AB 2115: Health care coverage: disclosures.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-08-29
Existing law, the federal Patient Protection and Affordable Care Act, requires each state to, by January 1, 2014, establish an American Health Benefit Exchange that makes available qualified health plans to qualified individuals and small employers. Existing state law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the enrollment of qualified individuals and qualified small employers in qualified health plans.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the 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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires specified health care service plans and health insurers to provide to individuals who cease to be enrolled in individual or group health care coverage a notice informing those individuals that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange or no-cost coverage through Medi-Cal.
This bill would require, on and after January 1, 2018, that the notice include a statement indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocates Internet Web site. The bill would require the Department of Insurance, the Department of Managed Health Care, the Office of the Patient Advocate, and the California Health Benefit Exchange to develop the statement no later than July 1, 2017. Because a willful violation of these requirements by a health care service plan 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.
Existing law, the federal Patient Protection and Affordable Care Act, requires each state to, by January 1, 2014, establish an American Health Benefit Exchange that makes available qualified health plans to qualified individuals and small employers. Existing state law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the enrollment of qualified individuals and qualified small employers in qualified health plans.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the 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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires specified health care service plans and health insurers to provide to individuals who cease to be enrolled in individual or group health care coverage a notice informing those individuals that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange or no-cost coverage through Medi-Cal.
This bill would require require, on and after January 1, 2018, that the notice include a statement regarding patient assistance programs to be included in the notice from health care service plans and health insurers to individuals who cease to be enrolled in individual or group health care coverage, as specified. indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocates Internet Web site. The bill would require the Department of Insurance, the Department of Managed Health Care, the Office of the Patient Advocate, and the California Health Benefit Exchange to develop the statement no later than July 1, 2017. Because a willful violation of these requirements by a health care service plan 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.
Existing law, the federal Patient Protection and Affordable Care Act, requires each state to, by January 1, 2014, establish an American Health Benefit Exchange that makes available qualified health plans to qualified individuals and small employers. Existing state law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the enrollment of qualified individuals and qualified small employers in qualified health plans.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the 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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires specified health care service plans and health insurers to provide to individuals who cease to be enrolled in individual or group health care coverage a notice informing those individuals that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange or no-cost coverage through Medi-Cal.
This bill would require a statement regarding patient assistance programs to be included in the notice from health care service plans and health insurers to individuals who cease to be enrolled in individual or group health care coverage, as specified. Because a willful violation of these requirements by a health care service plan 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.
Existing law, the federal Patient Protection and Affordable Care Act, requires each state to, by January 1, 2014, establish an American Health Benefit Exchange that makes available qualified health plans to qualified individuals and small employers. Existing state law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the enrollment of qualified individuals and qualified small employers in qualified health plans.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the 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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires specified health care service plans and health insurers to provide to individuals who cease to be enrolled in individual or group health care coverage a notice informing those individuals that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange or no-cost coverage through Medi-Cal. Existing law also requires every disclosure form issued by a health care service plan or insurer for specified group benefit plans to include a statement notifying the individual to examine his or her options carefully before declining the group coverage.
This bill would instead require every disclosure form issued by a health care service plan or insurer for specified group benefit plans to include a statement notifying the individual that he or she may be eligible for reduced-cost coverage through the California Health Benefit Exchange, no-cost coverage through Medi-Cal, coverage through an insured spouse or parent, or free or discounted prescription medicines through a manufacturers patient assistance program. The bill would also require a statement regarding patient assistance programs to be included in the notice from health care service plans and health insurers to individuals who cease to be enrolled in individual or group health care coverage. coverage, as specified. Because a willful violation of these requirements by a health care service plan 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.
Existing law, the federal Patient Protection and Affordable Care Act, requires each state to, by January 1, 2014, establish an American Health Benefit Exchange that makes available qualified health plans to qualified individuals and small employers. Existing state law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the enrollment of qualified individuals and qualified small employers in qualified health plans.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the 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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires specified health care service plans and health insurers to provide to individuals who cease to be enrolled in individual or group health care coverage a notice informing those individuals that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange or no-cost coverage through Medi-Cal. Existing law also requires every disclosure form issued by a health care service plan or insurer for specified group benefit plans to include a statement notifying the individual to examine his or her options carefully before declining the group coverage.
This bill would instead require every disclosure form issued by a health care service plan or insurer for specified group benefit plans to include a statement notifying the individual that he or she may be eligible for reduced-cost coverage through the California Health Benefit Exchange, no-cost coverage through Medi-Cal, coverage through an insured spouse, spouse or parent, or free or discounted prescription medicines through a manufacturers patient assistance program. The bill would also require a statement regarding patient assistance programs to be included in the notice from health care service plans and health insurers to individuals who cease to be enrolled in individual or group health care coverage. Because a willful violation of these requirements by a health care service plan 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.
Existing law, the federal Patient Protection and Affordable Care Act, requires each state to, by January 1, 2014, establish an American Health Benefit Exchange that makes available qualified health plans to qualified individuals and small employers. Existing state law establishes the California Health Benefit Exchange within state government for the purpose of facilitating the enrollment of qualified individuals and qualified small employers in qualified health plans.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the 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 provides for the regulation of health insurers by the Department of Insurance. Existing law requires specified health care service plans and health insurers to provide to individuals who cease to be enrolled in individual or group health care coverage a notice informing those individuals that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange or no-cost coverage through Medi-Cal. Existing law also requires every disclosure form issued by a health care service plan or insurer for specified group benefit plans to include a statement notifying the individual to examine his or her options carefully before declining the group coverage.
This bill would instead require every disclosure form issued by a health care service plan or insurer for specified group benefit plans to include a statement notifying the individual that he or she may be eligible for reduced-cost coverage through the California Health Benefit Exchange, no-cost coverage through Medi-Cal, coverage through an insured spouse, or free or discounted prescription medicines through a manufacturers patient assistance program. The bill would also require a statement regarding patient assistance programs to be included in the notice from health care service plans and health insurers to individuals who cease to be enrolled in individual or group health care coverage. Because a willful violation of these requirements by a health care service plan 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.
Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that took 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, including defining levels of coverage. Existing law makes a willful violation of the act a crime. Existing law requires the actuarial value for nongrandfathered small group markets to be determined in accordance with, among other things, a consideration by the Department of Managed Health Care, in consultation with the Department of Insurance and the California Health Benefit Exchange, of 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.
This bill would require the Department of Managed Health Care to also work in consultation with the State Department of Health Care Services in making the above consideration.
Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that take took 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, including defining levels of coverage. Existing law makes a willful violation of the act a crime. Existing law requires the actuarial value for nongrandfathered small group markets to be determined in accordance with, among other things, a consideration by the Department of Managed Health Care, in consultation with the Department of Insurance and the California Health Benefit Exchange, of 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.
This bill would make a technical, nonsubstantive change to these provisions.
This bill would require the Department of Managed Health Care to also work in consultation with the State Department of Health Care Services in making the above consideration.
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, including defining levels of coverage. Existing law makes a willful violation of the act a crime.
This bill would make a technical, nonsubstantive change to these provisions.
(a)(1)On and after January 1, 2014, a health care service plan providing individual or group health care coverage shall provide to enrollees or subscribers who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code, or no-cost coverage through Medi-Cal. The notice shall include information on obtaining coverage pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2013, in consultation with the Department of Insurance and the California Health Benefit Exchange.
(2)(A)On and after January 1, 2018, the notice shall include a statement indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocates Internet Web site, or the Internet Web site determined to be the most appropriate to contain this information, but that these programs may not meet the requirements of the individual mandate under the federal Patient Protection and Affordable Care Act.
(B)No later than July 1, 2017, the department, in consultation with the Office of the Patient Advocate, the Department of Insurance, and the California Health Benefit Exchange, shall develop the statement to be included in the notice pursuant to subparagraph (A).
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health care service plan.
(c)This section shall not apply with respect to a specialized health care service plan contract or a Medicare supplemental plan contract.
SEC. 2.Section 10786 of the Insurance Code is amended to read:10786.(a)(1)On and after January 1, 2014, a health insurer providing health insurance coverage shall provide to policyholders in individual policies or certificate holders in group policies who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code, or no-cost coverage through Medi-Cal. The notice shall include information on obtaining coverage pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2013, in consultation with the Department of Managed Health Care and the California Health Benefit Exchange.
(2)(A)On and after January 1, 2018, the notice shall include a statement indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocates Internet Web site, or the Internet Web site determined to be the most appropriate to contain this information, but that these programs may not meet the requirements of the individual mandate under the federal Patient Protection and Affordable Care Act.
(B)No later than July 1, 2017, the department, in consultation with the Office of the Patient Advocate, the Department of Managed Health Care, and the California Health Benefit Exchange, shall develop the statement to be included in the notice pursuant to subparagraph (A).
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health insurer.
(c)This section shall not apply with respect to a specialized health insurance policy or a health insurance policy consisting solely of coverage of excepted benefits as described in Section 2722 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21).
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)(1)On and after January 1, 2018, 2014, a health care service plan providing individual or group health care coverage shall provide to enrollees or subscribers who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code, or no-cost coverage through Medi-Cal. The notice shall include information on obtaining coverage or assistancepursuant pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2017, 2013, in consultation with the Department of Insurance, the Office of the Patient Advocate, Insurance and the California Health Benefit Exchange.
(2)The (A)On and after January 1, 2018, the notice shall include a statement indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocates Internet Web site site, or the Internet Web site determined to be the most appropriate to contain this information, but that these programs may not meet the requirements of the individual mandate under the federal Patient Protection and Affordable Care Act.
(B)No later than July 1, 2017, the department, in consultation with the Office of the Patient Advocate, the Department of Insurance, and the California Health Benefit Exchange, shall develop the statement to be included in the notice pursuant to subparagraph (A).
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health care service plan.
(c)This section shall not apply with respect to a specialized health care service plan contract or a Medicare supplemental plan contract.
SEC. 2.Section 10786 of the Insurance Code is amended to read:10786.(a)(1)On and after January 1, 2018, 2014, a health insurer providing health insurance coverage shall provide to policyholders in individual policies or certificate holders in group policies who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code, or no-cost coverage through Medi-Cal. The notice shall include information on obtaining coverage or assistance pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2017, 2013, in consultation with the Department of Managed Health Care, the Office of the Patient Advocate, Care and the California Health Benefit Exchange.
(2)The (A)On and after January 1, 2018, the notice shall include a statement indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocates Internet Web site site, or the Internet Web site determined to be the most appropriate to contain this information, but that these programs may not meet the requirements of the individual mandate under the federal Patient Protection and Affordable Care Act.
(B)No later than July 1, 2017, the department, in consultation with the Office of the Patient Advocate, the Department of Managed Health Care, and the California Health Benefit Exchange, shall develop the statement to be included in the notice pursuant to subparagraph (A).
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health insurer.
(c)This section shall not apply with respect to a specialized health insurance policy or a health insurance policy consisting solely of coverage of excepted benefits as described in Section 2722 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21).
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)(1)On and after January 1, 2017, 2018, a health care service plan providing individual or group health care coverage shall provide to enrollees or subscribers who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code, or no-cost coverage through Medi-Cal, or free or reduced cost prescription medicines through a manufacturers patient assistance program. Medi-Cal. The notice shall include information on obtaining coverage or assistance pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2017, in consultation with the Department of Insurance, the Office of the Patient Advocate, and the California Health Benefit Exchange.
(2)The notice shall include a statement clarifying that assistance through a manufacturers patient assistance program does not constitute coverage under, and will indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocates Internet Web site but that these programs may not meet the requirements of the individual mandate under, under the federal Patient Protection and Affordable Care Act.
(3)The department shall include information in the notice on locating free or reduced cost programs for health care and prescription medicines, such as through the Internet Web site of the Office of the Patient Advocate.
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health care service plan.
(c)This section shall not apply with respect to a specialized health care service plan contract or a Medicare supplemental plan contract.
