Existing law authorizes a religious employer, as defined, to request a contract or policy without coverage of FDA approved contraceptive methods that are contrary to the employer’s religious tenets and, if so requested, requires a contract or policy to be provided without that coverage. Existing law requires an individual or small group health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2014, to cover essential health benefits, which are defined to include the health benefits covered by particular benchmark plans.

This bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2015, to provide coverage for all FDA approved contraceptive drugs, devices, and products in each contraceptive category outlined by the FDA, as well as begin insert voluntary end insert sterilization procedures and contraceptive education and counseling begin delete , and would prohibit a plan or insurer from engaging in unreasonable medical management, as defined, in providing that coverage. The bill would specify that these benefits are included within the definition of essential health benefits for contracts and policies issued, amended, or renewed on or after January 1, 2015 end delete . The bill would prohibit a nongrandfathered plan contract or health insurance policy from imposing any cost-sharing requirements begin insert or other restrictions or delays end insert with respect to this coverage, except as specified. The bill would also begin delete prohibit end delete begin insert authorize end insert a plan or insurer begin delete from requiring end delete begin insert to require end insert a prescription to trigger coverage of FDA approved over-the-counter contraceptive methods and supplies. The bill would retain the provision authorizing a religious employer to request a contract or policy without coverage of FDA approved contraceptive methods that are contrary to the employer’s religious tenets. 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.  

The Legislature hereby finds and declares all of
the following:

(a) California has a long history of expanding timely access to
birth control to prevent unintended pregnancy.

(b) The federal Patient Protection and Affordable Care Act
includes a contraceptive coverage guarantee as part of a broader
requirement for health insurance carriers and plans to cover key
preventive care services without out-of-pocket costs for patients.

(c) The Legislature intends to build on existing state and federal
law to ensure greater contraceptive coverage equity and timely
access to all begin delete Federal end delete begin insert federal end insert Food and Drug Administration
approved methods of birth control for all individuals covered by
health care service plan contracts and health insurance policies in
California.

begin delete

SEC. 2.  

Section 1367.005 of the Health and Safety Code is
amended to read:

1367.005.  

(a) An individual or small group health care service
plan contract issued, amended, or renewed on or after January 1,
2014, shall, at a minimum, include coverage for essential health
benefits pursuant to PPACA and as outlined in this section. For
purposes of this section, “essential health benefits” means all of
the following:

(1) Health benefits within the categories identified in Section
1302(b) of PPACA: ambulatory patient services, emergency
services, hospitalization, maternity and newborn care, mental health
and substance use disorder services, including behavioral health
treatment, prescription drugs, rehabilitative and habilitative services
and devices, laboratory services, preventive and wellness services
and chronic disease management, and pediatric services, including
oral and vision care.

(2) (A) The health benefits covered by the Kaiser Foundation
Health Plan Small Group HMO 30 plan (federal health product
identification number 40513CA035) as this plan was offered during
the first quarter of 2012, as follows, regardless of whether the
benefits are specifically referenced in the evidence of coverage or
plan contract for that plan:

(i) Medically necessary basic health care services, as defined
in subdivision (b) of Section 1345 and in Section 1300.67 of Title
28 of the California Code of Regulations.

(ii) The health benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, as
described in the following sections: Sections 1367.002, 1367.06,
and 1367.35 (preventive services for children); Section 1367.25
(prescription drug coverage for contraceptives); Section 1367.45
(AIDS vaccine); Section 1367.46 (HIV testing); Section 1367.51
(diabetes); Section 1367.54 (alpha feto protein testing); Section
1367.6 (breast cancer screening); Section 1367.61 (prosthetics for
laryngectomy); Section 1367.62 (maternity hospital stay); Section
1367.63 (reconstructive surgery); Section 1367.635 (mastectomies);
Section 1367.64 (prostate cancer); Section 1367.65
(mammography); Section 1367.66 (cervical cancer); Section
1367.665 (cancer screening tests); Section 1367.67 (osteoporosis);
Section 1367.68 (surgical procedures for jaw bones); Section
1367.71 (anesthesia for dental); Section 1367.9 (conditions
attributable to diethylstilbestrol); Section 1368.2 (hospice care);
Section 1370.6 (cancer clinical trials); Section 1371.5 (emergency
response ambulance or ambulance transport services); subdivision
(b) of Section 1373 (sterilization operations or procedures); Section
1373.4 (inpatient hospital and ambulatory maternity); Section
1374.56 (phenylketonuria); Section 1374.17 (organ transplants for
HIV); Section 1374.72 (mental health parity); and Section 1374.73
(autism/behavioral health treatment).

(iii) Any other benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, as
described in those statutes.

