Bill Text: CA ABX12 | 2013-2014 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Health care coverage.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2013-05-09 - Chaptered by Secretary of State. Chapter 1, Statutes of 2013-14 First Extraordinary Session. [ABX12 Detail]
Download: California-2013-ABX12-Amended.html
Bill Title: Health care coverage.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2013-05-09 - Chaptered by Secretary of State. Chapter 1, Statutes of 2013-14 First Extraordinary Session. [ABX12 Detail]
Download: California-2013-ABX12-Amended.html
BILL NUMBER: ABX1 2 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 7, 2013
INTRODUCED BY Assembly Member Pan
JANUARY 29, 2013
An act to amend Sections 1357.51, 1357.503, 1357.504,
1357.509, 1357.512, 1363, and 1399.829 of, to amend the heading of
Article 11.7 (commencing with Section 1399.825) of Chapter 2.2 of
Division 2 of, to amend and add Sections 1389.4 and 1389.7 of, to
amend and repeal Section 1389.5 of, to amend, repeal, and add
Sections 1399.805 and 1399.811 of, to add Sections 1348.96 and
1399.836 to, to add Article 11.8 (commencing with Section 1399.845)
to Chapter 2.2 of Division 2 of, and to repeal Sections 1357.510 and
1399.816 of, the Health and Safety Code, and to amend
Sections 10119.1, 10198.7, 10603, 10753.05,
10753.06.5, 10753.11, 10753.12, 10753.14, and 10954 of, to amend the
heading of Chapter 9.7 (commencing with Section 10950) of Part 2 of
Division 2 of, to amend and add Sections 10113.95 and 10119.2 of,
to amend and repeal Section 10119.1 of, to amend, repeal,
and add Sections 10901.3 and 10901.9 of, to add Sections
10127.21 and 10960.5 to, to add Chapter 9.9 (commencing with Section
10965) to Part 2 of Division 2 of, to add Part 6.25
(commencing with Section 12694.50) to Division 2 of, and to
repeal Section 10902.4 of, the Insurance Code, relating to health
care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 2, as amended, Pan. Health care coverage.
(1) Existing federal law, the federal Patient Protection and
Affordable Care Act (PPACA), enacts various health care coverage
market reforms that take effect January 1, 2014. Among other things,
PPACA requires each health insurance issuer that offers health
insurance coverage in the individual or group market in a state to
accept every employer and individual in the state that applies for
that coverage and to renew that coverage at the option of the plan
sponsor or the individual. PPACA prohibits a group health plan and a
health insurance issuer offering group or individual health insurance
coverage from imposing any preexisting condition exclusion with
respect to that plan or coverage. PPACA allows the premium rate
charged by a health insurance issuer offering small group or
individual coverage to vary only by rating area, age, tobacco use,
and whether the coverage is for an individual or family and prohibits
discrimination against individuals based on health status, as
specified. PPACA requires an issuer to consider all enrollees in its
individual market plans to be part of a single risk pool and to
consider all enrollees in its small group market plans to be part of
a single risk pool, as specified. PPACA also requires each state to,
by January 1, 2014, establish an American Health Benefit Exchange
that facilitates the purchase of qualified health plans by qualified
individuals and qualified small employers, 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 Insurance
Commissioner. Existing law requires plans and
insurers offering coverage in the individual market to offer coverage
for a child subject to specified requirements. Existing law
establishes the California Health Benefit Exchange (Exchange) to
facilitate the purchase of qualified health plans through the
Exchange by qualified individuals and qualified small employers by
January 1, 2014.
This bill would require a plan or an
insurer, on and after October 1, 2013, to offer, market, and sell
all of the plan's or insurer's health benefit
plans that are sold in the individual market for policy years on or
after January 1, 2014, to all individuals and dependents in each
service area in which the plan or insurer provides
or arranges for the provision of health care services, as specified,
but would require plans and insurers to limit
enrollment in individual health benefit plans to specified open
enrollment and special enrollment periods. The bill would prohibit
these health benefit plans from imposing any preexisting condition
exclusion upon any individual and from conditioning the
issuance or offering of individual health benefit plans on any health
status-related factor, as specified. The bill would require a
health care service plan or health insurer to
consider the claims experience of all enrollees or
insureds of its nongrandfathered individual health benefit plans
offered in the state to be part of a single risk pool,
as specified, would require the plan or
insurer to establish a specified index rate for that market, and
would authorize the plan or insurer to vary
premiums from the index rate based only on specified factors. The
bill would authorize plans and insurers to use
only age, geographic region, and family size for purposes of
establishing rates for individual health benefit plans, as specified.
The bill would require plans and insurers to
provide specified information regarding the Exchange to applicants
for and subscribers of individual health benefit plans offered
outside the Exchange. The bill would prohibit a plan or
an insurer from advertising or marketing an
individual grandfathered health plan for the purpose of enrolling a
dependent of the subscriber or policyholder in the
plan and would also require plans and insurers to
annually issue a specified notice to subscribers and
policyholders enrolled in a grandfathered plan. The
bill would make certain of these provisions inoperative if, and 12
months after, certain provisions of PPACA are repealed or amended, as
specified.
Existing law requires plans and insurers to
guarantee issue their small employer health benefit plans, as
specified. With respect to nongrandfathered small employer health
benefit plans for plan years on or after January 1, 2014, among other
things, existing law provides certain exceptions from the guarantee
issue requirement, allows the premium for small employer health
benefit plans to vary only by age, geographic region, and family
size, as specified, and requires plans and
insurers to provide special enrollment periods and coverage effective
dates consistent with the individual nongrandfathered market in the
state. Existing law provides that these provisions shall be
inoperative if specified provisions of PPACA are repealed.
This bill would modify the small employer special enrollment
periods and coverage effective dates for purposes of consistency with
the individual market reforms described above. The bill would also
modify the exceptions from the guarantee issue requirement and the
manner in which a plan or an insurer
determines premium rates for a small employer health benefit plan, as
specified. The bill would also require a plan or
an insurer to consider the claims experience of all
enrollees of its nongrandfathered small employer health benefit plans
offered in this state to be part of a single risk pool,
as specified, would require the plan or
insurer to establish a specified index rate for that market, and
would authorize the plan or insurer to vary
premiums from the index rate based only on specified factors. The
bill would delete the provisions making make
certain of these provisions inoperative , as
specified, if , and 12 months after specified
provisions of PPACA are repealed.
Because a willful violation of these requirements with respect to
health care service plans would be a crime, the bill would impose a
state-mandated local program.
(2) PPACA requires a state or the United States Secretary of
Health and Human Services to implement a risk adjustment program for
the 2014 benefit year and every benefit year thereafter, under which
a charge is assessed on low actuarial risk plans and a payment is
made to high actuarial risk plans, as specified. If a state that
elects to operate an American Health Benefit Exchange elects not to
administer this risk adjustment program, the secretary will operate
the program and issuers will be required to submit data for purposes
of the program to the secretary.
This bill would require that any data submitted by health
care service plans and health insurers to the secretary
for purposes of the risk adjustment program also be submitted to the
Department of Managed Health Care or the
Department of Insurance , in the same format. The bill would
require the department to use that data fo r specified
purposes .
(3) PPACA requires health insurance issuers to provide a summary
of benefits and coverage explanation pursuant to specified standards
to applicants and enrollees or policyholders.
Existing law requires health care service plans to use disclosure
forms that contain specified information regarding the contracts
issued by the plan, including the benefits and coverage of the
contract, and the exceptions, reductions, and limitations that apply
to the contract. Existing law requires health care service plans that
offer individual or small group coverage to also provide a uniform
health plan benefits and coverage matrix containing the plan's major
provisions, as specified.
This bill would authorize the Department of Managed Health Care to
waive or modify those requirements for purposes of compliance with
PPACA through issuance of all-plan letters until January 1, 2015.
(4) Existing law requires a health care service plan or a health
insurer offering individual plan contracts or individual insurance
policies to fairly and affirmatively offer, market, and sell certain
individual contracts and policies to all federally eligible defined
individuals, as defined, in each service area in which the plan or
insurer provides or arranges for the provision of health care
services. Existing law prohibits the premium for those policies and
contracts from exceeding the premium paid by a subscriber of the
California Major Risk Medical Insurance Program who is of the same
age and resides in the same geographic region as the federally
eligible defined individual, as specified.
This bill would instead prohibit the premium for those policies
and contracts from exceeding the premium for a specified plan offered
in the individual market through the California Health Benefit
Exchange in the rating area in which the individual resides. The bill
would make this requirement operative on the later of January 1,
2014, or the 91st day following the adjournment of the 2013-14 First
Extraordinary Session. Because a willful violation of this
requirement by a health care service plan would be a crime, the bill
would impose a state-mandated local program.
(5) Existing law creates the Healthy Families Program,
administered by the Managed Risk Medical Insurance Board, to arrange
for the provision of health care services to eligible children
through participating health, dental, and vision care plans, as
defined. To be eligible for the program, existing law requires
applicants to, among other requirements, be less than 19 years of age
and have a limited gross household income, as specified. Existing
law provides for the transition of specified enrollees of the Healthy
Families Program to the Medi-Cal program, to the extent that those
individuals are otherwise eligible, no sooner than January 1, 2013.
This bill would require plans offering coverage to Healthy
Families Program enrollees, on or after January 1, 2012, including
those transitioned to the Medi-Cal program, to offer 18 months of
coverage, until a specified date, to individuals who were or are
disenrolled from the program due to ineligibility because of age and
are not eligible for full scope coverage under Medi-Cal. The bill
would require plans to provide notice of eligibility for this
coverage within a specified period of time and would require
beneficiaries electing this coverage to pay no more than 110% of the
average per subscriber payment made to all participating health,
dental, or vision plans for program coverage, as specified.
(6) 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.
(3) Existing law requires insurers to provide a summary of
information about each of their health insurance policies, as
provided, upon the appropriate disclosure form as prescribed by the
Insurance Commissioner.
This bill would provide that, on and after January 1, 2014, a
health insurer issuing the federal uniform summary of benefits and
coverage also complies with the commissioner's disclosure
requirements, but would require that the insurer ensure that all
applicable state law disclosures are made in other documents. The
bill would require the insurer to provide the commissioner a copy of
the federal summary of benefits and coverage form and the
corresponding health insurance policy, as specified.
(4) This bill would become operative only if S.B. 2 of the 2013-14
First Extraordinary Session is enacted and becomes effective.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1348.96 is added to the
Health and Safety Code, to read:
1348.96. Any data submitted by a health care service plan to the
United States Secretary of Health and Human Services, or his or her
designee, for purposes of the risk adjustment program described in
Section 1343 of the federal Patient Protection and Affordable Care
Act (42 U.S.C. Sec. 18063) shall be concurrently submitted to the
department.
SEC. 2. Section 1357.51 of the Health and
Safety Code, as added by Chapter 852 of the Statutes of 2012, is
amended to read:
1357.51. (a) A health benefit plan for group coverage shall not
impose any preexisting condition provision or waivered condition
provision upon any enrollee.
(b) A nongrandfathered health benefit plan for individual coverage
shall not impose any preexisting condition provision or waivered
condition provision upon any enrollee. A grandfathered health benefit
plan for individual coverage shall not exclude coverage on the basis
of a waivered condition provision or preexisting condition provision
for a period greater than 12 months following the enrollee's
effective date of coverage, nor limit or exclude coverage for a
specific enrollee by type of illness, treatment, medical condition,
or accident, except for satisfaction of a preexisting condition
provision or waivered condition provision pursuant to this article.
Waivered condition provisions or preexisting condition provisions
contained in individual grandfathered health benefit plans may relate
only to conditions for which medical advice, diagnosis, care, or
treatment, including use of prescription drugs, was recommended or
received from a licensed health practitioner during the 12 months
immediately preceding the effective date of coverage.
(c) (1) A health benefit plan for group coverage may apply a
waiting period of up to 60 days as a condition of employment if
applied equally to all eligible employees and dependents and if
consistent with PPACA. A health benefit plan for group coverage
through a health maintenance organization, as defined in Section 2791
of the federal Public Health Service Act, shall not impose any
affiliation period that exceeds 60 days. A waiting or affiliation
period shall not be based on a preexisting condition of an employee
or dependent, the health status of an employee or dependent, or any
other factor listed in Section 1357.52. An affiliation period shall
run concurrently with a waiting period. During the waiting or
affiliation period, the plan is not required to provide health care
services and no premium shall be charged to the subscriber or
enrollees.
(2) A health benefit plan for individual coverage shall not impose
any waiting or affiliation period.
(d) In determining whether a preexisting condition provision, a
waivered condition provision, or a waiting or affiliation period
applies to an enrollee, a plan shall credit the time the enrollee was
covered under creditable coverage, provided that the enrollee
becomes eligible for coverage under the succeeding plan contract
within 62 days of termination of prior coverage, exclusive of any
waiting or affiliation period, and applies for coverage under the
succeeding plan within the applicable enrollment period. A plan shall
also credit any time that an eligible employee must wait before
enrolling in the plan, including any postenrollment or
employer-imposed waiting or affiliation period.
However, if a person's employment has ended, the availability of
health coverage offered through employment or sponsored by an
employer has terminated, or an employer's contribution toward health
coverage has terminated, a plan shall credit the time the person was
covered under creditable coverage if the person becomes eligible for
health coverage offered through employment or sponsored by an
employer within 180 days, exclusive of any waiting or affiliation
period, and applies for coverage under the succeeding plan contract
within the applicable enrollment period.
(e) An individual's period of creditable coverage shall be
certified pursuant to Section 2704(e) of Title XXVII of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-3(e)).
SEC. 3. Section 1357.503 of the Health and
Safety Code is amended to read:
1357.503. (a) (1) On and after October 1, 2013, a plan shall
fairly and affirmatively offer, market, and sell all of the plan's
small employer health care service plan contracts for plan years on
or after January 1, 2014, to all small employers in each service area
in which the plan provides or arranges for the provision of health
care services.
(2) On and after October 1, 2013, a plan shall make available to
each small employer all small employer health care service plan
contracts that the plan offers and sells to small employers or to
associations that include small employers in this state for plan
years on or after January 1, 2014.
(3) A plan that offers qualified health plans through the Exchange
shall be deemed to be in compliance with paragraphs (1) and (2) with
respect to small employer health care service plan contracts offered
through the Exchange in those geographic regions in which the plan
offers plan contracts through the Exchange.
(b) A plan shall provide enrollment periods consistent with PPACA
and described in Section 155.725 of Title 45 of the Code of Federal
Regulations. Commencing January 1, 2014, a plan shall provide special
enrollment periods consistent with the special enrollment periods
described in Section 1399.849, except for the triggering events
identified in paragraphs (d)(3) and (d)(6) of Section 155.420 of
Title 45 of the Code of Federal Regulations with respect to plan
contracts offered through the Exchange.
(c) No plan or solicitor shall induce or otherwise encourage a
small employer to separate or otherwise exclude an eligible employee
from a health care service plan contract that is provided in
connection with employee's employment or membership in a guaranteed
association.
(d) Every plan shall file with the director the reasonable
employee participation requirements and employer contribution
requirements that will be applied in offering its plan contracts.
Participation requirements shall be applied uniformly among all small
employer groups, except that a plan may vary application of minimum
employee participation requirements by the size of the small employer
group and whether the employer contributes 100 percent of the
eligible employee's premium. Employer contribution requirements shall
not vary by employer size. A health care service plan shall not
establish a participation requirement that (1) requires a person who
meets the definition of a dependent in Section 1357.500 to enroll as
a dependent if he or she is otherwise eligible for coverage and
wishes to enroll as an eligible employee and (2) allows a plan to
reject an otherwise eligible small employer because of the number of
persons that waive coverage due to coverage through another employer.
Members of an association eligible for health coverage under
subdivision (m) of Section 1357.500, but not electing any health
coverage through the association, shall not be counted as eligible
employees for purposes of determining whether the guaranteed
association meets a plan's reasonable participation standards.
(e) The plan shall not reject an application from a small employer
for a small employer health care service plan contract if all of the
following conditions are met:
(1) The small employer offers health benefits to 100 percent of
its eligible employees. Employees who waive coverage on the grounds
that they have other group coverage shall not be counted as eligible
employees.
(2) The small employer agrees to make the required premium
payments.
(3) The small employer agrees to inform the small employer's
employees of the availability of coverage and the provision that
those not electing coverage must wait until the next open enrollment
or a special enrollment period to obtain coverage through the group
if they later decide they would like to have coverage.
(4) The employees and their dependents who are to be covered by
the plan contract work or reside in the service area in which the
plan provides or otherwise arranges for the provision of health care
services.
(f) No plan or solicitor shall, directly or indirectly, engage in
the following activities:
(1) Encourage or direct small employers to refrain from filing an
application for coverage with a plan because of the health status,
claims experience, industry, occupation of the small employer, or
geographic location provided that it is within the plan's approved
service area.
(2) Encourage or direct small employers to seek coverage from
another plan because of the health status, claims experience,
industry, occupation of the small employer, or geographic location
provided that it is within the plan's approved service area.
(3) Employ marketing practices or benefit designs that will have
the effect of discouraging the enrollment of individuals with
significant health needs.
(g) A plan shall not, directly or indirectly, enter into any
contract, agreement, or arrangement with a solicitor that provides
for or results in the compensation paid to a solicitor for the sale
of a health care service plan contract to be varied because of the
health status, claims experience, industry, occupation, or geographic
location of the small employer. This subdivision does not apply to a
compensation arrangement that provides compensation to a solicitor
on the basis of percentage of premium, provided that the percentage
shall not vary because of the health status, claims experience,
industry, occupation, or geographic area of the small employer.
(h) (1) A policy or contract that covers a small employer, as
defined in Section 1304(b) of PPACA and in Section 1357.500, shall
not establish rules for eligibility, including continued eligibility,
of an individual, or dependent of an individual, to enroll under the
terms of the policy or contract based on any of the following health
status-related factors:
(A) Health status.
(B) Medical condition, including physical and mental illnesses.
(C) Claims experience.
(D) Receipt of health care.
(E) Medical history.
(F) Genetic information.
(G) Evidence of insurability, including conditions arising out of
acts of domestic violence.
(H) Disability.
(I) Any other health status-related factor as determined by any
federal regulations, rules, or guidance issued pursuant to Section
2705 of the federal Public Health Service Act.
(2) Notwithstanding Section 1389.1, a health care service plan
shall not require an eligible employee or dependent to fill out a
health assessment or medical questionnaire prior to enrollment under
a small employer health care service plan contract. A health care
service plan shall not acquire or request information that relates to
a health status-related factor from the applicant or his or her
dependent or any other source prior to enrollment of the individual.
(i) (1) A health care service plan shall consider the claims
experience of all enrollees in all nongrandfathered small employer
health care service plan contracts offered in the state that are
subject to subdivision (a), including those enrollees who do not
enroll in the contracts through the Exchange, to be members of a
single risk pool.
(2) Each plan year, a health care service plan shall establish an
index rate for the small employer market in the state based on the
total combined claims costs for providing essential health benefits,
as defined pursuant to Section 1302 of PPACA, within the single risk
pool required under paragraph (1). The index rate shall be adjusted
on a market-wide basis based on the total expected market-wide
payments and charges under the risk adjustment and reinsurance
programs established for the state pursuant to Sections 1343 and 1341
of PPACA. The premium rate for all of the health care service plan's
nongrandfathered small employer health care service plan contracts
shall use the applicable index rate, as adjusted for total expected
market-wide payments and charges under the risk adjustment and
reinsurance programs established for the state pursuant to Sections
1343 and 1341 of PPACA, subject only to the adjustments permitted
under paragraph (3).
(3) A health care service plan may vary premiums rates for a
particular nongrandfathered small employer health care service plan
contract from its index rate based only on the following actuarially
justified plan-specific factors:
(A) The actuarial value and cost-sharing design of the plan
contract.
(B) The plan contract's provider network, delivery system
characteristics, and utilization management practices.
(C) The benefits provided under the plan contract that are in
addition to the essential health benefits, as defined pursuant to
Section 1302 of PPACA. These additional benefits shall be pooled with
similar benefits within the single risk pool required under
paragraph (1) and the claims experience from those benefits shall be
utilized to determine rate variations for plan contracts that offer
those benefits in addition to essential health benefits.
(D) With respect to catastrophic plans, as described in subsection
(e) of Section 1302 of PPACA, the expected impact of the specific
eligibility categories for those plans.
(j) A plan shall comply with the requirements of Section 1374.3.
SEC. 4. Section 1357.504 of the Health and
Safety Code is amended to read:
1357.504. (a) With respect to small employer health care service
plan contracts offered outside the Exchange, after a small employer
submits a completed application form for a plan contract, the health
care service plan shall, within 30 days, notify the employer of the
employer's actual premium charges for that plan contract established
in accordance with Section 1357.512. The employer shall have 30 days
in which to exercise the right to buy coverage at the quoted premium
charges.
(b) Except as provided in subdivision (c), when a small employer
submits a premium payment, based on the quoted premium charges, and
that payment is delivered or postmarked, whichever occurs earlier,
within the first 15 days of the month, coverage under the plan
contract shall become effective no later than the first day of the
following month. When that payment is neither delivered nor
postmarked until after the 15th day of a month, coverage shall become
effective no later than the first day of the second month following
delivery or postmark of the payment.
(c) (1) With respect to a small employer health care service plan
contract offered through the Exchange, a plan shall apply coverage
effective dates consistent with those required under Section 155.720
of Title 45 of the Code of Federal Regulations and paragraph (2) of
subdivision (e) of Section 1399.849.
