Bill Text: CA AB2601 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: California Health Benefit Exchange: charge on qualified health plans.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Introduced - Dead) 2014-05-21 - From committee without further action pursuant to Joint Rule 62(a). [AB2601 Detail]

Download: California-2013-AB2601-Amended.html

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BILL NUMBER: AB 2601	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 28, 2014

INTRODUCED BY   Assembly Member  Morrell  
Conway 

                        FEBRUARY 21, 2014

   An act to amend Section  100506   100503
 of the Government Code, relating to  the California
Health Benefit Exchange   health care coverage  .


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2601, as amended,  Morrell   Conway 
. California Health Benefit Exchange: appeals. 
 charge on qualified health plans.  
   Existing law establishes the California Health Benefit Exchange
within state government, specifies the powers and duties of the board
governing the Exchange, and requires the board to facilitate the
purchase of qualified health plans through the Exchange by qualified
individuals and small employers. Existing law requires the board to
assess a charge on qualified health plans and supplemental coverage
offered by carriers that is reasonable and necessary to support the
development, operations, and prudent cash management of the Exchange.
 
   This bill would prohibit the board from assessing a charge on
qualified health plans or supplemental coverage, on or after January
1, 2016, or increasing that charge thereafter, unless the charge is
enacted as a statute.  
   Existing law created the California Health Benefit Exchange
(Exchange) as an independent public entity in the state government,
not affiliated with an agency or department. The Exchange is governed
by an executive board consisting of 5 members. Existing law requires
the board to establish an appeal process for prospective and current
enrollees of the Exchange that complies with all requirements of the
federal Patient Protection and Affordable Care Act concerning the
role of a state Exchange in facilitating federal appeals of
Exchange-related determinations.  
   This bill would make technical, nonsubstantive changes to these
provisions. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 100503 of the  
Government Code   , as amended by Section 4 of Chapter 5 of
the First Extraordinary Session of the Statutes of 2013, is amended
to read: 
   100503.  In addition to meeting the minimum requirements of
Section 1311 of the federal act, the board shall do all of the
following:
   (a) Determine the criteria and process for eligibility,
enrollment, and disenrollment of enrollees and potential enrollees in
the Exchange and coordinate that process with the state and local
government entities administering other health care coverage
programs, including the State Department of Health Care Services, the
Managed Risk Medical Insurance Board, and California counties, in
order to ensure consistent eligibility and enrollment processes and
seamless transitions between coverage.
   (b) Develop processes to coordinate with the county entities that
administer eligibility for the Medi-Cal program and the entity that
determines eligibility for the Healthy Families Program, including,
but not limited to, processes for case transfer, referral, and
enrollment in the Exchange of individuals applying for assistance to
those entities, if allowed or required by federal law.
   (c) Determine the minimum requirements a carrier must meet to be
considered for participation in the Exchange, and the standards and
criteria for selecting qualified health plans to be offered through
the Exchange that are in the best interests of qualified individuals
and qualified small employers. The board shall consistently and
uniformly apply these requirements, standards, and criteria to all
carriers. In the course of selectively contracting for health care
coverage offered to qualified individuals and qualified small
employers through the Exchange, the board shall seek to contract with
carriers so as to provide health care coverage choices that offer
the optimal combination of choice, value, quality, and service.
   (d) Provide, in each region of the state, a choice of qualified
health plans at each of the five levels of coverage contained in
subsections (d) and (e) of Section 1302 of the federal act.
   (e) Require, as a condition of participation in the Exchange,
carriers to fairly and affirmatively offer, market, and sell in the
Exchange at least one product within each of the five levels of
coverage contained in subsections (d) and (e) of Section 1302 of the
federal act. The board may require carriers to offer additional
products within each of those five levels of coverage. This
subdivision shall not apply to a carrier that solely offers
