BILL NUMBER: AB 248 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 10, 2015
AMENDED IN ASSEMBLY APRIL 14, 2015
INTRODUCED BY Assembly Member Roger Hernández
(Coauthor: Assembly Member Gonzalez)
FEBRUARY 9, 2015
An act to add Section 1367.010 to the Health and Safety Code, and
to add Section 10112.9 to the Insurance Code, relating to health care
coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 248, as amended, Roger Hernández. Health insurance: minimum
value: large group market policies.
Existing law, the federal Patient Protection and Affordable Care
Act (PPACA), enacts various health care coverage market reforms that
take effect January 1, 2014, and exempts health insurance coverage
that provides excepted benefits from those reforms. PPACA requires
each state to establish an American Health Benefits Exchange and
allows qualified individuals to obtain premium assistance for
coverage purchased through the Exchange. PPACA specifies that this
premium assistance is not available if the individual is eligible for
affordable employer-sponsored coverage that provides minimum value,
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 provides for the
regulation of health insurers by the Insurance Commissioner. Existing
law requires that health benefit plans issued by health insurers and
health care service plans in the small group market and the
individual market comply with specified requirements. Existing law
defines a health benefit plan for the purpose of health benefit plans
issued by health insurers to exclude a policy or certificate of
specified disease or hospital confinement indemnity if the insurer
certifies to the commissioner that the policy is being offered as
supplemental health insurance and not as a substitute for essential
health benefits. Existing law requires an insurer issuing these
policies in the small group market or the individual market to
require that the persons to be covered are covered by coverage that
is not designed to serve as supplemental coverage.
This bill would extend that requirement to a nongrandfathered
health care service plan that offers, amends, or renews a
group health plan contract and an insurer issuing a policy, except a
health care service plan or insurer issuing a specialized health care
service plan or policy, that provides less than 60% minimum value in
the large group market and would require that the persons to be
covered are also covered by a contract or plan that provides at least
60% minimum value. The bill would not apply to limited wraparound
coverage, as described in a specified federal regulation, and a
policy that provides coverage for Medicare services pursuant to
federal government contracts, from these provisions. This bill
would exempt an insurer that is subject to specified disclosure
requirements from these provisions. The bill also would not
apply to certain grandfathered health insurance policies
that provide basic health care services without annual or lifetime
limits, as specified. This bill would require life licensees that
offer health benefit coverage to large group purchasers to document
to the commissioner that the health benefits provided to the insureds
provides at least 60% minimum value. By expanding the scope of
an existing crime, with respect to the regulation of health
care service plans, this 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. (a) The Legislature finds and declares that an employee
of a large employer who accepts health coverage from his or her
employer that is less than 60 percent minimum value is barred by
federal guidance from obtaining federal tax credits for affordable
health coverage through Covered California.
(b) It is the intent of the Legislature in enacting this act to
ensure that employees of large employers who are offered health
coverage by their employers are offered coverage that meets or
exceeds 60 percent minimum value, the minimum standard for
comprehensive employer coverage under federal law. This requirement
applies if an employer purchases that health coverage from a health
plan or health insurer regulated by the State of California.
SEC. 2. Section 1367.010 is added to the Health and Safety Code,
to read:
1367.010. (a) (1) A nongrandfathered health care
service plan, except a health care service plan offering a
specialized health care service plan contract, that offers, amends,
or renews a large group health care service plan contract shall not
market, offer, amend, or renew a large group plan contract that
provides a minimum value of less than 60 percent.
(2) This section shall not apply to limited wraparound coverage,
consistent with Section 146.145(b) of Title 45 of the Code of Federal
Regulations.
(b) For purposes of this section, a plan shall provide a minimum
value of at least 60 percent, as described in Section 36B(c)(2)(C) of
the federal Internal Revenue Code and any regulation or guidance
adopted under that section.
(c) The following definitions apply for purposes of this section:
(1) "Large group health care service plan contract" means a group
health care service plan contract other than a contract issued to a
"small employer," as defined in Section 1357, 1357.500, or 1357.600.
(2) "Plan year" has the meaning set forth in Section 144.103 of
Title 45 of the Code of Federal Regulations.
SEC. 3. Section 10112.9 is added to the Insurance Code, to read:
10112.9. (a) (1) An Notwithstanding
Section 10273.4, an insurer, except an insurer
issuing a specialized health insurance policy, issuing a policy or
certificate of health insurance insurance, as
defined in subdivision (b) of Section 106, shall
not market, offer, amend, issue, or renew a large group plan contract
that provides a minimum value of less than 60 percent
percent, except as provided in subdivision (d) .
(2) This section shall not apply to limited wraparound coverage,
that is consistent with Section 146.145(b) of Title 45 of the Code of
Federal Regulations. This section also shall not apply to a
policy that provides coverage of Medicare services pursuant to
contracts with the United States government.
(3) This section shall not apply to a grandfathered health
insurance policy that provides basic health care services, as defined
in subdivision (b) of Section 1345 of the Health and Safety Code,
without annual or lifetime limits for any of the basic health care
services.
(b) For purposes of this section, a plan shall provide a minimum
value of at least 60 percent, as described in Section 36B(c)(2)(C) of
the federal Internal Revenue Code and any regulations or guidance
adopted under that section.
(c) This section shall not apply to an insurer that is subject to
the disclosure requirements described in Section 10198.61.
(d) A life licensee who is authorized to transact accident and
health insurance, as described in paragraph (2) of subdivision (a) of
Section 1626, that offers coverage of health benefits to a large
group purchaser, shall document to the commissioner that the health
benefits provided to the insureds provides at least 60 percent
minimum value and shall not offer, sell, or transact coverage that
does not provide at least 60 percent minimum value. For this purpose,
health reimbursement accounts do not constitute benefits provided to
the insureds.
(d)
(e) For purposes of this section, the following
definitions apply:
(1) "Large group" means a group that is not a "small employer," as
defined in Section 10753.
(2) "Plan year" has the meaning set forth in Section 144.103 of
Title 45 of the Code of Federal Regulations.
SEC. 4. 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.