(2) With respect to a small employer health care service plan
contract offered outside the Exchange for which an individual applies
during a special enrollment period described in subdivision (b) of
Section 1357.503, the following provisions shall apply:
(A) Coverage under the plan contract shall become effective no
later than the first day of the first calendar month beginning after
the date the plan receives the request for special enrollment.
(B) Notwithstanding subparagraph (A), in the case of a birth,
adoption, or placement for adoption, coverage under the plan contract
shall become effective on the date of birth, adoption, or placement
for adoption.
(d) During the first 30 days after the effective date of the plan
contract, the small employer shall have the option of changing
coverage to a different plan contract offered by the same health care
service plan. If a small employer notifies the plan of the change
within the first 15 days of a month, coverage under the new plan
contract shall become effective no later than the first day of the
following month. If a small employer notifies the plan of the change
after the 15th day of a month, coverage under the new plan contract
shall become effective no later than the first day of the second
month following notification.
SEC. 5. Section 1357.509 of the Health and
Safety Code is amended to read:
1357.509. (a) To the extent permitted by PPACA, no plan shall be
required to offer a health care service plan contract or accept
applications for the contract pursuant to this article in the case of
any of the following:
(1) To a small employer, if the eligible employees and dependents
who are to be covered by the plan contract do not live, work or
reside within a plan's approved service areas.
(2) (A) Within a specific service area or portion of a service
area, if a plan reasonably anticipates and demonstrates to the
satisfaction of the director both of the following:
(i) It will not have sufficient health care delivery resources to
ensure that health care services will be available and accessible to
the eligible employee and dependents of the employee because of its
obligations to existing enrollees.
(ii) It is applying this subparagraph uniformly to all employers
without regard to the claims experience of those employers, and their
employees and dependents, or any health status-related factor
relating to those employees and dependents.
(B) A plan that cannot offer a health care service plan contract
to small employers because it is lacking in sufficient health care
delivery resources within a service area or a portion of a service
area pursuant to subparagraph (A) may not offer a contract in the
area in which the plan is not offering coverage to small employers to
new employer groups with more than 50 eligible employees until the
later of the following dates:
(i) The 181st day after the date that coverage is denied pursuant
to this paragraph.
(ii) The date the plan notifies the director that it has the
ability to deliver services to small employer groups, and certifies
to the director that from the date of the notice it will enroll all
small employer groups requesting coverage in that area from the plan.
(C) Subparagraph (B) shall not limit the plan's ability to renew
coverage already in force or relieve the plan of the responsibility
to renew that coverage as described in Section 1365.
(D) Coverage offered within a service area after the period
specified in subparagraph (B) shall be subject to the requirements of
this section.
(b) (1) A health care service plan may decline to offer a health
care service plan contract to a small employer if the plan
demonstrates to the satisfaction of the director both of the
following:
(A) It does not have the financial reserves necessary to
underwrite additional coverage. In determining whether this
subparagraph has been satisfied, the director shall consider, but not
be limited to, the plan's compliance with the requirements of
Section 1367, Article 6 (commencing with Section 1375), and the rules
adopted thereunder.
(B) It is applying this paragraph uniformly to all employers
without regard to the claims experience of those employers and their
employees and dependents or any health status-related factor relating
to those employees and dependents.
(2) A plan that denies coverage to a small employer under
paragraph (1) shall not offer coverage in the group market before the
later of the following dates:
(A) The 181st day after the date that coverage is denied pursuant
to paragraph (1).
(B) The date the plan demonstrates to the satisfaction of the
director that the plan has sufficient financial reserves necessary to
underwrite additional coverage.
(3) Paragraph (2) shall not limit the plan's ability to renew
coverage already in force or relieve the plan of the responsibility
to renew that coverage as described in Section 1365.
(4) Coverage offered within a service area after the period
specified in paragraph (2) shall be subject to the requirements of
this section.
(c) Nothing in this article shall be construed to limit the
director's authority to develop and implement a plan of
rehabilitation for a health care service plan whose financial
viability or organizational and administrative capacity has become
impaired to the extent permitted by PPACA.
SEC. 6. Section 1357.510 of the Health and
Safety Code is repealed.
SEC. 7. Section 1357.512 of the Health and
Safety Code is amended to read:
1357.512. (a) The premium rate for a small employer health care
service plan contract shall vary with respect to the particular
coverage involved only by the following:
(1) Age, pursuant to the age bands established by the United
States Secretary of Health and Human Services and the age rating
curve established by the Centers for Medicare and Medicaid Services
pursuant to Section 2701(a)(3) of the federal Public Health Service
Act (42 U.S.C. Sec. 300gg(a)(3)). Rates based on age shall be
determined using the individual's age as of the date of the contract
issuance or renewal, as applicable, and shall not vary by more than
three to one for like individuals of different age who are 21 years
of age or older as described in federal regulations adopted pursuant
to Section 2701(a)(3) of the federal Public Health Service Act (42
U.S.C. Sec. 300gg(a)(3)).
(2) (A) Geographic region. Except as provided in subparagraph (B),
the geographic regions for purposes of rating shall be the
following:
(i) Region 1 shall consist of the Counties of Alpine, Amador,
Butte, Calaveras, Colusa, Del Norte, El Dorado, Glenn, Humboldt,
Inyo, Kings, Lake, Lassen, Mendocino, Modoc, Mono, Monterey, Nevada,
Placer, Plumas, San Benito, Shasta, Sierra, Siskiyou, Sutter, Tehama,
Trinity, Tulare, Tuolumne, Yolo, and Yuba.
(ii) Region 2 shall consist of the Counties of Fresno, Imperial,
Kern, Madera, Mariposa, Merced, Napa, Sacramento, San Joaquin, San
Luis Obispo, Santa Cruz, Solano, Sonoma, and Stanislaus.
(iii) Region 3 shall consist of the Counties of Alameda, Contra
Costa, Marin, San Francisco, San Mateo, and Santa Clara.
(iv) Region 4 shall consist of the Counties of Orange, Santa
Barbara, and Ventura.
(v) Region 5 shall consist of the County of Los Angeles.
(vi) Region 6 shall consist of the Counties of Riverside, San
Bernardino, and San Diego.
(B) For the 2015 plan year and plan years thereafter, the
geographic regions for purposes of rating shall be the following,
subject to federal approval if required pursuant to Section 2701 of
the federal Public Health Service Act (42 U.S.C. Sec. 300gg) and
obtained by the department and the Department of Insurance by July 1,
2014:
(i) Region 1 shall consist of the Counties of Alpine, Amador,
Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen,
Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter,
Tehama, Trinity, Tuolumne, and Yuba.
(ii) Region 2 shall consist of the Counties of Marin, Napa,
Solano, and Sonoma.
(iii) Region 3 shall consist of the Counties of El Dorado, Placer,
Sacramento, and Yolo.
(iv) Region 4 shall
consist of the Counties of Alameda, Contra Costa, San Francisco, San
Mateo, and Santa Clara.
(v) Region 5 shall consist of the Counties of Monterey, San
Benito, and Santa Cruz.
(vi) Region 6 shall consist of the Counties of Fresno, Kings,
Madera, Mariposa, Merced, San Joaquin, Stanislaus, and Tulare.
(vii) Region 7 shall consist of the Counties of San Luis Obispo,
Santa Barbara, and Ventura.
(viii) Region 8 shall consist of the Counties of Imperial, Inyo,
Kern, and Mono.
(ix) Region 9 shall consist of the ZIP Codes in Los Angeles County
starting with 906 to 912, inclusive, 915, 917, 918, and 935.
(x) Region 10 shall consist of the ZIP Codes in Los Angeles County
other than those identified in clause (ix).
(xi) Region 11 shall consist of the Counties of Riverside and San
Bernardino.
(xii) Region 12 shall consist of the County of Orange.
(xiii) Region 13 shall consist of the County of San Diego.
(C) No later than June 1, 2017, the department, in collaboration
with the Exchange and the Department of Insurance, shall review the
geographic rating regions specified in this paragraph and the impacts
of those regions on the health care coverage market in California,
and submit a report to the appropriate policy committees of the
Legislature.
(3) Whether the contract covers an individual or family, as
described in PPACA.
(b) The rate for a health care service plan contract subject to
this section shall not vary by any factor not described in this
section.
(c) The total premium charged to a small employer pursuant to this
section shall be determined by summing the premiums of covered
employees and dependents in accordance with Section 147.102(c)(1) of
Title 45 of the Code of Federal Regulations.
(d) The rating period for rates subject to this section shall be
no less than 12 months from the date of issuance or renewal of the
plan contract.
SEC. 8. Section 1363 of the Health and Safety
Code is amended to read:
1363. (a) The director shall require the use by each plan of
disclosure forms or materials containing information regarding the
benefits, services, and terms of the plan contract as the director
may require, so as to afford the public, subscribers, and enrollees
with a full and fair disclosure of the provisions of the plan in
readily understood language and in a clearly organized manner. The
director may require that the materials be presented in a reasonably
uniform manner so as to facilitate comparisons between plan contracts
of the same or other types of plans. Nothing contained in this
chapter shall preclude the director from permitting the disclosure
form to be included with the evidence of coverage or plan contract.
The disclosure form shall provide for at least the following
information, in concise and specific terms, relative to the plan,
together with additional information as may be required by the
director, in connection with the plan or plan contract:
(1) The principal benefits and coverage of the plan, including
coverage for acute care and subacute care.
(2) The exceptions, reductions, and limitations that apply to the
plan.
(3) The full premium cost of the plan.
(4) Any copayment, coinsurance, or deductible requirements that
may be incurred by the member or the member's family in obtaining
coverage under the plan.
(5) The terms under which the plan may be renewed by the plan
member, including any reservation by the plan of any right to change
premiums.
(6) A statement that the disclosure form is a summary only, and
that the plan contract itself should be consulted to determine
governing contractual provisions. The first page of the disclosure
form shall contain a notice that conforms with all of the following
conditions:
(A) (i) States that the evidence of coverage discloses the terms
and conditions of coverage.
(ii) States, with respect to individual plan contracts, small
group plan contracts, and any other group plan contracts for which
health care services are not negotiated, that the applicant has a
right to view the evidence of coverage prior to enrollment, and, if
the evidence of coverage is not combined with the disclosure form,
the notice shall specify where the evidence of coverage can be
obtained prior to enrollment.
(B) Includes a statement that the disclosure and the evidence of
coverage should be read completely and carefully and that individuals
with special health care needs should read carefully those sections
that apply to them.
(C) Includes the plan's telephone number or numbers that may be
used by an applicant to receive additional information about the
benefits of the plan or a statement where the telephone number or
numbers are located in the disclosure form.
(D) For individual contracts, and small group plan contracts as
defined in Article 3.1 (commencing with Section 1357), the disclosure
form shall state where the health plan benefits and coverage matrix
is located.
(E) Is printed in type no smaller than that used for the remainder
of the disclosure form and is displayed prominently on the page.
(7) A statement as to when benefits shall cease in the event of
nonpayment of the prepaid or periodic charge and the effect of
nonpayment upon an enrollee who is hospitalized or undergoing
treatment for an ongoing condition.
(8) To the extent that the plan permits a free choice of provider
to its subscribers and enrollees, the statement shall disclose the
nature and extent of choice permitted and the financial liability
that is, or may be, incurred by the subscriber, enrollee, or a third
party by reason of the exercise of that choice.
(9) A summary of the provisions required by subdivision (g) of
Section 1373, if applicable.
(10) If the plan utilizes arbitration to settle disputes, a
statement of that fact.
(11) A summary of, and a notice of the availability of, the
process the plan uses to authorize, modify, or deny health care
services under the benefits provided by the plan, pursuant to
Sections 1363.5 and 1367.01.
(12) A description of any limitations on the patient's choice of
primary care physician, specialty care physician, or nonphysician
health care practitioner, based on service area and limitations on
the patient's choice of acute care hospital care, subacute or
transitional inpatient care, or skilled nursing facility.
(13) General authorization requirements for referral by a primary
care physician to a specialty care physician or a nonphysician health
care practitioner.
(14) Conditions and procedures for disenrollment.
(15) A description as to how an enrollee may request continuity of
care as required by Section 1373.96 and request a second opinion
pursuant to Section 1383.15.
(16) Information concerning the right of an enrollee to request an
independent review in accordance with Article 5.55 (commencing with
Section 1374.30).
(17) A notice as required by Section 1364.5.
(b) (1) As of July 1, 1999, the director shall require each plan
offering a contract to an individual or small group to provide with
the disclosure form for individual and small group plan contracts a
uniform health plan benefits and coverage matrix containing the plan'
s major provisions in order to facilitate comparisons between plan
contracts. The uniform matrix shall include the following category
descriptions together with the corresponding copayments and
limitations in the following sequence:
(A) Deductibles.
(B) Lifetime maximums.
(C) Professional services.
(D) Outpatient services.
(E) Hospitalization services.
(F) Emergency health coverage.
(G) Ambulance services.
(H) Prescription drug coverage.
(I) Durable medical equipment.
(J) Mental health services.
(K) Chemical dependency services.
(L) Home health services.
(M) Other.
(2) The following statement shall be placed at the top of the
matrix in all capital letters in at least 10-point boldface type:
THIS MATRIX IS INTENDED TO BE USED TO HELP YOU COMPARE COVERAGE
BENEFITS AND IS A SUMMARY ONLY. THE EVIDENCE OF COVERAGE AND PLAN
CONTRACT SHOULD BE CONSULTED FOR A DETAILED DESCRIPTION OF COVERAGE
BENEFITS AND LIMITATIONS.
(c) Nothing in this section shall prevent a plan from using
appropriate footnotes or disclaimers to reasonably and fairly
describe coverage arrangements in order to clarify any part of the
matrix that may be unclear.
(d) All plans, solicitors, and representatives of a plan shall,
when presenting any plan contract for examination or sale to an
individual prospective plan member, provide the individual with a
properly completed disclosure form, as prescribed by the director
pursuant to this section for each plan so examined or sold.
(e) In the case of group contracts, the completed disclosure form
and evidence of coverage shall be presented to the contractholder
upon delivery of the completed health care service plan agreement.
(f) Group contractholders shall disseminate copies of the
completed disclosure form to all persons eligible to be a subscriber
under the group contract at the time those persons are offered the
plan. If the individual group members are offered a choice of plans,
separate disclosure forms shall be supplied for each plan available.
Each group contractholder shall also disseminate or cause to be
disseminated copies of the evidence of coverage to all applicants,
upon request, prior to enrollment and to all subscribers enrolled
under the group contract.
(g) In the case of conflicts between the group contract and the
evidence of coverage, the provisions of the evidence of coverage
shall be binding upon the plan notwithstanding any provisions in the
group contract that may be less favorable to subscribers or
enrollees.
(h) In addition to the other disclosures required by this section,
every health care service plan and any agent or employee of the plan
shall, when presenting a plan for examination or sale to any
individual purchaser or the representative of a group consisting of
25 or fewer individuals, disclose in writing the ratio of premium
costs to health services paid for plan contracts with individuals and
with groups of the same or similar size for the plan's preceding
fiscal year. A plan may report that information by geographic area,
provided the plan identifies the geographic area and reports
information applicable to that geographic area.
(i) Subdivision (b) shall not apply to any coverage provided by a
plan for the Medi-Cal program or the Medicare program pursuant to
Title XVIII and Title XIX of the Social Security Act.
(j) Until January 1, 2015, the department may waive or modify the
requirements of this section for the purpose of resolving duplication
or conflict with federal requirements for uniform benefit disclosure
in effect pursuant to Section 2715 of the federal Public Health
Service Act and the regulations adopted thereunder. The department
shall implement this subdivision in a manner that preserves
disclosure requirements of this section that exceed or are not in
direct conflict with federal requirements. Notwithstanding the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code),
the department shall implement this subdivision through issuance of
all-plan letters.
SEC. 9. Section 1389.4 of the Health and Safety
Code is amended to read:
1389.4. (a) A full service health care service plan that issues,
renews, or amends individual health plan contracts shall be subject
to this section.
(b) A health care service plan subject to this section shall have
written policies, procedures, or underwriting guidelines establishing
the criteria and process whereby the plan makes its decision to
provide or to deny coverage to individuals applying for coverage and
sets the rate for that coverage. These guidelines, policies, or
procedures shall assure that the plan rating and underwriting
criteria comply with Sections 1365.5 and 1389.1 and all other
applicable provisions of state and federal law.
(c) On or before June 1, 2006, and annually thereafter, every
health care service plan shall file with the department a general
description of the criteria, policies, procedures, or guidelines the
plan uses for rating and underwriting decisions related to individual
health plan contracts, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage
or severely limit the plan products for which they would be eligible.
A plan may comply with this section by submitting to the department
underwriting materials or resource guides provided to plan solicitors
or solicitor firms, provided that those materials include the
information required to be submitted by this section.
(d) Commencing January 1, 2011, the director shall post on the
department's Internet Web site, in a manner accessible and
understandable to consumers, general, noncompany specific information
about rating and underwriting criteria and practices in the
individual market and information about the California Major Risk
Medical Insurance Program (Part 6.5 (commencing with Section 12700)
of Division 2 of the Insurance Code) and the federal temporary high
risk pool established pursuant to Part 6.6 (commencing with Section
12739.5) of Division 2 of the Insurance Code. The director shall
develop the information for the Internet Web site in consultation
with the Department of Insurance to enhance the consistency of
information provided to consumers. Information about individual
health coverage shall also include the following notification:
"Please examine your options carefully before declining group
coverage or continuation coverage, such as COBRA, that may be
available to you. You should be aware that companies selling
individual health insurance typically require a review of your
medical history that could result in a higher premium or you could be
denied coverage entirely."
(e) Nothing in this section shall authorize public disclosure of
company specific rating and underwriting criteria and practices
submitted to the director.
(f) This section shall not apply to a closed block of business, as
defined in Section 1367.15.
(g) This section shall become inoperative on November 1, 2013, or
the 91st calendar day following the adjournment of the 2013-14 First
Extraordinary Session, whichever date is later.
SEC. 10. Section 1389.4 is added to the Health
and Safety Code, to read:
1389.4. (a) A full service health care service plan that renews
individual grandfathered health plans shall be subject to this
section.
(b) A health care service plan subject to this section shall have
written policies, procedures, or underwriting guidelines establishing
the criteria and process whereby the plan makes its decision to
provide or to deny coverage to individuals applying for an individual
grandfathered health plan and sets the rate for that coverage. These
guidelines, policies, or procedures shall ensure that the plan
rating and underwriting criteria comply with Sections 1365.5 and
1389.1 and all other applicable provisions of state and federal law.
(c) On or before the June 1 next following the operative date of
this section, and annually thereafter, every health care service plan
shall file with the department a general description of the
criteria, policies, procedures, or guidelines the plan uses for
rating and underwriting decisions related to individual grandfathered
health plans, which means automatic declinable health conditions,
health conditions that may lead to a coverage decline, height and
weight standards, health history, health care utilization, lifestyle,
or behavior that might result in a decline for coverage or severely
limit the plan products for which they would be eligible. A plan may
comply with this section by submitting to the department underwriting
materials or resource guides provided to plan solicitors or
solicitor firms, provided that those materials include the
information required to be submitted by this section.
(d) Nothing in this section shall authorize public disclosure of
company specific rating and underwriting criteria and practices
submitted to the director.
(e) This section shall not apply to a closed block of business, as
defined in Section 1367.15.
(f) For purposes of this section, the following definitions shall
apply:
(1) "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 pursuant to that law.
(2) "Grandfathered health plan" has the same meaning as that term
is defined in Section 1251 of PPACA.
(g) This section shall become operative on November 1, 2013, or
the 91st calendar day following the adjournment of the 2013-14 First
Extraordinary Session, whichever date is later.
SEC. 11. Section 1389.5 of the Health and
Safety Code is amended to read:
1389.5. (a) This section shall apply to a health care service
plan that provides coverage under an individual plan contract that is
issued, amended, delivered, or renewed on or after January 1, 2007.
(b) At least once each year, the health care service plan shall
permit an individual who has been covered for at least 18 months
under an individual plan contract to transfer, without medical
underwriting, to any other individual plan contract offered by that
same health care service plan that provides equal or lesser benefits,
as determined by the plan.
"Without medical underwriting" means that the health care service
plan shall not decline to offer coverage to, or deny enrollment of,
the individual or impose any preexisting condition exclusion on the
individual who transfers to another individual plan contract pursuant
to this section.
(c) The plan shall establish, for the purposes of subdivision (b),
a ranking of the individual plan contracts it offers to individual
purchasers and post the ranking on its Internet Web site or make the
ranking available upon request. The plan shall update the ranking
whenever a new benefit design for individual purchasers is approved.
(d) The plan shall notify in writing all enrollees of the right to
transfer to another individual plan contract pursuant to this
section, at a minimum, when the plan changes the enrollee's premium
rate. Posting this information on the plan's Internet Web site shall
not constitute notice for purposes of this subdivision. The notice
shall adequately inform enrollees of the transfer rights provided
under this section, including information on the process to obtain
details about the individual plan contracts available to that
enrollee and advising that the enrollee may be unable to return to
his or her current individual plan contract if the enrollee transfers
to another individual plan contract.
(e) The requirements of this section shall not apply to the
following:
(1) A federally eligible defined individual, as defined in
subdivision (c) of Section 1399.801, who is enrolled in an individual
health benefit plan contract offered pursuant to Section 1366.35.
