Amended in Assembly June 24, 2014

Amended in Senate April 30, 2014

Amended in Senate April 7, 2014

Senate Bill No. 1176

Introduced by Senator Steinberg

February 20, 2014

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

LEGISLATIVE COUNSEL’S DIGEST

SB 1176, as amended, Steinberg. Health care coverage: cost sharing: begin delete tracking. end delete begin insert monitoring. 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. A willful violation of the act is a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires a begin insert health care service end insert plan or begin insert health end insert insurer to limit annual out-of-pocket expenses for all covered benefits, as specified.

begin delete

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, within 30 days, 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. The bill would require that the enrollee or insured have the opportunity to review the accrual of cost sharing and provide additional information regarding cost sharing that should be credited to the 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.

end delete begin insert

This bill would require a health care service plan or health insurer to be responsible for monitoring the accrual of out-of-pocket costs toward the annual out-of-pocket limit. The bill would require a health care service plan or health insurer, for cost sharing attributed to in-network providers, including contracted vendors, that count toward the annual limit on out-of-pocket costs, to be solely responsible for monitoring the accrual of out-of-pocket costs and prohibit the health care service plan or health insurer from requiring the consumer to track or monitor the accumulation of cost sharing for covered essential health benefits attributed to in-network providers, including contracted vendors. The bill would require a health care service plan or health insurer to accept claims from the provider or information from the consumer with respect to cost sharing for out-of-network providers who are providing certain emergency services or otherwise providing covered benefits arranged by the health care service plan or health insurer subject to the annual limit on out-of-pocket expenses. The bill would also require the health care service plan or health insurer, if the cost sharing for covered essential health benefits attributable to an enrollee or insured exceeds the maximum annual out-of-pocket limits, to reimburse the enrollee or insured no later than 5 working days after the health care service plan or health insurer is required to reimburse the claim or notify the claimant that the claim is contested or denied. The bill would require that the enrollee or insured have the opportunity to review the accrual of cost sharing and provide additional information regarding cost sharing that should be accrued to the 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.

end insert

This bill would make these provisions applicable to nongrandfathered individual and group health care service plans, specialized health care service plans that provide coverage for essential health benefits, nongrandfathered individual and group health insurers, and specialized health insurers that provide coverage for essential health benefits.

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

1367.0061.  

(a) This section shall apply to nongrandfathered
individual and group health care service plans and to specialized
health care service plans that provide coverage for essential health
benefits, as defined in Section 1367.005, and that are issued,
amended, or renewed on or after January 1, 2015.

(b) The health care service plan shall be responsible for
monitoring begin insert the end insert accrual of out-of-pocket costs begin delete as defined end delete begin insert toward
the annual limit on out-of-pocket costs as provided end insert in Section
1367.006.

begin delete

(c) 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.

end delete begin insert

(1) For cost sharing attributed to in-network providers,
including contracted vendors, that count toward the annual limit
on out-of-pocket costs, the health care service plan shall be solely
responsible for monitoring the accrual of out-of-pocket costs and
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.

end insert begin delete

(d)

end delete

begin insert (2) end insert  For cost sharing attributed to out-of-network providers who
are providing emergency services consistent with Section 1371.4
or begin insert cost sharing for out-of-network providers end insert otherwise providing
covered begin delete benefits, end delete begin insert benefits arranged by the health care service plan, end insert
subject to the annual limit on out-of-pocket expenses as specified
in Section 1367.006, the health care service plan shall accept claims
from the provider or begin insert information from end insert the consumer with respect
to cost sharing.

begin delete

(e)

end delete

begin insert (c) end insert  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 begin delete be
responsible for reimbursing the individual within 30 days of receipt
of claims information. end delete begin insert reimburse the enrollee no later than five
working days after the health care service plan is required to
reimburse the claim or notify the claimant that the claim is
contested or denied, as specified in Section 1371. end insert

begin delete

(f) Within 30 days, 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.

end delete begin insert

(d) If the cost sharing for covered essential health benefits
attributable to an enrollee meets or exceeds the maximum annual
out-of-pocket limits, the health care service plan shall notify the
enrollee no later than five working days after the health care
service plan is required to reimburse the claim or notify the
claimant that the claim is contested or denied, as specified in
Section 1371.

end insert begin delete

(g)

end delete

begin insert (e) end insert  The enrollee shall have the opportunity to review the accrual
of cost sharing and provide additional information regarding cost
sharing that should be accrued to the annual out-of-pocket limit.

begin delete

(h)

end delete

begin insert (f) end insert  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.

SEC. 2.  

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

10112.281.  

(a) This section shall apply to nongrandfathered
individual and group health insurers and to specialized health
insurers that provide coverage for essential health benefits, as
defined in Section 10112.27, and that are issued, amended, or
renewed on or after January 1, 2015.

(b) The health insurer shall be responsible for monitoring begin insert the end insert
accrual of out-of-pocket costs begin delete as defined end delete begin insert toward the annual limit
on out-of-pocket costs as provided end insert in Section 10112.28.

begin delete

(c) 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.

end delete begin insert

(1) For cost sharing attributed to in-network providers,
including contracted vendors, that count toward the annual limit
on out-of-pocket costs, the health insurer shall be solely responsible
for monitoring the accrual of out-of-pocket costs and 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.

end insert begin delete

(d)

end delete

begin insert (2) end insert  For cost sharing attributed to out-of-network providers who
are providing emergency services consistent with Section 10112.7
or otherwise providing covered begin delete benefits, end delete begin insert benefits arranged by the
health insurer, end insert subject to the annual limit on out-of-pocket
expenses as specified in Section 10112.28, the health insurer shall
accept claims from the provider or begin insert information from end insert the consumer
with respect to cost sharing.

begin delete

(e)

end delete

begin insert (c) end insert  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 begin delete be responsible for
reimbursing the individual within 30 days of receipt of claims
information. end delete begin insert reimburse the insured no later than five working days
after the health insurer is required to reimburse the claim or notify
the claimant that the claim is contested or denied, as specified in
Section 10123.13. end insert

begin delete

(f) Within 30 days, 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.

end delete begin insert

(d) If the cost sharing for covered essential health benefits
attributable to an insured meets or exceeds the maximum annual
out-of-pocket limits, the health insurer shall notify the insured no
later than five working days after the health insurer is required to
reimburse the claim or notify the claimant that the claim is
contested or denied, as specified in Section 10123.13.

end insert begin delete

(g)

end delete

begin insert (e) end insert  The insured shall have the opportunity to review the accrual
of cost sharing and provide additional information regarding cost
sharing that should be accrued to the annual out-of-pocket limit.

begin delete

(h)

end delete

begin insert (f) end insert  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.

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.