Amended in Senate April 7, 2014

Senate Bill No. 1176

Introduced by Senator Steinberg

February 20, 2014

An act begin insert to add Section 1367.0061 to the Health and Safety Code, and to add Section 10112.281 to the Insurance Code, end insert relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

SB 1176, as amended, Steinberg. Health care coverage: begin delete consumer notice. end delete begin insert cost sharing: tracking. end insert

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. begin insert A willful violation of the act is a crime. end insert Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires a plan or insurer to begin delete provide certain disclosures of the benefits, services, and terms of a contract or policy. end delete begin insert limit annual out-of-pocket expenses for all covered benefits, as specified. end insert

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This bill would require a health care service plan or health insurer to be responsible for monitoring the accrual of out-of-pocket costs. The bill would require a health care service plan or health insurer to track the accumulation of cost sharing for covered essential health benefits attributed to in-network providers, and would prohibit those entities from requiring consumers to track or monitor those costs. The bill would require a plan or insurer to accept claims from the provider or the consumer with respect to cost sharing for out-of-network providers who are providing certain emergency services or otherwise providing covered benefits. The bill would also require a plan or insurer to notify each enrollee or insured when his or her cost sharing has reached the maximum annual out-of-pocket limit for covered essential health benefits and to reimburse an enrollee or insured within 30 days of receiving a claim for cost sharing paid in excess of the maximum annual out-of-pocket limit. Because a willful violation of the bill’s provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program.

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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.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert begin delete

This bill would declare the intent of the Legislature to enact legislation that would require private health care service plans and health insurance companies to notify a consumer when that individual has achieved the maximum limits related to his or her copay, coinsurance, and deductible as stipulated in the consumer’s contract.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 1367.0061 is added to the end insert begin insert Health and
Safety Code end insert begin insert , end insert immediately following Section 1367.006 begin insert , to read: end insert

begin insert

begin insert 1367.0061. end insert   

(a) The health care service plan shall be
responsible for monitoring accrual of out-of-pocket costs as defined
in Section 1367.006.

(b) The health care service plan shall track the accumulation
of cost sharing for covered essential health benefits attributed to
in-network providers, including contracted vendors. The plan shall
not require consumers to track or monitor the accumulation of
cost sharing for covered essential health benefits attributed to
in-network providers, including contracted vendors.

(c) For cost sharing attributed to out-of-network providers who
are providing emergency services consistent with Section 1371.4
or otherwise providing covered benefits, the health care service
plan shall accept claims from the provider or the consumer with
respect to cost sharing.

(d) If the cost sharing for covered essential health benefits
attributable to an enrollee exceeds the maximum annual
out-of-pocket limits, the health care service plan shall be
responsible for reimbursing the individual within 30 days of receipt
of claims information.

(e) The health care service plan shall notify each enrollee when
the enrollee’s cost sharing has reached the maximum annual
out-of-pocket limit for covered essential health benefits.

(f) Nothing in this section shall be construed as requiring the
enrollee to determine or identify when the maximum annual
out-of-pocket limit for covered benefits has been reached.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 10112.281 is added to the end insert begin insert Insurance Code end insert begin insert , end insert immediately following Section 10112.28 begin insert , to read: end insert

begin insert

begin insert 10112.281. end insert   

(a) The health insurer shall be responsible for
monitoring accrual of out-of-pocket costs as defined in Section
10112.28.

(b) The health insurer shall track the accumulation of cost
sharing for covered essential health benefits attributed to
in-network providers, including contracted vendors. The insurer
shall not require consumers to track or monitor the accumulation
of cost sharing for covered essential health benefits attributed to
in-network providers, including contracted vendors.

(c) For cost sharing attributed to out-of-network providers who
are providing emergency services consistent with Section 10112.7
or otherwise providing covered benefits, the health insurer shall
accept claims from the provider or the consumer with respect to
cost sharing.

(d) If the cost sharing for covered essential health benefits
attributable to an insured exceeds the maximum annual
out-of-pocket limits, the health insurer shall be responsible for
reimbursing the individual within 30 days of receipt of claims
information.

(e) The health insurer shall notify each insured when the
insured’s cost sharing has reached the maximum annual
out-of-pocket limit for covered essential health benefits.

(f) Nothing in this section shall be construed as requiring the
insured to determine or identify when the maximum annual
out-of-pocket limit for covered benefits has been reached.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin 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.

end insert

begin delete

SECTION 1.  

It is the intent of the Legislature to enact
legislation that would require private health care service plans and
health insurance companies to notify a consumer when that
individual has achieved the maximum limits related to his or her
copay, coinsurance, and deductible as stipulated in the consumer’s
contract.

end delete