(2) An individual offered conversion coverage pursuant to Section
1373.6.
(3) Individual coverage under a specialized health care service
plan contract.
(4) An individual enrolled in the Medi-Cal program pursuant to
Chapter 7 (commencing with Section 14000) of Division 9 of Part 3 of
the Welfare and Institutions Code.
(5) An individual enrolled in the Access for Infants and Mothers
Program pursuant to Part 6.3 (commencing with Section 12695) of
Division 2 of the Insurance Code.
(6) An individual enrolled in the Healthy Families Program
pursuant to Part 6.2 (commencing with Section 12693) of Division 2 of
the Insurance Code.
(f) It is the intent of the Legislature that individuals shall
have more choice in their health coverage when health care service
plans guarantee the right of an individual to transfer to another
product based on the plan's own ranking system. The Legislature does
not intend for the department to review or verify the plan's ranking
for actuarial or other purposes.
(g) This section shall remain in effect only until January 1,
2014, or the 91st calendar day following the adjournment of the
2013-14 First Extraordinary Session, whichever date is later, and as
of that date is repealed, unless a later enacted statute, that
becomes operative on or before that date, deletes or extends the date
on which it is repealed.
SEC. 12. Section 1389.7 of the Health and
Safety Code is amended to read:
1389.7. (a) Every health care service plan that offers, issues,
or renews individual plan contracts shall offer to any individual,
who was covered under an individual plan contract that was rescinded,
a new individual plan contract, without medical underwriting, that
provides equal benefits. A health care service plan may also permit
an individual, who was covered under an individual plan contract that
was rescinded, to remain covered under that individual plan
contract, with a revised premium rate that reflects the number of
persons remaining on the plan contract.
(b) "Without medical underwriting" means that the health care
service plan shall not decline to offer coverage to, or deny
enrollment of, the individual or impose any preexisting condition
exclusion on the individual who is issued a new individual plan
contract or remains covered under an individual plan contract
pursuant to this section.
(c) If a new individual plan contract is issued, the plan may
revise the premium rate to reflect only the number of persons covered
on the new individual plan contract.
(d) Notwithstanding subdivision (a) and (b), if an individual was
subject to a preexisting condition provision or a waiting or an
affiliation period under the individual plan contract that was
rescinded, the health care service plan may apply the same
preexisting condition provision or waiting or affiliation period in
the new individual plan contract. The time period in the new
individual plan contract for the preexisting condition provision or
waiting or affiliation period shall not be longer than the one in the
individual plan contract that was rescinded and the health care
service plan shall credit any time that the individual was covered
under the rescinded individual plan contract.
(e) The plan shall notify in writing all enrollees of the right to
coverage under an individual plan contract pursuant to this section,
at a minimum, when the plan rescinds the individual plan contract.
The notice shall adequately inform enrollees of the right to coverage
provided under this section.
(f) The plan shall provide 60 days for enrollees to accept the
offered new individual plan contract and this contract shall be
effective as of the effective date of the original plan contract and
there shall be no lapse in coverage.
(g) This section shall not apply to any individual whose information
in the application for coverage and related communications led to the
rescission.
(h) This section shall become inoperative on January 1, 2014, or
the 91st calendar day following the adjournment of the 2013-14 First
Extraordinary Session, whichever date is later.
SEC. 13. Section 1389.7 is added to the Health
and Safety Code, to read:
1389.7. (a) Every health care service plan that offers, issues,
or renews individual plan contracts shall offer to any individual,
who was covered by the plan under an individual plan contract that
was rescinded, a new individual plan contract that provides the most
equivalent benefits.
(b) If a new individual plan contract is issued under subdivision
(a), the plan may revise the premium rate to reflect only the number
of persons covered on the new individual plan contract consistent
with Section 1399.855.
(c) The plan shall notify in writing all enrollees of the right to
coverage under an individual plan contract pursuant to this section,
at a minimum, when the plan rescinds the individual plan contract.
The notice shall adequately inform enrollees of the right to coverage
provided under this section.
(d) The plan shall provide 60 days for enrollees to accept the
offered new individual plan contract under subdivision (a), and this
contract shall be effective as of the effective date of the original
plan contract and there shall be no lapse in coverage.
(e) This section shall not apply to any individual whose
information in the application for coverage and related
communications led to the rescission.
(f) This section shall apply notwithstanding subdivision (a) or
(d) of Section 1399.849.
(g) This section shall become operative on January 1, 2014, or the
91st calendar day following the adjournment of the 2013-14 First
Extraordinary Session, whichever date is later.
SEC. 14. Section 1399.805 of the Health and
Safety Code is amended to read:
1399.805. (a) (1) After the federally eligible defined individual
submits a completed application form for a plan contract, the plan
shall, within 30 days, notify the individual of the individual's
actual premium charges for that plan contract, unless the plan has
provided notice of the premium charge prior to the application being
filed. In no case shall the premium charged for any health care
service plan contract identified in subdivision (d) of Section
1366.35 exceed the following amounts:
(A) For health care service plan contracts that offer services
through a preferred provider arrangement, the average premium paid by
a subscriber of the Major Risk Medical Insurance Program who is of
the same age and resides in the same geographic area as the federally
eligible defined individual. However, for federally qualified
individuals who are between the ages of 60 and 64, inclusive, the
premium shall not exceed the average premium paid by a subscriber of
the Major Risk Medical Insurance Program who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual.
(B) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 and 64, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual. The individual shall have 30
days in which to exercise the right to buy coverage at the quoted
premium rates.
(2) A plan may adjust the premium based on family size, not to
exceed the following amounts:
(A) For health care service plans that offer services through a
preferred provider arrangement, the average of the Major Risk Medical
Insurance Program rate for families of the same size that reside in
the same geographic area as the federally eligible defined
individual.
(B) For health care service plans identified in subdivision (d) of
Section 1366.35 that do not offer services through a preferred
provider arrangement, 170 percent of the standard premium charged to
a family that is of the same size and resides in the same geographic
area as the federally eligible defined individual.
(b) When a federally eligible defined individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage shall begin no later than the first
day of the following month. When that payment is neither delivered or
postmarked until after the 15th day of a month, coverage shall
become effective no later than the first day of the second month
following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the plan
contract, the individual shall have the option of changing coverage
to a different plan contract offered by the same health care service
plan. If the individual notified the plan of the change within the
first 15 days of a month, coverage under the new plan contract shall
become effective no later than the first day of the following month.
If an enrolled individual notified the plan of the change after the
15th day of a month, coverage under the new plan contract shall
become effective no later than the first day of the second month
following notification.
(d) This section shall remain in effect only until January 1,
2014, or the 91st calendar day following the adjournment of the
2013-14 First Extraordinary Session, whichever date is later, and as
of that date is repealed, unless a later enacted statute, that
becomes operative on or before that date, deletes or extends the date
on which it is repealed.
SEC. 15. Section 1399.805 is added to the
Health and Safety Code, to read:
1399.805. (a) After the federally eligible defined individual
submits a completed application form for a plan contract, the plan
shall, within 30 days, notify the individual of the individual's
actual premium charges for that plan contract, unless the plan has
provided notice of the premium charge prior to the application being
filed. In no case shall the premium charged for any health care
service plan contract identified in subdivision (d) of Section
1366.35 exceed the premium for the second lowest cost silver plan of
the individual market in the rating area in which the individual
resides which is offered through the California Health Benefit
Exchange established under Title 22 (commencing with Section 100500)
of the Government Code, as described in Section 36B(b)(3)(B) of Title
26 of the United States Code.
(b) When a federally eligible defined individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage shall begin no later than the first
day of the following month. When that payment is neither delivered
nor postmarked until after the 15th day of a month, coverage shall
become effective no later than the first day of the second month
following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the plan
contract, the individual shall have the option of changing coverage
to a different plan contract offered by the same health care service
plan. If the individual notified the plan of the change within the
first 15 days of a month, coverage under the new plan contract shall
become effective no later than the first day of the following month.
If an enrolled individual notified the plan of the change after the
15th day of a month, coverage under the new plan contract shall
become effective no later than the first day of the second month
following notification.
(d) This section shall become operative on January 1, 2014, or the
91st calendar day following the adjournment of the 2013-14 First
Extraordinary Session, whichever date is later.
SEC. 16. Section 1399.811 of the Health and
Safety Code is amended to read:
1399.811. Premiums for contracts offered, delivered, amended, or
renewed by plans on or after January 1, 2001, shall be subject to the
following requirements:
(a) The premium for new business for a federally eligible defined
individual shall not exceed the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program who is of the
same age and resides in the same geographic area as the federally
eligible defined individual. However, for federally qualified
individuals who are between the ages of 60 to 64 years, inclusive,
the premium shall not exceed the average premium paid by a subscriber
of the Major Risk Medical Insurance Program who is 59 years of age
and resides in the same geographic area as the federally eligible
defined individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 to 64 years, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual.
(b) The premium for in force business for a federally eligible
defined individual shall not exceed the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program who is of the
same age and resides in the same geographic area as the federally
eligible defined individual. However, for federally qualified
individuals who are between the ages of 60 and 64 years, inclusive,
the premium shall not exceed the average premium paid by a subscriber
of the Major Risk Medical Insurance Program who is 59 years of age
and resides in the same geographic area as the federally eligible
defined individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, 170 percent of the standard
premium charged to an individual who is of the same age and resides
in the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 and 64 years, inclusive, the premium shall not
exceed 170 percent of the standard premium charged to an individual
who is 59 years of age and resides in the same geographic area as the
federally eligible defined individual. The premium effective on
January 1, 2001, shall apply to in force business at the earlier of
either the time of renewal or July 1, 2001.
(c) The premium applied to a federally eligible defined individual
may not increase by more than the following amounts:
(1) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that offer services through a
preferred provider arrangement, the average increase in the premiums
charged to a subscriber of the Major Risk Medical Insurance Program
who is of the same age and resides in the same geographic area as the
federally eligible defined individual.
(2) For health care service plan contracts identified in
subdivision (d) of Section 1366.35 that do not offer services through
a preferred provider arrangement, the increase in premiums charged
to a nonfederally qualified individual who is of the same age and
resides in the same geographic area as the federally defined eligible
individual. The premium for an eligible individual may not be
modified more frequently than every 12 months.
(3) For a contract that a plan has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(d) This section shall remain in effect only until January 1,
2014, or the 91st calendar day following the adjournment of the
2013-14 First Extraordinary Session, whichever date is later, and as
of that date is repealed, unless a later enacted statute, that
becomes operative on or before that date, deletes or extends the date
on which it is repealed.
SEC. 17. Section 1399.811 is added to the
Health and Safety Code, to read:
1399.811. (a) Premiums for contracts offered, delivered, amended,
or renewed by plans on or after the operative date of this section
shall be subject to the following requirements:
(1) The premium for in force or new business for a federally
eligible defined individual shall not exceed the premium for the
second lowest cost silver plan of the individual market in the rating
area in which the individual resides which is offered through the
California Health Benefit Exchange established under Title 22
(commencing with Section 100500) of the Government Code, as described
in Section 36B(b)(3)(B) of Title 26 of the United States Code.
(2) For a contract that a plan has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(b) This section shall become operative on January 1, 2014, or the
91st calendar day following the adjournment of the 2013-14 First
Extraordinary Session, whichever date is later.
SEC. 18. Section 1399.816 of the Health and
Safety Code is repealed.
SEC. 19. The heading of Article 11.7
(commencing with Section 1399.825) of Chapter 2.2 of Division 2 of
the Health and Safety Code is amended to read:
Article 11.7. Child Access to Health Care Coverage
SEC. 20. Section 1399.829 of the Health and
Safety Code is amended to read:
1399.829. (a) A health care service plan may use the following
characteristics of an eligible child for purposes of establishing the
rate of the plan contract for that child, where consistent with
federal regulations under PPACA: age, geographic region, and family
composition, plus the health care service plan contract selected by
the child or the responsible party for the child.
(b) From the effective date of this article to December 31, 2013,
inclusive, rates for a child applying for coverage shall be subject
to the following limitations:
(1) During any open enrollment period or for late enrollees, the
rate for any child due to health status shall not be more than two
times the standard risk rate for a child.
(2) The rate for a child shall be subject to a 20-percent
surcharge above the highest allowable rate on a child applying for
coverage who is not a late enrollee and who failed to maintain
coverage with any health care service plan or health insurer for the
90-day period prior to the date of the child's application. The
surcharge shall apply for the 12-month period following the effective
date of the child's coverage.
(3) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a health care service plan
may rate a child based on health status during any period other than
an open enrollment period if the child is not a late enrollee.
(4) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a health care service plan
may condition an offer or acceptance of coverage on any preexisting
condition or other health status-related factor for a period other
than an open enrollment period and for a child who is not a late
enrollee.
(c) For any individual health care service plan contract issued,
sold, or renewed prior to December 31, 2013, the health plan shall
provide to a child or responsible party for a child a notice that
states the following:
"Please consider your options carefully before failing to maintain
or renewing coverage for a child for whom you are responsible. If
you attempt to obtain new individual coverage for that child, the
premium for the same coverage may be higher than the premium you pay
now."
(d) A child who applied for coverage between September 23, 2010,
and the end of the initial open enrollment period shall be deemed to
have maintained coverage during that period.
(e) Effective January 1, 2014, except for individual grandfathered
health plan coverage, the rate for any child shall be identical to
the standard risk rate.
(f) Health care service plans shall not require documentation from
applicants relating to their coverage history.
(g) (1) On and after the operative date of the act adding this
subdivision, and until January 1, 2014, a health care service plan
shall provide a notice to all applicants for coverage under this
article and to all enrollees, or the responsible party for an
enrollee, renewing coverage under this article that contains the
following information:
(A) Information about the open enrollment period provided under
Section 1399.849.
(B) An explanation that obtaining coverage during the open
enrollment period described in Section 1399.849 will not affect the
effective dates of coverage for coverage purchased pursuant to this
article unless the applicant cancels that coverage.
(C) An explanation that coverage purchased pursuant to this
article shall be effective as required under subdivision (d) of
Section 1399.826 and that such coverage shall not prevent an
applicant from obtaining new coverage during the open enrollment
period described in Section 1399.849.
(D) Information about the Medi-Cal program and the Healthy
Families Program and about subsidies available through the California
Health Benefit Exchange.
(2) The notice described in paragraph (1) shall be in plain
language and 14-point type.
(3) The department may adopt a model notice to be used by health
care service plans in order to comply with this subdivision, and
shall consult with the Department of Insurance in adopting that model
notice. Use of the model notice shall not require prior approval of
the department. Any model notice designated by the department for
purposes of this section shall not be subject to the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code).
SEC. 21. Section 1399.836 is added to the
Health and Safety Code, to read:
1399.836. This article shall become inoperative on January 1,
2014, or the 91st calendar day following the adjournment of the
2013-14 First Extraordinary Session, whichever date is later.
SEC. 22. Article 11.8 (commencing with Section
1399.845) is added to Chapter 2.2 of Division 2 of the Health and
Safety Code, to read:
Article 11.8. Individual Access to Health Care Coverage
1399.845. For purposes of this article, the following definitions
shall apply:
(a) "Child" means a child described in Section 22775 of the
Government Code and subdivisions (n) to (p), inclusive, of Section
599.500 of Title 2 of the California Code of Regulations.
(b) "Dependent" means the spouse or registered domestic partner,
or child, of an individual, subject to applicable terms of the health
benefit plan.
(c) "Exchange" means the California Health Benefit Exchange
created by Section 100500 of the Government Code.
(d) "Grandfathered health plan" has the same meaning as that term
is defined in Section 1251 of PPACA.
(e) "Health benefit plan" means any individual or group health
care service plan contract that provides medical, hospital, and
surgical benefits. The term does not include a specialized health
care service plan contract, a health care service plan conversion
contract offered pursuant to Section 1373.6, a health care service
plan contract provided in the Medi-Cal program (Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code), the Healthy Families Program (Part 6.2
(commencing with Section 12693) of Division 2 of the Insurance Code),
the Access for Infants and Mothers Program (Part 6.3 (commencing
with Section 12695) of Division 2 of the Insurance Code), or the
program under Part 6.4 (commencing with Section 12699.50) of Division
2 of the Insurance Code, a health care service plan contract offered
to a federally eligible defined individual under Article 4.6
(commencing with Section 1366.35), or Medicare supplement coverage,
to the extent consistent with PPACA.
(f) "Policy year" has the meaning set forth in Section 144.103 of
Title 45 of the Code of Federal Regulations.
(g) "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 pursuant to that law.
(h) "Preexisting condition provision" means a contract provision
that excludes coverage for charges or expenses incurred during a
specified period following the enrollee's effective date of coverage,
as to a condition for which medical advice, diagnosis, care, or
treatment was recommended or received during a specified period
immediately preceding the effective date of coverage.
(i) "Rating period" means the period for which premium rates
established by a plan are in effect.
(j) "Registered domestic partner" means a person who has
established a domestic partnership as described in Section 297 of the
Family Code.
1399.847. Every health care service plan offering individual
health benefit plans shall, in addition to complying with the
provisions of this chapter and rules adopted thereunder, comply with
the provisions of this article.
1399.849. (a) (1) On and after October 1, 2013, a plan shall
fairly and affirmatively offer, market, and sell all of the plan's
health benefit plans that are sold in the individual market for
policy years on or after January 1, 2014, to all individuals and
dependents in each service area in which the plan provides or
arranges for the provision of health care services. A plan shall
limit enrollment in individual health benefit plans to open
enrollment periods and special enrollment periods as provided in
subdivisions (c) and (d).
(2) A plan shall allow the
subscriber of an individual health benefit plan to add a dependent to
the subscriber's plan at the option of the subscriber, consistent
with the open enrollment, annual enrollment, and special enrollment
period requirements in this section.
(3) A health care service plan offering coverage in the individual
market shall not reject the request of a subscriber during an open
enrollment period to include a dependent of the subscriber as a
dependent on an existing individual health benefit plan.
(b) An individual health benefit plan issued, amended, or renewed
on or after January 1, 2014, shall not impose any preexisting
condition provision upon any individual.
(c) A plan shall provide an initial open enrollment period from
October 1, 2013, to March 31, 2014, inclusive, and annual enrollment
periods for plan years on or after January 1, 2015, from October 15
to December 7, inclusive, of the preceding calendar year.
(d) (1) Subject to paragraph (2), commencing January 1, 2014, a
plan shall allow an individual to enroll in or change individual
health benefit plans as a result of the following triggering events:
(A) He or she or his or her dependent loses minimum essential
coverage. For purposes of this paragraph, the following definitions
shall apply:
(i) "Minimum essential coverage" has the same meaning as that term
is defined in subsection (f) of Section 5000A of the Internal
Revenue Code (26 U.S.C. Sec. 5000A).
(ii) "Loss of minimum essential coverage" includes, but is not
limited to, loss of that coverage due to the circumstances described
in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the
Code of Federal Regulations and the circumstances described in
Section 1163 of Title 29 of the United States Code. "Loss of minimum
essential coverage" also includes loss of that coverage for a reason
that is not due to the fault of the individual.
(iii) "Loss of minimum essential coverage" does not include loss
of that coverage due to the individual's failure to pay premiums on a
timely basis or situations allowing for a rescission, subject to
clause (ii) and Sections 1389.7 and 1389.21.
(B) He or she gains a dependent or becomes a dependent.
(C) He or she is mandated to be covered pursuant to a valid state
or federal court order.
(D) He or she has been released from incarceration.
(E) His or her health benefit plan substantially violated a
material provision of the contract.
(F) He or she gains access to new health benefit plans as a result
of a permanent move.
(G) He or she was receiving services from a contracting provider
under another health benefit plan, as defined in Section 1399.845 or
Section 10965 of the Insurance Code, for one of the conditions
described in subdivision (c) of Section 1373.96 and that provider is
no longer participating in the health benefit plan.
(H) He or she demonstrates to the Exchange, with respect to health
benefit plans offered through the Exchange, or to the department,
with respect to health benefit plans offered outside the Exchange,
that he or she did not enroll in a health benefit plan during the
immediately preceding enrollment period available to the individual
because he or she was misinformed that he or she was covered under
minimum essential coverage.
(I) With respect to individual health benefit plans offered
through the Exchange, in addition to the triggering events listed in
this paragraph, any other events listed in Section 155.420(d) of
Title 45 of the Code of Federal Regulations.
(2) With respect to individual health benefit plans offered
outside the Exchange, an individual shall have 63 days from the date
of a triggering event identified in paragraph (1) to apply for
coverage from a health care service plan subject to this section.
With respect to individual health benefit plans offered through the
Exchange, an individual shall have 63 days from the date of a
triggering event identified in paragraph (1) to select a plan offered
through the Exchange, unless a longer period is provided in Part 155
(commencing with Section 155.10) of Subchapter B of Subtitle A of
Title 45 of the Code of Federal Regulations.
(e) With respect to individual health benefit plans offered
through the Exchange, the following provisions shall apply:
(1) The effective date of coverage selected pursuant to this
section shall be consistent with the dates specified in Section
155.410 or 155.420 of Title 45 of the Code of Federal Regulations.
(2) Notwithstanding paragraph (1), in the case where an individual
acquires or becomes a dependent by entering into a registered
domestic partnership pursuant to Section 297 of the Family Code and
applies for coverage of that domestic partner consistent with
subdivision (d), the coverage effective date shall be the first day
of the month following the date he or she selects a plan through the
Exchange, unless an earlier date is agreed to under Section 155.420
(b)(3) of Title 45 of the Code of Federal Regulations.
