Bill Text: CA SB607 | 2023-2024 | Regular Session | Amended

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

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Bill Title: Controlled substances.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2024-09-28 - Chaptered by Secretary of State. Chapter 862, Statutes of 2024. [SB607 Detail]

Download: California-2023-SB607-Amended.html

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Amended  IN  Senate  April 24, 2023

Amended  IN  Senate  April 17, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 607

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Introduced by Senator Portantino

February 15, 2023

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An act to amend Section 1343 of, and to add Section 1343.2 to, the Health and Safety Code, and to amend Section 740 of the Insurance Code, relating to health care coverage, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL'S DIGEST

SB 607, as amended, Portantino. Self-funded student health care coverage.

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. Existing law provides for the regulation of health insurers by the Department of Insurance. Under existing law, specified persons are exempt from that regulation by the Department of Managed Health Care or the Department of Insurance.

This bill would authorize a student health plan operated by a bona fide, private, nonprofit institution of higher learning to operate in California if the institution files a yearly report with the Director of the Department of Managed Health Care that certifies specified information under penalty of perjury. information, including information relating to specific coverage the student health plan would provide, and the characteristics the institution would use for purposes of establishing rates for individual students and any dependents. The bill would require the report to be certified under penalty of perjury. The bill would exempt a student health plan that complies with those requirements from other regulation by the Department of Managed Health Care or the Department of Insurance, except as specified. By expanding the crime of perjury, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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

This bill would declare that it is to take effect immediately as an urgency statute.

Digest Key

Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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Bill Text

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

SECTION 1.

 The Legislature finds and declares the following:

It is the intent of the Legislature to require that a bona fide, private, nonprofit institution of higher learning that elects to offer a self-funded student health plan in accordance with this act shall maintain or exceed coverage standards of the federal Patient Protection and Affordable Care Act, including all California-mandated benefits under the federal Patient Protection and Affordable Care Act, and to comply with the provisions of this act.

SEC. 2.

 Section 1343 of the Health and Safety Code is amended to read:

1343.

 (a) This chapter shall apply to health care service plans and specialized health care service plan contracts as defined in subdivisions (f) and (o) of Section 1345.

(b) The director may by the adoption of rules or the issuance of orders deemed necessary and appropriate, either unconditionally or upon specified terms and conditions or for specified periods, exempt from this chapter any class of persons or plan contracts if the director finds the action to be in the public interest and not detrimental to the protection of subscribers, enrollees, or persons regulated under this chapter, and that the regulation of the persons or plan contracts is not essential to the purposes of this chapter.

(c) The director, upon request of the Director of Health Care Services, shall exempt from this chapter any county-operated pilot program contracting with the State Department of Health Care Services pursuant to Article 7 (commencing with Section 14490) of Chapter 8 of Part 3 of Division 9 of the Welfare and Institutions Code. The director may exempt noncounty-operated pilot programs upon request of the Director of Health Care Services. Those exemptions may be subject to conditions the Director of Health Care Services deems appropriate.

(d) Upon the request of the Director of Health Care Services, the director may exempt from this chapter any mental health plan contractor or any capitated rate contract under Chapter 8.9 (commencing with Section 14700) of Part 3 of Division 9 of the Welfare and Institutions Code. Those exemptions may be subject to conditions the Director of Health Care Services deems appropriate.

(e) This chapter shall not apply to:

(1) A person organized and operating pursuant to a certificate issued by the Insurance Commissioner unless the entity is directly providing the health care service through those entity-owned or contracting health facilities and providers, in which case this chapter shall apply to the insurer’s plan and to the insurer.

(2) A plan directly operated by a bona fide public or private institution of higher learning that directly provides health care services only to its students, faculty, staff, administration, and their respective dependents, except that a plan described in this paragraph shall be subject to Sections 1343.2 and 1367.33, and Article 5.55 (commencing with Section 1374.30), as provided in Section 1343.2.

(3) A person who does all of the following:

(A) Promises to provide care for life or for more than one year in return for a transfer of consideration from, or on behalf of, a person 60 years of age or older.

(B) Has obtained a written license pursuant to Chapter 2 (commencing with Section 1250) or Chapter 3.2 (commencing with Section 1569).

(C) Has obtained a certificate of authority from the State Department of Social Services.

(4) The Major Risk Medical Insurance Board when engaging in activities under Chapter 8 (commencing with Section 10700) of Part 2 of Division 2 of the Insurance Code, Part 6.3 (commencing with Section 12695) of Division 2 of the Insurance Code, and Part 6.5 (commencing with Section 12700) of Division 2 of the Insurance Code.

(5) The California Small Group Reinsurance Fund.

SEC. 3.

 Section 1343.2 is added to the Health and Safety Code, to read:

1343.2.