(iv) The health benefits covered by the plan that are not
otherwise required to be covered under this chapter, to the extent
required pursuant to Sections 1367.18, 1367.21, 1367.215, 1367.22,
1367.24, and 1367.25, and Section 1300.67.24 of Title 28 of the
California Code of Regulations.

(v) Any other health benefits covered by the plan that are not
otherwise required to be covered under this chapter.

(B) Where there are any conflicts or omissions in the plan
identified in subparagraph (A) as compared with the requirements
for health benefits under this chapter that were enacted prior to
December 31, 2011, the requirements of this chapter shall be
controlling, except as otherwise specified in this section.

(C) Notwithstanding subparagraph (B) or any other provision
of this section, the home health services benefits covered under
the plan identified in subparagraph (A) shall be deemed to not be
in conflict with this chapter.

(D) For purposes of this section, the Paul Wellstone and Pete
Domenici Mental Health Parity and Addiction Equity Act of 2008
(Public Law 110-343) shall apply to a contract subject to this
section. Coverage of mental health and substance use disorder
services pursuant to this paragraph, along with any scope and
duration limits imposed on the benefits, shall be in compliance
with the Paul Wellstone and Pete Domenici Mental Health Parity
and Addiction Equity Act of 2008 (Public Law 110-343), and all
rules, regulations, or guidance issued pursuant to Section 2726 of
the federal Public Health Service Act (42 U.S.C. Sec. 300gg-26).

(3) With respect to habilitative services, in addition to any
habilitative services identified in paragraph (2), coverage shall
also be provided as required by federal rules, regulations, and
guidance issued pursuant to Section 1302(b) of PPACA.
Habilitative services shall be covered under the same terms and
conditions applied to rehabilitative services under the plan contract.

(4) With respect to pediatric vision care, the same health benefits
for pediatric vision care covered under the Federal Employees
Dental and Vision Insurance Program vision plan with the largest
national enrollment as of the first quarter of 2012. The pediatric
vision care benefits covered pursuant to this paragraph shall be in
addition to, and shall not replace, any vision services covered under
the plan identified in paragraph (2).

(5) With respect to pediatric oral care, the same health benefits
for pediatric oral care covered under the dental plan available to
subscribers of the Healthy Families Program in 2011-12, including
the provision of medically necessary orthodontic care provided
pursuant to the federal Children’s Health Insurance Program
Reauthorization Act of 2009. The pediatric oral care benefits
covered pursuant to this paragraph shall be in addition to, and shall
not replace, any dental or orthodontic services covered under the
plan identified in paragraph (2).

(b) With respect to an individual or group health care service
plan contract issued, amended, or renewed on or after January 1,
2015, except for a specialized health care service plan contract,
“essential health benefits” also includes the benefits required to
be covered under subdivision (b) of Section 1367.25.

(c) Treatment limitations imposed on health benefits described
in subdivision (a) shall be no greater than the treatment limitations
imposed by the corresponding plans identified in subdivision (a),
subject to the requirements set forth in paragraph (2) of subdivision
(a).

(d) Except as provided in subdivision (e), nothing in this section
shall be construed to permit a health care service plan to make
substitutions for the benefits required to be covered under this
section, regardless of whether those substitutions are actuarially
equivalent.

(e) To the extent permitted under Section 1302 of PPACA and
any rules, regulations, or guidance issued pursuant to that section,
and to the extent that substitution would not create an obligation
for the state to defray costs for any individual, a plan may substitute
its prescription drug formulary for the formulary provided under
the plan identified in subdivision (a) as long as the coverage for
prescription drugs complies with the sections referenced in clauses
(ii) and (iv) of subparagraph (A) of paragraph (2) of subdivision
(a) that apply to prescription drugs.

(f) No health care service plan, or its agent, solicitor, or
representative, shall issue, deliver, renew, offer, market, represent,
or sell any product, contract, or discount arrangement as compliant
with the essential health benefits requirement in federal law, unless
it meets all of the requirements of this section.

(g) This section shall apply regardless of whether the plan
contract is offered inside or outside the California Health Benefit
Exchange created by Section 100500 of the Government Code.

(h) Nothing in this section shall be construed to exempt a plan
or a plan contract from meeting other applicable requirements of
law.

(i) This section shall not be construed to prohibit a plan contract
from covering additional benefits, including, but not limited to,
spiritual care services that are tax deductible under Section 213 of
the Internal Revenue Code.

(j) Subdivision (a) shall not apply to any of the following:

(1) A specialized health care service plan contract.

(2) A Medicare supplement plan.

(3) A plan contract that qualifies as a grandfathered health plan
under Section 1251 of PPACA or any rules, regulations, or
guidance issued pursuant to that section.

