AB 955: Mexican prepaid health plans.

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 requires a prepaid health plan to apply for licensure as a health care service plan if the prepaid health plan operating lawfully under the laws of Mexico elects to operate a health care service plan in this state. Existing law requires the application for licensure to demonstrate compliance with specified requirements, including that the prepaid health plan offers and sells in this state only employer-sponsored group plan contracts exclusively for the benefit of Mexican nationals legally employed in the County of San Diego or the County of Imperial, and their dependents, that pay for the delivery of health care services that are provided wholly in Mexico, except as specified. Existing law also requires the application for licensure to demonstrate that the prepaid health plan maintains a tangible net equity of at least $1,000,000 or to demonstrate a reasonable acceptable alternative reimbursement arrangement that the Director of the Department of Managed Health Care is authorized, in the directors discretion, to accept.

This bill would modify the above-described requirement that a prepaid health plan offers and sells in this state only employer-sponsored group plan contracts exclusively for the benefit of specified Mexican nationals to additionally include employer-sponsored group plan contracts for the benefit of individuals legally employed in the County of San Diego or the County of Imperial, and for the benefit of their dependents regardless of nationality. The bill would authorize a prepaid health plan operating lawfully under the laws of Mexico that is licensed to operate a health care service plan to offer and sell that employer-sponsored group plan contract only to an employer that provides alternative health care coverage through either a specified full-service health care service plan or a health insurance policy. By adding a new requirement for a specified prepaid health plan operating a health care service plan in this state to comply with, the violation of which is a crime, The bill would modify the above-described requirement that a prepaid health plan maintains a tangible net equity of at least $1,000,000 to instead require a prepaid health plan to maintain a tangible net equity of at least $2,300,000 or to demonstrate an alternative reimbursement arrangement subject to the directors discretion, as described above. Because a willful violation of these provisions by a prepaid health plan, as described above, 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.