SEC. 2.Section 10786 of the Insurance Code is amended to read:10786.(a)(1)On and after January 1, 2017, 2018, a health insurer providing health insurance coverage shall provide to policyholders in individual policies or certificate holders in group policies who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code, or no-cost coverage through Medi-Cal, or free or reduced cost prescription medicines through a manufacturers patient assistance program. Medi-Cal. The notice shall include information on obtaining coverage or assistance pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2017, in consultation with the Department of Managed Health Care, the Office of the Patient Advocate, and the California Health Benefit Exchange.
(2)The notice shall include a statement clarifying that assistance through a manufacturers patient assistance program does not constitute coverage under, and will indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocates Internet Web site but that these programs may not meet the requirements of the individual mandate under, under the federal Patient Protection and Affordable Care Act.
(3)The department shall include information in the notice on locating free or reduced cost programs for health care and prescription medicines, such as through the Internet Web site of the Office of the Patient Advocate.
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health insurer.
(c)This section shall not apply with respect to a specialized health insurance policy or a health insurance policy consisting solely of coverage of excepted benefits as described in Section 2722 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21).
SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)Every health care service plan evidence of coverage, provided for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section.
(b)This disclosure shall state that all enrollees who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 1366.21, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the health care service plan, or the employer if the employer contracts to perform the administrative services as provided for in Section 1366.25, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 1366.21 within 60 days of the date of the qualifying event. This disclosure shall inform enrollees that failure to make the notification to the health care service plan, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article must request the continuation 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 health care service plan, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 1366.25, within the 60-day period following the later of (1) the date that the enrollees coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the enrollee was sent notice pursuant to subdivision (e) of Section 1366.25 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the health care service plan, in accordance with the terms and conditions of the plan contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 1366.25, the amount of the required premium payment, as set forth in Section 1366.26. The disclosure shall further require that the qualified beneficiarys first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the health care service plan, or to the employer if the employer has contracted with the plan to perform the administrative services pursuant to subdivision (d) of Section 1366.25, within 45 days of the date the qualified beneficiary provided written notice to the health care service plan or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment must equal an amount sufficient to pay any required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article.
(c)The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to subdivision (b) of Section 1366.27 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan.
(d)Prior to August 1, 1998, every health care service plan shall provide to all covered employees of employers subject to this article a written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this section a new or amended evidence of coverage that includes the disclosures required by this section. Any specialized health care service plan that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchasers of benefits.
(e)Every plan disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an enrollee may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the plans evidence of coverage.
(f)A disclosure issued, amended, or renewed on or after July 1, 2017, for a group benefit plan subject to this article shall include the following notice:
In addition to your coverage continuation options, you may be eligible for the following:
(1)Coverage through Covered California. By enrolling through Covered California during the annual open enrollment period, you may qualify for lower monthly premiums and lower out-of-pocket costs. Your family members may also qualify for coverage through Covered California. To find out more about how to apply through Covered California, visit the Covered California Internet Web site at http:www.coveredca.com.
(2)Coverage though Medi-Cal. Depending on your income, you may qualify for low- or no-cost coverage though Medi-Cal and can apply anytime. Your family members may also qualify for Medi-Cal. To find out more about how to apply for Medi-Cal, visit the Covered California Internet Web site at http:www.coveredca.com.
(3)Coverage through an insured spouse or parent. If your spouse has coverage that extends to family members, you may be eligible to be added to that benefit plan. Federal law does not require employers to offer coverage to spouses.
(4)Free or discounted prescription medicines through a manufacturer. You may be eligible for a patient assistance program offered by the manufacturer of any medicines you currently may be taking. To find out more about these programs, contact the manufacturer of your medicine or use an Internet Web site search tool, such as those provided by the Partnership for Prescription Assistance at https://www.ppars.org or RxAssist at http://www.rxassist.org. The manufacturer determines which individuals and which prescription medications are eligible for the manufacturers program. This assistance does not constitute coverage and will not meet the requirements of the individual mandate under the Affordable Care Act.
SEC. 2.SECTION 1.Section 1366.50 of the Health and Safety Code is amended to read:1366.50.
(a)(1)On and after January 1, 2017, a health care service plan providing individual or group health care coverage shall provide to enrollees or subscribers who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code, no-cost coverage through Medi-Cal, or free or reduced cost prescription coverage medicines through a manufacturers patient assistance program. The notice shall include information on obtaining coverage or assistance pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2017, in consultation with the Department of Insurance Insurance, the Office of the Patient Advocate, and the California Health Benefit Exchange.
(2)The notice shall include a statement clarifying that assistance through a manufacturers patient assistance program does not constitute coverage under, and will not meet the requirements of the individual mandate under, the federal Patient Protection and Affordable Care Act.
(3)The department shall include information in the notice on locating free or reduced cost programs for health care and prescription medicines, such as through the Internet Web site of the Office of the Patient Advocate.
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health care service plan.
(c)This section shall not apply with respect to a specialized health care service plan contract or a Medicare supplemental plan contract.
SEC. 3.Section 10128.54 of the Insurance Code is amended to read:10128.54.(a)Every insurers evidence of coverage for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section.
(b)This disclosure shall state that all insureds who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 10128.51, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the insurer, or the employer if the employer contracts to perform the administrative services as provided for in Section 10128.55, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 10128.51 within 60 days of the date of the qualifying event. This disclosure shall inform insureds that failure to make the notification to the insurer, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article must request the continuation 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 disability insurer, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 10128.55, within the 60-day period following the later of (1) the date that the insureds coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the insured was sent notice pursuant to subdivision (e) of Section 10128.55 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the disability insurer, in accordance with the terms and conditions of the policy or contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 10128.55, the amount of the required premium payment, as set forth in Section 10128.56. The disclosure shall further require that the qualified beneficiarys first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the disability insurer, or to the employer if the employer has contracted with the insurer to perform the administrative services pursuant to subdivision (d) of Section 10128.55, within 45 days of the date the qualified beneficiary provided written notice to the insurer or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment must equal an amount sufficient to pay all required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article.
(c)The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to Section 10128.57 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan.
(d)Prior to August 1, 1998, every insurer shall provide to all covered employees of employers subject to this article written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this article a new or amended evidence of coverage that includes the disclosures required by this section. Any insurer that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits, and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchasers of benefits.
(e)Every disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an insured may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the evidence of coverage.
(f)A disclosure issued, amended, or renewed on or after July 1, 2017, for a group benefit plan subject to this article shall include the following notice:
In addition to your coverage continuation options, you may be eligible for the following:
(1)Coverage through Covered California. By enrolling through Covered California during the annual open enrollment period, you may qualify for lower monthly premiums and lower out-of-pocket costs. Your family members may also qualify for coverage through Covered California. To find out more about how to apply through Covered California, visit the Covered California Internet Web site at http:www.coveredca.com.
(2)Coverage though Medi-Cal. Depending on your income, you may qualify for low- or no-cost coverage though Medi-Cal and can apply anytime. Your family members may also qualify for Medi-Cal. To find out more about how to apply for Medi-Cal, visit the Covered California Internet Web site at http:www.coveredca.com.
(3)Coverage through an insured spouse or parent. If your spouse has coverage that extends to family members, you may be eligible to be added to that benefit plan. Federal law does not require employers to offer coverage to spouses.
(4)Free or discounted prescription medicines through a manufacturer. You may be eligible for a patient assistance program offered by the manufacturer of any medicines you currently may be taking. To find out more about these programs, contact the manufacturer of your medicine or use an Internet Web site search tool, such as those provided by the Partnership for Prescription Assistance at https://www.ppars.org or RxAssist at http://www.rxassist.org. The manufacturer determines which individuals and which prescription medications are eligible for the manufacturers program. This assistance does not constitute coverage and will not meet the requirements of the individual mandate under the Affordable Care Act.
SEC. 4.SEC. 2.Section 10786 of the Insurance Code is amended to read:10786.
(a)(1)On and after January 1, 2017, a health insurer providing health insurance coverage shall provide to policyholders in individual policies or certificate holders in group policies who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code, no-cost coverage through Medi-Cal, or free or reduced cost prescription coverage medicines through a manufacturers patient assistance program. The notice shall include information on obtaining coverage or assistance pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2017, in consultation with the Department of Managed Health Care Care, the Office of the Patient Advocate, and the California Health Benefit Exchange.
(2)The notice shall include a statement clarifying that assistance through a manufacturers patient assistance program does not constitute coverage under, and will not meet the requirements of the individual mandate under, the federal Patient Protection and Affordable Care Act.
(3)The department shall include information in the notice on locating free or reduced cost programs for health care and prescription medicines, such as through the Internet Web site of the Office of the Patient Advocate.
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health insurer.
(c)This section shall not apply with respect to a specialized health insurance policy or a health insurance policy consisting solely of coverage of excepted benefits as described in Section 2722 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21).
SEC. 5.SEC. 3.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)Every health care service plan evidence of coverage, provided for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section.
(b)This disclosure shall state that all enrollees who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 1366.21, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the health care service plan, or the employer if the employer contracts to perform the administrative services as provided for in Section 1366.25, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 1366.21 within 60 days of the date of the qualifying event. This disclosure shall inform enrollees that failure to make the notification to the health care service plan, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article must request the continuation 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 health care service plan, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 1366.25, within the 60-day period following the later of (1) the date that the enrollees coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the enrollee was sent notice pursuant to subdivision (e) of Section 1366.25 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the health care service plan, in accordance with the terms and conditions of the plan contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 1366.25, the amount of the required premium payment, as set forth in Section 1366.26. The disclosure shall further require that the qualified beneficiarys first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the health care service plan, or to the employer if the employer has contracted with the plan to perform the administrative services pursuant to subdivision (d) of Section 1366.25, within 45 days of the date the qualified beneficiary provided written notice to the health care service plan or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment must equal an amount sufficient to pay any required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article.
(c)The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to subdivision (b) of Section 1366.27 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan.
(d)Prior to August 1, 1998, every health care service plan shall provide to all covered employees of employers subject to this article a written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this section a new or amended evidence of coverage that includes the disclosures required by this section. Any specialized health care service plan that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchasers of benefits.
(e)Every plan disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an enrollee may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the plans evidence of coverage.
(f)A disclosure issued, amended, or renewed on or after July 1, 2017, for a group benefit plan subject to this article shall include the following notice:
In addition to your coverage continuation options, you may be eligible for the following:
(1)Coverage through Covered California. By enrolling through Covered California during the annual open enrollment period, you may qualify for lower monthly premiums and lower out-of-pocket costs. Your family members may also qualify for coverage through Covered California. To find out more about how to apply through Covered California, visit the Covered California Internet Web site at http:www.coveredca.com.
(2)Coverage though Medi-Cal. Depending on your income, you may qualify for low- or no-cost coverage though Medi-Cal and can apply anytime. Your family members may also qualify for Medi-Cal. To find out more about how to apply for Medi-Cal, visit the Covered California Internet Web site at http:www.coveredca.com.
(3)Coverage through an insured spouse. spouse or parent. If your spouse has coverage that extends to family members, you may be eligible to be added to that benefit plan. Federal law does not require employers to offer coverage to spouses.
(4)Free or discounted prescription medicines through a manufacturer. You may be eligible for a patient assistance program offered by the manufacturer of any medicines you currently may be taking. To find out more about these programs, contact the manufacturer of your medicine or use an Internet Web site search tool, such as those provided by the Partnership for Prescription Assistance at https://www.ppars.org or RxAssist at http://www.rxassist.org. http://www.rxassist.org. The manufacturer determines which individuals and which prescription medications are eligible for the manufacturers program. This assistance does not constitute coverage and will not meet the requirements of the individual mandate under the Affordable Care Act.
SEC. 2.Section 1366.50 of the Health and Safety Code is amended to read:1366.50.
(a)On and after January 1, 2017, a health care service plan providing individual or group health care coverage shall provide to enrollees or subscribers who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code, no-cost coverage through Medi-Cal, or free or reduced prescription coverage medicines through a manufacturers patient assistance program. The notice shall include information on obtaining coverage or assistance pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2017, in consultation with the Department of Insurance and the California Health Benefit Exchange.