(k) Nothing in this section shall be implemented in a manner
that conflicts with a requirement of PPACA.

(l) This section shall be implemented only to the extent essential
health benefits are required pursuant to PPACA.

(m) Except for the benefits required under subdivision (b), an
essential health benefit is required to be provided under this section
only to the extent that federal law does not require the state to
defray the costs of the benefit.

(n) Nothing in this section shall obligate the state to incur costs
for the coverage of benefits that are not essential health benefits
as defined in this section.

(o) A plan is not required to cover, under this section, changes
to health benefits that are the result of statutes enacted on or after
December 31, 2011, except for the benefits required under
subdivision (b).

(p) (1) The department may adopt emergency regulations
implementing this section. The department may, on a one-time
basis, readopt any emergency regulation authorized by this section
that is the same as, or substantially equivalent to, an emergency
regulation previously adopted under this section.

(2) The initial adoption of emergency regulations implementing
this section and the readoption of emergency regulations authorized
by this subdivision shall be deemed an emergency and necessary
for the immediate preservation of the public peace, health, safety,
or general welfare. The initial emergency regulations and the
readoption of emergency regulations authorized by this section
shall be submitted to the Office of Administrative Law for filing
with the Secretary of State and each shall remain in effect for no
more than 180 days, by which time final regulations may be
adopted.

(3) The director shall consult with the Insurance Commissioner
to ensure consistency and uniformity in the development of
regulations under this subdivision.

(4) This subdivision shall become inoperative on March 1, 2016.

(q) For purposes of this section, the following definitions shall
apply:

(1) “Habilitative services” means medically necessary health
care services and health care devices that assist an individual in
partially or fully acquiring or improving skills and functioning and
that are necessary to address a health condition, to the maximum
extent practical. These services address the skills and abilities
needed for functioning in interaction with an individual’s
environment. Examples of health care services that are not
habilitative services include, but are not limited to, respite care,
day care, recreational care, residential treatment, social services,
custodial care, or education services of any kind, including, but
not limited to, vocational training. Habilitative services shall be
covered under the same terms and conditions applied to
rehabilitative services under the plan contract.

(2) (A) “Health benefits,” unless otherwise required to be
defined pursuant to federal rules, regulations, or guidance issued
pursuant to Section 1302(b) of PPACA, means health care items
or services for the diagnosis, cure, mitigation, treatment, or
prevention of illness, injury, disease, or a health condition,
including a behavioral health condition.

(B) “Health benefits” does not mean any cost-sharing
requirements such as copayments, coinsurance, or deductibles.

(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.

(4) “Small group health care service plan contract” means a
group health care service plan contract issued to a small employer,
as defined in Section 1357.

end delete

begin delete SEC. 3. end delete
begin insert SEC. 2. end insert   

Section 1367.25 of the Health and Safety Code is
amended to read:

1367.25.  

(a)  A group health care service plan contract, except
for a specialized health care service plan contract, that is issued,
amended, renewed, or delivered on or after January 1, 2000,
begin insert through December 31, 2014, inclusive, end insert and an individual health
care service plan contract that is amended, renewed, or delivered
on or after January 1, 2000, begin insert through December 31, 2014, inclusive, end insert
except for a specialized health care service plan contract, shall
provide coverage for the following, under general terms and
conditions applicable to all benefits:

(1)  A health care service plan contract that provides coverage
for outpatient prescription drug benefits shall include coverage for
a variety of federal Food and Drug Administration (FDA) approved
prescription contraceptive methods designated by the plan. In the
event the patient’s participating provider, acting within his or her
scope of practice, determines that none of the methods designated
by the plan is medically appropriate for the patient’s medical or
personal history, the plan shall also provide coverage for another
FDA approved, medically appropriate prescription contraceptive
method prescribed by the patient’s provider.

(2)   begin delete Outpatient prescription benefits end delete begin insert Benefits end insert for an enrollee
under this subdivision shall be the same for an enrollee’s covered
spouse and covered nonspouse dependents.

(b) (1) A group or individual health care service plan contract,
except for a specialized health care service plan contract, that is
issued, amended, renewed, or delivered on or after January 1, 2015,
shall provide coverage for all begin delete FDA end delete begin insert of the following: end insert

begin insert (A) end insert begin insert   end insert begin insert All FDA end insert approved contraceptive drugs, devices, and products
in each contraceptive category outlined by the FDA, begin delete as well as
sterilization procedures and contraceptive education and
counseling. A health care service plan shall not engage in
unreasonable medical management in providing the coverage
required by this subdivision. end delete begin insert including drugs, devices, and products
available over the counter, as prescribed by the enrollee’s
provider. end insert

begin delete

(2) A nongrandfathered group or individual health care service

end delete begin insert

(B) Voluntary sterilization procedures.

