Bill Text: CA SB639 | 2013-2014 | Regular Session | Amended

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

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Bill Title: Health care coverage.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2013-09-20 - Chaptered by Secretary of State. Chapter 316, Statutes of 2013. [SB639 Detail]

Download: California-2013-SB639-Amended.html

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BILL NUMBER: SB 639	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 9, 2013
	AMENDED IN SENATE  APRIL 1, 2013

INTRODUCED BY   Senator Hernandez

                        FEBRUARY 22, 2013

   An act to amend Section 1367 of, and to add Sections 1367.006,
1367.007,  and  1367.008  , and 1367.009 
to, the Health and Safety Code, and to add Sections 10112.28,
10112.29, 10112.295,  10112.297,  and 10112.7 to the
Insurance Code, relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 639, as amended, Hernandez. Health care coverage.
   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 establishes annual limits on deductibles for employer-sponsored
plans and defines bronze, silver, gold, and platinum levels of
coverage for the nongrandfathered individual and small group markets.

   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 Department of Insurance.
   This bill would prohibit the deductible under a small employer
health care service plan contract or health insurance policy offered,
sold, or renewed on or after January 1, 2014, from exceeding $2,000
in the case of a plan contract or policy covering a single
individual, or $4,000 in all other cases.
   The bill would require, for nongrandfathered products in the
individual or small group markets, a health care service plan
contract or health insurance policy, except a specialized health
insurance policy, that is issued, amended, or renewed on or after
January 1, 2014, to provide for a limit on annual out-of-pocket
expenses for all covered benefits that meet the definition of
essential health benefits, as defined, and would require the contract
or policy, for nongrandfathered products in the large group market,
to provide that limit for all covered benefits, including
out-of-network emergency care.
   The bill would define bronze, silver, gold, and platinum levels of
coverage for the nongrandfathered individual and small group markets
consistent with the definitions in PPACA. The bill would prohibit a
carrier that is not participating in the Exchange from offering a
catastrophic plan, as defined, in the individual market.
   PPACA requires a health insurance issuer offering group or
individual coverage that provides or covers benefits with respect to
services in the emergency department of a hospital to cover emergency
services without the need for prior authorization, regardless of
whether the provider is a participating provider, and subject to the
same cost sharing required if the services were provided by a
participating provider, as specified.
   This bill would impose that requirement with respect to health
insurance policies issued, amended, or renewed on or after January 1,
2014, as specified. 
    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. 
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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