(f) With respect to individual health benefit plans offered
outside the Exchange, the following provisions shall apply:
(1) After an individual submits a completed application form for a
plan contract, the health care service plan shall, within 30 days,
notify the individual of the individual's actual premium charges for
that plan established in accordance with Section 1399.855. The
individual shall have 30 days in which to exercise the right to buy
coverage at the quoted premium charges.
(2) With respect to an individual health benefit plan for which an
individual applies during the initial open enrollment period
described in subdivision (c), when the subscriber submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, by December 15,
2013, coverage under the individual health benefit plan shall become
effective no later than January 1, 2014. When that payment is
delivered or postmarked within the first 15 days of any subsequent
month, coverage shall become effective no later than the first day of
the following month. When that payment is delivered or postmarked
between December 16, 2013, and December 31, 2013, inclusive, or after
the 15th day of any subsequent month, coverage shall become
effective no later than the first day of the second month following
delivery or postmark of the payment.
(3) With respect to an individual health benefit plan for which an
individual applies during the annual open enrollment period
described in subdivision (c), when the individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs later, by December 15,
coverage shall become effective as of the following January 1. When
that payment is delivered or postmarked within the first 15 days of
any subsequent month, coverage shall become effective no later than
the first day of the following month. When that payment is delivered
or postmarked between December 16 and December 31, inclusive, or
after the 15th day of any subsequent month, coverage shall become
effective no later than the first day of the second month following
delivery or postmark of the payment.
(4) With respect to an individual health benefit plan for which an
individual applies during a special enrollment period described in
subdivision (d), the following provisions shall apply:
(A) When the individual submits a premium payment, based on the
quoted premium charges, and that payment is delivered or postmarked,
whichever occurs earlier, within the first 15 days of the month,
coverage under the plan shall become effective no later than the
first day of the following month. When the premium payment is neither
delivered nor postmarked until after the 15th day of the month,
coverage shall become effective no later than the first day of the
second month following delivery or postmark of the payment.
(B) Notwithstanding subparagraph (A), in the case of a birth,
adoption, or placement for adoption, the coverage shall be effective
on the date of birth, adoption, or placement for adoption.
(C) Notwithstanding subparagraph (A), in the case of marriage or
becoming a registered domestic partner or in the case where a
qualified individual loses minimum essential coverage, the coverage
effective date shall be the first day of the month following the date
the plan receives the request for special enrollment.
(g) (1) A health care service plan shall not establish rules for
eligibility, including continued eligibility, of any individual to
enroll under the terms of an individual health benefit plan based on
any of the following factors:
(A) Health status.
(B) Medical condition, including physical and mental illnesses.
(C) Claims experience.
(D) Receipt of health care.
(E) Medical history.
(F) Genetic information.
(G) Evidence of insurability, including conditions arising out of
acts of domestic violence.
(H) Disability.
(I) Any other health status-related factor as determined by any
federal regulations, rules, or guidance issued pursuant to Section
2705 of the federal Public Health Service Act.
(2) Notwithstanding Section 1389.1, a health care service plan
shall not require an individual applicant or his or her dependent to
fill out a health assessment or medical questionnaire prior to
enrollment under an individual health benefit plan. A health care
service plan shall not acquire or request information that relates to
a health status-related factor from the applicant or his or her
dependent or any other source prior to enrollment of the individual.
(h) (1) A health care service plan shall consider the claims
experience of all enrollees in all individual health benefit plans
offered in the state that are subject to subdivision (a), including
those enrollees who do not enroll in the plans through the Exchange,
to be members of a single risk pool.
(2) Each policy year, a health care service plan shall establish
an index rate for the individual market in the state based on the
total combined claims costs for providing essential health benefits,
as defined pursuant to Section 1302 of PPACA, within the single risk
pool required under paragraph (1). The index rate shall be adjusted
on a market-wide basis based on the total expected market-wide
payments and charges under the risk adjustment and reinsurance
programs established for the state pursuant to Sections 1343 and 1341
of PPACA. The premium rate for all of the health care service plan's
health benefit plans in the individual market shall use the
applicable index rate, as adjusted for total expected market-wide
payments and charges under the risk adjustment and reinsurance
programs established for the state pursuant to Sections 1343 and 1341
of PPACA, subject only to the adjustments permitted under paragraph
(3).
(3) A health care service plan may vary premiums rates for a
particular health benefit plan from its index rate based only on the
following actuarially justified plan-specific factors:
(A) The actuarial value and cost-sharing design of the health
benefit plan.
(B) The health benefit plan's provider network, delivery system
characteristics, and utilization management practices.
(C) The benefits provided under the health benefit plan that are
in addition to the essential health benefits, as defined pursuant to
Section 1302 of PPACA. These additional benefits shall be pooled with
similar benefits within the single risk pool required under
paragraph (1) and the claims experience from those benefits shall be
utilized to determine rate variations for plans that offer those
benefits in addition to essential health benefits.
(D) With respect to catastrophic plans, as described in subsection
(e) of Section 1302 of PPACA, the expected impact of the specific
eligibility categories for those plans.
(i) This section shall only apply with respect to individual
health benefit plans for policy years on or after January 1, 2014.
(j) This section shall not apply to an individual health benefit
plan that is a grandfathered health plan.
1399.851. (a) No health care service plan or solicitor shall,
directly or indirectly, engage in the following activities:
(1) Encourage or direct an individual to refrain from filing an
application for individual coverage with a plan because of the health
status, claims experience, industry, occupation, or geographic
location, provided that the location is within the plan's approved
service area, of the individual.
(2) Encourage or direct an individual to seek individual coverage
from another plan or health insurer or the California Health Benefit
Exchange because of the health status, claims experience, industry,
occupation, or geographic location, provided that the location is
within the plan's approved service area, of the individual.
(3) Employ marketing practices or benefit designs that will have
the effect of discouraging the enrollment of individuals with
significant health needs.
(b) A health care service plan shall not, directly or indirectly,
enter into any contract, agreement, or arrangement with a solicitor
that provides for or results in the compensation paid to a solicitor
for the sale of an individual health benefit plan to be varied
because of the health status, claims experience, industry,
occupation, or geographic location of the individual. This
subdivision does not apply to a compensation arrangement that
provides compensation to a solicitor on the basis of percentage of
premium, provided that the percentage shall not vary because of the
health status, claims experience, industry, occupation, or geographic
area of the individual.
(c) This section shall only apply with respect to individual
health benefit plans for policy years on or after January 1, 2014.
1399.853. (a) All individual health benefit plans shall conform
to the requirements of Sections 1365, 1366.3, 1367.001, and 1373.6,
and any other requirements imposed by this chapter, and shall be
renewable at the option of the enrollee except as permitted to be
canceled, rescinded, or not renewed pursuant to Section 1365.
(b) Any plan that ceases to offer for sale new individual health
benefit plans pursuant to Section 1365 shall continue to be governed
by this article with respect to business conducted under this
article.
1399.855. (a) With respect to individual health benefit plans for
policy years on or after January 1, 2014, a health care service plan
may use only the following characteristics of an individual, and any
dependent thereof, for purposes of establishing the rate of the
individual health benefit plan covering the individual and the
eligible dependents thereof, along with the health benefit plan
selected by the individual:
(1) Age, pursuant to the age bands established by the United
States Secretary of Health and Human Services and the age rating
curve established by the federal Centers for Medicare and Medicaid
Services pursuant to Section 2701(a)(3) of the federal Public Health
Service Act (42 U.S.C. Sec. 300gg(a)(3)). Rates based on age shall be
determined using the individual's age as of the date of the plan
issuance or renewal, as applicable, and shall not vary by more than
three to one for like individuals of different age who are age 21 or
older as described in federal regulations adopted pursuant to Section
2701(a)(3) of the federal Public Health Service Act (42 U.S.C. Sec.
300gg(a)(3)).
(2) (A) Geographic region. Except as provided in subparagraph (B),
the geographic regions for purposes of rating shall be the
following:
(i) Region 1 shall consist of the Counties of Alpine, Amador,
Butte, Calaveras, Colusa, Del Norte, El Dorado, Glenn, Humboldt,
Inyo, Kings, Lake, Lassen, Mendocino, Modoc, Mono, Monterey, Nevada,
Placer, Plumas, San Benito, Shasta, Sierra, Siskiyou, Sutter, Tehama,
Trinity, Tulare, Tuolomne, Yolo, and Yuba.
(ii) Region 2 shall consist of the Counties of Fresno, Imperial,
Kern, Madera, Mariposa, Merced, Napa, Sacramento, San Joaquin, San
Luis Obispo, Santa Cruz, Solano, Sonoma, and Stanislaus.
(iii) Region 3 shall consist of the Counties of Alameda, Contra
Costa, Marin, San Francisco, San Mateo, and Santa Clara.
(iv) Region 4 shall consist of the Counties of Orange, Santa
Barbara, and Ventura.
(v) Region 5 shall consist of the County of Los Angeles.
(vi) Region 6 shall consist of the Counties of Riverside, San
Bernardino, and San Diego.
(B) For the 2015 plan year and plan years thereafter, the
geographic regions for purposes of rating shall be the following,
subject to federal approval if required pursuant to Section 2701 of
the federal Public Health Service Act (42 U.S.C. Sec. 300gg) and
obtained by the department and the Department of Insurance by July 1,
2014:
(i) Region 1 shall consist of the Counties of Alpine, Amador,
Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen,
Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter,
Tehama, Trinity, Tuolumne, and Yuba.
(ii) Region 2 shall consist of the Counties of Marin, Napa,
Solano, and Sonoma.
(iii) Region 3 shall consist of the Counties of El Dorado, Placer,
Sacramento, and Yolo.
(iv) Region 4 shall consist of the Counties of Alameda, Contra
Costa, San Francisco, San Mateo, and Santa Clara.
(v) Region 5 shall consist of the Counties of Monterey, San
Benito, and Santa Cruz.
(vi) Region 6 shall consist of the Counties of Fresno, Kings,
Madera, Mariposa, Merced, San Joaquin, Stanislaus, and Tulare.
(vii) Region 7 shall consist of the Counties of San Luis Obispo,
Santa Barbara, and Ventura.
(viii) Region 8 shall consist of the Counties of Imperial, Inyo,
Kern, and Mono.
(ix) Region 9 shall consist of the ZIP Codes in Los Angeles County
starting with 906 to 912, inclusive, 915, 917, 918, and 935.
(x) Region 10 shall consist of the ZIP Codes in Los Angeles County
other than those identified in clause (ix).
(xi) Region 11 shall consist of the Counties of Riverside and San
Bernardino.
(xii) Region 12 shall consist of the County of Orange.
(xiii) Region 13 shall consist of the County of San Diego.
(C) No later than June 1, 2017, the department, in collaboration
with the Exchange and the Department of Insurance, shall review the
geographic rating regions specified in this paragraph and the impacts
of those regions on the health care coverage market in California,
and make a report to the appropriate policy committees of the
Legislature.
(3) Whether the plan covers an individual or family, as described
in PPACA.
(b) The rate for a health benefit plan subject to this section
shall not vary by any factor not described in this section.
(c) With respect to family coverage under an individual health
benefit plan, the rating variation permitted under paragraph (1) of
subdivision (a) shall be applied based on the portion of the premium
attributable to each family member covered under the plan. The total
premium for family coverage shall be determined by summing the
premiums for each individual family member. In determining the total
premium for family members, premiums for no more than the three
oldest family members who are under age 21 shall be taken into
account.
(d) The rating period for rates subject to this section shall be
from January 1 to December 31, inclusive.
(e) This section shall not apply to an individual health benefit
plan that is a grandfathered health plan.
(f) The requirement for submitting a report imposed under
subparagraph (B) of paragraph (2) of subdivision (a) is inoperative
on June 1, 2021, pursuant to Section 10231.5 of the Government Code.
1399.857. (a) A health care service plan shall not be required to
offer an individual health benefit plan or accept applications for
the plan pursuant to Section 1399.849 in the case of any of the
following:
(1) To an individual who does not live or reside within the plan's
approved service areas.
(2) (A) Within a specific service area or portion of a service
area, if the plan reasonably anticipates and demonstrates to the
satisfaction of the director both of the following:
(i) It will not have sufficient health care delivery resources to
ensure that health care services will be available and accessible to
the individual because of its obligations to existing enrollees.
(ii) It is applying this subparagraph uniformly to all individuals
without regard to the claims experience of those individuals or any
health status-related factor relating to those individuals.
(B) A health care service plan that cannot offer an individual
health benefit plan to individuals because it is lacking in
sufficient health care delivery resources within a service area or a
portion of a service area pursuant to subparagraph (A) shall not
offer a health benefit plan in that area to individuals until the
later of the following dates:
(i) The 181st day after the date coverage is denied pursuant to
this paragraph.
(ii) The date the plan notifies the director that it has the
ability to deliver services to individuals, and certifies to the
director that from the date of the notice it will enroll all
individuals requesting coverage in that area from the plan.
(C) Subparagraph (B) shall not limit the plan's ability to renew
coverage already in force or relieve the plan of the responsibility
to renew that coverage as described in Section 1365.
(D) Coverage offered within a service area after the period
specified in subparagraph (B) shall be subject to this section.
(b) (1) A health care service plan may decline to offer an
individual health benefit plan to an individual if the plan
demonstrates to the satisfaction of the director both of the
following:
(A) It does not have the financial reserves necessary to
underwrite additional coverage. In determining whether this
subparagraph has been satisfied, the director shall consider, but not
be limited to, the plan's compliance with the requirements of
Section 1367, Article 6 (commencing with Section 1375), and the rules
adopted thereunder.
(B) It is applying this subdivision uniformly to all individuals
without regard to the claims experience of those individuals any
health status-related factor relating to those individuals.
(2) A plan that denies coverage to an individual under paragraph
(1) shall not offer coverage in the individual market before the
later of the following dates:
(A) The 181st day after the date that coverage is denied pursuant
to paragraph (1).
(B) The date the plan demonstrates to the satisfaction of the
director that the plan has sufficient financial reserves necessary to
underwrite additional coverage.
(3) Paragraph (2) shall not limit the plan's ability to renew
coverage already in force or relieve the plan of the responsibility
to renew that coverage as described in Section 1365.
(4) Coverage offered within a service area after the period
specified in paragraph (2) shall be subject to this section.
(c) Nothing in this article shall be construed to limit the
director's authority to develop and implement a plan of
rehabilitation for a health care service plan whose financial
viability or organizational and administrative capacity has become
impaired to the extent permitted by PPACA.
(d) This section shall not apply to an individual health benefit
plan that is a grandfathered health plan.
1399.859. (a) A health care service plan that receives an
application for an individual health benefit plan outside the
Exchange during the initial open enrollment period, an annual
enrollment period, or a special enrollment period described in
Section 1399.849 shall inform the applicant that he or she may be
eligible for lower cost coverage through the Exchange and shall
inform the applicant of the applicable enrollment period provided
through the Exchange described in Section 1399.849.
(b) On or before October 1, 2013, and annually thereafter, a
health care service plan shall issue a notice to a subscriber
enrolled in an individual health benefit plan offered outside the
Exchange. The notice shall inform the subscriber that he or she may
be eligible for lower cost coverage through the Exchange and shall
inform the subscriber of the applicable open enrollment period
provided through the Exchange described in Section 1399.849.
(c) This section shall not apply where the individual health
benefit plan described in subdivision (a) or (b) is a grandfathered
health plan.
1399.861. (a) On or before October 1, 2013, and annually
thereafter, a health care service plan shall issue the following
notice to all subscribers enrolled in an individual health benefit
plan that is a grandfathered health plan:
New improved health insurance options are available in California.
You currently have health insurance that is exempt from many of the
new requirements. For instance, your plan may not include certain
consumer protections that apply to other plans, such as the
requirement for the provision of preventive health services without
any cost sharing and the prohibition against increasing your rates
based on your health status. You have the option to remain in your
current plan or switch to a new plan. Under the new rules, a health
plan cannot deny your application based on any health conditions you
may have. For more information about your options, please contact the
California Health Benefit Exchange, the Office of Patient Advocate,
your plan representative, an insurance broker, or a health care
navigator.
(b) Commencing October 1, 2013, a health care service plan shall
include the notice described in subdivision (a) in any renewal
material of the individual grandfathered health plan and in any
application for dependent coverage under the individual grandfathered
health plan.
(c) A health care service plan shall not advertise or market an
individual health benefit plan that is a grandfathered health plan
for purposes of enrolling a dependent of a subscriber into the plan
for policy years on or after January 1, 2014. Nothing in this
subdivision shall be construed to prohibit an individual enrolled in
an individual grandfathered health plan from adding a dependent to
that plan to the extent permitted by PPACA.
1399.862. Except as otherwise provided in this article, this
article shall only be implemented to the extent that it meets or
exceeds the requirements set forth in PPACA.
SEC. 23. SECTION 1. Section 10113.95
of the Insurance Code is amended to read:
10113.95. (a) A health insurer that issues, renews, or amends
individual health insurance policies shall be subject to this
section.
(b) An insurer subject to this section shall have written
policies, procedures, or underwriting guidelines establishing the
criteria and process whereby the insurer makes its decision to
provide or to deny coverage to individuals applying for coverage and
sets the rate for that coverage. These guidelines, policies, or
procedures shall ensure that the plan rating and underwriting
criteria comply with Sections 10140 and 10291.5 and all other
applicable provisions.
(c) On or before June 1, 2006, and annually thereafter, every
insurer shall file with the commissioner a general description of the
criteria, policies, procedures, or guidelines that the insurer uses
for rating and underwriting decisions related to individual health
insurance policies, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage
or severely limit the health insurance products for which individuals
applying for coverage would be eligible. An insurer may comply with
this section by submitting to the department underwriting materials
or resource guides provided to agents and brokers, provided that
those materials include the information required to be submitted by
this section.
(d) Commencing January 1, 2011, the commissioner shall post on the
department's Internet Web site, in a manner accessible and
understandable to consumers, general, noncompany specific information
about rating and underwriting criteria and practices in the
individual market and information about the California Major Risk
Medical Insurance Program (Part 6.5 (commencing with Section 12700))
and the federal temporary high risk pool established pursuant to Part
6.6 (commencing with Section 12739.5). The commissioner shall
develop the information for the Internet Web site in consultation
with the Department of Managed Health Care to enhance the consistency
of information provided to consumers. Information about individual
health insurance shall also include the following notification:
"Please examine your options carefully before declining group
coverage or continuation coverage, such as COBRA, that may be
available to you. You should be aware that companies selling
individual health insurance typically require a review of your
medical history that could result in a higher premium or you could be
denied coverage entirely."
(e) Nothing in this section shall authorize public disclosure of
company-specific rating and underwriting criteria and practices
submitted to the commissioner.
(f) This section shall not apply to a closed block of business, as
defined in Section 10176.10.
(g) (1) This section shall become
inoperative on November 1, 2013, or the 91st calendar day following
the adjournment of the 2013-14 First Extraordinary Session, whichever
date is later.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Services Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative 12 months after the date of that repeal or
amendment.
SEC. 24. SEC. 2. Section 10113.95 is
added to the Insurance Code, to read:
10113.95. (a) A health insurer that renews individual
grandfathered health benefit plans shall be subject to
this section.
(b) An insurer subject to this section shall have written
policies, procedures, or underwriting guidelines establishing the
criteria and process whereby the insurer makes its decision to
provide or to deny coverage to individuals
dependents applying for an individual grandfathered health
benefit plan and sets the rate for that coverage. These
guidelines, policies, or procedures shall ensure that the plan rating
and underwriting criteria comply with Sections 10140 and 10291.5 and
all other applicable provisions. provisions
of state and federal law.
(c) On or before the June 1 next following the operative date of
this section, and annually thereafter, every insurer shall file with
the commissioner a general description of the criteria, policies,
procedures, or guidelines that the insurer uses for rating and
underwriting decisions related to individual grandfathered health
benefit plans, which means automatic declinable health
conditions, health conditions that may lead to a coverage decline,
height and weight standards, health history, health care utilization,
lifestyle, or behavior that might result in a decline for coverage
or severely limit the health insurance products for which individuals
applying for coverage would be eligible. An insurer may comply with
this section by submitting to the department underwriting materials
or resource guides provided to agents and brokers, provided that
those materials include the information required to be submitted by
this section.
(d) Nothing in this section shall authorize public disclosure of
company-specific rating and underwriting criteria and practices
submitted to the commissioner.
(e) This section shall not apply to a closed block of business, as
defined in Section 10176.10.
(f)
(e) For purposes of this section, the following
definitions shall apply:
(1) "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 pursuant to that law.
(2) "Grandfathered health benefit plan" has the same
meaning as that term is defined in Section 1251 of PPACA.
(g)
(f) (1) This section
shall become operative on November 1, 2013, or the 91st calendar day
following the adjournment of the 2013-14 First Extraordinary Session,
whichever date is later.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individueal market, as defined in Section 2791 of the federal
Public Health Services Act (42 U.S.C. Sec. 300gg-4), this section
shall become inoperative 12 months after the date of that repeal or
amendment.
SEC. 25. SEC. 3. Section 10119.1 of
the Insurance Code is amended to read:
10119.1. (a) This section shall apply to a health insurer that
covers hospital, medical, or surgical expenses under an individual
health benefit plan, as defined in subdivision (a) of Section
10198.6, that is issued, amended, renewed, or delivered on or after
January 1, 2007.