end insert begin insert

(C) Patient education and counseling on contraception.

end insert

begin insert (2) end insert begin insert   end insert begin insert (A) end insert begin insert   end insert begin insert Except for a grandfathered health plan, and subject to
subparagraph (B), a health care service end insert plan begin delete contract end delete subject to
this subdivision shall not impose a deductible, coinsurance,
copayment, or any other cost-sharing requirement on the coverage
provided pursuant to this subdivision.

begin delete

(3) Notwithstanding paragraph (2), a plan may cover a generic
drug without cost sharing and impose cost sharing for equivalent
branded drugs. If a generic version of a drug is not available, a
plan shall provide coverage for the brand name drug in accordance
with the requirements of this subdivision. In addition, a plan shall
accommodate an enrollee for whom a generic drug would be
medically inappropriate under this subdivision, as determined by
the enrollee’s participating provider in consultation with the
enrollee, by having a mechanism for waiving the otherwise
applicable cost sharing for the branded version.

(4) Notwithstanding paragraph (1), a health care service plan
may impose reasonable quantity limits on the number of
contraceptive supplies an enrollee may receive at a given time
under this subdivision.

end delete begin insert

(B) A health care service plan may cover a generic drug, device,
or product without cost sharing and impose cost sharing for
equivalent nonpreferred or branded drugs, devices, or products.
However, if a generic version of a drug, device, or product is not
available, or is deemed medically inadvisable by the enrollee’s
provider, a health care service plan shall provide coverage for
the nonpreferred or brand name drug, device, or product without
cost sharing.

end insert begin delete

(5)

end delete

begin insert (3) end insert  A health care service plan begin delete shall not end delete begin insert may end insert require a
prescription to trigger coverage of FDA approved over-the-counter
contraceptive methods and supplies under this subdivision.

begin delete

(6) Outpatient drug benefits for

end delete begin insert

(4) Except as otherwise authorized under this section, a health
care service plan shall not impose any restrictions or delays on
the coverage required under this subdivision.

end insert

begin insert (5) end insert begin insert   end insert begin insert Benefits for end insert an enrollee under this subdivision shall be the
same for an enrollee’s covered spouse and covered nonspouse
dependents.

(c) Notwithstanding any other provision of this section, a
religious employer may request a health care service plan contract
without coverage for FDA approved contraceptive methods that
are contrary to the religious employer’s religious tenets. If so
requested, a health care service plan contract shall be provided
without coverage for contraceptive methods.

(1)  For purposes of this section, a “religious employer” is an
entity for which each of the following is true:

(A)  The inculcation of religious values is the purpose of the
entity.

(B)  The entity primarily employs persons who share the
religious tenets of the entity.

(C)  The entity serves primarily persons who share the religious
tenets of the entity.

(D)  The entity is a nonprofit organization as described in
Section 6033(a)(2)(A)i or iii, of the Internal Revenue Code of
1986, as amended.

(2)  Every religious employer that invokes the exemption
provided under this section shall provide written notice to
prospective enrollees prior to enrollment with the plan, listing the
contraceptive health care services the employer refuses to cover
for religious reasons.

(d) Nothing in this section shall be construed to exclude
coverage for contraceptive supplies begin delete ordered end delete begin insert as prescribed end insert by a
provider, acting within his or her scope of practice, for reasons
other than contraceptive purposes, such as decreasing the risk of
ovarian cancer or eliminating symptoms of menopause, or for
contraception that is necessary to preserve the life or health of an
enrollee.

(e) Nothing in this section shall be construed to deny or restrict
in any way the department’s authority to ensure plan compliance
with this chapter when a plan provides coverage for begin insert contraceptive end insert
drugs begin insert , devices, and products end insert .

(f) Nothing in this section shall be construed to require an
individual or group health care service plan contract to cover
experimental or investigational treatments.

(g) For purposes of this section, the following definitions apply:

(1) “Grandfathered health plan” has the meaning set forth in
Section 1251 of PPACA.

begin delete

(2) “Nongrandfathered individual or group health care service
plan contract” means a health care service plan contract that is not
a grandfathered health plan.

end delete begin delete

(3)

end delete

begin insert (2) end insert  “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.

begin delete

(4)

end delete

begin insert (3) end insert  With respect to health care service plan contracts issued,
amended, or renewed on or after January 1, 2015, “provider” means
an individual who is certified or licensed pursuant to Division 2
(commencing with Section 500) of the Business and Professions
Code, or an initiative act referred to in that division, or Division
2.5 (commencing with Section 1797).

begin delete

(5) “Reasonable quantity limits” means quantity limits placed
by a health care service plan on contraceptive supplies that would
not cause an undue burden or barrier to consistent, regular, and
effective use of the contraceptive method.

end delete begin delete

(6) “Unreasonable medical management” means techniques
used by a health care service plan that deny, tier, or condition
enrollee access to an FDA approved contraceptive drug, device,
or product.

end delete

begin delete

SEC. 4.  