  SECTION 1.  Section 1367 of the Health and Safety Code is amended
to read:
   1367.  A health care service plan and, if applicable, a
specialized health care service plan shall meet the following
requirements:
   (a)  Facilities located in this state including, but not limited
to, clinics, hospitals, and skilled nursing facilities to be utilized
by the plan shall be licensed by the State Department of Public
Health, where licensure is required by law. Facilities not located in
this state shall conform to all licensing and other requirements of
the jurisdiction in which they are located.
   (b)  Personnel employed by or under contract to the plan shall be
licensed or certified by their respective board or agency, where
licensure or certification is required by law.
   (c)  Equipment required to be licensed or registered by law shall
be so licensed or registered, and the operating personnel for that
equipment shall be licensed or certified as required by law.
   (d)  The plan shall furnish services in a manner providing
continuity of care and ready referral of patients to other providers
at times as may be appropriate consistent with good professional
practice.
   (e)  (1)  All services shall be readily available at reasonable
times to each enrollee consistent with good professional practice. To
the extent feasible, the plan shall make all services readily
accessible to all enrollees consistent with Section 1367.03.
   (2)  To the extent that telehealth services are appropriately
provided through telehealth, as defined in subdivision (a) of Section
2290.5 of the Business and Professions Code, these services shall be
considered in determining compliance with Section 1300.67.2 of Title
28 of the California Code of Regulations.
   (3)  The plan shall make all services accessible and appropriate
consistent with Section 1367.04.
   (f)  The plan shall employ and utilize allied health manpower for
the furnishing of services to the extent permitted by law and
consistent with good medical practice.
   (g)  The plan shall have the organizational and administrative
capacity to provide services to subscribers and enrollees. The plan
shall be able to demonstrate to the department that medical decisions
are rendered by qualified medical providers, unhindered by fiscal
and administrative management.
   (h)  (1)  Contracts with subscribers and enrollees, including
group contracts, and contracts with providers, and other persons
furnishing services, equipment, or facilities to or in connection
with the plan, shall be fair, reasonable, and consistent with the
objectives of this chapter. All contracts with providers shall
contain provisions requiring a fast, fair, and cost-effective dispute
resolution mechanism under which providers may submit disputes to
the plan, and requiring the plan to inform its providers upon
contracting with the plan, or upon change to these provisions, of the
procedures for processing and resolving disputes, including the
location and telephone number where information regarding disputes
may be submitted.
   (2)  A health care service plan shall ensure that a dispute
resolution mechanism is accessible to noncontracting providers for
the purpose of resolving billing and claims disputes.
   (3)  On and after January 1, 2002, a health care service plan
shall annually submit a report to the department regarding its
dispute resolution mechanism. The report shall include information on
the number of providers who utilized the dispute resolution
mechanism and a summary of the disposition of those disputes.
   (i)  A health care service plan contract shall provide to
subscribers and enrollees all of the basic health care services
included in subdivision (b) of Section 1345, except that the director
may, for good cause, by rule or order exempt a plan contract or any
class of plan contracts from that requirement. The director shall by
rule define the scope of each basic health care service that health
care service plans are required to provide as a minimum for licensure
under this chapter. Nothing in this chapter shall prohibit a health
care service plan from charging subscribers or enrollees a copayment
or a deductible for a basic health care service consistent with
Section 1367.006 or 1367.007, provided that the copayments,
deductibles, or other cost sharing are reported to the director and
set forth to the subscriber or enrollee pursuant to the disclosure
provisions of Section 1363. Nothing in this chapter shall prohibit a
health care service plan from setting forth, by contract, limitations
on maximum coverage of basic health care services, provided that the
limitations are reported to, and held unobjectionable by, the
director and set forth to the subscriber or enrollee pursuant to the
disclosure provisions of Section 1363.
   (j)  A health care service plan shall not require registration
under the Controlled Substances Act of 1970 (21 U.S.C. Sec. 801 et
seq.) as a condition for participation by an optometrist certified to
use therapeutic pharmaceutical agents pursuant to Section 3041.3 of
the Business and Professions Code.
   Nothing in this section shall be construed to permit the director
to establish the rates charged subscribers and enrollees for
contractual health care services.
   The director's enforcement of Article 3.1 (commencing with Section
1357) shall not be deemed to establish the rates charged subscribers
and enrollees for contractual health care services.
   The obligation of the plan to comply with this chapter shall not
be waived when the plan delegates any services that it is required to
perform to its medical groups, independent practice associations, or
other contracting entities.
  SEC. 2.  Section 1367.006 is added to the Health and Safety Code,
to read:
   1367.006.  (a) (1) For nongrandfathered products in the individual
or small group markets, a health care service plan contract, except
a specialized health care service plan contract, that is issued,
amended, or renewed on or after January 1, 2014, shall provide for a
limit on annual out-of-pocket expenses for all covered benefits that
meet the definition of essential health benefits in paragraph (1) of
subdivision (a) of Section 1367.005.
   (2) For nongrandfathered products in the large group market, a
health care service plan contract, except a specialized health care
service plan contract, that is issued, amended, or renewed on or
after January 1, 2014, shall provide for a limit on annual
out-of-pocket expenses for all covered benefits, including
out-of-network emergency care consistent with Section 1371.4. For
large group products for the first plan year commencing on or after
January 1, 2014, the requirement that a product provide for a limit
on annual out-of-pocket expenses shall be satisfied if both of the
following apply: 