(b) At least once each year, a health insurer shall permit an
individual who has been covered for at least 18 months under an
individual health benefit plan to transfer, without medical
underwriting, to any other individual health benefit plan offered by
that same health insurer that provides equal or lesser benefits as
determined by the insurer.
"Without medical underwriting" means that the health insurer shall
not decline to offer coverage to, or deny enrollment of, the
individual or impose any preexisting condition exclusion on the
individual who transfers to another individual health benefit plan
pursuant to this section.
(c) The insurer shall establish, for the purposes of subdivision
(b), a ranking of the individual health benefit plans it offers to
individual purchasers and post the ranking on its Internet Web site
or make the ranking available upon request. The insurer shall update
the ranking whenever a new benefit design for individual purchasers
is approved.
(d) The insurer shall notify in writing all insureds of the right
to transfer to another individual health benefit plan pursuant to
this section, at a minimum, when the insurer changes the insured's
premium rate. Posting this information on the insurer's Internet Web
site shall not constitute notice for purposes of this subdivision.
The notice shall adequately inform insureds of the transfer rights
provided under this section including information on the process to
obtain details about the individual health benefit plans available to
that insured and advising that the insured may be unable to return
to his or her current individual health benefit plan if the insured
transfers to another individual health benefit plan.
(e) The requirements of this section shall not apply to the
following:
(1) A federally eligible defined individual, as defined in
subdivision (e) of Section 10900, who purchases individual coverage
pursuant to Section 10785.
(2) An individual offered conversion coverage pursuant to Sections
12672 and 12682.1.
(3) An individual enrolled in the Medi-Cal program pursuant to
Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of
the Welfare and Institutions Code.
(4) An individual enrolled in the Access for Infants and Mothers
Program, pursuant to Part 6.3 (commencing with Section 12695).
(5) An individual enrolled in the Healthy Families Program
pursuant to Part 6.2 (commencing with Section 12693).
(f) It is the intent of the Legislature that individuals shall
have more choice in their health care coverage when health insurers
guarantee the right of an individual to transfer to another product
based on the insurer's own ranking system. The Legislature does not
intend for the department to review or verify the insurer's ranking
for actuarial or other purposes.
(g) (1) This section shall remain
in effect only until become inoperative on
January 1, 2014, or the 91st calendar day following the adjournment
of the 2013-14 First Extraordinary Session, whichever date is
later, and as of that date is repealed, unless a later
enacted statute, that becomes operative on or before that date,
deletes or extends the date on which it is repealed.
later.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Services Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative 12 months after the date of that repeal or
amendment.
SEC. 26. SEC. 4. Section 10119.2 of
the Insurance Code is amended to read:
10119.2. (a) Every health insurer that offers, issues, or renews
health insurance under an individual health benefit plan, as defined
in subdivision (a) of Section 10198.6, shall offer to any individual,
who was covered under an individual health benefit plan that was
rescinded, a new individual health benefit plan without medical
underwriting that provides equal benefits. A health insurer may also
permit an individual, who was covered under an individual health
benefit plan that was rescinded, to remain covered under that
individual health benefit plan, with a revised premium rate that
reflects the number of persons remaining on the health benefit plan.
(b) "Without medical underwriting" means that the health insurer
shall not decline to offer coverage to, or deny enrollment of, the
individual or impose any preexisting condition exclusion on the
individual who is issued a new individual health benefit plan or
remains covered under an individual health benefit plan pursuant to
this section.
(c) If a new individual health benefit plan is issued, the insurer
may revise the premium rate to reflect only the number of persons
covered under the new individual health benefit plan.
(d) Notwithstanding subdivision
subdivisions (a) and (b), if an individual was subject to a
preexisting condition provision or a waiting or affiliation period
under the individual health benefit plan that was rescinded, the
health insurer may apply the same preexisting condition provision or
waiting or affiliation period in the new individual health benefit
plan. The time period in the new individual health benefit plan for
the preexisting condition provision or waiting or affiliation period
shall not be longer than the one in the individual health benefit
plan that was rescinded and the health insurer shall credit any time
that the individual was covered under the rescinded individual health
benefit plan.
(e) The insurer shall notify in writing all insureds of the right
to coverage under an individual health benefit plan pursuant to this
section, at a minimum, when the insurer rescinds the individual
health benefit plan. The notice shall adequately inform insureds of
the right to coverage provided under this section.
(f) The insurer shall provide 60 days for insureds to accept the
offered new individual health benefit plan and this plan shall be
effective as of the effective date of the original individual health
benefit plan and there shall be no lapse in coverage.
(g) This section shall not apply to any individual whose
information in the application for coverage and related
communications led to the rescission.
(h) (1) This section shall become
inoperative on January 1, 2014, or the 91st calendar day following
the adjournment of the 2013-14 First Extraordinary Session, whichever
date is later.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Services Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative 12 months after the date of that repeal or
amendment.
SEC. 27. SEC. 5. Section 10119.2 is
added to the Insurance Code, to read:
10119.2. (a) Every health insurer that offers, issues, or renews
health insurance under an individual health benefit plan, as defined
in subdivision (a) of Section 10198.6, through the California Health
Benefit Exchange shall offer to any individual, who was covered by
the insurer under an individual health benefit plan that was
rescinded, a new individual health benefit plan through the Exchange
that provides the most equivalent benefits.
(b) A health insurer that offers, issues, or renews individual
health benefit plans inside or outside the California Health Benefit
Exchange may also permit an individual, who was covered by the
insurer under an individual health benefit plan that was rescinded,
to remain covered under that individual health benefit plan, with a
revised premium rate that reflects the number of persons remaining on
the health benefit plan consistent with Section 10965.9.
(c) If a new individual health benefit plan is issued under
subdivision (a), the insurer may revise the premium rate to reflect
only the number of persons covered on the new individual health
benefit plan consistent with Section 10965.9.
(d) The insurer shall notify in writing all insureds of the right
to coverage under an individual health benefit plan pursuant to this
section, at a minimum, when the insurer rescinds the individual
health benefit plan. The notice shall adequately inform insureds of
the right to coverage provided under this section.
(e) The insurer shall provide 60 days for insureds to accept the
offered new individual health benefit plan under subdivision (a), and
this plan shall be effective as of the effective date of the
original health benefit plan and there shall be no lapse in coverage.
(f) This section shall not apply to any individual whose
information in the application for coverage and related
communications led to the rescission.
(g) This section shall apply notwithstanding subdivision (a) or
(d) of Section 10965.3.
(h) (1) This section shall become operative
on January 1, 2014, or the 91st calendar day following the
adjournment of the 2013-14 First Extraordinary Session, whichever
date is later.
(2) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Services Act (42 U.S.C. Sec. 300gg-4), this section
shall become inoperative 12 months after the date of that repeal or
amendment.
SEC. 28. SEC. 6. Section 10127.21 is
added to the Insurance Code, to read:
10127.21. Any data submitted by a health insurer to the United
States Secretary of Health and Human Services, or his or her
designee, for purposes of the risk adjustment program described in
Section 1343 of the federal Patient Protection and Affordable Care
Act (42 U.S.C. Sec. 18063) shall be concurrently submitted to the
department. department and in the same
format. The department shall use the information to monitor federal
implementation of risk adjustment in the state and to ensure that
insurers are in compliance with federal requirements related to risk
adjustment.
SEC. 29. SEC. 7. Section 10198.7 of
the Insurance Code is amended to read:
10198.7. (a) A health benefit plan for group coverage shall not
impose any preexisting condition provision or waivered condition
provision upon any individual.
(b) A nongrandfathered health benefit plan for individual coverage
shall not impose any preexisting condition provision or waivered
condition provision upon any individual. A grandfathered health
benefit plan for individual coverage shall not exclude coverage on
the basis of a waivered condition provision or preexisting condition
provision for a period greater than 12 months following the
individual's effective date of coverage, nor limit or exclude
coverage for a specific insured by type of illness, treatment,
medical condition, or accident, except for satisfaction of a
preexisting condition provision or waivered condition provision
pursuant to this article. Waivered condition provisions or
preexisting condition provisions contained in health benefit plans
may relate only to conditions for which medical advice, diagnosis,
care, or treatment, including use of prescription drugs, was
recommended or received from a licensed health practitioner during
the 12 months immediately preceding the effective date of coverage.
(c) (1) A health benefit plan for group coverage may apply a
waiting period of up to 60 days as a condition of employment if
applied equally to all eligible employees and dependents and if
consistent with PPACA. A waiting period shall not be based on a
preexisting condition of an employee or dependent, the health status
of an employee or dependent, or any other factor listed in Section
10198.9. During the waiting period, the health benefit plan is not
required to provide health care services and no premium shall be
charged to the policyholder or insureds.
(2) A health benefit plan for individual coverage shall not impose
a waiting period.
(d) In determining whether a preexisting condition provision, a
waivered condition provision, or a waiting period applies to a
person, a health benefit plan shall credit the time the person was
covered under creditable coverage, provided that the person becomes
eligible for coverage under the succeeding health benefit plan within
62 days of termination of prior coverage, exclusive of any waiting
period, and applies for coverage under the succeeding plan within the
applicable enrollment period. A plan shall also credit any time that
an eligible employee must wait before enrolling in the plan,
including any postenrollment or employer-imposed waiting period.
However, if a person's employment has ended, the availability of
health coverage offered through employment or sponsored by an
employer has terminated, or an employer's contribution toward health
coverage has terminated, a carrier shall credit the time the person
was covered under creditable coverage if the person becomes eligible
for health coverage offered through employment or sponsored by an
employer within 180 days, exclusive of any waiting period, and
applies for coverage under the succeeding plan within the applicable
enrollment period.
(e) An individual's period of creditable coverage shall be
certified pursuant to Section 2704(e) of Title XXVII of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-3(e)).
SEC. 8. Section 10603 of the Insurance
Code is amended to read:
10603. (a) (1) On or before April 1, 1975,
the commissioner shall promulgate a standard supplemental disclosure
form for all disability insurance policies. Upon the appropriate
disclosure form as prescribed by the commissioner, each insurer shall
provide, in easily understood language and in a uniform, clearly
organized manner, as prescribed and required by the commissioner,
such the summary information about each
disability insurance policy offered by the insurer as the
commissioner finds is necessary to provide for full and fair
disclosure of the provisions of the policy.
(2) On and after January 1, 2014, a disability insurer offering
health insurance coverage subject to Section 2715 of the federal
Public Health Service Act (42 U.S.C. Sec. 300gg-15) shall satisfy the
requirements of this section and the implementing regulations by
providing the uniform summary of benefits and coverage required under
Section 2715 of the federal Public Health Service Act and any rules
or regulations issued thereunder. An insurer that issues the federal
uniform summary of benefits referenced in this paragraph shall ensure
that all applicable disclosures required in this chapter and its
implementing regulations are met in other documents provided to
policyholders and insureds. An insurer subject to this paragraph
shall provide the uniform summary of benefits and coverage to the
commissioner together with the corresponding health insurance policy
pursuant to Section 10290.
(b) Nothing in this section shall preclude the disclosure form
from being included with the evidence of coverage or certificate of
coverage or policy.
SEC. 30. SEC. 9. Section 10753.05 of
the Insurance Code is amended to read:
10753.05. (a) No group or individual policy or contract or
certificate of group insurance or statement of group coverage
providing benefits to employees of small employers as defined in this
chapter shall be
issued or delivered by a carrier subject to the jurisdiction of the
commissioner regardless of the situs of the contract or master
policyholder or of the domicile of the carrier nor, except as
otherwise provided in Sections 10270.91 and 10270.92, shall a carrier
provide coverage subject to this chapter until a copy of the form of
the policy, contract, certificate, or statement of coverage is filed
with and approved by the commissioner in accordance with Sections
10290 and 10291, and the carrier has complied with the requirements
of Section 10753.17.
(b) (1) On and after October 1, 2013, each carrier shall fairly
and affirmatively offer, market, and sell all of the carrier's health
benefit plans that are sold to, offered through, or sponsored by,
small employers or associations that include small employers for plan
years on or after January 1, 2014, to all small employers in each
geographic region in which the carrier makes coverage available or
provides benefits.
(2) A carrier that offers qualified health plans through the
Exchange shall be deemed to be in compliance with paragraph (1) with
respect to health benefit plans offered through the Exchange in those
geographic regions in which the carrier offers plans through the
Exchange.
(3) A carrier shall provide enrollment periods consistent with
PPACA and described in Section 155.725 of Title 45 of the Code of
Federal Regulations. Commencing January 1, 2014, a carrier shall
provide special enrollment periods consistent with the special
enrollment periods described in Section 10965.3, except for the
triggering events identified in paragraphs (d)(3) and (d)(6) of
Section 155.420 of Title 45 of the Code of Federal Regulations with
respect to health benefit plans offered through the Exchange.
(4) Nothing in this section shall be construed to require an
association, or a trust established and maintained by an association
to receive a master insurance policy issued by an admitted insurer
and to administer the benefits thereof solely for association
members, to offer, market or sell a benefit plan design to those who
are not members of the association. However, if the association
markets, offers or sells a benefit plan design to those who are not
members of the association it is subject to the requirements of this
section. This shall apply to an association that otherwise meets the
requirements of paragraph (8) formed by merger of two or more
associations after January 1, 1992, if the predecessor organizations
had been in active existence on January 1, 1992, and for at least
five years prior to that date and met the requirements of paragraph
(5).
(5) A carrier which (A) effective January 1, 1992, and at least 20
years prior to that date, markets, offers, or sells benefit plan
designs only to all members of one association and (B) does not
market, offer or sell any other individual, selected group, or group
policy or contract providing medical, hospital and surgical benefits
shall not be required to market, offer, or sell to those who are not
members of the association. However, if the carrier markets, offers
or sells any benefit plan design or any other individual, selected
group, or group policy or contract providing medical, hospital and
surgical benefits to those who are not members of the association it
is subject to the requirements of this section.
(6) Each carrier that sells health benefit plans to members of one
association pursuant to paragraph (5) shall submit an annual
statement to the commissioner which states that the carrier is
selling health benefit plans pursuant to paragraph (5) and which, for
the one association, lists all the information required by paragraph
(7).
(7) Each carrier that sells health benefit plans to members of any
association shall submit an annual statement to the commissioner
which lists each association to which the carrier sells health
benefit plans, the industry or profession which is served by the
association, the association's membership criteria, a list of
officers, the state in which the association is organized, and the
site of its principal office.
(8) For purposes of paragraphs (4) and (6), an association is a
nonprofit organization comprised of a group of individuals or
employers who associate based solely on participation in a specified
profession or industry, accepting for membership any individual or
small employer meeting its membership criteria, which do not
condition membership directly or indirectly on the health or claims
history of any person, which uses membership dues solely for and in
consideration of the membership and membership benefits, except that
the amount of the dues shall not depend on whether the member applies
for or purchases insurance offered by the association, which is
organized and maintained in good faith for purposes unrelated to
insurance, which has been in active existence on January 1, 1992, and
at least five years prior to that date, which has a constitution and
bylaws, or other analogous governing documents which provide for
election of the governing board of the association by its members,
which has contracted with one or more carriers to offer one or more
health benefit plans to all individual members and small employer
members in this state. Health coverage through an association
that is not related to employment shall be considered individual
coverage pursuant to Section 144.102(c) of Title 45 of the Code of
Federal Regulations.
(c) On and after October 1, 2013, each carrier shall make
available to each small employer all health benefit plans that the
carrier offers or sells to small employers or to associations that
include small employers for plan years on or after January 1, 2014.
Notwithstanding subdivision (d) of Section 10753, for purposes of
this subdivision, companies that are affiliated companies or that are
eligible to file a consolidated income tax return shall be treated
as one carrier.
(d) Each carrier shall do all of the following:
(1) Prepare a brochure that summarizes all of its health benefit
plans and make this summary available to small employers, agents, and
brokers upon request. The summary shall include for each plan
information on benefits provided, a generic description of the manner
in which services are provided, such as how access to providers is
limited, benefit limitations, required copayments and deductibles, an
explanation of how creditable coverage is calculated if a waiting
period is imposed, and a telephone number that can be called for more
detailed benefit information. Carriers are required to keep the
information contained in the brochure accurate and up to date, and,
upon updating the brochure, send copies to agents and brokers
representing the carrier. Any entity that provides administrative
services only with regard to a health benefit plan written or issued
by another carrier shall not be required to prepare a summary
brochure which includes that benefit plan.
(2) For each health benefit plan, prepare a more detailed evidence
of coverage and make it available to small employers, agents and
brokers upon request. The evidence of coverage shall contain all
information that a prudent buyer would need to be aware of in making
selections of benefit plan designs. An entity that provides
administrative services only with regard to a health benefit plan
written or issued by another carrier shall not be required to prepare
an evidence of coverage for that health benefit plan.
(3) Provide copies of the current summary brochure to all agents
or brokers who represent the carrier and, upon updating the brochure,
send copies of the updated brochure to agents and brokers
representing the carrier for the purpose of selling health benefit
plans.
(4) Notwithstanding subdivision (c) of Section 10753, for purposes
of this subdivision, companies that are affiliated companies or that
are eligible to file a consolidated income tax return shall be
treated as one carrier.
(e) Every agent or broker representing one or more carriers for
the purpose of selling health benefit plans to small employers shall
do all of the following:
(1) When providing information on a health benefit plan to a small
employer but making no specific recommendations on particular
benefit plan designs:
(A) Advise the small employer of the carrier's obligation to sell
to any small employer any of the health benefit plans it offers to
small employers, consistent with PPACA, and provide them, upon
request, with the actual rates that would be charged to that employer
for a given health benefit plan.
(B) Notify the small employer that the agent or broker will
procure rate and benefit information for the small employer on any
health benefit plan offered by a carrier for whom the agent or broker
sells health benefit plans.
(C) Notify the small employer that, upon request, the agent or
broker will provide the small employer with the summary brochure
required in paragraph (1) of subdivision (d) for any benefit plan
design offered by a carrier whom the agent or broker represents.
(D) Notify the small employer of the availability of coverage and
the availability of tax credits for certain employers consistent with
PPACA and state law, including any rules, regulations, or guidance
issued in connection therewith.
(2) When recommending a particular benefit plan design or designs,
advise the small employer that, upon request, the agent will provide
the small employer with the brochure required by paragraph (1) of
subdivision (d) containing the benefit plan design or designs being
recommended by the agent or broker.
(3) Prior to filing an application for a small employer for a
particular health benefit plan:
(A) For each of the health benefit plans offered by the carrier
whose health benefit plan the agent or broker is presenting, provide
the small employer with the benefit summary required in paragraph (1)
of subdivision (d) and the premium for that particular employer.
(B) Notify the small employer that, upon request, the agent or
broker will provide the small employer with an evidence of coverage
brochure for each health benefit plan the carrier offers.
(C) Obtain a signed statement from the small employer
acknowledging that the small employer has received the disclosures
required by this paragraph and Section 10753.16.
(f) No carrier, agent, or broker shall induce or otherwise
encourage a small employer to separate or otherwise exclude an
eligible employee from a health benefit plan which, in the case of an
eligible employee meeting the definition in paragraph (1) of
subdivision (f) of Section 10753, is provided in connection with the
employee's employment or which, in the case of an eligible employee
as defined in paragraph (2) of subdivision (f) of Section 10753, is
provided in connection with a guaranteed association.
(g) No carrier shall reject an application from a small employer
for a health benefit plan provided:
(1) The small employer as defined by subparagraph (A) of paragraph
(1) of subdivision (q) of Section 10753 offers health benefits to
100 percent of its eligible employees as defined in paragraph (1) of
subdivision (f) of Section 10753. Employees who waive coverage on the
grounds that they have other group coverage shall not be counted as
eligible employees.
(2) The small employer agrees to make the required premium
payments.
(h) No carrier or agent or broker shall, directly or indirectly,
engage in the following activities:
(1) Encourage or direct small employers to refrain from filing an
application for coverage with a carrier because of the health status,
claims experience, industry, occupation, or geographic location
within the carrier's approved service area of the small employer or
the small employer's employees.
(2) Encourage or direct small employers to seek coverage from
another carrier because of the health status, claims experience,
industry, occupation, or geographic location within the carrier's
approved service area of the small employer or the small employer's
employees.
(3) Employ marketing practices or benefit designs that will have
the effect of discouraging the enrollment of individuals with
significant health needs or discriminate based on the
individual 's race, color, national origin, present or
predicted disability, age, sex, gender identity, sexual
orientation, expected length of life, degree o f medical
dependency, quality of life, or other health conditions .
This subdivision shall be enforced in the same manner as Section
790.03, including through Sections 790.035 and 790.05.
(i) No carrier shall, directly or indirectly, enter into any
contract, agreement, or arrangement with an agent or broker that
provides for or results in the compensation paid to an agent or
broker for a health benefit plan to be varied because of the health
status, claims experience, industry, occupation, or geographic
location of the small employer or the small employer's employees.
This subdivision shall not apply with respect to a compensation
arrangement that provides compensation to an agent or broker on the
basis of percentage of premium, provided that the percentage shall
not vary because of the health status, claims experience, industry,
occupation, or geographic area of the small employer.
(j) (1) A health benefit plan offered to a small employer, as
defined in Section 1304(b) of PPACA and in Section 10753, shall not
establish rules for eligibility, including continued eligibility, of
an individual, or dependent of an individual, to enroll under the
terms of the plan based on any of the following health status-related
factors:
(A) Health status.