Section 10112.27 of the Insurance Code is amended
to read:

10112.27.  

(a) An individual or small group health insurance
policy issued, amended, or renewed on or after January 1, 2014,
shall, at a minimum, include coverage for essential health benefits
pursuant to PPACA and as outlined in this section. This section
shall exclusively govern what benefits a health insurer must cover
as essential health benefits. For purposes of this section, “essential
health benefits” means all of the following:

(1) Health benefits within the categories identified in Section
1302(b) of PPACA: ambulatory patient services, emergency
services, hospitalization, maternity and newborn care, mental health
and substance use disorder services, including behavioral health
treatment, prescription drugs, rehabilitative and habilitative services
and devices, laboratory services, preventive and wellness services
and chronic disease management, and pediatric services, including
oral and vision care.

(2) (A) The health benefits covered by the Kaiser Foundation
Health Plan Small Group HMO 30 plan (federal health product
identification number 40513CA035) as this plan was offered during
the first quarter of 2012, as follows, regardless of whether the
benefits are specifically referenced in the plan contract or evidence
of coverage for that plan:

(i) Medically necessary basic health care services, as defined
in subdivision (b) of Section 1345 of the Health and Safety Code
and in Section 1300.67 of Title 28 of the California Code of
Regulations.

(ii) The health benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, as
described in the following sections of the Health and Safety Code:
Sections 1367.002, 1367.06, and 1367.35 (preventive services for
children); Section 1367.25 (prescription drug coverage for
contraceptives); Section 1367.45 (AIDS vaccine); Section 1367.46
(HIV testing); Section 1367.51 (diabetes); Section 1367.54 (alpha
feto protein testing); Section 1367.6 (breast cancer screening);
Section 1367.61 (prosthetics for laryngectomy); Section 1367.62
(maternity hospital stay); Section 1367.63 (reconstructive surgery);
Section 1367.635 (mastectomies); Section 1367.64 (prostate
cancer); Section 1367.65 (mammography); Section 1367.66
(cervical cancer); Section 1367.665 (cancer screening tests);
Section 1367.67 (osteoporosis); Section 1367.68 (surgical
procedures for jaw bones); Section 1367.71 (anesthesia for dental);
Section 1367.9 (conditions attributable to diethylstilbestrol);
Section 1368.2 (hospice care); Section 1370.6 (cancer clinical
trials); Section 1371.5 (emergency response ambulance or
ambulance transport services); subdivision (b) of Section 1373
(sterilization operations or procedures); Section 1373.4 (inpatient
hospital and ambulatory maternity); Section 1374.56
(phenylketonuria); Section 1374.17 (organ transplants for HIV);
Section 1374.72 (mental health parity); and Section 1374.73
(autism/behavioral health treatment).

(iii) Any other benefits mandated to be covered by the plan
pursuant to statutes enacted before December 31, 2011, as
described in those statutes.

(iv) The health benefits covered by the plan that are not
otherwise required to be covered under Chapter 2.2 (commencing
with Section 1340) of Division 2 of the Health and Safety Code,
to the extent otherwise required pursuant to Sections 1367.18,
1367.21, 1367.215, 1367.22, 1367.24, and 1367.25 of the Health
and Safety Code, and Section 1300.67.24 of Title 28 of the
California Code of Regulations.

(v) Any other health benefits covered by the plan that are not
otherwise required to be covered under Chapter 2.2 (commencing
with Section 1340) of Division 2 of the Health and Safety Code.

(B) Where there are any conflicts or omissions in the plan
identified in subparagraph (A) as compared with the requirements
for health benefits under Chapter 2.2 (commencing with Section
1340) of Division 2 of the Health and Safety Code that were
enacted prior to December 31, 2011, the requirements of Chapter
2.2 (commencing with Section 1340) of Division 2 of the Health
and Safety Code shall be controlling, except as otherwise specified
in this section.

(C) Notwithstanding subparagraph (B) or any other provision
of this section, the home health services benefits covered under
the plan identified in subparagraph (A) shall be deemed to not be
in conflict with Chapter 2.2 (commencing with Section 1340) of
Division 2 of the Health and Safety Code.