supplemental coverage in the Exchange under paragraph (10) of
subdivision (a) of Section 100504.
   (f) (1) Except as otherwise provided in this section and Section
100504.5, require, as a condition of participation in the Exchange,
carriers that sell any products outside the Exchange to do both of
the following:
   (A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
   (B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small employers
purchasing coverage outside the Exchange.
   (2) For purposes of this subdivision, "product" does not include
contracts entered into pursuant to Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code between the Managed Risk
Medical Insurance Board and carriers for enrolled Healthy Families
beneficiaries or contracts entered into pursuant to Chapter 7
(commencing with Section 14000) of, or Chapter 8 (commencing with
Section 14200) of, Part 3 of Division 9 of the Welfare and
Institutions Code between the State Department of Health Care
Services and carriers for enrolled Medi-Cal beneficiaries. "Product"
also does not include a bridge plan product offered pursuant to
Section 100504.5.
   (3) Except as required by Section 1301(a)(1)(C)(ii) of the federal
act, a carrier offering a bridge plan product in the Exchange may
limit the products it offers in the Exchange solely to a bridge plan
product contract.
   (g) Determine when an enrollee's coverage commences and the extent
and scope of coverage.
   (h) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.
   (i) Determine and approve cost-sharing provisions for qualified
health plans.
   (j) Establish uniform billing and payment policies for qualified
health plans offered in the Exchange to ensure consistent enrollment
and disenrollment activities for individuals enrolled in the
Exchange.
   (k) Undertake activities necessary to market and publicize the
availability of health care coverage and federal subsidies through
the Exchange. The board shall also undertake outreach and enrollment
activities that seek to assist enrollees and potential enrollees with
enrolling and re   enrolling in the Exchange in the least
burdensome manner, including populations that may experience barriers
to enrollment, such as the disabled and those with limited English
language proficiency.
   (l) Select and set performance standards and compensation for
navigators selected under subdivision (l) of Section 100502.
   (m) Employ necessary staff.
   (1) The board shall hire a chief fiscal officer, a chief
operations officer, a director for the SHOP Exchange, a director of
Health Plan Contracting, a chief technology and information officer,
a general counsel, and other key executive positions, as determined
by the board, who shall be exempt from civil service.
   (2) (A) The board shall set the salaries for the exempt positions
described in paragraph (1) and subdivision (i) of Section 100500 in
amounts that are reasonably necessary to attract and retain
individuals of superior qualifications. The salaries shall be
published by the board in the board's annual budget. The board's
annual budget shall be posted on the Internet Web site of the
Exchange. To determine the compensation for these positions, the
board shall cause to be conducted, through the use of independent
outside advisors, salary surveys of both of the following:
   (i) Other state and federal health insurance exchanges that are
most comparable to the Exchange.
   (ii) Other relevant labor pools.
   (B) The salaries established by the board under subparagraph (A)
shall not exceed the highest comparable salary for a position of that
type, as determined by the surveys conducted pursuant to
subparagraph (A).
   (C) The Department of Human Resources shall review the methodology
used in the surveys conducted pursuant to subparagraph (A).
   (3) The positions described in paragraph (1) and subdivision (i)
of Section 100500 shall not be subject to otherwise applicable
provisions of the Government Code or the Public Contract Code and,
for those purposes, the Exchange shall not be considered a state
agency or public entity.
   (n) Assess a charge on the qualified health plans offered by
carriers that is reasonable and necessary to support the development,
operations, and prudent cash management of the Exchange. This charge
shall not affect the requirement under Section 1301 of the federal
act that carriers charge the same premium rate for each qualified
health plan whether offered inside or outside the Exchange.  The
board shall not assess a charge on qualified health plans pursuant to
this subdivision, or on supplemental coverage pursuant to paragraph
(10) of subdivision (a) of Section 100504, on or after January 1,
2016, or increase that charge thereafter, unless the charge or
increase is enacted as a statute. 
   (o) Authorize expenditures, as necessary, from the California
Health Trust Fund to pay program expenses to administer the Exchange.