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health care service plan.
(c)This section shall not apply with respect to a specialized health care service plan contract or a Medicare supplemental plan contract.
SEC. 3.Section 10128.54 of the Insurance Code is amended to read:10128.54.(a)Every insurers evidence of coverage for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section.
(b)This disclosure shall state that all insureds who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 10128.51, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the insurer, or the employer if the employer contracts to perform the administrative services as provided for in Section 10128.55, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 10128.51 within 60 days of the date of the qualifying event. This disclosure shall inform insureds that failure to make the notification to the insurer, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article must request the continuation 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 disability insurer, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 10128.55, within the 60-day period following the later of (1) the date that the insureds coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the insured was sent notice pursuant to subdivision (e) of Section 10128.55 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the disability insurer, in accordance with the terms and conditions of the policy or contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 10128.55, the amount of the required premium payment, as set forth in Section 10128.56. The disclosure shall further require that the qualified beneficiarys first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the disability insurer, or to the employer if the employer has contracted with the insurer to perform the administrative services pursuant to subdivision (d) of Section 10128.55, within 45 days of the date the qualified beneficiary provided written notice to the insurer or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment must equal an amount sufficient to pay all required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article.
(c)The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to Section 10128.57 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan.
(d)Prior to August 1, 1998, every insurer shall provide to all covered employees of employers subject to this article written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this article a new or amended evidence of coverage that includes the disclosures required by this section. Any insurer that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits, and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchases purchasers of benefits.
(e)Every disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an insured may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the evidence of coverage.
(f)A disclosure issued, amended, or renewed on or after July 1, 2017, for a group benefit plan subject to this article shall include the following notice:
In addition to your coverage continuation options, you may be eligible for the following:
(1)Coverage through Covered California. By enrolling through Covered California during the annual open enrollment period, you may qualify for lower monthly premiums and lower out-of-pocket costs. Your family members may also qualify for coverage through Covered California. To find out more about how to apply through Covered California, visit the Covered California Internet Web site at http:www.coveredca.com.
(2)Coverage though Medi-Cal. Depending on your income, you may qualify for low- or no-cost coverage though Medi-Cal and can apply anytime. Your family members may also qualify for Medi-Cal. To find out more about how to apply for Medi-Cal, visit the Covered California Internet Web site at http:www.coveredca.com.
(3)Coverage through an insured spouse. spouse or parent. If your spouse has coverage that extends to family members, you may be eligible to be added to that benefit plan. Federal law does not require employers to offer coverage to spouses.
(4)Free or discounted prescription medicines through a manufacturer. You may be eligible for a patient assistance program offered by the manufacturer of any medicines you currently may be taking. To find out more about these programs, contact the manufacturer of your medicine or use an Internet Web site search tool, such as those provided by the Partnership for Prescription Assistance at https://www.ppars.org or RxAssist at http://www.rxassist.org. http://www.rxassist.org. The manufacturer determines which individuals and which prescription medications are eligible for the manufacturers program. This assistance does not constitute coverage and will not meet the requirements of the individual mandate under the Affordable Care Act.
SEC. 4.Section 10786 of the Insurance Code is amended to read:10786.
(a)On and after January 1, 2017, a health insurer providing health insurance coverage shall provide to policyholders in individual policies or certificate holders in group policies who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code, no-cost coverage through Medi-Cal, or free or reduced prescription coverage medicines through a manufacturers patient assistance program. The notice shall include information on obtaining coverage pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1 2017, in consultation with the Department of Managed Health Care and the California Health Benefit Exchange.
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health insurer.
(c)This section shall not apply with respect to a specialized health insurance policy or a health insurance policy consisting solely of coverage of excepted benefits as described in Section 2722 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21).
SEC. 5.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
(a)Every health care service plan evidence of coverage, provided for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section.
(b)This disclosure shall state that all enrollees who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 1366.21, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the health care service plan, or the employer if the employer contracts to perform the administrative services as provided for in Section 1366.25, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 1366.21 within 60 days of the date of the qualifying event. This disclosure shall inform enrollees that failure to make the notification to the health care service plan, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article must request the continuation 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 health care service plan, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 1366.25, within the 60-day period following the later of (1) the date that the enrollees coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the enrollee was sent notice pursuant to subdivision (e) of Section 1366.25 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the health care service plan, in accordance with the terms and conditions of the plan contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 1366.25, the amount of the required premium payment, as set forth in Section 1366.26. The disclosure shall further require that the qualified beneficiarys first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the health care service plan, or to the employer if the employer has contracted with the plan to perform the administrative services pursuant to subdivision (d) of Section 1366.25, within 45 days of the date the qualified beneficiary provided written notice to the health care service plan or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment must equal an amount sufficient to pay any required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article.
(c)The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to subdivision (b) of Section 1366.27 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan.
(d)Prior to August 1, 1998, every health care service plan shall provide to all covered employees of employers subject to this article a written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this section a new or amended evidence of coverage that includes the disclosures required by this section. Any specialized health care service plan that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchasers of benefits.
(e)Every plan disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an enrollee may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the plans evidence of coverage.
(f)Every disclosure issued, amended, or renewed on and after July 1, 2006, for a group benefit plan subject to this article shall include the following notice:
Please examine your options carefully before declining this coverage. 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.
(f)A disclosure issued, amended, or renewed on or after July 1, 2017, for a group plan subject to this article shall include the following notice:
In addition to your coverage continuation options, you may be eligible for the following:
(1)Coverage through Covered California. By enrolling through Covered California during the annual open enrollment period, you may qualify for lower monthly premiums and lower out-of-pocket costs. Your family members may also qualify for coverage through Covered California. To find out more about how to apply through Covered California, visit the Covered California Internet Web site at http:www.coveredca.com.
(2)Coverage though Medi-Cal. Depending on your income, you may qualify for low- or no-cost coverage though Medi-Cal and can apply anytime. Your family members may also qualify for Medi-Cal. To find out more about how to apply for Medi-Cal, visit the Covered California Internet Web site at http:www.coveredca.com.
(3)Coverage through an insured spouse. If your spouse has coverage that extends to family members, you may be eligible to be added to that benefit plan.
(4)Free or discounted prescription medicines through a manufacturer. You may be eligible for a patient assistance program offered by the manufacturer of any medicines you currently may be taking. To find out more about these programs, contact the manufacturer of your medicine or use an Internet Web site search tool, such as those provided by the Partnership for Prescription Assistance at https://www.ppars.org or RxAssist at http://www.rxassist.org.
SEC. 2.Section 1366.50 of the Health and Safety Code is amended to read:1366.50.
(a)On and after January 1, 2014, 2017, a health care service plan providing individual or group health care coverage shall provide to enrollees or subscribers who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code or Code, no-cost coverage through Medi-Cal Medi-Cal, or free or reduced prescription coverage medicines through a manufacturers patient assistance program. The notice shall include information on obtaining coverage or assistance pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2013, 2017, in consultation with the Department of Insurance and the California Health Benefit Exchange.
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health care service plan.
(c)This section shall not apply with respect to a specialized health care service plan contract or a Medicare supplemental plan contract.
SEC. 3.Section 10128.54 of the Insurance Code is amended to read:10128.54.(a)Every insurers evidence of coverage for group benefit plans subject to this article, that is issued, amended, or renewed on or after January 1, 1999, shall disclose to covered employees of group benefit plans subject to this article the ability to continue coverage pursuant to this article, as required by this section.
(b)This disclosure shall state that all insureds who are eligible to be qualified beneficiaries, as defined in subdivision (c) of Section 10128.51, shall be required, as a condition of receiving benefits pursuant to this article, to notify, in writing, the insurer, or the employer if the employer contracts to perform the administrative services as provided for in Section 10128.55, of all qualifying events as specified in paragraphs (1), (3), (4), and (5) of subdivision (d) of Section 10128.51 within 60 days of the date of the qualifying event. This disclosure shall inform insureds that failure to make the notification to the insurer, or to the employer when under contract to provide the administrative services, within the required 60 days will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article. The disclosure shall further state that a qualified beneficiary who wishes to continue coverage under the group benefit plan pursuant to this article must request the continuation 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 disability insurer, or to the employer if the plan has contracted with the employer for administrative services pursuant to subdivision (d) of Section 10128.55, within the 60-day period following the later of (1) the date that the insureds coverage under the group benefit plan terminated or will terminate by reason of a qualifying event, or (2) the date the insured was sent notice pursuant to subdivision (e) of Section 10128.55 of the ability to continue coverage under the group benefit plan. The disclosure required by this section shall also state that a qualified beneficiary electing continuation shall pay to the disability insurer, in accordance with the terms and conditions of the policy or contract, which shall be set forth in the notice to the qualified beneficiary pursuant to subdivision (d) of Section 10128.55, the amount of the required premium payment, as set forth in Section 10128.56. The disclosure shall further require that the qualified beneficiarys first premium payment required to establish premium payment be delivered by first-class mail, certified mail, or other reliable means of delivery, including personal delivery, express mail, or private courier company, to the disability insurer, or to the employer if the employer has contracted with the insurer to perform the administrative services pursuant to subdivision (d) of Section 10128.55, within 45 days of the date the qualified beneficiary provided written notice to the insurer or the employer, if the employer has contracted to perform the administrative services, of the election to continue coverage in order for coverage to be continued under this article. This disclosure shall also state that the first premium payment must equal an amount sufficient to pay all required premiums and all premiums due, and that failure to submit the correct premium amount within the 45-day period will disqualify the qualified beneficiary from receiving continuation coverage pursuant to this article.
(c)The disclosure required by this section shall also describe separately how qualified beneficiaries whose continuation coverage terminates under a prior group benefit plan pursuant to Section 10128.57 may continue their coverage for the balance of the period that the qualified beneficiary would have remained covered under the prior group benefit plan, including the requirements for election and payment. The disclosure shall clearly state that continuation coverage shall terminate if the qualified beneficiary fails to comply with the requirements pertaining to enrollment in, and payment of premiums to, the new group benefit plan within 30 days of receiving notice of the termination of the prior group benefit plan.
(d)Prior to August 1, 1998, every insurer shall provide to all covered employees of employers subject to this article written notice containing the disclosures required by this section, or shall provide to all covered employees of employers subject to this article a new or amended evidence of coverage that includes the disclosures required by this section. Any insurer that, in the ordinary course of business, maintains only the addresses of employer group purchasers of benefits, and does not maintain addresses of covered employees, may comply with the notice requirements of this section through the provision of the notices to its employer group purchases of benefits.
(e)Every disclosure form issued, amended, or renewed on and after January 1, 1999, for a group benefit plan subject to this article shall provide a notice that, under state law, an insured may be entitled to continuation of group coverage and that additional information regarding eligibility for this coverage may be found in the evidence of coverage.
(f)Every disclosure form issued, amended, or renewed on and after July 1, 2006, for a group benefit plan subject to this article shall include the following notice:
Please examine your options carefully before declining this coverage. 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.
(f)A disclosure issued, amended, or renewed on or after July 1, 2017, for a group plan subject to this article shall include the following notice:
In addition to your coverage continuation options, you may be eligible for the following:
(1)Coverage through Covered California. By enrolling through Covered California during the annual open enrollment period, you may qualify for lower monthly premiums and lower out-of-pocket costs. Your family members may also qualify for coverage through Covered California. To find out more about how to apply through Covered California, visit the Covered California Internet Web site at http:www.coveredca.com.
(2)Coverage though Medi-Cal. Depending on your income, you may qualify for low- or no-cost coverage though Medi-Cal and can apply anytime. Your family members may also qualify for Medi-Cal. To find out more about how to apply for Medi-Cal, visit the Covered California Internet Web site at http:www.coveredca.com.
(3)Coverage through an insured spouse. If your spouse has coverage that extends to family members, you may be eligible to be added to that benefit plan.