    (A) The product complies with the requirements of this
paragraph with respect to basic health care services. 
    (B) To the extent the product includes an out-of-pocket
maximum on coverage that does not consist solely of basic health care
services, the out-of-pocket maximum does not exceed the limit
established pursuant to this paragraph. 
   (b) The limit described in subdivision (a) shall apply to any
copayment, coinsurance, deductible, incentive payment, and any other
form of cost sharing for all covered benefits  , including
prescription drugs covered pursuant to Section 1367.24  .
   (c) The limit described in subdivision (a) shall not exceed the
limit described in Section 1302(c) of PPACA, and any subsequent
rules, regulations, or guidance issued under that section.
   (d) Nothing in this section shall 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.
   (e) "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 thereunder.
  SEC. 3.  Section 1367.007 is added to the Health and Safety Code,
to read:
   1367.007.  (a) (1) For a small employer health care service plan
contract offered, sold, or renewed on or after January 1, 2014, the
deductible under the plan shall not exceed:
   (A) Two thousand dollars ($2,000) in the case of a plan contract
covering a single individual.
   (B) Four thousand dollars ($4,000) in the case of any other plan
contract.
   (2) The dollar amounts in this section shall be indexed consistent
with Section 1302(c)(2) of PPACA and any federal rules or guidance
pursuant to that section.
   (3) The limitation in this subdivision shall be applied in a
manner that does not affect the actuarial value of any small employer
health care service plan contract.
   (4) For small group products at the bronze level of coverage, as
defined in Section 1367.008, the department may permit plans to offer
a higher deductible in order to meet the actuarial value requirement
of the bronze level. In making this determination, the department
shall consider affordability of cost sharing for enrollees and shall
also consider whether enrollees may be deterred from seeking
appropriate care because of higher cost sharing.
   (b) Nothing in this section shall be construed to allow a plan
contract to have a deductible that applies to preventive services as
defined in Section 1367.002.
   (c) "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 thereunder.
  SEC. 4.  Section 1367.008 is added to the Health and Safety Code,
to read:
   1367.008.  (a) Levels of coverage for the nongrandfathered
individual  and small group markets   market
 are defined as follows:
   (1) Bronze level: A health care service plan contract in the
bronze level shall provide a level of coverage that is actuarially
equivalent to 60 percent of the full actuarial value of the benefits
provided under the plan contract. No product shall be offered at this
level of coverage unless it is a standardized product consistent
with Section 1366.6.
   (2) Silver level: A health care service plan contract in the
silver level shall provide a level of coverage that is actuarially
equivalent to 70 percent of the full actuarial value of the benefits
provided under the plan contract. No product shall be offered at this
level of coverage unless it is a standardized product consistent
with Section 1366.6.
   (3) Gold level: A health care service plan contract in the gold
level shall provide a level of coverage that is actuarially
equivalent to 80 percent of the full actuarial value of the benefits
provided under the plan contract. No product shall be offered at this
level of coverage unless it is a standardized product consistent
with Section 1366.6.
   (4) Platinum level: A health care service plan contract in the
platinum level shall provide a level of coverage that is actuarially
equivalent to 90 percent of the full actuarial value of the benefits
provided under the plan contract. No product shall be offered at this
level of coverage unless it is a standardized product consistent
with Section 1366.6.
   (b) Actuarial value for nongrandfathered individual  and
nongrandfathered small employer  health care service plan
contracts shall be determined in accordance with the following:
   (1) Actuarial value shall not vary by more than plus or minus 2
percent.
   (2) Actuarial value shall be determined on the basis of essential
health benefits as defined in Section 1367.005 and as provided to a
standard, nonelderly population. For this purpose, a standard
population shall not include those receiving coverage through the
Medi-Cal or Medicare programs.
   (3) The department may use the actuarial value methodology
developed consistent with Section 1302(d) of PPACA.
   (4) The department, in consultation with the Department of
Insurance and the Exchange, shall consider whether to exercise
state-level flexibility with respect to the actuarial value
calculator in order to take into account the unique characteristics
of the California health care coverage market, including the
prevalence of health care service plans, total cost of care paid for
by the plan, price of care, patterns of service utilization, and
relevant demographic factors. 
   (5) For small group products, employer contributions toward health
reimbursement accounts and health savings accounts shall count
toward the actuarial value of the product in the manner specified in
federal rules and guidance. 
   (c) For all products in the nongrandfathered individual 
and small group markets, any deductible shall apply to all services
  market   commencing January 1, 2015, 
 any deductible shall apply to the same services for any product
in the same level of coverage whether regulated by the department or
the Department of Insurance  .
   (d) (1) A catastrophic plan is a health care service plan contract
that provides no benefits for any plan year until the enrollee has
incurred cost-sharing expenses in an amount equal to the annual limit
on out-of-pocket costs as specified in Section 1367.006 except that
it shall provide coverage for at least three primary care visits. A
carrier that is not participating in the Exchange shall not offer,
market, or sell a catastrophic plan in the individual market. No
product shall be offered at this level of coverage unless it is a
standardized product consistent with Section 1366.6.
   (2) A catastrophic plan may be offered only in the individual
market and only if consistent with subdivision (c) and this
paragraph. Catastrophic plans may be offered only if either of the
following apply:
   (A) The individual purchasing the plan has not yet attained 30
years of age.
   (B) The individual has a certificate of exemption from Section
5000(A) of the Internal Revenue Code because the individual is not
offered affordable coverage or because the individual faces hardship.