(B) Medical condition, including physical and mental illnesses.
(C) Claims experience.
(D) Receipt of health care.
(E) Medical history.
(F) Genetic information.
(G) Evidence of insurability, including conditions arising out of
acts of domestic violence.
(H) Disability.
(I) Any other health status-related factor as determined by any
federal regulations, rules, or guidance issued pursuant to Section
2705 of the federal Public Health Service Act.
(2) Notwithstanding Section 10291.5, a carrier shall not require
an eligible employee or dependent to fill out a health assessment or
medical questionnaire prior to enrollment under a health benefit
plan. A carrier shall not acquire or request information that relates
to a health status-related factor from the applicant or his or her
dependent or any other source prior to enrollment of the individual.
(k) (1) A carrier shall consider the claims experience of all
insureds in all nongrandfathered health benefit plans offered in the
state that are subject to subdivision (a), including those insureds
who do not enroll in the plans through the Exchange, to be members of
a single risk pool.
(k) (1) A carrier shall consider as a single risk pool for rating
purposes in the small employer market the claims experience of all
insureds in all nongrandfathered small employer health benefit plans
offered by the carrier in this state, whether offered as health care
service plan contracts or health insurance policies, including those
insureds and enrollees who enroll in coverage through the Exchange
and insureds and enrollees covered by the carrier outside of the
Exchange.
(2) Each plan calendar year, a
carrier shall establish an index rate for the small employer market
in the state based on the total combined claims costs for providing
essential health benefits, as defined pursuant to Section 1302 of
PPACA and Section 10112.27 , within the single risk pool
required under paragraph (1). The index rate shall be adjusted on a
marketwide basis based on the total expected marketwide payments and
charges under the risk adjustment and reinsurance programs
established for the state pursuant to Sections 1343 and 1341 of
PPACA. The premium rate for all of the carrier's nongrandfathered
health benefit plans shall use the applicable index rate, as adjusted
for total expected marketwide payments and charges under the risk
adjustment and reinsurance programs established for the state
pursuant to Sections 1343 and 1341 of PPACA, subject only to the
adjustments permitted under paragraph (3).
(3) A carrier may vary premiums premium
rates for a particular nongrandfathered health benefit plan
from its index rate based only on the following actuarially justified
plan-specific factors:
(A) The actuarial value and cost-sharing design of the health
benefit plan.
(B) The health benefit plan's provider network, delivery system
characteristics, and utilization management practices.
(C) The benefits provided under the health benefit plan that are
in addition to the essential health benefits, as defined pursuant to
Section 1302 of PPACA. These additional benefits shall be pooled with
similar benefits within the single risk pool required under
paragraph (1) and the claims experience from those benefits shall be
utilized to determine rate variations for health benefit plans that
offer those benefits in addition to essential health benefits.
(D) Administrative costs, excluding any user fees required by the
Exchange.
(D)
( E) With respect to catastrophic plans, as
described in subsection (e) of Section 1302 of PPACA, the expected
impact of the specific eligibility categories for those plans.
(l) If a carrier enters into a contract, agreement, or other
arrangement with a third-party administrator or other entity to
provide administrative, marketing, or other services related to the
offering of health benefit plans to small employers in this state,
the third-party administrator shall be subject to this chapter.
(m) (1) Except as provided in paragraph (2), this section shall
become inoperative if Section 2702 of the federal Public Health
Service Act (42 U.S.C. Sec. 300gg-1),
300gg-4), as added by Section 1201 of PPACA, is repealed, in
which case , 12 months after the repeal, carriers subject
to this section shall instead be governed by Section 10705 to the
extent permitted by federal law, and all references in this chapter
to this section shall instead refer to Section 10705, except for
purposes of paragraph (2).
(2) Paragraph (3) of subdivision (b) of this section shall remain
operative as it relates to health benefit plans offered through the
Exchange.
SEC. 31. SEC. 10. Section 10753.06.5
of the Insurance Code is amended to read:
10753.06.5. (a) With respect to health benefit plans offered
outside the Exchange, after a small employer submits a completed
application, the carrier shall, within 30 days, notify the employer
of the employer's actual rates in accordance with Section 10753.14.
The employer shall have 30 days in which to exercise the right to buy
coverage at the quoted rates.
(b) Except as required under subdivision (c), when a small
employer submits a premium payment, based on the quoted rates, and
that payment is delivered or postmarked, whichever occurs earlier,
within the first 15 days of a month, coverage shall become effective
no later than the first day of the following month. When that payment
is neither delivered nor postmarked until after the 15th day of a
month, coverage shall become effective no later than the first day of
the second month following delivery or postmark of the payment.
(c) (1) With respect to a small employer health benefit
plan offered through the Exchange, a carrier shall apply coverage
effective dates consistent with those required under Section 155.720
of Title 45 of the Code of Federal Regulations and paragraph (2) of
subdivision (e) of Section 10965.3.
(2) With respect to a small employer health benefit
plan offered outside the Exchange for which an individual applies
during a special enrollment period described in paragraph (3) of
subdivision (b) of Section 10753.05, the following provisions shall
apply:
(A) Coverage under the plan shall become effective no later than
the first day of the first calendar month beginning after the date
the carrier receives the request for special enrollment.
(B) Notwithstanding subparagraph (A), in the case of a birth,
adoption, or placement for adoption, coverage under the plan shall
become effective on the date of birth, adoption, or placement for
adoption.
(d) During the first 30 days of coverage, the small employer shall
have the option of changing coverage to a different health benefit
plan offered by the same carrier. If a small employer notifies the
carrier of the change within the first 15 days of a month, coverage
under the new health benefit plan shall become effective no later
than the first day of the following month. If a small employer
notifies the carrier of the change after the 15th day of a month,
coverage under the new health benefit plan shall become effective no
later than the first day of the second month following notification.
(e) All eligible employees and dependents listed on the small
employer's completed application shall be covered on the effective
date of the health benefit plan.
SEC. 32. SEC. 11. Section 10753.11
of the Insurance Code is amended to read:
10753.11. (a) To the extent permitted by PPACA, no carrier shall
be required by the provisions of this chapter to do any
either of the following:
(1) To offer coverage to or accept applications from a small
employer where the small employer is seeking coverage for eligible
employees and dependents who do not live, work, or reside
in a carrier's approved service areas.
(2) (A) To offer coverage to, or accept applications from, a
small employer for a benefits plan design within an area if the
commissioner has found all of the following:
(i) The carrier will not have the capacity within the area in its
network of providers to deliver service adequately to the eligible
employees and dependents of that employee because of its obligations
to existing group contractholders and enrollees.
(ii) The carrier is applying this paragraph uniformly to all
employers without regard to the claims experience of those employers,
and their employees and dependents, or any health status-related
factor relating to those employees and dependents.
(iii) The action is not unreasonable or clearly inconsistent with
the intent of this chapter.
(B) A carrier that cannot offer coverage to small employers in a
specific service area because it is lacking sufficient capacity as
described in this paragraph may not offer coverage in the applicable
area to new employer groups with more than 50 eligible
employees until the later of the following dates:
(i) The 181st day after the date that coverage is denied pursuant
to this paragraph.
(ii) The date the carrier notifies the commissioner that it has
regained capacity to deliver services to small employers, and
certifies to the commissioner that from the date of the notice it
will enroll all small groups requesting coverage from the carrier
until the carrier has met the requirements of subdivision (g) of
Section 10753.05.
(C) Subparagraph (B) shall not limit the carrier's ability to
renew coverage already in force or relieve the carrier of the
responsibility to renew that coverage as described in Sections
10273.4 and 10753.13.
(D) Coverage offered within a service area after the period
specified in subparagraph (B) shall be subject to the requirements of
this section.
SEC. 33. SEC. 12. Section 10753.12
of the Insurance Code is amended to read:
10753.12. (a) A carrier shall not be required to offer coverage
or accept applications for benefit plan designs pursuant to this
chapter where the carrier demonstrates to the satisfaction of the
commissioner both of the following:
(1) The acceptance of an application or applications would place
the carrier in a financially impaired condition.
(2) The carrier is applying this subdivision uniformly to all
employers without regard to the claims experience of those employers
and their employees and dependents or any health status-related
factor relating to those employees and dependents.
(b) The commissioner's determination under subdivision (a) shall
follow an evaluation that includes a certification by the
commissioner that the acceptance of an application or applications
would place the carrier in a financially impaired condition.
(c) A carrier that has not offered coverage or accepted
applications pursuant to this chapter shall not offer coverage or
accept applications for any individual or group health benefit plan
until the later of the following dates:
(1) The 181st day after the date that coverage is denied pursuant
to this section.
(2) The date on which the carrier ceases to be financially
impaired, as determined by the commissioner.
(d) Subdivision (c) shall not limit the carrier's ability to renew
coverage already in force or relieve the carrier of the
responsibility to renew that coverage as described in Sections
10273.4, 10273.6, and 10753.13.
(e) Coverage offered within a service area after the period
specified in subdivision (c) shall be subject to the requirements of
this section.
SEC. 34. SEC. 13. Section 10753.14
of the Insurance Code is amended to read:
10753.14. (a) The premium rate for a health benefit plan issued,
amended, or renewed on or after January 1, 2014, shall vary with
respect to the particular coverage involved only by the following:
(1) Age, pursuant to the age bands established by the United
States Secretary of Health and Human Services and the age rating
curve established by the Centers for Medicare and Medicaid Services
pursuant to Section 2701(a)(3) of the federal Public Health Service
Act (42 U.S.C. Sec. 300gg(a)(3)). Rates based on age shall be
determined using the individual's age as of the date of the plan
issuance or renewal, as applicable, and shall not vary by more than
three to one for like individuals of different age who are 21 years
of age or older as described in federal regulations adopted pursuant
to Section 2701(a)(3) of the federal Public Health Service Act (42
U.S.C. Sec. 300gg(a)(3)).
(2) (A) Geographic region. Except as provided in
subparagraph (B), the The geographic regions for
purposes of rating shall be the following:
(i) Region 1 shall consist of the Counties of Alpine, Amador,
Butte, Calaveras, Colusa, Del Norte, El Dorado, Glenn, Humboldt,
Inyo, Kings, Lake, Lassen, Mendocino, Modoc, Mono, Monterey,
Nevada, Placer, Plumas, San
Benito, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity, Tulare,
Tuolomne, Yolo, and Yuba.
(ii) Region 2 shall consist of the Counties of Fresno, Imperial,
Kern, Madera, Mariposa, Merced, Napa, Sacramento, San Joaquin, San
Luis Obispo, Santa Cruz, Solano, Sonoma, and Stanislaus.
(iii) Region 3 shall consist of the Counties of Alameda, Contra
Costa, Marin, San Francisco, San Mateo, and Santa Clara.
(iv) Region 4 shall consist of the Counties of Orange, Santa
Barbara, and Ventura.
(v) Region 5 shall consist of the County of Los Angeles.
(vi) Region 6 shall consist of the Counties of Riverside, San
Bernardino, and San Diego.
(B) For the 2015 plan year and plan years thereafter, the
geographic regions for purposes of rating shall be the following,
subject to federal approval if required pursuant to Section 2701 of
the federal Public Health Service Act (42 U.S.C. Sec. 300gg) and
obtained by the department and the Department of Managed Health Care
by July 1, 2014:
(i) Region 1 shall consist of the Counties of Alpine, Amador,
Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen,
Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter,
Tehama, Trinity, Tuolumne, and Yuba.
(ii) Region 2 shall consist of the Counties of Marin, Napa,
Solano, and Sonoma.
(iii) Region 3 shall consist of the Counties of El Dorado, Placer,
Sacramento, and Yolo.
(iv) Region 4 shall consist of the Counties of Alameda, Contra
Costa, San Francisco, San Mateo, and Santa Clara.
(v) Region 5 shall consist of the Counties of Monterey, San
Benito, and Santa Cruz.
(vi) Region 6 shall consist of the Counties of Fresno, Kings,
Madera, Mariposa, Merced, San Joaquin, Stanislaus, and Tulare.
(vii) Region 7 shall consist of the Counties of San Luis Obispo,
Santa Barbara, and Ventura.
(viii) Region 8 shall consist of the Counties of Imperial, Inyo,
Kern, and Mono.
(ix) Region 9 shall consist of the ZIP Codes in Los Angeles County
starting with 906 to 912, inclusive, 915, 917, 918, and 935.
(x) Region 10 shall consist of the ZIP Codes in Los Angeles County
other than those identified in clause (ix).
(xi) Region 11 shall consist of the Counties of San Bernardino and
Riverside.
(xii) Region 12 shall consist of the County of Orange.
(xiii) Region 13 shall consist of the County of San Diego.
(i) Region 1 shall consist of the Counties of Alpine, Amador,
Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen,
Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter,
Tehama, Trinity, Tuolumne, and Yuba.
(ii) Region 2 shall consist of the Counties of Marin, Napa,
Solano, and Sonoma.
(iii) Region 3 shall consist of the Counties of El Dorado, Placer,
Sacramento, and Yolo.
(iv) Region 4 shall consist of the City and County of San
Francisco.
(v) Region 5 shall consist of the County of Contra Costa.
(vi) Region 6 shall consist of the County of Alameda.
(vii) Region 7 shall consist of the County of Santa Clara.
(viii) Region 8 shall consist of the County of San Mateo.
(ix) Region 9 shall consist of the Counties of Monterey, San
Benito, and Santa Cruz.
(x) Region 10 shall consist of the Counties of Mariposa, Merced,
San Joaquin, Stanislaus, and Tulare.
(xi) Region 11 shall consist of the Counties of Fresno, Kings, and
Madera.
(xii) Region 12 shall consist of the Counties of San Luis Obispo,
Santa Barbara, and Ventura.
(xiii) Region 13 shall consist of the Counties of Imperial, Inyo,
and Mono.
(xiv) Region 14 shall consist of the County of Kern.
(xv) Region 15 shall consist of the ZIP Codes in the County of Los
Angeles starting with 906 to 912, inclusive, 915, 917, 918, and 935.
(xvi) Region 16 shall consist of the ZIP Codes in the County of
Los Angeles other than those identified in clause (xv).
(xvii) Region 17 shall consist of the Counties of Riverside and
San Bernardino.
(xviii) Region 18 shall consist of the County of Orange.
(xix) Region 19 shall consist of the County of San Diego.
(C)
(B) (i) No later than
June 1, 2017, the department, in collaboration with the Exchange and
the Department of Managed Health Care, shall review the geographic
rating regions specified in this paragraph and the impacts of those
regions on the health care coverage market in California, and make a
report to the appropriate policy committees of the Legislature.
(ii) The requirement for submitting a report imposed under this
subparagraph is inoperative June 1, 2021, pursuant to Section 10231.5
of the Government Code.
(3) Whether the health benefit plan covers an individual or
family, as described in PPACA.
(b) The rate for a health benefit plan subject to this section
shall not vary by any factor not described in this section.
(c) The total premium charged to a small employer pursuant to this
section shall be determined by summing the premiums of covered
employees and dependents in accordance with Section 147.102(c)(1) of
Title 45 of the Code of Federal Regulations.
(d) The rating period for rates subject to this section shall be
no less than 12 months from the date of issuance or renewal of the
health benefit plan.
(e) This section shall become inoperative if Section 2701 of the
federal Public Health Services Act (42 U.S.C. Sec. 300gg), as added
by Section 1201 of PPACA, is repealed, in which case, 12 months after
the repeal, rates for health benefit plans subject to this section
shall instead be subject to Section 10714, to the extent permitted by
federal law, and all references to this section shall be deemed to
be references to Section 10714.
SEC. 35. Section 10901.3 of the Insurance Code
is amended to read:
10901.3. (a) (1) After the federally eligible defined individual
submits a completed application form for a health benefit plan, the
carrier shall, within 30 days, notify the individual of the
individual's actual premium charges for that health benefit plan
design. In no case shall the premium charged for any health benefit
plan identified in subdivision (d) of Section 10785 exceed the
following amounts:
(A) For health benefit plans that offer services through a
preferred provider arrangement, the average premium paid by a
subscriber of the Major Risk Medical Insurance Program who is of the
same age and resides in the same geographic area as the federally
eligible defined individual. However, for federally qualified
individuals who are between the ages of 60 and 64, inclusive, the
premium shall not exceed the average premium paid by a subscriber of
the Major Risk Medical Insurance Program who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual.
(B) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 and
64, inclusive, the premium shall not exceed 170 percent of the
standard premium charged to an individual who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual. The individual shall have 30 days in which to exercise
the right to buy coverage at the quoted premium rates.
(2) A carrier may adjust the premium based on family size, not to
exceed the following amounts:
(A) For health benefit plans that offer services through a
preferred provider arrangement, the average of the Major Risk Medical
Insurance Program rate for families of the same size that reside in
the same geographic area as the federally eligible defined
individual.
(B) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to a family
that is of the same size and resides in the same geographic area as
the federally eligible defined individual.
(b) When a federally eligible defined individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage shall begin no later than the first
day of the following month. When that payment is neither delivered or
postmarked until after the 15th day of a month, coverage shall
become effective no later than the first day of the second month
following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the
health benefit plan, the individual shall have the option of changing
coverage to a different health benefit plan design offered by the
same carrier. If the individual notified the plan of the change
within the first 15 days of a month, coverage under the new health
benefit plan shall become effective no later than the first day of
the following month. If an enrolled individual notified the carrier
of the change after the 15th day of a month, coverage under the
health benefit plan shall become effective no later than the first
day of the second month following notification.
(d) This section shall remain in effect only until January 1,
2014, or the 91st calendar day following the adjournment of the
2013-14 First Extraordinary Session, whichever date is later, and as
of that date is repealed, unless a later enacted statute, that
becomes operative on or before that date, deletes or extends the date
on which it is repealed.
SEC. 36. Section 10901.3 is added to the
Insurance Code, to read:
10901.3. (a) After the federally eligible defined individual
submits a completed application form for a health benefit plan, the
carrier shall, within 30 days, notify the individual of the
individual's actual premium charges for that health benefit plan
design. In no case shall the premium charged for any health benefit
plan identified in subdivision (d) of Section 10785 exceed the
premium for the second lowest cost silver plan of the individual
market in the rating area in which the individual resides which is
offered through the California Health Benefit Exchange established
under Title 22 (commencing with Section 100500) of the Government
Code, as described in Section 36B(b)(3)(B) of Title 26 of the United
States Code.
(b) When a federally eligible defined individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, within the first
15 days of the month, coverage shall begin no later than the first
day of the following month. When that payment is neither delivered or
postmarked until after the 15th day of a month, coverage shall
become effective no later than the first day of the second month
following delivery or postmark of the payment.
(c) During the first 30 days after the effective date of the
health benefit plan, the individual shall have the option of changing
coverage to a different health benefit plan design offered by the
same carrier. If the individual notified the plan of the change
within the first 15 days of a month, coverage under the new health
benefit plan shall become effective no later than the first day of
the following month. If an enrolled individual notified the carrier
of the change after the 15th day of a month, coverage under the
health benefit plan shall become effective no later than the first
day of the second month following notification.
(d) This section shall become operative on January 1, 2014, or the
91st calendar day following the adjournment of the 2013-14 First
Extraordinary Session, whichever date is later.
SEC. 37. Section 10901.9 of the Insurance Code
is amended to read:
10901.9. Commencing January 1, 2001, premiums for health benefit
plans offered, delivered, amended, or renewed by carriers shall be
subject to the following requirements:
(a) The premium for new business for a federally eligible defined
individual shall not exceed the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average premium paid by a subscriber of the Major
Risk Medical Insurance Program who is of the same age and resides in
the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 to 64, inclusive, the premium shall not exceed
the average premium paid by a subscriber of the Major Risk Medical
Insurance Program who is 59 years of age and resides in the same
geographic area as the federally eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 to 64,
inclusive, the premium shall not exceed 170 percent of the standard
premium charged to an individual who is 59 years of age and resides
in the same geographic area as the federally eligible defined
individual.
(b) The premium for in force business for a federally eligible
defined individual shall not exceed the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average premium paid by a subscriber of the Major
Risk Medical Insurance Program who is of the same age and resides in
the same geographic area as the federally eligible defined
individual. However, for federally qualified individuals who are
between the ages of 60 and 64, inclusive, the premium shall not
exceed the average premium paid by a subscriber of the Major Risk
Medical Insurance Program who is 59 years of age and resides in the
same geographic area as the federally eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, 170 percent of the standard premium charged to an
individual who is of the same age and resides in the same geographic
area as the federally eligible defined individual. However, for
federally qualified individuals who are between the ages of 60 and
64, inclusive, the premium shall not exceed 170 percent of the
standard premium charged to an individual who is 59 years of age and
resides in the same geographic area as the federally eligible defined
individual. The premium effective on January 1, 2001, shall apply to
in force business at the earlier of either the time of renewal or
July 1, 2001.
(c) The premium applied to a federally eligible defined individual
may not increase by more than the following amounts:
(1) For health benefit plans identified in subdivision (d) of
Section 10785 that offer services through a preferred provider
arrangement, the average increase in the premiums charged to a
subscriber of the Major Risk Medical Insurance Program who is of the
same age and resides in the same geographic area as the federally
eligible defined individual.
(2) For health benefit plans identified in subdivision (d) of
Section 10785 that do not offer services through a preferred provider
arrangement, the increase in premiums charged to a nonfederally
qualified individual who is of the same age and resides in the same
geographic area as the federally defined eligible individual. The
premium for an eligible individual may not be modified more
frequently than every 12 months.