(4)Free or discounted prescription medicines through a manufacturer. You may be eligible for a patient assistance program offered by the manufacturer of any medicines you currently may be taking. To find out more about these programs, contact the manufacturer of your medicine or use an Internet Web site search tool, such as those provided by the Partnership for Prescription Assistance at https://www.ppars.org or RxAssist at http://www.rxassist.org.
SEC. 4.Section 10786 of the Insurance Code is amended to read:10786.
(a)On and after January 1, 2014, 2017, a health insurer providing health insurance coverage shall provide to policyholders in individual policies or certificate holders in group policies who cease to be enrolled in coverage a notice informing them that they may be eligible for reduced-cost coverage through the California Health Benefit Exchange established under Title 22 (commencing with Section 100500) of the Government Code or Code, no-cost coverage through Medi-Cal. Medi-Cal, or free or reduced prescription coverage medicines through a manufacturers patient assistance program. The notice shall include information on obtaining coverage pursuant to those programs, shall be in no less than 12-point type, and shall be developed by the department, no later than July 1, 2013, 2017, in consultation with the Department of Managed Health Care and the California Health Benefit Exchange.
(b)The notice described in subdivision (a) may be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health insurer.
(c)This section shall not apply with respect to a specialized health insurance policy or a health insurance policy consisting solely of coverage of excepted benefits as described in Section 2722 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-21).
SEC. 5.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
SECTION 1.Section 1367.009 of the Health and Safety Code is amended 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 all of 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 actuarial value for pediatric dental benefits, whether offered by a full service plan or a specialized plan, shall be consistent with federal law and guidance applicable to the plan type.
(5)The department, in consultation with the Department of Insurance, the State Department of Health Care Services, 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.
(6)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)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.
(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 all of 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 actuarial value for pediatric dental benefits, whether offered by a full service plan or a specialized plan, shall be consistent with federal law and guidance applicable to the plan type.
(5)The department, in consultation with the Department of Insurance Insurance, the State Department of Health Care Services, 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.
(6)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)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.
(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 all of 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 actuarial value for pediatric dental benefits, whether offered by a full service plan or a specialized plan, shall be consistent with federal law and guidance applicable to the plan type.
(5)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.
(6)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)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.
|
Date
|
Status
|
|---|---|
| May 23, 2016 | Read third time. Passed. Ordered to the Senate. |
| Sep 2, 2016 | Enrolled and presented to the Governor at 12 p.m. |
| Aug 25, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 72. Noes 0. Page 6292.). |
| Aug 25, 2016 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Aug 23, 2016 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after August 25 pursuant to Assembly Rule 77. |
| Aug 22, 2016 | Read third time. Passed. Ordered to the Assembly. (Ayes 36. Noes 3. Page 5230.). |
| Aug 22, 2016 | Read third time. Passed. Ordered to the Assembly. |
| Aug 18, 2016 | Read second time. Ordered to third reading. |
| Aug 17, 2016 | Read third time and amended. Ordered to second reading. |
| Aug 9, 2016 | Read second time. Ordered to third reading. |
| Aug 8, 2016 | From committee: Be placed on second reading file pursuant to Senate Rule 28.8. |
| Aug 2, 2016 | Read second time and amended. Re-referred to Com. on APPR. |
| Aug 1, 2016 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (June 29). |
| Jun 9, 2016 | Referred to Com. on HEALTH. |
| May 23, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 71. Noes 0.) |
| May 23, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 71. Noes 0. Page 4900.) |
| Feb 17, 2016 | Read first time. To print. |
| May 23, 2016 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 19, 2016 | Read second time. Ordered to third reading. |
| May 18, 2016 | From committee: Do pass. (Ayes 14. Noes 0.) (May 18). |
| May 12, 2016 | Re-referred to Com. on APPR. |
| May 11, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on APPR. Read second time and amended. |
| Apr 27, 2016 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Apr 21, 2016 | Re-referred to Com. on APPR. |
| Apr 20, 2016 | Read second time and amended. |
| Apr 19, 2016 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 19. Noes 0.) (April 12). |
| Apr 6, 2016 | Re-referred to Com. on HEALTH. |
| Apr 5, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on HEALTH. Read second time and amended. |
| Mar 28, 2016 | Re-referred to Com. on HEALTH. |
| Mar 18, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on HEALTH. Read second time and amended. |
| Mar 17, 2016 | Referred to Com. on HEALTH. |
| Feb 18, 2016 | From printer. May be heard in committee March 19. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 25, 2016 | AB 2115 WOOD Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Aug 22, 2016 | Assembly 3rd Reading AB2115 Wood By Nguyen | Senate Floor |
Passed |
|
| Jun 29, 2016 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Health |
Passed |
|
| May 23, 2016 | AB 2115 WOOD Assembly Third Reading | Assembly Floor |
Passed |
|
| May 18, 2016 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 12, 2016 | Do pass as amended and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Health |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Association Of California Life & Health Insurance Companies | * Against | Jun 29, 2016 |
| Blue Shield Of California | ** Against | Aug 22, 2016 |
| California Association Of Health Plans | ** Against | Aug 22, 2016 |
| California Life Science Association | ** Support | Aug 22, 2016 |
| Kaiser Permanente | ** Against | Aug 22, 2016 |
| National Multiple Sclerosis Society | ** Support | Aug 22, 2016 |
| Pharma | * Support | May 18, 2016 |
GOVERNOR'S VETO
GV Bill Id:AB 2115
Author:(Wood)
As Enrolled Ver:September 2, 2016
2/3 vote
ASSEMBLY: | 71-0 | (May 23, 2016) | SENATE: | 36-3 | (August 22, 2016) |
ASSEMBLY: | 72-0 | (August 25, 2016) |
Original Committee Reference: HEALTH
SUMMARY: Requires health care service plans (health plans) and health insurers, when notifying enrollees who cease to be enrolled in health plans or insurance products about other health care coverage options, to also provide information on low- or no-cost programs for health care and prescription medicines on the Office of Patient Advocate (OPA) Web site.
The Senate amendments:
- Delete language with respect to free or reduced cost prescription medicine through a manufacturer's patient assistance program (PAP) as part of the health plan and health insurer notice to enrollees who cease to be enrolled in health plans or insurance products.
- Delete notice language specifying that the manufacturer PAP does not constitute coverage under the federal Patient Protection and Affordable Care Act (ACA).
- Add notice language indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the OPA Web site or the Internet Web site determined to be the most appropriate to contain this information, effective January 1, 2018.
- Clarify language indicating no later than July 1, 2017, the Department of Managed Health Care, in consultation with the Office of the Patient Advocate, the Department of Insurance, and the California Health Benefit Exchange, to develop the statement to be included in the notice.
- Delete language requiring the Department of Managed Health Care and California Department of Insurance to including notice information on locating free or reduced cost programs for health care and prescription medicines, such as through OPA's Web site.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: According to the author, despite California's implementation of the ACA, which created or expanded coverage options for many Californians, gaps remain – with an estimated 3.8 million Californians under age 65 remaining without coverage. Compared to their insured counterparts, California's uninsured have reported having a significantly lower health status and a substantially higher rate of not seeking care due to cost concerns. Nationwide, an estimated 125,000 deaths per year and between 33 and 69% of medication-related hospital admissions are a result of patients not getting or taking a prescribed medicine in a timely manner. Washington State established a program using navigators and online resources to assist consumers in finding appropriate PAPs for their respective situations and medication needs, handling over 41 million prescriptions since 2009. A recent study of the Washington program found that patients receiving assistance in finding appropriate programs had nearly half the number of emergency department and hospital encounters as those not receiving such assistance. In helping to ensure Californians leaving coverage understand the programs available to them for free and reduced cost medicines, this bill will help to reduce the potential negative health impact that delays in access to prescribed medicines can cause.
According to the National Conference of State Legislatures, PAPs has been a substantial and growing state interest for a number of years, generally in response to individuals who lack insurance coverage for medicines or who were not eligible for other government programs. In 1975, the first states began to authorize and fund direct subsidy programs. By 2009, a total of at least 42 states had established or authorized some type of program to provide pharmaceutical coverage or assistance; several of those are not currently operational. The subsidy programs, often termed "SPAPs," utilize state funds to pay for a portion of the drug costs, usually for a defined population that meets enrollment criteria. In addition, an increasing number of states use discounts or bulk purchasing approaches that do not spend state funds for the drug purchases, identified as "Discount Programs." Since the passage of the ACA, state legislatures have been less active on SPAP issues.
I am returning Assembly Bill 2115 without my signature.
Existing law requires health plans and insurers to notify individuals who will no longer be covered by that plan or insurer that they may be eligible for low or no-cost health coverage through Covered California or Medi-Cal. This bill adds to the notice a statement that information about low or no-cost health care and prescription medicines may be found on a website that is to be determined.
I believe the current notification requirements are sufficient.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0005098
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 2115
Author:(Wood)
As Amended Ver:August 17, 2016
Majority vote
ASSEMBLY: | 71-0 | (May 23, 2016) | SENATE: | 36-3 | (August 22, 2016) |
Original Committee Reference: HEALTH
SUMMARY: Requires health care service plans (health plans) and health insurers, when notifying enrollees who cease to be enrolled in health plans or insurance products about other health care coverage options, to also provide information on low- or no-cost programs for health care and prescription medicines on the Office of Patient Advocate (OPA) Web site.
The Senate amendments:
- Delete language with respect to free or reduced cost prescription medicine through a manufacturer's patient assistance program (PAP) as part of the health plan and health insurer notice to enrollees who cease to be enrolled in health plans or insurance products.
- Delete notice language specifying that the manufacturer PAP does not constitute coverage under the federal Patient Protection and Affordable Care Act (ACA).
- Add notice language indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the OPA Web site or the Internet Web site determined to be the most appropriate to contain this information, effective January 1, 2018.
- Clarify language indicating no later than July 1, 2017, the Department of Managed Health Care, in consultation with the Office of the Patient Advocate, the Department of Insurance, and the California Health Benefit Exchange, to develop the statement to be included in the notice.
- Delete language requiring the Department of Managed Health Care (DMHC) and California Department of Insurance (CDI) to including notice information on locating free or reduced cost programs for health care and prescription medicines, such as through OPA's Web site.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS: According to the author, despite California's implementation of the ACA, which created or expanded coverage options for many Californians, gaps remain – with an estimated 3.8 million Californians under age 65 remaining without coverage. Compared to their insured counterparts, California's uninsured have reported having a significantly lower health status and a substantially higher rate of not seeking care due to cost concerns. Nationwide, an estimated 125,000 deaths per year and between 33 and 69% of medication-related hospital admissions are a result of patients not getting or taking a prescribed medicine in a timely manner. Washington State established a program using navigators and online resources to assist consumers in finding appropriate PAPs for their respective situations and medication needs, handling over 41 million prescriptions since 2009. A recent study of the Washington program found that patients receiving assistance in finding appropriate programs had nearly half the number of emergency department and hospital encounters as those not receiving such assistance. In helping to ensure Californians leaving coverage understand the programs available to them for free and reduced cost medicines, this bill will help to reduce the potential negative health impact that delays in access to prescribed medicines can cause.
According to the National Conference of State Legislatures, PAPs has been a substantial and growing state interest for a number of years, generally in response to individuals who lack insurance coverage for medicines or who were not eligible for other government programs. In 1975, the first states began to authorize and fund direct subsidy programs. By 2009, a total of at least 42 states had established or authorized some type of program to provide pharmaceutical coverage or assistance; several of those are not currently operational. The subsidy programs, often termed "SPAPs," utilize state funds to pay for a portion of the drug costs, usually for a defined population that meets enrollment criteria. In addition, an increasing number of states use discounts or bulk purchasing approaches that do not spend state funds for the drug purchases, identified as "Discount Programs." Since the passage of the ACA, state legislatures have been less active on SPAP issues.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0004542
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 2115 |
THIRD READING
Bill No: AB 2115
Amended: 8/17/16 in Senate
SENATE HEALTH COMMITTEE: 7-0, 6/29/16
AYES: Hernandez, Nguyen, Hall, Mitchell, Nielsen, Pan, Roth
NO VOTE RECORDED: Monning, Wolk
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 71-0, 5/23/16 - See last page for vote
SUBJECT: Health care coverage: disclosures
SOURCE: California Life Science Association
DIGEST: This bill requires health plans and health insurers to inform an individual who ceases to be enrolled in coverage that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocate’s (OPA’s) Internet Web site or the Internet Web site determined to be the most appropriate to contain this information, but these programs may not meet the requirements of the individual mandate under the federal Patient Protection and Affordable Care Act (ACA).