   (e) Nothing in this section shall prohibit a plan from offering
supplemental benefits for services that are not included in essential
health benefits as defined in Section 1367.005, including adult
dental, adult vision, acupuncture, or chiropractic, if the plan
demonstrates to the satisfaction of the director that those benefits
will not affect the risk adjustment scores or the reinsurance amounts
for the product or the plan. For a plan to continue to offer a
supplemental benefit, the plan shall annually provide to the
department information necessary to determine whether the benefit has
affected the risk mix in the prior plan year.  
   (e) 
    (f)  "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 thereunder.

  SEC. 5.    Section 1367.009 is added to the Health and
Safety Code, to read:
   1367.009.  (a) Levels of coverage for the nongrandfathered small
group market are defined as follows:
   (1) Bronze level: A health care service plan contract in the
bronze level shall provide a level of coverage that is actuarially
equivalent to 60 percent of the full actuarial value of the benefits
provided under the plan contract.
   (2) Silver level: A health care service plan contract in the
silver level shall provide a level of coverage that is actuarially
equivalent to 70 percent of the full actuarial value of the benefits
provided under the plan contract.
   (3) Gold level: A health care service plan contract in the gold
level shall provide a level of coverage that is actuarially
equivalent to 80 percent of the full actuarial value of the benefits
provided under the plan contract.
   (4) Platinum level: A health care service plan contract in the
platinum level shall provide a level of coverage that is actuarially
equivalent to 90 percent of the full actuarial value of the benefits
provided under the plan contract.
   (b) Actuarial value for nongrandfathered small employer health
care service plan contracts shall be determined in accordance with
the following:
   (1) Actuarial value shall not vary by more than plus or minus 2
percent.
   (2) Actuarial value shall be determined on the basis of essential
health benefits as defined in Section 1367.005 and as provided to a
standard, nonelderly population. For this purpose, a standard
population shall not include those receiving coverage through the
Medi-Cal or Medicare programs.
   (3) The department may use the actuarial value methodology
developed consistent with Section 1302(d) of PPACA.
   (4) The department, in consultation with the Department of
Insurance and the Exchange, shall consider whether to exercise
state-level flexibility with respect to the actuarial value
calculator in order to take into account the unique characteristics
of the California health care coverage market, including the
prevalence of health care service plans, total cost of care paid for
by the plan, price of care, patterns of service utilization, and
relevant demographic factors.
   (5) Employer contributions toward health reimbursement accounts
and health savings accounts shall count toward the actuarial value of
the product in the manner specified in federal rules and guidance.
   (c) For all products in the nongrandfathered small group market
commencing January 1, 2015, any deductible shall apply to the same
services for any product in the same level of coverage whether
regulated by the department or the Department of Insurance.
   (e) "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 thereunder. 
   SEC. 5.   SEC. 6.   Section 10112.28 is
added to the Insurance Code, to read:
   10112.28.  (a) (1) For nongrandfathered products in the individual
or small group markets, a health insurance policy, except a
specialized health insurance policy, that is issued, amended, or
renewed on or after January 1, 2014, shall provide for a limit on
annual out-of-pocket expenses for all covered benefits that meet the
definition of essential health benefits in paragraph (1) of
subdivision (a) of Section 10112.27.
   (2) For nongrandfathered products in the large group market, a
health insurance policy, except a specialized health insurance
policy, that is issued, amended, or renewed on or after January 1,
2014, shall provide for a limit on annual out-of-pocket expenses for
all covered benefits, including out-of-network emergency care. 
For large group products for the first plan year commencing on or
after January 1, 2014, the requirement that a product provide for a
limit on annual out-of-pocket expenses   shall be satisfied
if both of the following apply:  
   (A) The product complies with the requirements of this paragraph
with respect to basic health care services.  
   (B) To the extent the product includes an out-of-pocket maximum on
coverage that does not consistent solely of basic health care
services, the out-of-pocket maximum does not exceed the limit
established pursuant to this subdivision. 
   (b) The limit described in subdivision (a) shall apply to any
copayment, coinsurance, deductible, incentive payment and any other
form of cost sharing for all covered benefits  , including
nonformulary prescription drugs that are authorized as medically
necessary  .
   (c) The limit described in subdivision (a) shall not exceed the
limit described in Section 1302(c) of PPACA and any subsequent rules,
regulations, or guidance issued under that section.
   (d) Nothing in this section shall 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.
   (e) "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 thereunder.
   SEC. 6.   SEC. 7.   Section 10112.29 is
added to the Insurance Code, to read:
   10112.29.  (a) (1) For a small employer health insurance policy
offered, sold, or renewed on or after January 1, 2014, the deductible
under the policy shall not exceed:
   (A) Two thousand dollars ($2,000) in the case of a policy covering
a single individual.
   (B) Four thousand dollars ($4,000) in the case of any other
policy.
   (2) The dollar amounts in this section shall be indexed consistent
with Section 1302(c)(2) of PPACA and any federal rules or guidance
pursuant to that section.
   (3) The limitation in this subdivision shall be applied in a
manner that does not affect the actuarial value of any small employer
health insurance policy.
   (4) For small group products at the bronze level of coverage, as
defined in Section 10112.295, the department may permit insurers to
offer a higher deductible in order to meet the actuarial value
requirement of the bronze level. In making this determination, the
department shall consider affordability of cost sharing for insureds
and shall also consider whether insureds may be deterred from seeking
appropriate care because of higher cost sharing.
   (b) Nothing in this section shall be construed to allow a policy
to have a deductible that applies to preventive services as defined
in PPACA.
   (c) "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 thereunder.
   SEC. 7.   SEC. 8.   Section 10112.295 is
added to the Insurance Code, to read:
   10112.295.  (a) Levels of coverage for the nongrandfathered
individual  and small group markets   market
 are defined as follows:
   (1) Bronze level: A health insurance policy in the bronze level
shall provide a level of coverage that is actuarially equivalent to
60 percent of the full actuarial value of the benefits provided under
the policy. No product shall be offered at this level of coverage
unless it is a standardized product consistent with Section 10112.3.
   (2) Silver level: A health insurance policy in the silver level
shall provide a level of coverage that is actuarially equivalent to
70 percent of the full actuarial value of the benefits provided under
the policy. No product shall be offered at this level of coverage
unless it is a standardized product consistent with Section 10112.3.
   (3) Gold level: A health insurance policy in the gold level shall
provide a level of coverage that is actuarially equivalent to 80
percent of the full actuarial value of the benefits provided under
the policy. No product shall be offered at this level of coverage
unless it is a standardized product consistent with Section 10112.3.
   (4) Platinum level: A health insurance policy in the platinum
level shall provide a level of coverage that is actuarially
equivalent to 90 percent of the full actuarial value of the benefits
provided under the policy. No product shall be offered at this level
of coverage unless it is a standardized product consistent with
Section 10112.3.
   (b) Actuarial value for nongrandfathered individual  and
nongrandfathered small employer  health insurance policies
shall be determined in accordance with the following:
   (1) Actuarial value shall not vary by more than plus or minus 2
percent.
   (2) Actuarial value shall be determined on the basis of essential
health benefits as defined in Section 10112.27 and as provided to a
standard, nonelderly population. For this purpose, a standard
population shall not include those receiving coverage through the
Medi-Cal or Medicare programs.
   (3) The department may use the actuarial value methodology
developed consistent with Section 1302(d) of PPACA.
   (4) The department, in consultation with the Department of Managed
Health Care and the Exchange, shall consider whether to exercise
state-level flexibility with respect to the actuarial value
calculator in order to take into account the unique characteristics
of the California health care coverage market, including the
prevalence of health  care service plans  
insurance policies  , total cost of care paid for by the
 plan   health insurer  , price of care,
patterns of service utilization, and relevant demographic factors.