(3) For a contract that a carrier has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(d) This section shall remain in effect only until January 1,
2014, or the 91st calendar day following the adjournment of the
2013-14 First Extraordinary Session, whichever date is later, and as
of that date is repealed, unless a later enacted statute, that
becomes operative on or before that date, deletes or extends the date
on which it is repealed.
SEC. 38. Section 10901.9 is added to the
Insurance Code, to read:
10901.9. (a) Commencing on the date on which the act adding this
section becomes operative, premiums for health benefit plans offered,
delivered, amended, or renewed by carriers shall be subject to the
following requirements:
(1) The premium for in force or new business for a federally
eligible defined individual shall not exceed the premium for the
second lowest cost silver plan of the individual market in the rating
area in which the individual resides which is offered through the
California Health Benefit Exchange established under Title 22
(commencing with Section 100500) of the Government Code, as described
in Section 36B(b)(3)(B) of Title 26 of the United States Code.
(2) For a contract that a carrier has discontinued offering, the
premium applied to the first rating period of the new contract that
the federally eligible defined individual elects to purchase shall be
no greater than the premium applied in the prior rating period to
the discontinued contract.
(b) This section shall become operative on January 1, 2014, or the
91st calendar day following the adjournment of the 2013-14 First
Extraordinary Session, whichever date is later.
SEC. 39. SEC. 14. Section 10902.4 of
the Insurance Code is repealed.
SEC. 40. SEC. 15. The heading of
Chapter 9.7 (commencing with Section 10950) of Part 2 of Division 2
of the Insurance Code is amended to read:
CHAPTER 9.7. CHILD ACCESS TO HEALTH INSURANCE
SEC. 41. SEC. 16. Section 10954 of
the Insurance Code is amended to read:
10954. (a) A carrier may use the following characteristics of an
eligible child for purposes of establishing the rate of the health
benefit plan for that child, where consistent with federal
regulations under PPACA: age, geographic region, and family
composition, plus the health benefit plan selected by the child or
the responsible party for a child.
(b) From the effective date of this chapter to December 31, 2013,
inclusive, rates for a child applying for coverage shall be subject
to the following limitations:
(1) During any open enrollment period or for late enrollees, the
rate for any child due to health status shall not be more than two
times the standard risk rate for a child.
(2) The rate for a child shall be subject to a 20-percent
surcharge above the highest allowable rate on a child applying for
coverage who is not a late enrollee and who failed to maintain
coverage with any carrier or health care service plan for the 90-day
period prior to the date of the child's application. The surcharge
shall apply for the 12-month period following the effective date of
the child's coverage.
(3) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a carrier may rate a child
based on health status during any period other than an open
enrollment period if the child is not a late enrollee.
(4) If expressly permitted under PPACA and any rules, regulations,
or guidance issued pursuant to that act, a carrier may condition an
offer or acceptance of coverage on any preexisting condition or other
health status-related factor for a period other than an open
enrollment period and for a child who is not a late enrollee.
(c) For any individual health benefit plan issued, sold, or
renewed prior to December 31, 2013, the carrier shall provide to a
child or responsible party for a child a notice that states the
following:
"Please consider your options carefully before failing to maintain
or renewing coverage for a child for whom you are responsible. If
you attempt to obtain new individual coverage for that child, the
premium for the same coverage may be higher than the premium you pay
now."
(d) A child who applied for coverage between September 23, 2010,
and the end of the initial enrollment period shall be deemed to have
maintained coverage during that period.
(e) Effective January 1, 2014, except for individual grandfathered
health plan coverage, the rate for any child shall be identical to
the standard risk rate.
(e)
(f) Carriers shall not require documentation from
applicants relating to their coverage history.
(f)
(g) (1) On and after the operative date of the act
adding this subdivision, and until January 1, 2014, a carrier shall
provide a the model notice , as
provided in paragraph (3), to all applicants for coverage under
this chapter and to all insureds, or the responsible party for an
insured, renewing coverage under this chapter that contains the
following information:
(A) Information about the open enrollment period provided under
Section 10965.3.
(B) An explanation that obtaining coverage during the open
enrollment period described in Section 10965.3 will not affect the
effective dates of coverage for coverage purchased pursuant to this
chapter unless the applicant cancels that coverage.
(C) An explanation that coverage purchased pursuant to this
chapter shall be effective as required under subdivision (d) of
Section 10951 and that such coverage shall not prevent an applicant
from obtaining new coverage during the open enrollment period
described in Section 10965.3.
(D) Information about the Medi-Cal program and the Healthy
Families Program and about subsidies available through the California
Health Benefit Exchange.
(2) The notice described in paragraph (1) shall be in plain
language and 14-point type.
(3) The department may shall adopt a
uniform model notice to be used by carriers in order to
comply with this subdivision, and shall consult with the Department
of Managed Health Care in adopting that uniform model
notice. Use of the model notice shall not require prior approval of
the department. Any The model notice
designated adopted by the department
for purposes of this section shall not be subject to the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
SEC. 42. SEC. 17. Section 10960.5 is
added to the Insurance Code, to read:
10960.5. (a) This chapter shall become
inoperative on January 1, 2014, or the 91st calendar day following
the adjournment of the 2013-14 First Extraordinary Session, whichever
date is later.
(b) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Services Act (42 U.S.C. Sec. 300gg-4), this section
shall become operative 12 months after the date of that repeal or
amendment.
SEC. 43. SEC. 18. Chapter 9.9
(commencing with Section 10965) is added to Part 2 of Division 2 of
the Insurance Code, to read:
CHAPTER 9.9. INDIVIDUAL ACCESS TO HEALTH INSURANCE
10965. For purposes of this chapter, the following definitions
shall apply:
(a) "Child" means a child described in Section 22775 of the
Government Code and subdivisions (n) to (p), inclusive, of Section
599.500 of Title 2 of the California Code of Regulations.
(b) "Dependent" means the spouse or registered domestic partner,
or child, of an individual, subject to applicable terms of the health
benefit plan.
(c) "Exchange" means the
California Health Benefit Exchange created by Section 100500 of the
Government Code.
(d) "Family" means the policyholder and dependent or dependents.
(d)
(e) "Grandfathered health plan" has the same meaning as
that term is defined in Section 1251 of PPACA.
(e)
(f) "Health benefit plan" means any individual or group
policy of health insurance, as defined in Section 106. The term does
not include a health insurance 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), subject to Section 10965.01 , a health insurance
conversion policy offered pursuant to Section 12682.1, a
health insurance policy provided in the Medi-Cal program (Chapter 7
(commencing with Section 14000) of Part 3 of Division 9 of the
Welfare and Institutions Code), the Healthy Families Program (Part
6.2 (commencing with Section 12693) of Division 2), the Access for
Infants and Mothers Program (Part 6.3 (commencing with Section 12695)
of Division 2), or the program under Part 6.4 (commencing with
Section 12699.50) of Division 2, or a health insurance
policy offered to a federally eligible defined individual under
Chapter 8.5 (commencing with Section 10785), to the extent
consistent with PPACA or a specified disease or hospital
indemnity policy, subject to Section 10965.01 .
(f)
(g) "Policy year" has the meaning set forth in Section
144.103 of Title 45 of the Code of Federal Regulations.
(g)
(h) "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 pursuant to
that law.
(h)
(i) "Preexisting condition provision" means a policy
provision that excludes coverage for charges or expenses incurred
during a specified period following the insured's effective date of
coverage, as to a condition for which medical advice, diagnosis,
care, or treatment was recommended or received during a specified
period immediately preceding the effective date of coverage.
(i)
(j) "Rating period" means the period
calendar year for which premium rates
established by an insurer are in effect pursuant to
subdivision (d) of Section 10965.9 .
(j)
(k) "Registered domestic partner" means a person who
has established a domestic partnership as described in Section 297 of
the Family Code.
10965.01. (a) For purposes of this chapter, "health benefit plan"
does not include policies or certificates of specified disease or
hospital confinement indemnity provided that the carrier offering
those policies or certificates complies with the following:
(1) The carrier files, on or before March 1 of each year, a
certification with the commissioner that contains the statement and
information described in paragraph (2).
(2) The certification required in paragraph (1) shall contain the
following:
(A) A statement from the carrier certifying that policies or
certificates described in this section (i) are being offered and
marketed as supplemental health insurance and not as a substitute for
coverage that provides essential health benefits as defined by the
state pursuant to Section 1302 of PPACA, and (ii) the disclosure
forms as described in Section 10603 contains the following statement
prominently on the first page:
"This is a supplement to health insurance. It is not a substitute
for essential health benefits or minimum essential coverage as
defined in federal law."
(B) A summary description of each policy or certificate described
in this section, including the average annual premium rates, or range
of premium rates in cases where premiums vary by age, gender, or
other factors, charged for the policies and certificates issued
or delivered in this state.
(3) In the case of a policy or certificate that is described in
this section and that is offered for the first time
in this state on or after January 1, 2013,
2014, the carrier files with the commissioner
the information and statement required in paragraph (2) at least 30
days prior to the date such a policy or certificate is issued or
delivered in this state.
(4) The carrier issuing a policy or certificate of specified
disease or a policy or certificate of hospital confinement indemnity
requires that the person to be insured is covered by an individual or
group policy or contract that arranges or provides medical,
hospital, and surgical coverage not designed to supplement other
private or governmental plans.
(b) As used in this section, "policies or certificates of
specified disease" and "policies or certificates of hospital
confinement indemnity" mean policies or certificates of insurance
sold to an insured to supplement other health insurance coverage as
specified in this section.
10965.1. Every health insurer offering individual health benefit
plans shall, in addition to complying with the provisions of this
part and rules adopted thereunder, comply with the provisions of this
chapter.
10965.3. (a) (1) On and after October 1, 2013, a health insurer
shall fairly and affirmatively offer, market, and sell all of the
insurer's health benefit plans that are sold in the individual market
for policy years on or after January 1, 2014, to all individuals and
dependents in each service area in which the insurer provides or
arranges for the provision of health care services. A health insurer
shall limit enrollment in individual health benefit plans to open
enrollment periods and special enrollment periods as provided in
subdivisions (c) and (d).
(2) A health insurer shall allow the policyholder of an individual
health benefit plan to add a dependent to the policyholder's health
benefit plan at the option of the policyholder, consistent with the
open enrollment, annual enrollment, and special enrollment period
requirements in this section.
(3) A health insurer offering coverage in the individual market
shall not reject the request of a policyholder during an open
enrollment period to include a dependent of the policyholder as a
dependent on an existing individual health benefit plan.
(b) An individual health benefit plan issued, amended, or renewed
on or after January 1, 2014, shall not impose any preexisting
condition provision upon any individual.
(c) (1) A health insurer shall provide an
initial open enrollment period from October 1, 2013, to March 31,
2014, inclusive, and annual enrollment periods for plan years on or
after January 1, 2015, from October 15 to December 7, inclusive, of
the preceding calendar year.
(2) For individuals enrolled in noncalendar-year individual health
plan contracts, a plan shall provide a limited open enrollment
period beginning on the date that is 30 calendar days prior to the
date the policy year ends in 2014 pursuant to Section 147.104(b)(2)
of Title 45 of the Code of Federal Regulations.
(d) (1) Subject to paragraph (2), commencing January 1, 2014, a
health insurer shall allow an individual to enroll in or change
individual health benefit plans as a result of the following
triggering events:
(A) He or she or his or her dependent loses minimum essential
coverage. For purposes of this paragraph, both of the following
definitions shall apply:
(i) "Minimum essential coverage" has the same meaning as that term
is defined in subsection (f) of Section 5000A of the Internal
Revenue Code (26 U.S.C. Sec. 5000A).
(ii) "Loss of minimum essential coverage" includes, but is not
limited to, loss of that coverage due to the circumstances described
in Section 54.9801-6(a)(3)(i) to (iii), inclusive, of Title 26 of the
Code of Federal Regulations and the circumstances described in
Section 1163 of Title 29 of the United States Code. "Loss of minimum
essential coverage" also includes loss of that coverage for a reason
that is not due to the fault of the individual.
(iii) "Loss of minimum essential coverage" does not include loss
of that coverage due to the individual's failure to pay premiums on a
timely basis or situations allowing for a rescission, subject to
clause (ii) and Sections 10119.2 and 10384.17.
(B) He or she gains a dependent or becomes a dependent.
(C) He or she is mandated to be covered as a dependent
pursuant to a valid state or federal court order.
(D) He or she has been released from incarceration.
(E) His or her health benefit plan
coverage issuer substantially violated a material provision of
the policy health coverage contract .
(F) He or she gains access to new health benefit plans as a result
of a permanent move.
(G) He or she was receiving services from a contracting provider
under another health benefit plan, as defined in Section 10965 or
Section 1399.845 of the Health and Safety Code for one of the
conditions described in subdivision (a) of Section 10133.56 and that
provider is no longer participating in the health benefit plan.
(H) He or she demonstrates to the Exchange, with respect to health
benefit plans offered through the Exchange, or to the department,
with respect to health benefit plans offered outside the Exchange,
that he or she did not enroll in a health benefit plan during the
immediately preceding enrollment period available to the individual
because he or she was misinformed that he or she was covered under
minimum essential coverage.
(I) With respect to individual health benefit plans offered
through the Exchange, in addition to the triggering events listed in
this paragraph, any other events listed in Section 155.420(d) of
Title 45 of the Code of Federal Regulations.
(2) With respect to individual health benefit plans offered
outside the Exchange, an individual shall have 63
60 days from the date of a triggering event identified in
paragraph (1) to apply for coverage from a health care service plan
subject to this section. With respect to individual health benefit
plans offered through the Exchange, an individual shall have
63 60 days from the date of a triggering event
identified in paragraph (1) to select a plan offered through the
Exchange, unless a longer period is provided in Part 155 (commencing
with Section 155.10) of Subchapter B of Subtitle A of Title 45 of the
Code of Federal Regulations.
(e) With respect to individual health benefit plans offered
through the Exchange, the following provisions shall apply:
(1) The
the effective date of coverage selected
required pursuant to this section shall be consistent
with the dates specified in Section 155.410 or 155.420 of Title 45 of
the Code of Federal Regulations. A dependent that is
a registered domestic partner pursuant to Section 297 of the Family
Code shall have the same effective date of coverage as a spouse.
(2) Notwithstanding paragraph (1), in the case where an individual
acquires a dependent or becomes a dependent by entering into a
registered domestic partnership pursuant to Section 297 of the Family
Code and applies for coverage of that domestic partner consistent
with subdivision (d), the coverage effective date shall be the first
day of the month following the date he or she selects a plan through
the Exchange, unless an earlier date is agreed to under Section
155.420(b)(3) of Title 45 of the Code of Federal Regulations.
(f) With respect to an individual health benefit plan offered
outside the Exchange, the following provisions shall apply:
(1) After an individual submits a completed application form for a
plan, the insurer shall, within 30 days, notify the individual of
the individual's actual premium charges for that plan established in
accordance with Section 10965.9. The individual shall have 30 days in
which to exercise the right to buy coverage at the quoted premium
charges.
(2) With respect to an individual health benefit plan for which an
individual applies during the initial open enrollment period
described in subdivision (c), when the policyholder submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs earlier, by December 15,
2013, coverage under the individual health benefit plan shall become
effective no later than January 1, 2014. When that payment is
delivered or postmarked within the first 15 days of any subsequent
month, coverage shall become effective no later than the first day of
the following month. When that payment is delivered or postmarked
between December 16, 2013, and December 31, 2013, inclusive, or after
the 15th day of any subsequent month, coverage shall become
effective no later than the first day of the second month following
delivery or postmark of the payment.
(3) With respect to an individual health benefit plan for which an
individual applies during the annual open enrollment period
described in subdivision (c), when the individual submits a premium
payment, based on the quoted premium charges, and that payment is
delivered or postmarked, whichever occurs later, by December 15,
coverage shall become effective as of the following January 1. When
that payment is delivered or postmarked within the first 15 days of
any subsequent month, coverage shall become effective no later than
the first day of the following month. When that payment is delivered
or postmarked between December 16 and December 31, inclusive, or
after the 15th day of any subsequent month, coverage shall become
effective no later than the first day of the second month following
delivery or postmark of the payment.
(4) With respect to an individual health benefit plan for which an
individual applies during a special enrollment period described in
subdivision (d), the following provisions shall apply:
(A) When the individual submits a premium payment, based on the
quoted premium charges, and that payment is delivered or postmarked,
whichever occurs earlier, within the first 15 days of the month,
coverage under the plan shall become effective no later than the
first day of the following month. When the premium payment is neither
delivered nor postmarked until after the 15th day of the month,
coverage shall become effective no later than the first day of the
second month following delivery or postmark of the payment.
(B) Notwithstanding subparagraph (A), in the case of a birth,
adoption, or placement for adoption, the coverage shall be effective
on the date of birth, adoption, or placement for adoption.
(C) Notwithstanding subparagraph (A), in the case of marriage or
becoming a registered domestic partner or in the case where a
qualified individual loses minimum essential coverage, the coverage
effective date shall be the first day of the month following the date
the insurer receives the request for special enrollment.
(g) (1) A health insurer shall not establish rules for
eligibility, including continued eligibility, of any individual to
enroll under the terms of an individual health benefit plan based on
any of the following factors:
(A) Health status.
(B) Medical condition, including physical and mental illnesses.
(C) Claims experience.
(D) Receipt of health care.
(E) Medical history.
(F) Genetic information.
(G) Evidence of insurability, including conditions arising out of
acts of domestic violence.
(H) Disability.
(I) Any other health status-related factor as determined by any
federal regulations, rules, or guidance issued pursuant to Section
2705 of the federal Public Health Service Act.
(2) Notwithstanding subdivision (c) of Section 10291.5, a health
insurer shall not require an individual applicant or his or her
dependent to fill out a health assessment or medical questionnaire
prior to enrollment under an individual health benefit plan. A health
insurer shall not acquire or request information that relates to a
health status-related factor from the applicant or his or her
dependent or any other source prior to enrollment of the individual.
(h) (1) A health insurer shall consider the claims experience of
all insureds in all individual health benefit plans offered in the
state that are subject to subdivision (a), including those insureds
who do not enroll in the plans through the Exchange, to be members of
a single risk pool.
(h) (1) A health insurer shall consider as a single risk pool for
rating purposes in the individual market the claims experience of all
insureds and enrollees in all nongrandfathered individual health
benefit plans offered by that insurer in this state, whether offered
as health care service plan contracts or individual health insurance
policies, including those insureds who enroll in individual coverage
through the Exchange and insureds who enroll in individual coverage
outside the Exchange.
(2) Each policy calendar year, a
health insurer shall establish an index rate for the individual
market in the state based on the total combined claims costs for
providing essential health benefits, as defined pursuant to Section
1302 of PPACA, within the single risk pool required under paragraph
(1). The index rate shall be adjusted on a marketwide basis based on
the total expected marketwide payments and charges under the risk
adjustment and reinsurance programs established for the state
pursuant to Sections 1343 and 1341 of PPACA. The premium rate for all
of the health insurer's health benefit plans in the individual
market shall use the applicable index rate, as adjusted for total
expected marketwide payments and charges under the risk adjustment
and reinsurance programs established for the state pursuant to
Sections 1343 and 1341 of PPACA, subject only to the adjustments
permitted under paragraph (3).
(3) A health insurer may vary premiums
premium rates for a particular health benefit plan from its
index rate based only on the following actuarially justified
plan-specific factors:
(A) The actuarial value and cost-sharing design of the health
benefit plan.
(B) The health benefit plan's provider network, delivery system
characteristics, and utilization management practices.
(C) The benefits provided under the health benefit plan that are
in addition to the essential health benefits, as defined pursuant to
Section 1302 of PPACA and Section 10112.27 . These
additional benefits shall be pooled with similar benefits within the
single risk pool required under paragraph (1) and the claims
experience from those benefits shall be utilized to determine rate
variations for plans that offer those benefits in addition to
essential health benefits.
(D) With respect to catastrophic plans, as described in subsection
(e) of Section 1302 of PPACA and Section 10112.3 , the
expected impact of the specific eligibility categories for those
plans.
(E) Administrative costs, excluding any user fees required by the
Exchange.
(i) This section shall only apply with respect to individual
health benefit plans for policy years on or after January 1, 2014.
(j) This section shall not apply to an individual health benefit
plan that is a grandfathered health plan.
(k) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Services Act (42 U.S.C. Sec. 300gg-4), subdivisions
(a), (b), and (g) shall become inoperative 12 months after the date
of that repeal or amendment and individual health care benefit plans
shall thereafter be subject to Sections 10901.2, 10951, and 10953.
10965.5. (a) No Commencing on October 1,
2013, no health insurer or agent or broker shall, directly or
indirectly, engage in the following activities:
(1) Encourage or direct an individual to refrain from filing an
application for individual coverage with an insurer because of the
health status, claims experience, industry, occupation, or geographic
location, provided that the location is within the insurer's
approved service area, of the individual.
(2) Encourage or direct an individual to seek individual coverage
from another health care service plan or health insurer or the
Exchange because of the health status, claims experience, industry,
occupation, or geographic location, provided that the location is
within the insurer's approved service area, of the individual.
(3) Employ marketing practices or benefit designs that will have
the effect of discouraging the enrollment of individuals with
significant health needs or discriminate based on an individual
's race, color, national origin, present or predicted
disability, age, sex, gender identity, sexual orientation, expected
length of life, degree of medical dependency, quality of life, or
other health conditions .