Senate Floor Amendments of 8/17/16 require, on and after January 1, 2018, the notice to include a statement indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Internet Web site determined to be the most appropriate to contain this information. The amendments also require no later than July 1, 2017, the Department of Managed Health Care (DMHC) and California Department of Insurance (CDI), in consultation with the OPA and Covered California, to develop the statement to be included in the health plan and health insurer disclosures.
Existing law:
- Provides for the regulation of health plans by DMHC, regulation of health insurers by CDI, the administration of the Medi-Cal program by the Department of Health Care Services, which provides health coverage for qualified low income individuals, children, families and individuals who are aged and disabled, and the OPA in the California Health and Human Services Agency to coordinate, provide assistance to, and collect data from state health care consumer assistance call centers.
- Establishes federal and state-based market places or health benefit exchanges, under the ACA, such as Covered California, which make individual and small group health insurance products available for purchase. Exchanges also administer federal premium subsidies and cost-sharing reductions to help qualified purchasers afford health insurance purchased through an exchange.
- Requires most Americans to have health insurance coverage or pay a tax penalty. Provides for open enrollment periods when individuals can purchase health insurance, and special enrollment periods which allow for the purchase of insurance within 60 days of certain life events including but not limited to marriage, divorce, and loss of group coverage.
- Requires, on and after January 1, 2014, a health plan or health insurer providing individual or group health care coverage to provide to enrollees, subscribers, policyholders or certificate holders, who cease to be enrolled in coverage, a notice informing them that they may be eligible for reduced-cost coverage through Covered California or no-cost coverage through Medi-Cal.
This bill:
- Requires, on and after January 1, 2018, notices required of health plans and health insurers when an individual ceases to be enrolled in coverage to include a statement indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on OPA’s Internet Web site or the Internet Web site determined to be the most appropriate to contain this information, but that these programs may not meet the requirements under the ACA.
- Requires, no later than July 1, 2017, DMHC and CDI, in consultation with the OPA and the California Health Benefit Exchange (Covered California), to develop the statement to be included in the health plan and health insurer disclosures.
Comments
- Author’s statement. According to the author, despite California’s implementation of the ACA, which created or expanded coverage options for many Californians, gaps remain – with an estimated 3.8 million Californians under age 65 remaining without coverage. Compared to their insured counterparts, California’s uninsured have reported having a significantly lower health status and a substantially higher rate of not seeking care due to cost concerns. Nationwide, an estimated 125,000 deaths per year and between 33 and 69% of medication-related hospital admissions are a result of patients not getting or taking a prescribed medicine in a timely manner. Washington State established a program using navigators and online resources to assist consumers in finding appropriate patient assistance programs for their respective situations and medication needs, handling over 41 million prescriptions since 2009. A recent study of the Washington program found that patients receiving assistance in finding appropriate programs had nearly half the number of emergency department and hospital encounters as those not receiving such assistance. In helping to ensure Californians leaving coverage understand the programs available to them for free and reduced cost medicines, AB 2115 will help to reduce the potential negative health impact that delays in access to prescribed medicines can cause.
- Prescription Assistance Programs. According to an April 2016 article in the Journal of Managed Care and Specialty Pharmacy, there are over 200 Prescription Assistance Programs available from pharmaceutical companies. Use of these programs is hindered by inconsistent eligibility requirements and reported difficulties in identifying and applying for appropriate programs. These programs typically provide brand-name drugs at little or no cost to income-eligible patients. These programs remain underutilized by target populations. In a survey of 215 safety-net facilities in California, Florida, Illinois, and Texas, 22% of the clinics reported not using the programs at all because the enrollment process was too complex and time consuming. A nationwide effort sponsored by America’s biopharmaceutical research companies called the Partnership for Prescription Assistance (PPA) has helped nearly 10 million uninsured and underinsured Americans get information about programs that provide prescription medicines for free or nearly free. PPA provides a single point of access to more than 475 patient assistance programs, including nearly 200 offered by biopharmaceutical companies. From April 2009 to May 2016, 320,830 California residents have been helped by PPA, according to its Web site.
- Washington State. According to an April 2016 article in the Journal of Managed Care and Specialty Pharmacy in 2008, the Spokane Prescription Assistance Network (SPAN) was started as a pilot project to assist low-income adults with accessing affordable prescription medications. A SPAN patient prescription coordinator accepted referrals from area health clinics, social service organizations, pharmacies, hospitals, etc. The coordinator matched patients with appropriate prescription assistance programs and helped the patients apply for the programs. The coordinator followed-up with the patient and their providers regularly. The aim was to reduce unnecessary and avoidable health care encounters for patients having difficulty accessing prescription medications. Among 310 SPAN participants, emergency department and hospital encounters declined from .38 per participant the year before enrollment to .20 encounters in the year following program entry. SPAN was associated with a 51% decline in the rate of emergency department and hospital utilization. The study concluded a formalized patient prescription coordinator can help patients access prescribed medications at low cost and remain compliant with treatment plans.
- Other studies. A 2009 study published in Health Affairs concluded the benefits of patient assistance programs remain unclear. Little is known about these programs. A survey found much variability in their structures and application processes. Most of these programs cover only one or two drugs. Only 4% disclosed how many patients they had directly helped, and half would not disclose their income eligibility criteria. A 2014 perspective in the New England Journal of Medicine indicates that more than 300 drugs have associated patient assistance programs, and manufacturers spend about $4 billion per year on these programs. The article says these programs increase demand, allow companies to charge higher prices, and provide public-relations benefits. In addition, patient assistance programs may lead to higher drug prices as a result of the interplay between patent demand and prices. If patient demand is less sensitive to prices, manufacturers of on-patent drugs respond by setting higher prices. The author of the study also points out that the federal Department of Health and Human Services (DHHS) has sent mixed signals about these programs and has discouraged hospitals and other providers from paying premiums or other cost-sharing liabilities for exchange enrollees; and the author believes DHHS is right to limit the scope of these programs and that these programs can help individual patients but are associated with hidden costs for insurers and taxpayers.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
California Life Science Association (source)
National Multiple Sclerosis Society
OPPOSITION: (Verified 8/17/16)
Association of California Life and Health Insurance Companies
Blue Shield of California
California Association of Health Plans
Kaiser Permanente
ARGUMENTS IN SUPPORT: The California Life Sciences Association (CLSA) writes that this bill is simply adding a new item to a list in an existing notice requirement for health plans and insurers, its costs should be minimal, especially in light of the significant potential for healthcare costs avoided and improvements in patients’ health. Greater awareness of patient assistance programs among individuals who are at-risk of becoming uninsured could bring benefits similar to those seen in Washington. In response to concerns raised by health plans, this bill has been amended to delete sections applicable to Cal-COBRA (a California specific version of the federal Consolidated Omnibus Budget Reconciliation Act) and all specific language requirements for the notices, including website citations. CLSA believes this bill achieves, at a modest cost, a greater awareness of patient assistance programs, helping patients stay on their medications during coverage interruptions and consequently reducing preventable emergency room visits and other care as a result of medication non-adherence.
ARGUMENTS IN OPPOSITION: The California Association of Health Plans (CAHP) writes that drug company-sponsored assistance programs provide a major advantage for manufacturers of brand name or otherwise costly drugs. These programs increase demand for brand name and costly products over lower cost and equally effective generics, which is why this bill is supported by the pharmaceutical industry. Researchers, government agencies, and payers have expressed a fair amount of skepticism about the intent and utility of these programs. These programs are banned or discouraged in certain public programs. CAHP states that due to a lack of transparency, very little is known about these programs or how they impact the health system. Before California starts promoting these programs, which provide a huge public relations benefit for drug companies, a better understanding of their purpose and impact on cost-effective drug use should be obtained. The Association of California Life and Health Insurance Companies (ACLHIC) writes that it is unclear what problem this bill is intending to solve, and while the increased cost and administrative burden of updating current notices is an issue, even more concerning to ACLHIC’s members is the decision to require one industry to promote the activities of another. Especially when taking into consideration that these programs can have a direct impact on driving up the cost of healthcare by steering patients toward higher cost brand name drugs when equally effective generic alternatives are available. Kaiser Permanente writes that federal law prohibits the use of these discount coupons (also known as third party payments in public programs) and discourages their use by health plans participating in ACA exchanges due to their effect of increasing drug spending.
ASSEMBLY FLOOR: 71-0, 5/23/16
AYES: Achadjian, Alejo, Travis Allen, Atkins, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Frazier, Beth Gaines, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Arambula, Bigelow, Brough, Eggman, Gallagher, Jones-Sawyer, Mayes, Obernolte, Patterson
Prepared by: Teri Boughton / HEALTH / (916) 651-4111
8/18/16 16:57:24
**** END ****
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 2115 |
THIRD READING
Bill No: AB 2115
Amended: 8/2/16 in Senate
SENATE HEALTH COMMITTEE: 7-0, 6/29/16
AYES: Hernandez, Nguyen, Hall, Mitchell, Nielsen, Pan, Roth
NO VOTE RECORDED: Monning, Wolk
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 71-0, 5/23/16 - See last page for vote
SUBJECT: Health care coverage: disclosures
SOURCE: California Life Science Association
DIGEST: This bill requires health plans and health insurers to inform an individual who ceases to be enrolled in coverage that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocate’s Internet Web site but these programs may not meet the requirements of the individual mandate under the federal Patient Protection and Affordable Care Act (ACA).
Existing law:
- Provides for the regulation of health plans by the Department of Managed Health Care (DMHC), regulation of health insurers by the California Department of Insurance (CDI), and the administration of the Medi-Cal program by the Department of Health Care Services, which provides health coverage for qualified low income individuals, children, families and individuals who are aged and disabled.
- Establishes federal and state-based market places or health benefit exchanges, under the ACA, such as Covered California, which make individual and small group health insurance products available for purchase. Exchanges also administer federal premium subsidies and cost-sharing reductions to help qualified purchasers afford health insurance purchased through an exchange.
- Requires most Americans to have health insurance coverage or pay a tax penalty. Provides for open enrollment periods when individuals can purchase health insurance, and special enrollment periods which allow for the purchase of insurance within 60 days of certain life events including but not limited to marriage, divorce, and loss of group coverage.
- Requires on and after January 1, 2014, a health plan or health insurer providing individual or group health care coverage to provide to enrollees, subscribers, policyholders or certificate holders, who cease to be enrolled in coverage, a notice informing them that they may be eligible for reduced-cost coverage through Covered California or no-cost coverage through Medi-Cal.
- Requires the notice to include information on obtaining coverage pursuant to those programs, and to be in no less than 12-point type, and developed by DMHC and CDI, no later than July 1, 2013, in consultation with Covered California.
- Permits the notice to be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health plan or health insurer.
- Exempts a specialized health plan contract, specialized health insurance policy, or a health insurance policy consisting solely of coverage of excepted health benefits, as specified, or a Medicare supplemental plan contract from the provisions described in 4) to 6) above.
This bill:
- Adds to notices required of health plans and health insurers when an individual ceases to be enrolled in coverage a statement indicating that additional information on low- or no-cost programs for health care and prescription medicines may be found on the Office of the Patient Advocate’s Internet Web site but these programs may not meet the requirements of the individual mandate under the ACA.
- Requires this notice to be provided on and after January 1, 2018.