   (5) For small group products, employer contributions toward health
reimbursement accounts and health savings accounts shall count
toward the actuarial value of the product in the manner specified in
federal rules and guidance. 
   (c) For all products in the nongrandfathered individual 
and small group markets, any deductible shall apply to all services
  market commencing January 1, 2015, any deductible
shall apply to the sam   e services for any product in the
same level of coverage whether regulated by the department or the
Department of Managed Health Care  .
   (d) (1) A catastrophic policy is a health insurance policy that
provides no benefits for any plan year until the insured has incurred
cost-sharing expenses in an amount equal to the annual limit on
out-of-pocket costs as specified in Section 10112.28 except that it
shall provide coverage for at least three primary care visits. No
product shall be offered at this level of coverage unless it is a
standardized product consistent with Section 10112.3. A carrier that
is not participating in the Exchange shall not offer, market, or sell
a catastrophic plan in the individual market.

      (2) A catastrophic policy may be offered only in the individual
market and only if consistent with subdivision (c) and this
paragraph. Catastrophic policies may be offered only if either of the
following apply:
   (A) The individual purchasing the policy has not yet attained 30
years of age.
   (B) The individual has a certificate of exemption from Section
5000(A) of the Internal Revenue Code because the individual is not
offered affordable coverage or because the individual faces hardship.