(D) For purposes of this section, the Paul Wellstone and Pete
Domenici Mental Health Parity and Addiction Equity Act of 2008
(Public Law 110-343) shall apply to a policy subject to this section.
Coverage of mental health and substance use disorder services
pursuant to this paragraph, along with any scope and duration
limits imposed on the benefits, shall be in compliance with the
Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008 (Public Law 110-343), and all rules,
regulations, and guidance issued pursuant to Section 2726 of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg-26).

(3) With respect to habilitative services, in addition to any
habilitative services identified in paragraph (2), coverage shall
also be provided as required by federal rules, regulations, or
guidance issued pursuant to Section 1302(b) of PPACA.
Habilitative services shall be covered under the same terms and
conditions applied to rehabilitative services under the policy.

(4) With respect to pediatric vision care, the same health benefits
for pediatric vision care covered under the Federal Employees
Dental and Vision Insurance Program vision plan with the largest
national enrollment as of the first quarter of 2012. The pediatric
vision care services covered pursuant to this paragraph shall be in
addition to, and shall not replace, any vision services covered under
the plan identified in paragraph (2).

(5) With respect to pediatric oral care, the same health benefits
for pediatric oral care covered under the dental plan available to
subscribers of the Healthy Families Program in 2011-12, including
the provision of medically necessary orthodontic care provided
pursuant to the federal Children’s Health Insurance Program
Reauthorization Act of 2009. The pediatric oral care benefits
covered pursuant to this paragraph shall be in addition to, and shall
not replace, any dental or orthodontic services covered under the
plan identified in paragraph (2).

(b) With respect to an individual or group health insurance
policy issued, amended, or renewed on or after January 1, 2015,
except for a specialized health insurance policy, “essential health
benefits” also includes the benefits required to be covered under
subdivision (b) of Section 10123.196.

(c) Treatment limitations imposed on health benefits described
in subdivision (a) shall be no greater than the treatment limitations
imposed by the corresponding plans identified in subdivision (a),
subject to the requirements set forth in paragraph (2) of subdivision
(a).

(d) Except as provided in subdivision (e), nothing in this section
shall be construed to permit a health insurer to make substitutions
for the benefits required to be covered under this section, regardless
of whether those substitutions are actuarially equivalent.

(e) To the extent permitted under Section 1302 of PPACA and
any rules, regulations, or guidance issued pursuant to that section,
and to the extent that substitution would not create an obligation
for the state to defray costs for any individual, an insurer may
substitute its prescription drug formulary for the formulary
provided under the plan identified in subdivision (a) as long as the
coverage for prescription drugs complies with the sections
referenced in clauses (ii) and (iv) of subparagraph (A) of paragraph
(2) of subdivision (a) that apply to prescription drugs.

(f) No health insurer, or its agent, producer, or representative,
shall issue, deliver, renew, offer, market, represent, or sell any
product, policy, or discount arrangement as compliant with the
essential health benefits requirement in federal law, unless it meets
all of the requirements of this section. This subdivision shall be
enforced in the same manner as Section 790.03, including through
the means specified in Sections 790.035 and 790.05.

(g) This section shall apply regardless of whether the policy is
offered inside or outside the California Health Benefit Exchange
created by Section 100500 of the Government Code.

(h) Nothing in this section shall be construed to exempt a health
insurer or a health insurance policy from meeting other applicable
requirements of law.

(i) This section shall not be construed to prohibit a policy from
covering additional benefits, including, but not limited to, spiritual
care services that are tax deductible under Section 213 of the
Internal Revenue Code.

(j) Subdivision (a) shall not apply to any of the following:

(1) A policy that provides excepted benefits as described in
Sections 2722 and 2791 of the federal Public Health Service Act
(42 U.S.C. Sec. 300gg-21; 42 U.S.C. Sec. 300gg-91).

(2) A policy that qualifies as a grandfathered health plan under
Section 1251 of PPACA or any binding rules, regulation, or
guidance issued pursuant to that section.

(k) Nothing in this section shall be implemented in a manner
that conflicts with a requirement of PPACA.

(l) This section shall be implemented only to the extent essential
health benefits are required pursuant to PPACA.

(m) Except for the benefits required under subdivision (b), an
essential health benefit is required to be provided under this section
only to the extent that federal law does not require the state to
defray the costs of the benefit.

(n) Nothing in this section shall obligate the state to incur costs
for the coverage of benefits that are not essential health benefits
as defined in this section.

(o) An insurer is not required to cover, under this section,
changes to health benefits that are the result of statutes enacted on
or after December 31, 2011, except for the benefits required under
subdivision (b).

(p) (1) The commissioner may adopt emergency regulations
implementing this section. The commissioner may, on a one-time
basis, readopt any emergency regulation authorized by this section
that is the same as, or substantially equivalent to, an emergency
regulation previously adopted under this section.