Comments
- Author’s statement. According to the author, despite California’s implementation of the ACA, which created or expanded coverage options for many Californians, gaps remain – with an estimated 3.8 million Californians under age 65 remaining without coverage. Compared to their insured counterparts, California’s uninsured have reported having a significantly lower health status and a substantially higher rate of not seeking care due to cost concerns. Nationwide, an estimated 125,000 deaths per year and between 33 and 69% of medication-related hospital admissions are a result of patients not getting or taking a prescribed medicine in a timely manner. Washington State established a program using navigators and online resources to assist consumers in finding appropriate patient assistance programs for their respective situations and medication needs, handling over 41 million prescriptions since 2009. A recent study of the Washington program found that patients receiving assistance in finding appropriate programs had nearly half the number of emergency department and hospital encounters as those not receiving such assistance. In helping to ensure Californians leaving coverage understand the programs available to them for free and reduced cost medicines, AB 2115 will help to reduce the potential negative health impact that delays in access to prescribed medicines can cause.
- Prescription Assistance Programs. According to an April 2016 article in the Journal of Managed Care and Specialty Pharmacy, there are over 200 Prescription Assistance Programs available from pharmaceutical companies. Use of these programs is hindered by inconsistent eligibility requirements and reported difficulties in identifying and applying for appropriate programs. These programs typically provide brand-name drugs at little or no cost to income-eligible patients. These programs remain underutilized by target populations. In a survey of 215 safety-net facilities in California, Florida, Illinois, and Texas, 22% of the clinics reported not using the programs at all because the enrollment process was too complex and time consuming. A nationwide effort sponsored by America’s biopharmaceutical research companies called the Partnership for Prescription Assistance (PPA) has helped nearly 10 million uninsured and underinsured Americans get information about programs that provide prescription medicines for free or nearly free. PPA provides a single point of access to more than 475 patient assistance programs, including nearly 200 offered by biopharmaceutical companies. From April 2009 to May 2016, 320,830 California residents have been helped by PPA, according to its Web site.
- Washington State. According to an April 2016 article in the Journal of Managed Care and Specialty Pharmacy in 2008, the Spokane Prescription Assistance Network (SPAN) was started as a pilot project to assist low-income adults with accessing affordable prescription medications. A SPAN patient prescription coordinator accepted referrals from area health clinics, social service organizations, pharmacies, hospitals, etc. The coordinator matched patients with appropriate prescription assistance programs and helped the patients apply for the programs. The coordinator followed-up with the patient and their providers regularly. The aim was to reduce unnecessary and avoidable health care encounters for patients having difficulty accessing prescription medications. Among 310 SPAN participants, emergency department and hospital encounters declined from .38 per participant the year before enrollment to .20 encounters in the year following program entry. SPAN was associated with a 51% decline in the rate of emergency department and hospital utilization. The study concluded a formalized patient prescription coordinator can help patients access prescribed medications at low cost and remain compliant with treatment plans.
- Other studies. A 2009 study published in Health Affairs concluded the benefits of patient assistance programs remain unclear. Little is known about these programs. A survey found much variability in their structures and application processes. Most of these programs cover only one or two drugs. Only 4% disclosed how many patients they had directly helped, and half would not disclose their income eligibility criteria. A 2014 perspective in the New England Journal of Medicine indicates that more than 300 drugs have associated patient assistance programs, and manufacturers spend about $4 billion per year on these programs. The article says these programs increase demand, allow companies to charge higher prices, and provide public-relations benefits. In addition, patient assistance programs may lead to higher drug prices as a result of the interplay between patent demand and prices. If patient demand is less sensitive to prices, manufacturers of on-patent drugs respond by setting higher prices. The author of the study also points out that the federal Department of Health and Human Services (DHHS) has sent mixed signals about these programs and has discouraged hospitals and other providers from paying premiums or other cost-sharing liabilities for exchange enrollees; and the author believes DHHS is right to limit the scope of these programs and that these programs can help individual patients but are associated with hidden costs for insurers and taxpayers.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
California Life Science Association (source)
National Multiple Sclerosis Society
Association of California Life and Health Insurance Companies
Blue Shield of California
California Association of Health Plans
Kaiser Permanente
ARGUMENTS IN SUPPORT: The California Life Sciences Association (CLSA) writes that this bill is simply adding a new item to a list in an existing notice requirement for health plans and insurers, its costs should be minimal, especially in light of the significant potential for healthcare costs avoided and improvements in patients’ health. Greater awareness of patient assistance programs among individuals who are at-risk of becoming uninsured could bring benefits similar to those seen in Washington. In response to concerns raised by health plans, this bill has been amended to delete sections applicable to Cal-COBRA (a California specific version of the federal Consolidated Omnibus Budget Reconciliation Act) and all specific language requirements for the notices, including website citations. CLSA believes this bill achieves, at a modest cost, a greater awareness of patient assistance programs, helping patients stay on their medications during coverage interruptions and consequently reducing preventable emergency room visits and other care as a result of medication non-adherence.
ARGUMENTS IN OPPOSITION: The California Association of Health Plans (CAHP) writes that drug company-sponsored assistance programs provide a major advantage for manufacturers of brand name or otherwise costly drugs. These programs increase demand for brand name and costly products over lower cost and equally effective generics, which is why this bill is supported by the pharmaceutical industry. Researchers, government agencies, and payers have expressed a fair amount of skepticism about the intent and utility of these programs. These programs are banned or discouraged in certain public programs. CAHP states that due to a lack of transparency, very little is known about these programs or how they impact the health system. Before California starts promoting these programs, which provide a huge public relations benefit for drug companies, a better understanding of their purpose and impact on cost-effective drug use should be obtained. The Association of California Life and Health Insurance Companies (ACLHIC) writes that it is unclear what problem this bill is intending to solve, and while the increased cost and administrative burden of updating current notices is an issue, even more concerning to ACLHIC’s members is the decision to require one industry to promote the activities of another. Especially when taking into consideration that these programs can have a direct impact on driving up the cost of healthcare by steering patients toward higher cost brand name drugs when equally effective generic alternatives are available. Kaiser Permanente writes that federal law prohibits the use of these discount coupons (also known as third party payments in public programs) and discourages their use by health plans participating in ACA exchanges due to their effect of increasing drug spending.
ASSEMBLY FLOOR: 71-0, 5/23/16
AYES: Achadjian, Alejo, Travis Allen, Atkins, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Frazier, Beth Gaines, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Arambula, Bigelow, Brough, Eggman, Gallagher, Jones-Sawyer, Mayes, Obernolte, Patterson
Prepared by: Teri Boughton / HEALTH / (916) 651-4111
8/10/16 16:00:46
**** END ****
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 2115
AUTHOR: | Wood | ||
VERSION: | May 11, 2016 | ||
HEARING DATE: | June 29, 2016 | ||
CONSULTANT: | Teri Boughton | ||
SUBJECT: Health care coverage: disclosures
SUMMARY:
Requires health plans and health insurers to inform an individual who ceases to be enrolled in coverage that he or she may be eligible for free or reduced cost prescription medicines through a manufacturer’s patient assistance program.
Existing law:
- Provides for the regulation of health plans by the Department of Managed Health Care (DMHC), regulation of health insurers by the California Department of Insurance (CDI), and the administration of the Medi-Cal program by the Department of Health Care Services, which provides health coverage for qualified low income individuals, children, families and individuals who are aged and disabled.
- Establishes federal and state-based market places or health benefit exchanges, under the federal Patient Protection and Affordable Care Act (ACA), such as Covered California, which make individual and small group health insurance products available for purchase. Exchanges also administer federal premium subsidies and cost-sharing reductions to help qualified purchasers afford health insurance purchased through an exchange.
- Requires most Americans to have health insurance coverage or pay a tax penalty. Provides for open enrollment periods when individuals can purchase health insurance, and special enrollment periods which allow for the purchase of insurance within 60 days of certain life events including but not limited to marriage, divorce, and loss of group coverage.
- Requires on and after January 1, 2014, a health plan or health insurer providing individual or group health care coverage to provide to enrollees, subscribers, policyholders or certificate holders, who cease to be enrolled in coverage, a notice informing them that they may be eligible for reduced-cost coverage through Covered California or no-cost coverage through Medi-Cal.
- Requires the notice to include information on obtaining coverage pursuant to those programs, and to be in no less than 12-point type, and developed by DMHC and CDI, no later than July 1, 2013, in consultation with Covered California.
- Permits the notice to be incorporated into or sent simultaneously with and in the same manner as any other notices sent by the health plan or health insurer.
- Exempts a specialized health plan contract, specialized health insurance policy, or a health insurance policy consisting solely of coverage of excepted health benefits, as specified, or a Medicare supplemental plan contract from the provisions described in 4)-6) above.
This bill:
- Adds to notice requirements of health plans and health insurers when an individual ceases to be enrolled in coverage that he or she may be eligible for free or reduced cost prescription medicines through a manufacturer’s patient assistance program, and that the Office of the Patient Advocate also be consulted in the development of the notice.
- Requires the notice to include a statement clarifying that assistance through a manufacturer’s patient assistance program does not constitute coverage under, and will not meet the requirements of the individual mandate under, the ACA.
- Requires the DMHC and CDI to include information in the notice on locating free or reduced cost programs for health care and prescription medicines, such as through the Internet Web site of the Office of the Patient Advocate.
- Requires this notice to be provided on and after January 1, 2017.
FISCAL EFFECT:
According to the Assembly Appropriations Committee, any impact to DMHC (Managed Care Fund) and CDI (Insurance Fund) is expected to be minor and absorbable.
PRIOR VOTES:
Assembly Floor: | 71 - 0 |
Assembly Appropriations Committee: | 14 - 0 |
Assembly Health Committee: | 19 - 0 |
COMMENTS:
- Author’s statement. According to the author, despite California’s implementation of the ACA, which created or expanded coverage options for many Californians, gaps remain – with an estimated 3.8 million Californians under age 65 remaining without coverage. Compared to their insured counterparts, California’s uninsured have reported having a significantly lower health status and a substantially higher rate of not seeking care due to cost concerns. Nationwide, an estimated 125,000 deaths per year and between 33 and 69% of medication-related hospital admissions are a result of patients not getting or taking a prescribed medicine in a timely manner. Washington State established a program using navigators and online resources to assist consumers in finding appropriate patient assistance programs for their respective situations and medication needs, handling over 41 million prescriptions since 2009. A recent study of the Washington program found that patients receiving assistance in finding appropriate programs had nearly half the number of emergency department and hospital encounters as those not receiving such assistance. In helping to ensure Californians leaving coverage understand the programs available to them for free and reduced cost medicines, AB 2115 will help to reduce the potential negative health impact that delays in access to prescribed medicines can cause.
- Prescription Assistance Programs. According to an April 2016 article in the Journal of Managed Care and Specialty Pharmacy, there are over 200 Prescription Assistance Programs available from pharmaceutical companies. Use of these programs is hindered by inconsistent eligibility requirements and reported difficulties in identifying and applying for appropriate programs. These programs typically provide brand-name drugs at little or no cost to income-eligible patients. These programs remain underutilized by target populations. In a survey of 215 safety-net facilities in California, Florida, Illinois, and Texas, 22% of the clinics reported not using the programs at all because the enrollment process was too complex and time consuming. A nationwide effort sponsored by America’s biopharmaceutical research companies called the Partnership for Prescription Assistance (PPA) has helped nearly 10 million uninsured and underinsured Americans get information about programs that provide prescription medicines for free or nearly free. PPA provides a single point of access to more than 475 patient assistance programs, including nearly 200 offered by biopharmaceutical companies. From April 2009 to May 2016, 320,830 California residents have been helped by PPA, according to its website.
- Washington State. According to an April 2016 article in the Journal of Managed Care and Specialty Pharmacy in 2008, the Spokane Prescription Assistance Network (SPAN) was started as a pilot project to assist low-income adults with accessing affordable prescription medications. A SPAN patient prescription coordinator accepted referrals from area health clinics, social service organizations, pharmacies, hospitals, etc. The coordinator matched patients with appropriate prescription assistance programs and helped the patients apply for the programs. The coordinator followed-up with the patient and their providers regularly. The aim was to reduce unnecessary and avoidable health care encounters for patients having difficulty accessing prescription medications. Among 310 SPAN participants, emergency department and hospital encounters declined from .38 per participant the year before enrollment to .20 encounters in the year following program entry. SPAN was associated with a 51% decline in the rate of emergency department and hospital utilization. The study concluded a formalized patient prescription coordinator can help patients access prescribed medications at low cost and remain compliant with treatment plans.