 (a) A plan operated by a bona fide, private, nonprofit institution of higher learning that directly provides health care services to its students and their respective dependents may operate in the state if, on or before July 1 of each year for which the student health plan will be offered for the upcoming school year, the institution files a report with the director under penalty of perjury certifying that all of the following are true:

(1) The student health plan does all of the following:

(1)The student health plan satisfies

(A) Satisfies all applicable minimum essential coverage standards under federal law and the federal Centers for Medicare and Medicaid Services within the United States Department of Health and Human Services has issued a minimum essential coverage certification pursuant to Section 156.604 of Title 45 of the Code of Federal Regulations or otherwise acknowledges that the student health plan satisfies all applicable minimum essential coverage standards.

(B) Provides guaranteed coverage to eligible students, with no waiting periods or exclusions of preexisting conditions.

(C) Provides 100-percent coverage of preventive health services, including preventive health services for women as defined in the federal Patient Protection and Affordable Care Act (PPACA) (Section 2713 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-13)) and its implementing regulations (Part 147 of Title 45 of the Code of Federal Regulations).

(D) Provides coverage for all essential health benefits, as defined in PPACA and its implementing regulations.

(E) Provides coverage for the health benefits covered by the Kaiser Foundation Health Plan Small Group HMO 30 plan (federal health product identification number 40513CA035) as this plan was offered during the first quarter of 2014, as follows, regardless of whether the benefits are specifically referenced in the plan contract or evidence of coverage for that plan:

(i) Medically necessary basic health care services, as defined in subdivision (b) of Section 1345 of this code and Section 1300.67 of Title 28 of the California Code of Regulations.

(ii) The health benefits mandated by statutes enacted before December 31, 2011, as described in the following sections: Sections 1367.002, 1367.06, and 1367.35 (preventive services for children); Section 1367.25 (prescription drug coverage for contraceptives); Section 1367.45 (AIDS vaccine); Section 1367.46 (HIV testing); Section 1367.51 (diabetes); Section 1367.54 (alpha-fetoprotein testing); Section 1367.6 (breast cancer screening); Section 1367.61 (prosthetics for laryngectomy); Section 1367.62 (maternity hospital stay); Section 1367.63 (reconstructive surgery); Section 1367.635 (mastectomies); Section 1367.64 (prostate cancer); Section 1367.65 (mammography); Section 1367.66 (cervical cancer); Section 1367.665 (cancer screening tests); Section 1367.67 (osteoporosis); Section 1367.68 (surgical procedures for jaw bones); Section 1367.71 (anesthesia for dental); Section 1367.9 (conditions attributable to diethylstilbestrol); Section 1368.2 (hospice care); Section 1370.6 (cancer clinical trials); Section 1371.5 (emergency response ambulance or ambulance transport services); subdivision (b) of Section 1373 (sterilization operations or procedures); Section 1373.4 (inpatient hospital and ambulatory maternity); Section 1374.56 (phenylketonuria); Section 1374.17 (organ transplants for HIV); Section 1374.72 (mental health parity); and Section 1374.73 (autism/behavioral health treatment).

(iii) Any other benefits mandated by statutes enacted before December 31, 2011, as described in those statutes.

(iv) The health benefits that are not otherwise required to be covered under Chapter 2.2 (commencing with Section 1340), to the extent otherwise required pursuant to Sections 1367.18, 1367.21, 1367.215, 1367.22, 1367.24, and 1367.25, and Section 1300.67.24 of Title 28 of the California Code of Regulations.

(2) The institution pledges assets sufficient to support the liabilities of the student health plan.

(3) The institution has received a report prepared by an actuary a Fellow of the Society of Actuaries that includes both of the following:

(A) Support for the proposed premiums for the plan.

(B) The assets pledged by the institution to support the liabilities of the student health plan are sufficient for the institution to operate the student health plan.

(4) The institution operated operated, or participated in, an employer-sponsored plan in the prior calendar year with at least 10,000 enrollees, including employees and their dependents.

(5) The institution maintains at least an AA bond rating by one of the major credit rating agencies. agencies, or the institution obtains an annual independent actuarial assessment of the outstanding future liability of the program and secures a surety bond of equal or greater value to cover all outstanding future liability associated with the program.

(6) The institution will operate the student health plan in compliance with the independent medical review system established pursuant to Article 5.55 (commencing with Section 1374.30).

(7) The institution will operate the student health plan in compliance with the grievance system established pursuant to Section 1368.

(8) The institution will use only the following characteristics of an individual, and any dependent thereof, for purposes of establishing the rate of the individual, and any dependent thereof:

(A) 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 ages 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)).

(B) Geographic region. 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, 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) Whether the plan covers an individual, or an individual and dependents thereof.

(9) The plan will apply an annual limit on maximum out-of-pocket expenses as follows:

(A) The limit shall not exceed the limit described in Section 1302(c) of PPACA and any subsequent rules, regulations, or guidance issued under that section.

(B) The limit shall result in a total maximum out-of-pocket limit for all covered essential health benefits that shall equal the dollar amounts in effect under Section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 with the dollar amounts adjusted as specified in Section 1302(c)(1)(B) of PPACA.