(2) The initial adoption of emergency regulations implementing
this section and the readoption of emergency regulations authorized
by this subdivision shall be deemed an emergency and necessary
for the immediate preservation of the public peace, health, safety,
or general welfare. The initial emergency regulations and the
readoption of emergency regulations authorized by this section
shall be submitted to the Office of Administrative Law for filing
with the Secretary of State and each shall remain in effect for no
more than 180 days, by which time final regulations may be
adopted.

(3) The commissioner shall consult with the Director of the
Department of Managed Health Care to ensure consistency and
uniformity in the development of regulations under this
subdivision.

(4) This subdivision shall become inoperative on March 1, 2016.

(q) Nothing in this section shall impose on health insurance
policies the cost sharing or network limitations of the plans
identified in subdivision (a) except to the extent otherwise required
to comply with provisions of this code, including this section, and
as otherwise applicable to all health insurance policies offered to
individuals and small groups.

(r) For purposes of this section, the following definitions shall
apply:

(1) “Habilitative services” means medically necessary health
care services and health care devices that assist an individual in
partially or fully acquiring or improving skills and functioning and
that are necessary to address a health condition, to the maximum
extent practical. These services address the skills and abilities
needed for functioning in interaction with an individual’s
environment. Examples of health care services that are not
habilitative services include, but are not limited to, respite care,
day care, recreational care, residential treatment, social services,
custodial care, or education services of any kind, including, but
not limited to, vocational training. Habilitative services shall be
covered under the same terms and conditions applied to
rehabilitative services under the policy.

(2) (A) “Health benefits,” unless otherwise required to be
defined pursuant to federal rules, regulations, or guidance issued
pursuant to Section 1302(b) of PPACA, means health care items
or services for the diagnosis, cure, mitigation, treatment, or
prevention of illness, injury, disease, or a health condition,
including a behavioral health condition.

(B) “Health benefits” does not mean any cost-sharing
requirements such as copayments, coinsurance, or deductibles.

(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.

(4) “Small group health insurance policy” means a group health
care service insurance policy issued to a small employer, as defined
in Section 10700.

end delete

begin delete SEC. 5. end delete
begin insert SEC. 3. end insert   

Section 10123.196 of the Insurance Code is amended
to read:

10123.196.  

(a) An individual or group policy of disability
insurance issued, amended, renewed, or delivered on or after
January 1, 2000, begin insert through December 31, 2014, inclusive, end insert that
provides coverage for hospital, medical, or surgical expenses, shall
provide coverage for the following, under the same terms and
conditions as applicable to all benefits:

(1) A disability insurance policy that provides coverage for
outpatient prescription drug benefits shall include coverage for a
variety of federal Food and Drug Administration (FDA) approved
prescription contraceptive methods, as designated by the insurer.
If an insured’s health care provider determines that none of the
methods designated by the disability insurer is medically
appropriate for the insured’s medical or personal history, the insurer
shall, in the alternative, provide coverage for some other FDA
approved prescription contraceptive method prescribed by the
patient’s health care provider.

(2)  begin delete Outpatient prescription coverage end delete begin insert Coverage end insert with respect to
an insured under this subdivision shall be identical for an insured’s
covered spouse and covered nonspouse dependents.

(b) (1) A group or individual policy of disability insurance,
except for a specialized health insurance policy, that is issued,
amended, renewed, or delivered on or after January 1, 2015, shall
provide coverage for all begin delete FDA approved contraceptive drugs,
devices, and products in each contraceptive category outlined by
the FDA, as well as sterilization procedures and contraceptive
education and counseling. A disability insurer shall not engage in
unreasonable medical management in providing the coverage
required by this subdivision. end delete begin insert of the following: end insert

begin insert

(A) All FDA approved contraceptive drugs, devices, and
products in each contraceptive category outlined by the FDA,
including drugs, devices, and products available over the counter,
as prescribed by the insured’s provider.

end insert begin insert

(B) Voluntary sterilization procedures.

end insert begin insert

(C) Patient education and counseling on contraception.

end insert begin delete

(2) A nongrandfathered group or individual policy of disability
insurance

end delete

begin insert (2) end insert begin insert   end insert begin insert (A) end insert begin insert   end insert begin insert Except for a grandfathered health plan, and subject to
subparagraph (B), a disability insurer end insert subject to this subdivision
shall not impose a deductible, coinsurance, copayment, or any
other cost-sharing requirement on the coverage provided pursuant
to this subdivision.

begin delete

(3) Notwithstanding paragraph (2), an insurer may cover a
generic drug without cost sharing and impose cost sharing for
equivalent branded drugs. If a generic version of a drug is not
available, an insurer shall provide coverage for the brand name
drug in accordance with the requirements of this subdivision. In
addition, an insurer shall accommodate an insured for whom a
generic drug would be medically inappropriate under this
subdivision, as determined by the insured’s health care provider
in consultation with the insured, by having a mechanism for
waiving the otherwise applicable cost sharing for the branded
version.