   (p) Keep an accurate accounting of all activities, receipts, and
expenditures, and annually submit to the United States Secretary of
Health and Human Services a report concerning that accounting.
Commencing January 1, 2016, the board shall conduct an annual audit.
   (q) (1) Annually prepare a written report on the implementation
and performance of the Exchange functions during the preceding fiscal
year, including, at a minimum, the manner in which funds were
expended and the progress toward, and the achievement of, the
requirements of this title. The report shall also include data
provided by health care service plans and health insurers offering
bridge plan products regarding the extent of health care provider and
health facility overlap in their Medi-Cal networks as compared to
the health care provider and health facility networks contracting
with the plan or insurer in their bridge plan contracts. This report
shall be transmitted to the Legislature and the Governor and shall be
made available to the public on the Internet Web site of the
Exchange. A report made to the Legislature pursuant to this
subdivision shall be submitted pursuant to Section 9795.
   (2) The Exchange shall prepare, or contract for the preparation
of, an evaluation of the bridge plan program using the first three
years of experience with the program. The evaluation shall be
provided to the health policy and fiscal committees of the
Legislature in the fourth year following federal approval of the
bridge plan option. The evaluation shall include, but not be limited
to, all of the following:
   (A) The number of individuals eligible to participate in the
bridge plan program each year by category of eligibility.
   (B) The number of eligible individuals who elect a bridge plan
option each year by category of eligibility.
   (C) The average length of time, by region and statewide, that
individuals remain in the bridge plan option each year by category of
eligibility.
   (D) The regions of the state with a bridge plan option, and the
carriers in each region that offer a bridge plan, by year.
   (E) The premium difference each year, by region, between the
bridge plan and the first and second lowest cost plan for individuals
in the Exchange who are not eligible for the bridge plan.
   (F) The effect of the bridge plan on the premium subsidy amount
for bridge plan eligible individuals each year by each region.
   (G) Based on a survey of individuals enrolled in the bridge plan:
   (i) Whether individuals enrolling in the bridge plan product are
able to keep their existing health care providers.
   (ii) Whether individuals would want to retain their bridge plan
product, buy a different Exchange product, or decline to purchase
health insurance if there was no bridge plan product available. The
Exchange may include questions designed to elicit the information in
this subparagraph as part of an existing survey of individuals
receiving coverage in the Exchange.
   (3) In addition to the evaluation required by paragraph (2), the
Exchange shall post the items in subparagraphs (A) to (F), inclusive,
on its Internet Web site each year.
   (4) In addition to the report described in paragraph (1), the
board shall be responsive to requests for additional information from
the Legislature, including providing testimony and commenting on
proposed state legislation or policy issues. The Legislature finds
and declares that activities including, but not limited to,
responding to legislative or executive inquiries, tracking and
commenting on legislation and regulatory activities, and preparing
reports on the implementation of this title and the performance of
the Exchange, are necessary state requirements and are distinct from
the promotion of legislative or regulatory modifications referred to
in subdivision (d) of Section 100520.
   (r) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenue in the fund, and if
sufficient revenue is not available to pay estimated expenditures,
institute appropriate measures to ensure fiscal solvency.
   (s) Exercise all powers reasonably necessary to carry out and
comply with the duties, responsibilities, and requirements of this
act and the federal act.
   (t) Consult with stakeholders relevant to carrying out the
activities under this title, including, but not limited to, all of
the following:
   (1) Health care consumers who are enrolled in health plans.
   (2) Individuals and entities with experience in facilitating
enrollment in health plans.
   (3) Representatives of small businesses and self-employed
individuals.
   (4) The State Medi-Cal Director.
   (5) Advocates for enrolling hard-to-reach populations.
   (u) Facilitate the purchase of qualified health plans in the
Exchange by qualified individuals and qualified small employers no
later than January 1, 2014.
   (v) Report, or contract with an independent entity to report, to
the Legislature by December 1, 2018, on whether to adopt the option
in Section 1312(c)(3) of the federal act to merge the individual and
small employer markets. In its report, the board shall provide
information, based on at least two years of data from the Exchange,
on the potential impact on rates paid by individuals and by small
employers in a merged individual and small employer market, as
compared to the rates paid by individuals and small employers if a
separate individual and small employer market is maintained. A report
made pursuant to this subdivision shall be submitted pursuant to
Section 9795.
   (w) With respect to the SHOP Program, collect premiums and
administer all other necessary and related tasks, including, but not
limited to, enrollment and plan payment, in order to make the
offering of employee plan choice as simple as possible for qualified
small employers.
   (x) Require carriers participating in the Exchange to immediately
notify the Exchange, under the terms and conditions established by
the board when an individual is or will be enrolled in or disenrolled
from any qualified health plan offered by the carrier.
   (y) Ensure that the Exchange provides oral interpretation services
in any language for individuals seeking coverage through the
Exchange and makes available a toll-free telephone number for the
hearing and speech impaired. The board shall ensure that written
information made available by the Exchange is presented in a plainly
worded, easily understandable format and made available in prevalent
languages.
   (z) This section shall become inoperative on the October 1 that is
five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative and
is repealed.
   SEC. 2.    Section 100503 of the  
Government Code   , as added by Section 5 of Chapter 5 of
the First Extraordinary Session of the Statutes o   f 2013,
is amended to read: 
   100503.  In addition to meeting the minimum requirements of