- Other studies. A 2009 study published in Health Affairs concluded the benefits of patient assistance programs remain unclear. Little is known about these programs. A survey found much variability in their structures and application processes. Most of these programs cover only one or two drugs. Only 4% disclosed how many patients they had directly helped, and half would not disclose their income eligibility criteria. A 2014 perspective in the New England Journal of Medicine indicates that more than 300 drugs have associated patient-assistance programs, and manufacturers spend about $4 billion per year on these programs. The article says these programs increase demand, allow companies to charge higher prices, and provide public-relations benefits. In addition, patient-assistance programs may lead to higher drug prices as a result of the interplay between patent demand and prices. If patient demand is less sensitive to prices, manufacturers of on-patent drugs respond by setting higher prices. The author also points out that the federal Department of Health and Human Services (DHHS) has sent mixed signals about these programs and has discouraged hospitals and other providers from paying premiums or other cost-sharing liabilities for exchange enrollees. The author of the study believes DHHS is right to limit the scope of these programs and that these programs can help individual patients but are associated with hidden costs for insurers and taxpayers.
- Medicare. Medicare.gov has links to information about patient assistance programs. The following information is on the Medicare.gov website. “Some pharmaceutical companies offer assistance programs for the drugs they manufacture. Click on the first letter of your drug name to see if any programs are available for the drugs you are taking. If your drug is on the list, click on "details" for detailed information about the program.” The details provide information about eligibility criteria and benefits assistance as well as contact information for the program.
- Office of Inspector General Report. The federal Office of Inspector General (OIG) published a report in September of 2014 on pharmaceutical manufacturers that offer copayment coupons to reduce or eliminate the cost of patients’ out-of-pocket copayments for specific brand-name drugs. The federal anti-kickback statute prohibits the knowing and willful offer or payment of remuneration to a person to induce the purchase of any item or service for which payment may be made by a federal health care program. Manufacturers may be liable under the anti-kickback statute if they offer coupons to induce the purchase of drugs paid for by federal health care programs, including Medicare Part D. The use of coupons by Medicare beneficiaries could impose significant costs on the Part D program because many coupons encourage beneficiaries to choose more expensive brand-name drugs over less expensive alternative drugs. In two surveys by outside groups, approximately 6-7% of seniors surveyed reported using coupons to purchase prescription drugs. The OIG concluded pharmaceutical manufacturers’ current safeguards may not prevent all copayment coupons from being used for drugs paid for by Part D.
- Related legislation. SB 1010 (Hernandez), would require health plans and health insurers that report health insurance rate information to also include information regarding covered prescription drugs. Requires DMHC and CDI to compile and report this data in an aggregated report to demonstrate the overall impact of drug costs on health care premiums. Requires any manufacturer of a prescription drug, who sells to or is reimbursed by a state purchaser, health plan, health insurer, or pharmacy benefit manager, to provide notice describing a price increase. Requires the Legislature to conduct an annual public hearing on aggregate trends in prescription drug pricing. SB 1010 is set to be heard in the Assembly Health Committee on June 28, 2016,
AB 463 (Chiu of 2015), would have required pharmaceutical companies to file an annual report with OSHPD containing specified information regarding the development and pricing of prescription drugs. AB 463 was referred to the Assembly Health Committee but was never heard.
- Prior legislation. AB 339 (Gordon, Chapter 619, Statutes of 2015), requires health plans and health insurers that provide coverage for outpatient prescription drugs to have formularies that do not discourage the enrollment of individuals with health conditions, and requires combination antiretrovirals drug treatment coverage of a single-tablet that is as effective as a multitablet regimen for treatment of HIV/AIDS, as specified. Places in state law, federal requirements related to pharmacy and therapeutics committees, access to in-network retail pharmacies, standardized formulary requirements, formulary tier requirements similar to those required of health plans and insurers participating in Covered California and copayment caps of $250 and $500 for a supply of up to 30 days for an individual prescription, as specified.
AB 792 (Bonilla, Chapter 851, Statutes of 2012), establishes notification requirements about the availability of reduced-cost coverage in Covered California and no-cost coverage available in Medi-Cal to an individual filing a dissolution or nullity of marriage, divorce or separation, or petitioning for adoption or for an individual who ceases to be enrolled in health coverage through a health plan or health insurer.
- Support. The California Life Sciences Association (CLSA) writes that this bill is simply adding a new item to a list in an existing notice requirement for health plans and insurers, its costs should be minimal, especially in light of the significant potential for healthcare costs avoided and improvements in patients’ health. Greater awareness of patient assistance programs among individuals who are at-risk of becoming uninsured could bring benefits similar to those seen in Washington. In response to concerns raised by health plans, the bill has been amended to delete sections applicable to Cal-COBRA and all specific language requirements for the notices, including website citations. CLSA believes this bill achieves, at a modest cost, a greater awareness of patient assistance programs, helping patients stay on their medications during coverage interruptions and consequently reducing preventable emergency room visits and other care as a result of medication non-adherence.
- Opposition. The California Association of Health Plans (CAHP) writes that drug company-sponsored assistance programs provide a major advantage for manufacturers of brand name or otherwise costly drugs. These programs increase demand for brand name and costly products over lower cost and equally effective generics, which is why this bill is supported by the pharmaceutical industry. Researchers, government agencies, and payers have expressed a fair amount of skepticism about the intent and utility of these programs. These programs are banned or discouraged in certain public programs. CAHP states that due to a lack of transparency, very little is known about these programs or how they impact the health system. Before California starts promoting these programs, which provide a huge public relations benefit for drug companies, a better understanding of their purpose and impact on cost-effective drug use should be obtained. The Association of California Life and Health Insurance Companies (ACLHIC) writes that it is unclear to us what problem this bill is intending to solve, and while the increased cost and administrative burden of updating current notices is an issue, even more concerning to ACLHIC’s members is the decision to require one industry to promote the activities of another. Especially when taking into consideration that these programs can have a direct impact on driving up the cost of healthcare by steering patients toward higher cost brand name drugs when equally effective generic alternatives are available. Kaiser Permanente writes that federal law prohibits the use of these discount coupons (also known as third party payments in public programs) and discourages their use by health plans participating in ACA exchanges due to their effect of increasing drug spending.
- Policy Comment. While connecting an uninsured patient with needed medications is clearly in the interest of the patient’s health and, as demonstrated in the SCAN pilot, can lead to declines in emergency department use and hospitalizations, it is not clear how a notice about patient assistance programs provided to all enrollees and insured who cease their health coverage would result in these outcomes. Furthermore, if an individual who ceases coverage thinks he or she can get access to free or reduced cost medications, he or she might forgo pursuit of replacement coverage. Lack of health insurance coverage, especially for someone with a chronic condition, will be detrimental to his or her health.
A study provided by this bill’s sponsor points out that over the next 10 years, per-capita out-of-pocket spending on prescription medication is projected to rise by 34%. A 2015 poll conducted by the Kaiser Family Foundation indicates the top two health care concerns of respondents relate to the price of prescription drugs. Seventy-six percent listed “making sure that high-cost drugs for chronic conditions are affordable to those who need them” and 60% expressed a need for “government action to lower prescription drug prices.” There are more meaningful actions pharmaceutical companies can take in order to expand access to their medications for people with chronic conditions, such as lowering their prices.
SUPPORT AND OPPOSITION:
Support: California Life Science Association (sponsor)
National Multiple Sclerosis Society
Oppose: Association of California Life and Health Insurance Companies
Blue Shield of California
California Association of Health Plans
Kaiser Permanente
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:
Author:(Wood)
As Amended Ver:May 11, 2016
Majority vote
Committee | Votes | Ayes | Noes |
Health | 19-0 | Wood, Maienschein, Bonilla, Burke, Campos, Chiu, Dababneh, Gomez, Roger Hernández, Lackey, Nazarian, Olsen, Patterson, Ridley-Thomas, Rodriguez, Santiago, Steinorth, Thurmond, Waldron | |
Appropriations | 14-0 | Gonzalez, Bloom, Bonilla, Bonta, Calderon, Daly, Eggman, Eduardo Garcia, Roger Hernández, Holden, Quirk, Santiago, Weber, Wood |
|
SUMMARY: Requires health care service plans (health plans) and health insurers, when notifying enrollees who cease to be enrolled in health plans or insurance products about other health care coverage options, to also provide information about reduced-cost prescription drugs available through manufacturer patient assistance programs. It also requires information on locating free or reduced-cost programs for health care and prescription medications, such as through the Internet Web Site of the Office of the Patient Advocate.
FISCAL EFFECT: Any impact to the Department of Managed Health Care and the California Department of Insurance is expected to be minor and absorbable.
COMMENTS: This bill adds an additional disclosure to existing requirements notifying individuals, upon termination of coverage, of the availability of free or reduced prescription medicines prescription medicines through a manufacturer's patient assistance program (PAPs). The notice will also include a statement clarifying that assistance through a manufacturer's PAP does not constitute coverage under, and will not meet the requirements of the individual mandate under, the federal Patient Protection and Affordable Care Act.
The Centers for Medicare and Medicaid Services note that pharmaceutical manufacturers may sponsor PAPs that provide financial assistance or drug free product (through in-kind product donations) to low income individuals to augment any existing prescription drug coverage. PAPs can provide assistance to Part D enrollees and interface with Part D plans by operating "outside the Part D benefit" to ensure separateness of Part D benefits and PAP assistance. The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP). The calculation of TrOOP is important for determining whether an individual has reached the threshold for catastrophic coverage under the Part D benefit.
A 2005 Publication of the Office of Inspector General (OIG) Special Advisory Bulletin on PAPs for Medicare Part D (Bulletin) noted that PAPs have long provided important safety net assistance to patients of limited means who do not have insurance coverage for drugs, typically serving patients with chronic illnesses and high drug costs. The OIG Bulletin noted that PAPs are structured and operated in many different ways, such as cash subsidies, free or reduced price drugs, or assistance directly to patients. Some PAPs replenish drugs furnished by pharmacies, clinics, hospitals, and other entities to eligible patients whose drugs are not covered by insurance manufacturers. The OIG Bulletin also indicated that some PAPs are affiliated with particular pharmaceutical manufacturers or independent charitable organizations without regard to any specific donor or industry interests.
According to the National Conference of State Legislatures, prescription drug assistance has been a substantial and growing state interest for a number of years, generally in response to individuals who lack insurance coverage for medicines or who were not eligible for other government programs. In 1975, the first states began to authorize and fund direct subsidy programs. By 2009, a total of at least 42 states had established or authorized some type of program to provide pharmaceutical coverage or assistance; several of those are not currently operational. The subsidy programs, often termed "SPAPs," utilize state funds to pay for a portion of the drug costs, usually for a defined population that meets enrollment criteria. In addition, an increasing number of states use discounts or bulk purchasing approaches that do not spend state funds for the drug purchases, identified as "Discount Programs." Since the passage of the Affordable Care Act, state legislatures have been less active on SPAP issues.
This bill is supported by the biopharmaceutical industry, who indicates PAPs provide financial assistance for lifesaving drugs that otherwise may be inaccessible due to cost. Health plans and insurers oppose this bill, citing; 1) a lack of data on the effectiveness, purpose, and effect on overall drug costs; 2) concern about requiring one industry to promote the activities of another; 3) concern that promoting these programs can have the effect of driving up costs for individuals and employers purchasing health coverage; and 4) current law signed last year that already establishes strict out-of-pocket limitations on prescription drugs and shields individuals from the drugs' astronomical costs.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0003010
Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ABPCA Bill Id:AB 2115
Author:(Wood) – As Amended Ver:May 11, 2016
Policy Committee: | Health | Vote: | 19 - 0 |
Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill requires health care service plans (health plans) and health insurers, when notifying enrollees who cease to be enrolled in plans or insurance products about other health care coverage options, to also provide information about reduced-cost prescription drugs available through manufacturer patient assistance programs.