   (e) Nothing in this section shall prohibit an insurer from
offering supplemental benefits for services that are not included in
essential health benefits as defined in paragraph (1) of subdivision
(a) of Section 10112.27, including adult dental, adult vision,
acupuncture, or chiropractic, if the insurer demonstrates to the
satisfaction of the commissioner that those benefits will not affect
the risk adjustment scores or the reinsurance amounts for the product
or the policy. For an insurer to continue to offer a supplemental
benefit, the insurer shall annually provide to the department
information necessary to determine whether the benefit has affected
the risk mix in the prior policy year.  
   (e) 
    (f)  "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 thereunder.

  SEC. 9.    Section 10112.297 is added to the Insurance
Code, to read:
   10112.297.  (a) Levels of coverage for the nongrandfathered small
group market are defined as follows:
   (1) Bronze level: A health insurance policy in the bronze level
shall provide a level of coverage that is actuarially equivalent to
60 percent of the full actuarial value of the benefits provided under
the policy.
   (2) Silver level: A health insurance policy in the silver level
shall provide a level of coverage that is actuarially equivalent to
70 percent of the full actuarial value of the benefits provided under
the policy.
   (3) Gold level: A health insurance policy in the gold level shall
provide a level of coverage that is actuarially equivalent to 80
percent of the full actuarial value of the benefits provided under
the policy.
   (4) Platinum level: A health insurance policy in the platinum
level shall provide a level of coverage that is actuarially
equivalent to 90 percent of the full actuarial value of the benefits
provided under the policy.
   (b) Actuarial value for nongrandfathered small employer health
insurance policies shall be determined in accordance with the
following:
   (1) Actuarial value shall not vary by more than plus or minus 2
percent.
   (2) Actuarial value shall be determined on the basis of essential
health benefits as defined in paragraph (1) of subdivision (a) of
Section 10112.27 and as provided to a standard, nonelderly
population. For this purpose, a standard population shall not include
those receiving coverage through the Medi-Cal or Medicare programs.
   (3) The department may use the actuarial value methodology
developed consistent with Section 1302(d) of PPACA.
   (4) The department, in consultation with the Department of Managed
Health Care and the Exchange, shall consider whether to exercise
state-level flexibility with respect to the actuarial value
calculator in order to take into account the unique characteristics
of the California health care coverage market, including the
prevalence of health insurance policies, total cost of care paid for
by the health insurer, price of care, patterns of service
utilization, and relevant demographic factors.
   (5) Employer contributions toward health reimbursement accounts
and health savings accounts shall count toward the actuarial value of
the product in the manner specified in federal rules and guidance.
   (c) For all products in the nongrandfathered small group market
commencing January 1, 2015, any deductible shall apply to the same
services for any product in the same level of coverage whether
regulated by the department or the Department of Managed Health Care.

   (e) "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 thereunder. 
   SEC. 8.   SEC. 10.   Section 10112.7 is
added to the Insurance Code, to read:
   10112.7.  (a) A group or individual health insurance policy
issued, amended, or renewed on or after January 1, 2014, that
provides or covers any benefits with respect to services in an
emergency department of a hospital shall cover emergency services as
follows:
   (1) Without the need for any prior authorization determination.
   (2) Whether the health care provider furnishing the services is a
participating provider with respect to those services.
   (3) In a manner so that, if the services are provided to an
insured:
   (A) By a nonparticipating health care provider with or without
prior authorization; or
   (B) (i) The services will be provided without imposing any
requirement under the policy for prior authorization of services or
any limitation on coverage where the provider of services does not
have a contractual relationship with the insurer for the providing of
services that is more restrictive than the requirements or
limitations that apply to emergency department services received from
providers who do have such a contractual relationship with the
insurer; and
   (ii) If the services are provided to an insured out-of-network,
the cost-sharing requirement, expressed as a copayment amount or
coinsurance rate, is the same requirement that would apply if the
services were provided in-network.
   (b) For the purposes of this section, the term "emergency services"
means, with respect to an emergency medical condition:
   (1) A medical screening examination that is within the capability
of the emergency department of a hospital, including ancillary
services routinely available to the emergency department to evaluate
that emergency medical condition.
   (2) Within the capabilities of the staff and facilities available
at the hospital, further medical examination and treatment as are
required under Section 1867(e)(3) of the federal Social Security Act
(42 U.S.C. 1395dd(e)(3)) to stabilize the patient.
   SEC. 9.   SEC. 11.    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.