(C) The limit shall not be construed to affect the reduction in cost sharing for eligible enrollees described in Section 1402 of PPACA and any subsequent rules, regulations, or guidance issued under that section.

(D) The maximum out-of-pocket limit shall apply to any copayment, coinsurance, deductible, and any other form of cost sharing for all covered benefits that meet the definition of essential health benefits under Section 1367.005.

(10) The plan will not establish either of the following:

(A) Lifetime limits on the dollar value of any specific covered benefits that are essential health benefits, whether provided in network or out of network.

(B) Annual limits on the dollar value of any specific covered benefits that are essential health benefits, whether provided in network or out of network.

(11) All contracts between the institution and a provider of medical services to plan enrollees shall bar the provider from seeking payment from the plan enrollee other than a copayment specified therein.

(12) The institution will not submit any charge to the plan:

(A) That is not incurred for the operation of the plan.

(B) That does not reflect fair market value cost.

(b) A plan that has complied with subdivision (a) is exempt from this chapter, except for Sections 1367.33, 1368, and 1379 and Article 5.55 (commencing with Section 1374.30 of the Health and Safety Code).

(c) This section does not apply to a plan operated by the University of California system.

(d) As used in this section, the term “institution of higher learning” means an institution of higher education as defined in the federal Higher Education Act of 1965 (20 U.S.C Sec. 1001).

SEC. 4.

 Section 740 of the Insurance Code is amended to read:

740.

 (a) Notwithstanding any other law, and except as provided in this section, a person or other entity that provides coverage in this state for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric expenses, whether the coverage is by direct payment, reimbursement, or otherwise, shall be presumed to be subject to the jurisdiction of the department unless the person or other entity shows that while providing the services it is subject to the jurisdiction of another agency of this or another state or the federal government.

(b) A person or entity may show that it is subject to the jurisdiction of another agency of this or another state or the federal government by providing to the commissioner the appropriate certificate or license issued by the other governmental agency that permits or qualifies it to provide those services for which it is licensed or certificated.

(c) A person or entity that is unable to show that it is subject to the jurisdiction of another agency of this or another state or the federal government, shall submit to an examination by the commissioner to determine the organization and solvency of the person or the entity, and to determine whether the person or entity is in compliance with the applicable provisions of this code, and shall be required to obtain a certificate of authority to do business in California and be required to meet all appropriate reserve, surplus, capital, and other necessary requirements imposed by this code for all insurers.

(d) A person or entity unable to show that it is subject to the jurisdiction of another agency of this or another state or the federal government shall be subject to all appropriate provisions of this code regarding the conduct of its business.

(e) The department shall prepare and maintain for public inspection a list of those persons or entities described in subdivision (a) that are not subject to the jurisdiction of another agency of this or another state or the federal government and that the department knows to be operating in this state. There shall be no liability of any kind on the part of the state, the department, and its employees for the accuracy of the list or for any comments made with respect to it.

(f) (1) An administrator licensed by the department who advertises or administers coverage in this state described in subdivision (a), that is provided by any person or entity described in subdivision (c), and where the coverage does not meet all pertinent requirements specified in this code and that is not provided or completely underwritten, insured or otherwise fully covered by an admitted life or disability insurer, hospital service plan or health care service plan, shall advise and disclose to any purchaser, prospective purchaser, covered person or entity, and any production agency licensed by the department involved in the transaction, all financial and operational information relative to the content and scope of the plan and, specifically, as to the lack of insurance or other coverage.

(2) A production agency obtaining knowledge of any coverage relative to the content and scope of a hospital service plan or health care service plan, as required under this subdivision, shall advise and disclose to any purchaser, prospective purchaser, covered person or entity, the knowledge regarding the content and scope of the plan and, specifically, as to the lack of insurance by an admitted carrier or other qualified plan.

(g) A health care service plan, as defined in Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code, shall not be subject to this section.

(h) The department shall notify, in writing, the Director of the Department of Managed Health Care whenever it determines that a multiple employer trust qualifies as a health care service plan subject to Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code.

(i) A health care service plan, including a self-insured reimbursement plan that pays for or reimburses any part of the cost of health care services, operated by any city, county, city and county, public entity, or political subdivision, or a public joint labor management trust as described in subdivision (c) of Section 1349.2 of the Health and Safety Code, that is exempt pursuant to Section 1349.2 of the Health and Safety Code from the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code), is also exempt from this code.

(j) A self-funded student health plan operated by a bona fide, private, nonprofit institution of higher learning that directly provides health care services to its students and their respective dependents and that timely files the report required by Section 1343.2 of the Health and Safety Code is exempt from this code.

SEC. 5.

 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. 6.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:

To authorize universities to implement self-funded student health plans commencing with the fall 2023 academic semester and thereby end hardship to enrollees of existing student health plans underwritten by commercial plans and insurers in the form of higher rates and limited benefits, it is necessary that this bill take effect immediately.