(4) Notwithstanding paragraph (1), an insurer may impose
reasonable quantity limits on the number of contraceptive supplies
an insured may receive at a given time under this subdivision.

end delete begin insert

(B) A disability insurer may cover a generic drug, device, or
product without cost sharing and impose cost sharing for an
equivalent nonpreferred or branded drug, device, or product.
However, if a generic version of a drug, device, or product is not
available, or is deemed medically inadvisable by the insured’s
provider, a disability insurer shall provide coverage for the
nonpreferred or brand name drug, device, or product without cost
sharing.

end insert begin delete

(5)

end delete

begin insert (3) end insert  An insurer begin delete shall not end delete begin insert may end insert require a prescription to trigger
coverage of FDA approved over-the-counter contraceptive methods
and supplies under this subdivision.

begin insert

(4) Except as otherwise authorized under this section, an insurer
shall not impose any restrictions or delays on the coverage
required under this subdivision.

end insert begin delete

(6) Outpatient drug coverage

end delete

begin insert (5) end insert begin insert   end insert begin insert Coverage end insert with respect to an insured under this subdivision
shall be identical for an insured’s covered spouse and covered
nonspouse dependents.

(c) Nothing in this section shall be construed to deny or restrict
in any way any existing right or benefit provided under law or by
contract.

(d) Nothing in this section shall be construed to require an
individual or group disability insurance policy to cover
experimental or investigational treatments.

(e) Notwithstanding any other provision of this section, a
religious employer may request a disability insurance policy
without coverage for contraceptive methods that are contrary to
the religious employer’s religious tenets. If so requested, a
disability insurance policy shall be provided without coverage for
contraceptive methods.

(1) For purposes of this section, a “religious employer” is an
entity for which each of the following is true:

(A) The inculcation of religious values is the purpose of the
entity.

(B) The entity primarily employs persons who share the religious
tenets of the entity.

(C) The entity serves primarily persons who share the religious
tenets of the entity.

(D) The entity is a nonprofit organization pursuant to Section
6033(a)(2)(A)(i) or (iii) of the Internal Revenue Code of 1986, as
amended.

(2) Every religious employer that invokes the exemption
provided under this section shall provide written notice to any
prospective employee once an offer of employment has been made,
and prior to that person commencing that employment, listing the
contraceptive health care services the employer refuses to cover
for religious reasons.

(f) Nothing in this section shall be construed to exclude coverage
for contraceptive supplies begin delete ordered end delete begin insert as prescribed end insert by a begin delete health care end delete
provider, acting within his or her scope of practice, for reasons
other than contraceptive purposes, such as decreasing the risk of
ovarian cancer or eliminating symptoms of menopause, or for
contraception that is necessary to preserve the life or health of an
insured.

(g) This section shall only apply to disability insurance policies
or contracts that are defined as health benefit plans pursuant to
subdivision (a) of Section 10198.6, except that for accident only,
specified disease, or hospital indemnity coverage, coverage for
benefits under this section shall apply to the extent that the benefits
are covered under the general terms and conditions that apply to
all other benefits under the policy or contract. Nothing in this
section shall be construed as imposing a new benefit mandate on
accident only, specified disease, or hospital indemnity insurance.

(h) For purposes of this section, the following definitions apply:

(1) “Grandfathered health plan” has the meaning set forth in
Section 1251 of PPACA.

begin delete

(2) “Nongrandfathered group or individual policy of disability
insurance” means a disability insurance policy that is not a
grandfathered health plan.

end delete begin delete

(3)

end delete

begin insert (2) end insert  “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.

begin delete

(4)

end delete

begin insert (3) end insert  With respect to policies of disability insurance issued,
amended, or renewed on or after January 1, 2015, “health care
provider” means an individual who is certified or licensed pursuant
to Division 2 (commencing with Section 500) of the Business and
Professions Code, or an initiative act referred to in that division,
or Division 2.5 (commencing with Section 1797) of the Health
and Safety Code.

begin delete

(5) “Reasonable quantity limits” means quantity limits placed
by a disability insurer on contraceptive supplies that would not
cause an undue burden or barrier to consistent, regular, and
effective use of the contraceptive method.

end delete begin delete

(6) “Unreasonable medical management” means techniques
used by a disability insurer that deny, tier, or condition insured
access to an FDA approved contraceptive drug, device, or product.

end delete

begin delete SEC. 6. end delete
begin insert SEC. 4. end insert   

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.