(b) A Commencing on October 1, 2013, a
health insurer shall not, directly or indirectly, enter into
any contract, agreement, or arrangement with a broker or agent that
provides for or results in the compensation paid to a broker or agent
for the sale of an individual health benefit plan to be varied
because of the health status, claims experience, industry,
occupation, or geographic location of the individual. This
subdivision does not apply to a compensation arrangement that
provides compensation to a broker or agent on the basis of percentage
of premium, provided that the percentage shall not vary because of
the health status, claims experience, industry, occupation, or
geographic area of the individual.
(c) This section shall only apply with respect to individual
health benefit plans for policy years on or after January 1, 2014.
(d) This section shall be enforced in the same manner as Section
790.03, including through Sections 790.05 and 790.035.
10965.7. (a) All individual health benefit plans shall conform to
the requirements of Sections 10112.1, 10127.18, 10273.6, and
12682.1, and any other requirements imposed by this code, and shall
be renewable at the option of the insured except as permitted to be
canceled, rescinded, or not renewed pursuant to Section 10273.6.
(b) Any insurer that ceases to offer for sale new individual
health benefit plans pursuant to Section 10273.6 shall continue to be
governed by this chapter with respect to business conducted under
this chapter.
10965.9. (a) With respect to individual health benefit plans
issued, amended, or renewed on or after January 1, 2014, a health
insurer may use only the following characteristics of an individual,
and any dependent thereof, for purposes of establishing the rate of
the individual health benefit plan covering the individual and the
eligible dependents thereof, along with the health benefit plan
selected by the individual:
(1) Age, pursuant to the age bands established by the United
States Secretary of Health and Human Services and the age rating
curve established by the federal Centers for Medicare and Medicaid
Services pursuant to Section 2701(a)(3) of the federal Public Health
Service Act (42 U.S.C. Sec. 300gg(a)(3)). Rates based on age shall be
determined using the individual's age as of the date of the plan
issuance or renewal, as applicable, and shall not vary by more than
three to one for like individuals of different age who are
age 21 21 years of age or older as described in
federal regulations adopted pursuant to Section 2701(a)(3) of the
federal Public Health Service Act (42 U.S.C. Sec. 300gg(a)(3)).
(2) (A) Geographic region. Except as provided in
subparagraph (B), the The geographic regions for
purposes of rating shall be the following:
(i) Region 1 shall consist of the Counties of Alpine, Amador,
Butte, Calaveras, Colusa, Del Norte, El Dorado, Glenn, Humboldt,
Inyo, Kings, Lake, Lassen, Mendocino, Modoc, Mono, Monterey, Nevada,
Placer, Plumas, San Benito, Shasta, Sierra, Siskiyou, Sutter, Tehama,
Trinity, Tulare, Tuolomne, Yolo, and Yuba.
(ii) Region 2 shall consist of the Counties of Fresno, Imperial,
Kern, Madera, Mariposa, Merced, Napa, Sacramento, San Joaquin, San
Luis Obispo, Santa Cruz, Solano, Sonoma, and Stanislaus.
(iii) Region 3 shall consist of the Counties of Alameda, Contra
Costa, Marin, San Francisco, San Mateo, and Santa Clara.
(iv) Region 4 shall consist of the Counties of Orange, Santa
Barbara, and Ventura.
(v) Region 5 shall consist of the County of Los Angeles.
(vi) Region 6 shall consist of the Counties of Riverside, San
Bernardino, and San Diego.
(B) For the 2015 plan year and plan years thereafter, the
geographic regions for purposes of rating shall be the following,
subject to federal approval if required pursuant to Section 2701 of
the federal Public Health Service Act (42 U.S.C. Sec. 300gg) and
obtained by the department and the Department of Managed Health Care
by July 1, 2014:
(i) Region 1 shall consist of the Counties of Alpine, Amador,
Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen,
Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter,
Tehama, Trinity, Tuolumne, and Yuba.
(ii) Region 2 shall consist of the Counties of Marin, Napa,
Solano, and Sonoma.
(iii) Region 3 shall consist of the Counties of El Dorado, Placer,
Sacramento, and Yolo.
(iv) Region 4 shall consist of the Counties of Alameda, Contra
Costa, San Francisco, San Mateo, and Santa Clara.
(v) Region 5 shall consist of the Counties of Monterey, San
Benito, and Santa Cruz.
(vi) Region 6 shall consist of the Counties of Fresno, Kings,
Madera, Mariposa, Merced, San Joaquin, Stanislaus, and Tulare.
(vii) Region 7 shall consist of the Counties of San Luis Obispo,
Santa Barbara, and Ventura.
(viii) Region 8 shall consist of the Counties of Imperial,
Inyo, Kern, and Mono.
(ix) Region 9 shall consist of the ZIP Codes in Los Angeles County
starting with 906 to 912, inclusive, 915, 917, 918, and 935.
(x) Region 10 shall consist of the ZIP Codes in Los Angeles County
other than those identified in clause (ix).
(xi) Region 11 shall consist of the Counties of San Bernardino and
Riverside.
(xii) Region 12 shall consist of the County of Orange.
(xiii) Region 13 shall consist of the County of San Diego.
(i) Region 1 shall consist of the Counties of Alpine, Amador,
Butte, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen,
Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter,
Tehama, Trinity, Tuolumne, and Yuba.
(ii) Region 2 shall consist of the Counties of Marin, Napa,
Solano, and Sonoma.
(iii) Region 3 shall consist of the Counties of El Dorado, Placer,
Sacramento, and Yolo.
(iv) Region 4 shall consist of the City and County of San
Francisco.
(v) Region 5 shall consist of the County of Contra Costa.
(vi) Region 6 shall consist of the County of Alameda.
(vii) Region 7 shall consist of the County of Santa Clara.
(viii) Region 8 shall consist of the County of San Mateo.
(ix) Region 9 shall consist of the Counties of Monterey, San
Benito, and Santa Cruz.
(x) Region 10 shall consist of the Counties of Mariposa, Merced,
San Joaquin, Stanislaus, and Tulare.
(xi) Region 11 shall consist of the Counties of Fresno, Kings, and
Madera.
(xii) Region 12 shall consist of the Counties of San Luis Obispo,
Santa Barbara, and Ventura.
(xiii) Region 13 shall consist of the Counties of Imperial, Inyo,
and Mono.
(xiv) Region 14 shall consist of the County of Kern.
(xv) Region 15 shall consist of the ZIP Codes in the County of Los
Angeles starting with 906 to 912, inclusive, 915, 917, 918, and 935.
(xvi) Region 16 shall consist of the ZIP Codes in the County of
Los Angeles other than those identified in clause (xv).
(xvii) Region 17 shall consist of the Counties of Riverside and
San Bernardino.
(xviii) Region 18 shall consist of the County of Orange.
(xix) Region 19 shall consist of the County of San Diego.
(C)
(B) No later than June 1, 2017, the department, in
collaboration with the Exchange and the Department of Managed Heath
Care, shall review the geographic rating regions specified in this
paragraph and the impacts of those regions on the health care
coverage market in California, and make a report to the appropriate
policy committees of the Legislature.
(3) Whether the plan covers an individual or family, as described
in PPACA.
(b) The rate for a health benefit plan subject to this section
shall not vary by any factor not described in this section.
(c) With respect to family coverage under an individual health
benefit plan, the rating variation permitted under paragraph (1) of
subdivision (a) shall be applied based on the portion of the premium
attributable to each family member covered under the plan. The total
premium for family coverage shall be determined by summing the
premiums for each individual family member. In determining the total
premium for family members, premiums for no more than the three
oldest family members who are under age 21 21
years of age shall be taken into account.
(d) The rating period for rates subject to this section shall be
from January 1 to December 31, inclusive.
(e) This section shall not apply to an individual health benefit
plan that is a grandfathered health plan.
(f) The requirement for submitting a report imposed under
subparagraph (B) of paragraph (2) of subdivision (a) is inoperative
on June 1, 2021, pursuant to Section 10231.5 of the Government Code.
(g) If Section 5000A of the Internal Revenue Code, as added by
Section 1501 of PPACA, is repealed or amended to no longer apply to
the individual market, as defined in Section 2791 of the federal
Public Health Services Act (42 U.S.C. Sec. 300gg-4), this section
shall become inoperative 12 months after the date of that repeal or
the amendment.
10965.11. (a) A health insurer shall not be required to offer an
individual health benefit plan or accept applications for the plan
pursuant to Section 10965.3 in the case of any of the following:
(1) To an individual who does not live or reside within the
insurer's approved service areas.
(2) (A) Within a specific service area or portion of a service
area, if the insurer reasonably anticipates and demonstrates to the
satisfaction of the commissioner both of the following:
(i) It will not have sufficient health care delivery resources to
ensure that health care services will be available and accessible to
the individual because of its obligations to existing insureds.
(ii) It is applying this subparagraph uniformly to all individuals
without regard to the claims experience of those individuals or any
health status-related factor relating to those individuals.
(B) A health insurer that cannot offer an individual
a health benefit plan to individuals because it
is lacking in sufficient health care delivery resources within a
service area or a portion of a service area pursuant to subparagraph
(A) shall not offer an individual a
health benefit plan in that area until the later of the following
dates:
(i) The 181st day after the date coverage is denied pursuant to
this paragraph.
(ii) The date the insurer notifies the commissioner that it has
the ability to deliver services to individuals, and certifies to the
commissioner that from the date of the notice it will enroll all
individuals requesting coverage in that area from the insurer.
(C) Subparagraph (B) shall not limit the insurer's ability to
renew coverage already in force or relieve the insurer of the
responsibility to renew that coverage as described in Section
10273.6.
(D) Coverage offered within a service area after the period
specified in subparagraph (B) shall be subject to this section.
(b) (1) A health insurer may decline to offer an individual health
benefit plan to an individual if the insurer demonstrates to the
satisfaction of the commissioner both of the following:
(A) It does not have the financial reserves necessary to
underwrite additional coverage. In determining whether this
subparagraph has been satisfied, the commissioner shall consider, but
not be limited to, the insurer's compliance with the requirements of
this part and the rules adopted under those provisions.
(B) It is applying this subdivision uniformly to all individuals
without regard to the claims experience of those individuals or any
health status-related factor relating to those individuals.
(2) A health insurer that denies coverage to an individual under
paragraph (1) shall not offer coverage in the individual
market before the later of the following dates:
(A) The 181st day after the date coverage is denied pursuant to
this subdivision.
(B) The date the insurer demonstrates to the satisfaction of the
commissioner that the insurer has sufficient financial reserves
necessary to underwrite additional coverage.
(3) Paragraph (2) shall not limit the insurer's ability to renew
coverage already in force or relieve the insurer of the
responsibility to renew that coverage as described in Section
10273.6.
(C) Coverage offered within a service area after the period
specified in paragraph (2) shall be subject to this section.
(c) Nothing in this chapter shall be construed to limit the
commissioner's authority to develop and implement a plan of
rehabilitation for a health insurer whose financial viability or
organizational and administrative capacity has become
impaired impaired, to the extent permitted by
PPACA.
10965.13. (a) A health insurer that receives an application for
an individual health benefit plan outside the Exchange during the
initial open enrollment period, an annual enrollment period, or a
special enrollment period described in Section 10965.3 shall inform
the applicant that he or she may be eligible for lower cost coverage
through the Exchange and shall inform the applicant of the applicable
enrollment period provided through the Exchange described in Section
10965.3.
(b) On or before October 1, 2013, and annually thereafter, a
health insurer shall issue a notice to a policyholder enrolled in an
individual health benefit plan offered outside the Exchange. The
notice shall inform the policyholder that he or she may be eligible
for lower cost coverage through the Exchange and shall inform the
policyholder of the applicable open enrollment period provided
through the Exchange described in Section 10965.3.
(c) This section shall not apply where the individual health
benefit plan described in subdivision (a) or (b) is a grandfathered
health plan.
10965.15. (a) On or before October 1, 2013, and annually
thereafter, a health insurer shall issue the following notice to all
policyholders enrolled in an individual health benefit plan that is a
grandfathered health plan:
New improved health insurance options are available in California.
You currently have health insurance that is exempt from many of the
new requirements. For instance, your policy may not include certain
consumer protections that apply to other policies, such as the
requirement for the provision of preventive health services without
any cost sharing and the prohibition against increasing your rates
based on your health status. You have the option to remain in your
current policy or switch to a new policy. Under the new rules, a
health insurance company cannot deny your application based on any
health conditions you may have. For more information about your
options, please contact the California Health Benefit Exchange, the
Office of Patient Advocate, your policy representative, an insurance
broker, or a health care navigator.
New improved health insurance options are available in California.
You currently have health insurance that is not required to follow
many of the new laws. For example, your policy may not provide
preventive health services without you having to pay any cost sharing
(copayments or coinsurance). Also your current policy may be allowed
to increase your rates based on your health status while new
policies cannot. You have the option to remain in your current policy
or switch to a new policy. Under the new rules, a health insurance
company cannot deny your application based on any health conditions
you may have. For more information about your options, please contact
the California Health Benefit Exchange, the Office of Patient
Advocate, your policy representative, an insurance broker, or a
health care navigator.
(b) Commencing October 1, 2013, a health insurer shall include the
notice described in subdivision (a) in any renewal material of the
individual grandfathered health plan and in any application for
dependent coverage under the individual grandfathered health plan.
(c) A health insurer shall not advertise or market an individual
health benefit plan that is a grandfathered health plan for purposes
of enrolling a dependent of a policyholder into the plan for policy
years on or after January 1, 2014. Nothing in this subdivision shall
be construed to prohibit an individual enrolled in an individual
grandfathered health plan from adding a dependent to that plan to the
extent permitted by PPACA.
10965.16. Except as otherwise provided in this chapter, this
chapter shall be implemented to the extent that it meets or exceeds
the requirements set forth in PPACA.
SEC. 44. Part 6.25 (commencing with Section
12694.50) is added to Division 2 of the Insurance Code, to read:
PART 6.25. CHIP Continuation Coverage
12694.50. For purposes of this part, the following definitions
shall apply:
(a) "Board" means the Managed Risk Medical Insurance Board.
(b) "Department" means the State Department of Health Care
Services.
(c) "Participating dental plan" means any of the following plans
that is lawfully engaged in providing, arranging, paying for, or
reimbursing the cost of personal dental services under insurance
policies or health care service plan contracts, or membership
contracts, in consideration of premiums or other periodic charges
payable to it, and that, on or after January 1, 2012, has or had a
contract with the board or the department to provide coverage to
program subscribers:
(1) A dental insurer holding a valid outstanding certificate of
authority from the commissioner.
(2) A specialized health care service plan as defined under
subdivision (o) of Section 1345 of the Health and Safety Code.
(d) "Participating health plan" means any of the following plans
that is lawfully engaged in providing, arranging, paying for, or
reimbursing the cost of personal health care services under insurance
policies or health care service plan contracts, medical and hospital
service arrangements, or membership contracts, in consideration of
premiums or other periodic charges payable to it, and that, on or
after January 1, 2012, has or had a contract with the board or the
department to provide coverage to program subscribers:
(1) A private health insurer holding a valid outstanding
certificate of authority from the commissioner.
(2) A health care service plan as defined under subdivision (f) of
Section 1345 of the Health and Safety Code, including a plan
operating as a geographic managed care plan pursuant to a contract
entered into under Article 2.91 (commencing with Section 14089) of
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code.
(3) A county organized health system.
(e) "Participating vision care plan" means any of the following
plans that is lawfully engaged in providing, arranging, paying for,
or reimbursing the cost of personal vision services under insurance
policies or health care service plan contracts, or membership
contracts, in consideration of premiums or other periodic charges
payable to it, and that, on or after January 1, 2012, has or had a
contract with the board or the department to provide coverage to
program subscribers:
(1) A vision insurer holding a valid outstanding certificate of
authority from the commissioner.
(2) A specialized health care service plan as defined under
subdivision (o) of Section 1345 of the Health and Safety Code.
(f) "Program" means the federal Children's Health Insurance
Program established in the state pursuant to Title XXI of the federal
Social Security Act and includes the program established under Part
6.2 (commencing with Section 12693) and the transition of the
enrollees in that program pursuant to Section 14005.26 of the Welfare
and Institutions Code.
(g) "Qualified beneficiary" means an individual who meets all of
the following requirements:
(1) On or after January 1, 2012, received or receives coverage
under a participating dental, health, or vision plan under the
program.
(2) Was disenrolled or will be disenrolled from the program due to
loss of eligibility because of his or her age.
(3) Is not eligible for full scope benefits under the Medi-Cal
program.
(h) "Subscriber" means an individual who is eligible for and
enrolled in the program.
12694.52. (a) Until January 1, 2014, or the date that is six
months following the operative date of this part, whichever date is
later, every participating health, dental, and vision plan shall
offer coverage to a qualified beneficiary. The plan shall offer the
qualified beneficiary the same coverage that the beneficiary had
immediately prior to disenrollment from the program or coverage with
benefits that are most equivalent to the coverage that the
beneficiary had immediately prior to disenrollment from the program.
(b) Except as otherwise provided in this part, coverage provided
pursuant to this part shall be provided under the same terms and
conditions that apply to similarly situated subscribers in the
program under the applicable participating plan.
(c) (1) For a qualified beneficiary who was disenrolled from the
program prior to the operative date of this part, the participating
health, dental, or vision plan shall provide written notification of
eligibility for coverage pursuant to this section to the qualified
beneficiary within 30 days of the operative date of this part.
(2) For a qualified beneficiary who is disenrolled from the
program on or after the operative date of this part, the
participating health, dental, or vision plan shall provide written
notification of eligibility for coverage pursuant to this section to
the qualified beneficiary no less than 30 days prior to disenrollment
from the program.
(3) The notice required under this subdivision shall state that
the qualified beneficiary must elect the coverage in writing and
deliver the written request, by first-class mail, or other reliable
means of delivery, including personal delivery, express mail, or
private courier company, to the participating plan within 60 days of
the mailing of the notice. The notice shall also state that a
qualified beneficiary electing coverage pursuant to this part shall
pay to the participating plan the amount of the required premium
payment, as set forth in Section 12694.54.
(d) A qualified beneficiary shall have 60 days from the mailing of
the notice required under subdivision (c) to elect coverage pursuant
to this section. The election shall be in writing and shall be
delivered by first-class mail, or other reliable means of delivery,
including personal delivery, express mail, or private courier
company, to the participating plan.
(e) A qualified beneficiary receiving coverage pursuant to this
part shall continue to receive that coverage until the coverage is
terminated at his or her election or pursuant to Section 12694.56,
whichever occurs first.
(f) A qualified beneficiary receiving coverage pursuant to this
part shall be considered part of the participating plan and treated
as similarly situated subscribers for contract purposes, unless
otherwise specified in this part.
12694.54. (a) A qualified beneficiary who elects coverage
pursuant to this part shall make the following premium payments to
the participating health, dental, or vision plan, as applicable:
(1) To the participating health plan: not more than 110 percent of
the average per subscriber payment made by the board or the
department to all participating health plans for coverage provided
under the program to subscribers who are one year of age or older.
(2) To the participating dental plan: not more than 110 percent of
the average per subscriber payment made by the board or the
department to all participating dental plans for coverage provided
under the program to subscribers who are one year of age or older.
(3) To the participating vision plan: not more than 110 percent of
the average per subscriber payment made by the board or the
department to all participating vision plans for coverage provided
under the program to subscribers who are one year of age or older.
(b) The premium payments required by this section shall be made
before the due date of each payment but not more frequently than on a
monthly basis.
12694.56. The continuation coverage provided pursuant to this
part shall terminate at the first to occur of the following:
(a) The date 18 months after the effective date of coverage
elected pursuant to this part.
(b) The end of the period for which premium payments were made, if
the qualified beneficiary ceases to make payments or fails to make
timely payments of a required premium, in accordance with Section
12694.54 and the terms and conditions of the policy or contract. In
the case of nonpayment of premiums, reinstatement shall be governed
by the terms and conditions of the policy or contract.
(c) The qualified beneficiary moves out of the plan's service area
or the qualified beneficiary, or applicant acting on his or her
behalf, commits fraud or deception in the use of plan services.
SEC. 45. SEC. 19. (a)
The Insurance Commissioner may adopt regulations
regulations, to implement the changes made to
the Insurance Code by this act act,
pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code). The commissioner shall consult with the Director of
the Department of Managed Health Care prior to adopting any
regulations pursuant to this section
subdivision for the specific purpose of ensuring, to the extent
practical, that there is consistency of regulations applicable to
entities regulated by the commissioner and those regulated by
the Director of the Department of Managed Health
Care.
(b) (1) The commissioner may adopt emergency regulations
implementing the changes made to the Insurance Code by this act no
later than December 31, 2014. The commissioner may 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 one readoption of emergency regulations
authorized by this section 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,
notwithstanding Section 11346.1 of the Government Code, the one
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. The
commissioner shall consult with the Director of the Department of
Managed Health Care prior to adopting any regulations pursuant to
this subdivision for the specific purpose of ensuring, to the extent
practical, that there is consistency of regulations applicable to
entities regulated by the commissioner and those regulated by the
Department of Managed Health Care.
SEC. 46. 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.
SEC. 2 0. This bill shall become
operative only if Senate Bill 2 of the 2013-14 First Extraordinary
Session is enacted and becomes effective.