Section 1311 of the federal act, the board shall do all of the
following:
   (a) Determine the criteria and process for eligibility,
enrollment, and disenrollment of enrollees and potential enrollees in
the Exchange and coordinate that process with the state and local
government entities administering other health care coverage
programs, including the State Department of Health Care Services, the
Managed Risk Medical Insurance Board, and California counties, in
order to ensure consistent eligibility and enrollment processes and
seamless transitions between coverage.
   (b) Develop processes to coordinate with the county entities that
administer eligibility for the Medi-Cal program and the entity that
determines eligibility for the Healthy Families Program, including,
but not limited to, processes for case transfer, referral, and
enrollment in the Exchange of individuals applying for assistance to
those entities, if allowed or required by federal law.
   (c) Determine the minimum requirements a carrier must meet to be
considered for participation in the Exchange, and the standards and
criteria for selecting qualified health plans to be offered through
the Exchange that are in the best interests of qualified individuals
and qualified small employers. The board shall consistently and
uniformly apply these requirements, standards, and criteria to all
carriers. In the course of selectively contracting for health care
coverage offered to qualified individuals and qualified small
employers through the Exchange, the board shall seek to contract with
carriers so as to provide health care coverage choices that offer
the optimal combination of choice, value, quality, and service.
   (d) Provide, in each region of the state, a choice of qualified
health plans at each of the five levels of coverage contained in
subsections (d) and (e) of Section 1302 of the federal act.
   (e) Require, as a condition of participation in the Exchange,
carriers to fairly and affirmatively offer, market, and sell in the
Exchange at least one product within each of the five levels of
coverage contained in subsections (d) and (e) of Section 1302 of the
federal act. The board may require carriers to offer additional
products within each of those five levels of coverage. This
subdivision shall not apply to a carrier that solely offers
supplemental coverage in the Exchange under paragraph (10) of
subdivision (a) of Section 100504.
   (f) (1) Require, as a condition of participation in the Exchange,
carriers that sell any products outside the Exchange to do both of
the following:
   (A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
   (B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small employers
purchasing coverage outside the Exchange.
   (2) For purposes of this subdivision, "product" does not include
contracts entered into pursuant to Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code between the Managed Risk
Medical Insurance Board and carriers for enrolled Healthy Families
beneficiaries or contracts entered into pursuant to Chapter 7
(commencing with Section 14000) of, or Chapter 8 (commencing with
Section 14200) of, Part 3 of Division 9 of the Welfare and
Institutions Code between the State Department of Health Care
Services and carriers for enrolled Medi-Cal beneficiaries.
   (g) Determine when an enrollee's coverage commences and the extent
and scope of coverage.
   (h) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.
   (i) Determine and approve cost-sharing provisions for qualified
health plans.
   (j) Establish uniform billing and payment policies for qualified
health plans offered in the Exchange to ensure consistent enrollment
and disenrollment activities for individuals enrolled in the
Exchange.
   (k) Undertake activities necessary to market and publicize the
availability of health care coverage and federal subsidies through
the Exchange. The board shall also undertake outreach and enrollment
activities that seek to assist enrollees and potential enrollees with
enrolling and reenrolling in the Exchange in the least burdensome
manner, including populations that may experience barriers to
enrollment, such as the disabled and those with limited English
language proficiency.
   (l) Select and set performance standards and compensation for
navigators selected under subdivision (l) of Section 100502.
   (m) Employ necessary staff.
   (1) The board shall hire a chief fiscal officer, a chief
operations officer, a director for the SHOP Exchange, a director of
Health Plan Contracting, a chief technology and information officer,
a general counsel, and other key executive positions, as determined
by the board, who shall be exempt from civil service.
   (2) (A) The board shall set the salaries for the exempt positions
described in paragraph (1) and subdivision (i) of Section 100500 in
amounts that are reasonably necessary to attract and retain
individuals of superior qualifications. The salaries shall be
published by the board in the board's annual budget. The board's
annual budget shall be posted on the Internet Web site of the
Exchange. To determine the compensation for these positions, the
board shall cause to be conducted, through the use of independent
outside advisors, salary surveys of both of the following:
   (i) Other state and federal health insurance exchanges that are
most comparable to the Exchange.
   (ii) Other relevant labor pools.
   (B) The salaries established by the board under subparagraph (A)
shall not exceed the highest comparable salary for a position of that
type, as determined by the surveys conducted pursuant to
subparagraph (A).
   (C) The Department of Human Resources shall review the methodology
used in the surveys conducted pursuant to subparagraph (A).
   (3) The positions described in paragraph (1) and subdivision (i)
of Section 100500 shall not be subject to otherwise applicable
provisions of the Government Code or the Public Contract Code and,
for those purposes, the Exchange shall not be considered a state
agency or public entity.
   (n) Assess a charge on the qualified health plans offered by
carriers that is reasonable and necessary to support the development,
operations, and prudent cash management of the Exchange. This charge
shall not affect the requirement under Section 1301 of the federal
act that carriers charge the same premium rate for each qualified
health plan whether offered inside or outside the Exchange.  The
board shall not assess a charge on qualified health plans pursuant to
this subdivision, or on supplemental coverage pursuant to paragraph
(10) of subdivision (a) of Section 100504, on or after January 1,
2016, or increase that charge thereafter, unless the charge or
increase is enacted as a statute. 
   (o) Authorize expenditures, as necessary, from the California
Health Trust Fund to pay program expenses to administer the Exchange.