It also requires information on locating free or reduced-cost programs for health care and prescription medications, such as through the Internet Web Site of the Office of the Patient Advocate.
FISCAL EFFECT:
Any impact to the Department of Managed Health Care (DMHC/ Managed Care Fund) and the California Department of Insurance (CDI/Insurance Fund) is expected to be minor and absorbable.
COMMENTS:
- Purpose. Existing law requires health plans and insurers to notify individuals terminating coverage of their options to continue receiving coverage. This would add information about manufacturer drug assistance programs. The author states this additional information would assist patients who can't afford necessary prescription drugs.
- Background. The Centers for Medicare and Medicaid Services notes many pharmaceutical manufacturers sponsor programs that provide financial assistance or donation of free product. Patients must generally meet some eligibility criteria, including income and insurance status. Some programs will assist with copayments for insured patients. For instance, the Sovaldi Co-pay Coupon Program is run by Gilead, the maker of Sovaldi, a breakthrough Hepatitis C medication. This program assists patients who are "cash-pay" patients who do not have coverage, as well as patients with commercial insurance, with their share of cost for the drug. This program, for example, states it covers the out-of-pocket costs of prescriptions after the patient pays the first $5 per prescription fill, up to a maximum of 25% of the catalog price of a 12-week regimen.
Such programs are not without controversy. For instance, a 2014 "Perspective" in the New England Journal of Medicine entitled "Drug Companies’ Patient-Assistance Programs — Helping Patients or Profits?" notes, "Assistance programs are a triple boon for manufacturers. They increase demand, allow companies to charge higher prices, and provide public-relations benefits. Assistance programs are an especially attractive proposition for firms that sell particularly costly drugs. Faced with high out-of-pocket costs, some patients may decide against taking an expensive medication. Patient-assistance programs can convert such patients from nonusers to users. Programs must incur costs for patients who would have used the drug even in the absence of a program, but manufacturers can afford to pay a lot of $25 or $50 copayments in return for even a small increase in the sales of a $50,000 drug."
For those who are uninsured, patient assistance programs can provide help to afford medication that would otherwise be unaffordable. For insured patients, patient assistance programs change the economics of utilization management for plans and insurers, which can increase patient demand for more expensive drugs. For example, if there are two equally effective drugs available, a cheap generic with a $20 co-payment and a pricey brand-name drug with a $100 co-payment, a plan can encourage utilization of the cheaper drug through offering the lower co-payment. But if a patient assistance program brings the co-payment for the brand-name drug to $10, utilization of the brand-name drug, which is far more costly to the plan, could go up. Under this scenario of two equally effective drugs, the plan might pay far more than the patient would save, for the same therapeutic benefit to the patient.
- Prior legislation. AB 792 (Bonilla), Chapter 851, Statutes of 2012, requires health plans and health insurers to provide a notice informing individuals that they may be eligible for reduced-cost coverage through the Exchange or no-cost coverage through Medi-Cal when an enrollee or subscriber ceases to be enrolled in coverage.
- Support and Opposition. This bill is supported by the biopharmaceutical industry, who indicates these programs provide financial assistance for lifesaving drugs that otherwise may be inaccessible due to cost. Health plans and insurers oppose this bill, citing; 1) a lack of data on the effectiveness, purpose, and effect on overall drug costs; 2) concern about requiring one industry to promote the activities of another; 3) concern that promoting these programs can have the effect of driving up costs for individuals and employers purchasing health coverage; and 4) current law signed last year that already establishes strict out-of-pocket limitations on prescription drugs and shields individuals from the drugs' astronomical costs.
- Staff Comment. Concerns have been raised about patient assistance programs. Health policy experts have noted they can increase utilization of expensive drugs even when cheaper therapeutic alternatives are available, which does not appear consistent with principles of cost-effectiveness in health care delivery. Although, in theory, increased utilization of these programs among the insured population could raise health care costs by increasing demand for more costly medications, the effect of the specific notification required by the bill on health care costs is unknown. Many programs exclude individuals with Medicaid (Medi-Cal) coverage.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
Date of Hearing: April 27, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ABPCA Bill Id:AB 2115
Author:(Wood) – As Amended Ver:April 5, 2016
Policy Committee: | Health | Vote: | 19 - 0 |
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Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill requires health care service plans (health plans) and health insurers, when providing a notice about coverage continuation options to covered individuals under a group benefit plan, to also provide information about other coverage for which they may be eligible.
FISCAL EFFECT:
Any impact to the Department of Managed Health Care (DMHC/ Managed Care Fund) and the California Department of Insurance (CDI/Insurance Fund) is expected to be minor and absorbable.
COMMENTS:
- Purpose. This bill is intended to update inaccurate information included in notifications required under current law, and add a notification about free or discounted prescription medicines.
- Background. Existing law requires health plans and insurers to notify individuals terminating coverage of their options to continue receiving coverage. Many disclosures have been updated, but one required notification still states, "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." This is no longer accurate pursuant to the federal Affordable Care Act. This bill updates those disclosure notices for insurance market changes and adds information about patient assistance programs, which are administered by drug manufacturers to help uninsured individuals access prescription drugs.
- Prior legislation. AB 792 (Bonilla), Chapter 851, Statutes of 2012, requires health plans and health insurers to provide a notice informing individuals that they may be eligible for reduced-cost coverage through the Exchange or no-cost coverage through Medi-Cal when an enrollee or subscriber ceases to be enrolled in coverage.
Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081
Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
ABPCA Bill Id:AB 2115
Author:(Wood) – As Amended Ver:April 5, 2016
SUBJECT: Health care coverage: disclosures.
SUMMARY: Requires health care service plans (health plans) and health insurers, when providing a notice about coverage continuation options to covered individuals under a group benefit plan, to also provide information about other coverage for which they may be eligible. Specifically, this bill:
- Requires, upon coverage termination, health plans and health insurers to include, in any group benefit plan disclosure issued, amended, or renewed on or after January 1, 2017, in addition to coverage continuation options, a notice of the following:
- Coverage through Covered California and qualifying for lower monthly premiums and lower out-of-pocket costs;
- Coverage through Medi-Cal and qualifying for low or no cost coverage;
- Coverage through an insured spouse; and,
- Free or discounted prescription medicines through a manufacturer or through the use an Internet Web site search tool, such as those provided by the Partnership for Prescription Assistance at https://www.ppars.org or RxAssist at http://www.rxassist.org.
- Coverage through Covered California and qualifying for lower monthly premiums and lower out-of-pocket costs;
- Requires health plans or health insurers, on or after January 1, 2017, providing individual or group health care coverage to provide enrollees, subscribers, or policy holders or certificate holders who cease to be enrolled, a notice informing them free or reduced prescription medicines prescription medicines through a manufacturer’s patient assistance program (PAP).
EXISTING LAW:
- Regulates health plans under the Knox-Keene Health Care Service Plan Act of 1975 through the Department of Managed Health Care and regulates health insurers under the Insurance Code through the California Department of Insurance.
- Establishes the Medi-Cal program which is administered by the Department of Health Care Services (DHCS), under which qualified low-income persons receive health care benefits. Governs and funds the Medi-Cal program, in part, by federal Medicaid program provisions. Allows DHCS to exercise a specified federal option to extend continuous Medi-Cal eligibility to children 19 years of age and younger.
- Establishes California’s Health Benefit Exchange (the Exchange), also referred to as Covered California (CoveredCa) within state government, as an independent public entity not affiliated with an agency or department, and requires the Exchange to compare and make available through selective contracting health insurance for individual and small business purchasers as authorized under the federal Patient Protection and Affordable Care Act (ACA).
- Establishes the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) under federal law that applies to employers and group health plans that cover 20 or more employees and allows enrollees to keep his or her group health plan for at least 18 months when a job ends or hours are cut.
- Establishes the California Continuation Benefits Replacement Act (Cal-COBRA) that applies to employers and group health plans that cover two to19 employees and allows enrollees to keep his or her health plan for up to 36 months and may be available after COBRA ends.
- Requires health plans and health insurers to send model notices intended to inform recipients that they may be eligible for free coverage through Medi-Cal or low-cost coverage through CoveredCa, if certain requirements are met.
FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.
COMMENTS:
- PURPOSE OF THIS BILL. This bill adds an additional disclosure to existing requirements notifying individuals, upon termination of coverage, of the availability of free or reduced prescription medicines prescription medicines through a manufacturer’s patient assistance program (PAPs). For enrollees in a group product, health plans and health insurers will provide notice that the individual may be eligible for reduced-cost coverage through CoveredCa, no-cost coverage through Medi-Cal, coverage through an insured spouse, and free or discounted prescription medicines through a manufacturer’s PAP.
- BACKGROUND. The Centers for Medicare and Medicaid Services notes that pharmaceutical manufacturers may sponsor PAPs that provide financial assistance or drug free product (through in-kind product donations) to low income individuals to augment any existing prescription drug coverage. PAPs can provide assistance to Part D enrollees and interface with Part D plans by operating "outside the Part D benefit" to ensure separateness of Part D benefits and PAP assistance. The PAP's assistance on behalf of the PAP enrollee does not count towards a Part D beneficiary's true-out-of-pocket cost (TrOOP). The calculation of TrOOP is important for determining whether an individual has reached the threshold for catastrophic coverage under the Part D benefit.
A 2005 Publication of the Office of Inspector General (OIG) Special Advisory Bulletin on PAPs for Medicare Part D (Bulletin) noted that PAPs have long provided important safety net assistance to patients of limited means who do not have insurance coverage for drugs, typically serving patients with chronic illnesses and high drug costs. The OIG Bulletin noted that PAPs are structured and operated in many different ways, such as cash subsidies, free or reduced price drugs, or assistance directly to patients. Some PAPs replenish drugs furnished by pharmacies, clinics, hospitals, and other entities to eligible patients whose drugs are not covered by insurance manufacturers. The OIG Bulletin also indicated that some PAPs are affiliated with particular pharmaceutical manufacturers or independent charitable organizations without regard to any specific donor or industry interests.
A Consumer Reports article states that people can find out about specific PAPs through various sources, including doctors, pharmacists, staff at a health or community clinic, the internet, and drug companies. Consumer Reports identifies three Websites in particular that service as major portals to multiple PAPs, including RxAssist, the Partnership for Prescription Assistance, and NeedyMeds.
- OTHER STATES. According to the National Conference of State Legislatures, prescription drug assistance has been a substantial and growing state interest for a number of years, generally in response to individuals who lack insurance coverage for medicines or who were not eligible for other government programs. In 1975, the first states began to authorize and fund direct subsidy programs. By 2009, a total of at least 42 states had established or authorized some type of program to provide pharmaceutical coverage or assistance; several of those are not currently operational. The subsidy programs, often termed "SPAPs," utilize state funds to pay for a portion of the drug costs, usually for a defined population that meets enrollment criteria. In addition, an increasing number of states use discounts or bulk purchasing approaches that do not spend state funds for the drug purchases, identified as "Discount Programs.” Since the passage of the ACA, state legislatures have been less active on SPAP issues.
- PREVIOUS LEGISLATION. AB 792 (Bonilla), Chapter 851, Statutes of 2012, requires specified health plans and health insurers to provide a notice informing individuals that they may be eligible for reduced-cost coverage through the Exchange or no-cost coverage through Medi-Cal when an enrollee or subscriber ceases to be enrolled in coverage.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file.
Opposition
None on file.
Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097
Discussed in Hearing
54SEC
Assembly Floor
2MIN
Senate Floor
4MIN
Senate Standing Committee on Health
2MIN
Assembly Floor
3MIN
Assembly Standing Committee on Appropriations
5MIN
Assembly Standing Committee on Health
Bill Author
Bill Co-Author(s):