   (p) Keep an accurate accounting of all activities, receipts, and
expenditures, and annually submit to the United States Secretary of
Health and Human Services a report concerning that accounting.
Commencing January 1, 2016, the board shall conduct an annual audit.
   (q) (1) Annually prepare a written report on the implementation
and performance of the Exchange functions during the preceding fiscal
year, including, at a minimum, the manner in which funds were
expended and the progress toward, and the achievement of, the
requirements of this title. This report shall be transmitted to the
Legislature and the Governor and shall be made available to the
public on the Internet Web site of the Exchange. A report made to the
Legislature pursuant to this subdivision shall be submitted pursuant
to Section 9795.
   (2) In addition to the report described in paragraph (1), the
board shall be responsive to requests for additional information from
the Legislature, including providing testimony and commenting on
proposed state legislation or policy issues. The Legislature finds
and declares that activities including, but not limited to,
responding to legislative or executive inquiries, tracking and
commenting on legislation and regulatory activities, and preparing
reports on the implementation of this title and the performance of
the Exchange, are necessary state requirements and are distinct from
the promotion of legislative or regulatory modifications referred to
in subdivision (d) of Section 100520.
   (r) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenue in the fund, and if
sufficient revenue is not available to pay estimated expenditures,
institute appropriate measures to ensure fiscal solvency.
   (s) Exercise all powers reasonably necessary to carry out and
comply with the duties, responsibilities, and requirements of this
act and the federal act.
   (t) Consult with stakeholders relevant to carrying out the
activities under this title, including, but not limited to, all of
the following:
   (1) Health care consumers who are enrolled in health plans.
   (2) Individuals and entities with experience in facilitating
enrollment in health plans.
   (3) Representatives of small businesses and self-employed
individuals.
   (4) The State Medi-Cal Director.
   (5) Advocates for enrolling hard-to-reach populations.
   (u) Facilitate the purchase of qualified health plans in the
Exchange by qualified individuals and qualified small employers no
later than January 1, 2014.
   (v) Report, or contract with an independent entity to report, to
the Legislature by December 1, 2018, on whether to adopt the option
in Section 1312(c)(3) of the federal act to merge the individual and
small employer markets. In its report, the board shall provide
information, based on at least two years of data from the Exchange,
on the potential impact on rates paid by individuals and by small
employers in a merged individual and small employer market, as
compared to the rates paid by individuals and small employers if a
separate individual and small employer market is maintained. A report
made pursuant to this subdivision shall be submitted pursuant to
Section 9795.
   (w) With respect to the SHOP Program, collect premiums and
administer all other necessary and related tasks, including, but not
limited to, enrollment and plan payment, in order to make the
offering of employee plan choice as simple as possible for qualified
small employers.
   (x) Require carriers participating in the Exchange to immediately
notify the Exchange, under the terms and conditions established by
the board when an individual is or will be enrolled in or disenrolled
from any qualified health plan offered by the carrier.
   (y) Ensure that the Exchange provides oral interpretation services
in any language for individuals seeking coverage through the
Exchange and makes available a toll-free telephone number for the
hearing and speech impaired. The board shall ensure that written
information made available by the Exchange is presented in a plainly
worded, easily understandable format and made available in prevalent
languages.
   (z) This section shall become operative only if Section 4 of the
act that added this section becomes inoperative pursuant to
subdivision (z) of that Section 4. 
  SECTION 1.    Section 100506 of the Government
Code is amended to read:
   100506.  (a) The board shall establish an appeals process for
prospective and current enrollees of the Exchange that complies with
all requirements of the federal act concerning the role of a state
Exchange in facilitating federal
            appeals of Exchange-related determinations. The scope of
those appeals shall not be construed to be broader than the
requirements of the federal act in any event. Once the federal
regulations concerning appeals have been issued in final form by the
United States Secretary of Health and Human Services, the board may
establish additional requirements related to appeals, provided that
the board determines, prior to adoption, that any additional
requirement results in no cost to the General Fund and no increase in
the charge imposed under subdivision (n) of Section 100503.
   (b) The board shall not be required to provide an appeal if the
subject of the appeal is within the jurisdiction of the Department of
Managed Health Care pursuant to the Knox-Keene Health Care Service
Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of
Division 2 of the Health and Safety Code) and its implementing
regulations, or within the jurisdiction of the Department of
Insurance pursuant to the Insurance Code and its implementing
regulations.